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<TITLE>GRUPO IUSACELL CELULAR, S.A. DE C.V.</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

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<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

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<B>Washington, D.C. 20549</B>
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<B><FONT size="5">Form 20-F</FONT></B>

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    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2"><FONT face="wingdings">&#111;</FONT>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">REGISTRATION STATEMENT PURSUANT TO SECTION
    12(b) or (g)&nbsp;OF THE SECURITIES EXCHANGE ACT OF
    1934</FONT></B></TD>
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    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
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    <TD colspan="3" align="center" valign="top">
    <B><FONT size="2">or</FONT></B></TD>
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    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
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    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2"><FONT face="wingdings">&#254;</FONT></FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
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    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">For the fiscal year ended December&nbsp;31,
    2001</FONT></B></TD>
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    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
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    <TD colspan="3" align="center" valign="top">
    <B><FONT size="2">or</FONT></B></TD>
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    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
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    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2"><FONT face="wingdings">&#111;</FONT></FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">TRANSITION REPORT PURSUANT TO SECTION 13 or
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></B></TD>
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    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">For the transition period
    from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to</FONT></B></TD>
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<B><FONT size="2">Commission file number 1-13120</FONT></B>

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<B><FONT size="6">Grupo Iusacell Celular, S.A. de C.V.</FONT></B>

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<I><FONT size="2">(Exact name of Registrant as specified in its
charter)</FONT></I>
</DIV>

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<B><FONT size="2">Iusacell Celular Group, Inc.</FONT></B>

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<I><FONT size="2">(Translation of Registrant&#146;s name into
English)</FONT></I>
</DIV>

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<B><FONT size="2">United Mexican States</FONT></B>

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<I><FONT size="2">(Jurisdiction of incorporation or
organization)</FONT></I>
</DIV>

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<FONT size="2">Prolongaci&#243;n Paseo de la Reforma 1236
</FONT>

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<FONT size="2">Colonia Santa Fe
</FONT>
</DIV>

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<FONT size="2">Delegaci&#243;n Cuajimalpa
</FONT>
</DIV>

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<FONT size="2">05348 Mexico, D.F.
</FONT>
</DIV>

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<I><FONT size="2">(Address of principal executive
offices)</FONT></I>
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<B><FONT size="2">Securities registered or to be registered
pursuant to Section&nbsp;12(b) of the Act.</FONT></B>

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    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="center" nowrap><B><FONT size="1">Title of each class</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Name of each exchange on which registered</FONT></B></TD>
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<B><FONT size="2">None</FONT></B>

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<B><FONT size="2">Securities registered or to be registered
pursuant to Section&nbsp;12(g) of the Act:</FONT></B>

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<B><FONT size="2">None</FONT></B>

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<B><FONT size="2">Securities for which there is a reporting
obligation pursuant to Section&nbsp;15(d) of the Act:</FONT></B>

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<B><FONT size="2">10% Senior Notes due 2004</FONT></B>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate the number of outstanding shares of each
of the issuer&#146;s classes of capital or common stock as of
the close of the period covered by the Annual Report:
</FONT>

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    <TD width="78%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
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    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Series&nbsp;A Capital Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,967 shares</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Series&nbsp;B Capital Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,865 shares</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark whether the registrant
(1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12&nbsp;months (or for such shorter period
that the registrant was required to file such reports), and
(2)&nbsp;has been subject to such filing requirements for the
past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indicate by check mark which financial statement
item the registrant has elected to
follow:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;17&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;18&nbsp;<FONT face="wingdings">&#254;</FONT>
</FONT>

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<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

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<TR><TD colspan="9"><A HREF="#000">PART I</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">ITEM 3. KEY INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">ITEM 4. INFORMATION ON THE COMPANY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">ITEM 8. FINANCIAL INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009">ITEM 9. THE OFFER AND LISTING</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">ITEM 10. ADDITIONAL INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#011">ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#012">Interest Rate Risks</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#013">ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015">ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#016">ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#017">ITEM 15. RESERVED</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#018">ITEM 16. RESERVED</A></TD></TR>
<TR><TD colspan="9"><A HREF="#019">PART III</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#020">ITEM 17. FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#021">ITEM 18. FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#022">CONSOLIDATED BALANCE SHEETS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#023">CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#024">NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#025">ITEM 19. EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="y61802exv7.txt">COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES</A></TD></TR>
<TR><TD colspan="9"><A HREF="y61802exv8.txt">LIST OF SUBSIDIARIES</A></TD></TR>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

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<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

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<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Part I.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;1.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Identity of Directors, Senior Management and
    Advisers
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;2.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Offer Statistics and Expected Timetable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;3.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Key Information
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;4.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Information on the Company
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;5.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Operating and Financial Review and Prospects
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;6.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Directors, Senior Management and Employees
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;7.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Major Shareholders and Related Party Transactions
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;8.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Financial Information
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item &nbsp;9.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">The Offer and Listing
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 10.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Additional Information
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 11.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Quantitative and Qualitative Disclosures About
    Market Risk
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 12.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Description of Securities Other Than Equity
    Securities
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Part II.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 13.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Defaults, Dividend Arrearages and Delinquencies
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 14.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Material Modifications to the Rights of Security
    Holders and Use of Proceeds
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 15.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Reserved
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 16.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Reserved
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Part III.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 17.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Financial Statements
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 18.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Financial Statements
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Item 19.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Exhibits
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">i
</FONT>
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<P align="center">
<B><FONT size="2">FORWARD-LOOKING INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This Annual Report contains various
forward-looking statements within the meaning of
Section&nbsp;27A of the Securities Act of 1933 as amended (the
&#147;Act&#148;), and Section&nbsp;21E of the Securities
Exchange Act of 1934 as amended (the &#147;Exchange Act&#148;),
including statements regarding, among other things, the
financial performance and operating plans for Grupo Iusacell
Celular, S.A. de C.V. These statements are based upon the
current beliefs of our management, as well as on assumptions
made by management based upon information currently available to
it. The words &#147;believe,&#148; &#147;expect,&#148;
&#147;likely&#148; and &#147;anticipate&#148; and similar
expressions identify some of these forward-looking statements.
These statements are subject to various risks and uncertainties
and other factors which may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied
by such forward-looking statements. Should management&#146;s
assumptions prove incorrect, actual results may vary materially
and adversely from those anticipated or projected. Readers are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of their respective dates. We
undertake no obligation to update publicly or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following factors, as well as other factors
described in this Annual Report, could cause actual results to
differ materially from such forward-looking statements:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Material adverse changes in the business
    environment in Mexico, such as a change in value of the peso,
    the imposition of exchange controls, an increase in inflation
    levels and economic downturns;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Material adverse changes in the regulatory
    environment in Mexico;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Our ability to adapt to rapid technological
    change, develop new technologies and hire and retain qualified
    personnel;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Our ability to obtain debt or equity financing
    necessary to pursue business opportunities; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Our ability to compete against other
    telecommunications service providers.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">&#147;Iusacell&#148; means Grupo Iusacell,
S.A. de C.V. This company was formerly known as Nuevo Grupo
Iusacell, S.A. de C.V.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">&#147;Iusacell Celular&#148; means Grupo
Iusacell Celular, S.A. de C.V. This company was formerly known
as Grupo Iusacell, S.A. de C.V. Iusacell owns 100% of the
capital stock of Iusacell Celular.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2000, Bell Atlantic Corporation,
our principal shareholder, which holds its interest in Iusacell
through various subsidiaries, acquired GTE Corporation in a
merger of equals, renaming itself as &#147;Verizon
Communications Inc.&#148; The subsidiaries which directly hold
Iusacell capital stock remained unchanged. As a result of the
foregoing, the term &#147;Verizon&#148; in this Annual Report
refers to Verizon Communications Inc. or its subsidiaries, as
the context requires. We continue to use the term &#147;Bell
Atlantic&#148; in this Annual Report to refer to Bell Atlantic
Corporation and its subsidiaries in connection with events prior
to June&nbsp;30, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular does not have any publicly
traded equity securities. Iusacell Celular has publicly traded
debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified, all references to
&#147;U.S. dollars,&#148; &#147;dollars,&#148; &#147;U.S.$&#148;
or &#147;$&#148; are to United States dollars, and references to
&#147;Ps.&#148; and &#147;pesos&#148; are to Mexican pesos. We
publish our financial statements in pesos that are adjusted to
reflect changes in purchasing power due to inflation. Thus,
unless otherwise specified, our financial data is presented in
constant pesos with purchasing power as of December&nbsp;31,
2001. Amounts presented in this Annual Report may not add up or
may be slightly inconsistent due to rounding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified, this Annual Report
contains translations of peso amounts into U.S. dollars solely
for the convenience of the reader based on the exchange rate
reported by the Federal Reserve Bank of New York as its noon
buying rate for pesos, which we refer to as the Noon Buying
Rate, at December&nbsp;31, 2001, which was Ps.9.156 per
U.S.$1.00. These currency conversions should not be construed as
representa-
</FONT>

<P align="center"><FONT size="2">ii
</FONT>

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<DIV align="left">
<FONT size="2">tions that the peso amounts actually represent
such dollar amounts. Additionally, these conversions should not
be construed as representations that these peso amounts have
been, could have been or could be converted into U.S. dollars at
those or any other rates of exchange.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will provide without charge to each person to
whom this Annual Report is delivered, upon written or oral
request, a copy of any or all of the documents incorporated by
reference into this Annual Report (other than exhibits, unless
such exhibits are specifically incorporated by reference in such
documents). Written requests for such copies should be directed
to Grupo Iusacell Celular, S.A. de C.V., Prolongaci&#243;n Paseo
de la Reforma 1236, Colonia Santa Fe, Delegaci&#243;n
Cuajimalpa, 05348 Mexico, D.F., Attention: Investor Relations
Department. E-mail requests may be directed to
investor.relations@iusacell.com.mx. Telephone requests may be
directed to 011-52-55-5109-5759.
</FONT>

<P align="center"><FONT size="2">iii
</FONT>

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<!-- link1 "PART I" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">PART I</FONT></B>

<!-- link2 "ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</FONT></B>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and
Senior Management</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advisers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Auditors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<!-- link2 "ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OFFER
STATISTICS AND EXPECTED TIMETABLE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">1
</FONT>

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<!-- link2 "ITEM 3. KEY INFORMATION" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KEY
INFORMATION</FONT></B>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selected
Financial Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables present selected
consolidated financial data of Iusacell Celular and its
consolidated subsidiaries. We have derived this data from the
audited consolidated financial statements of Iusacell Celular as
of December&nbsp;31, 2001, 2000, 1999, 1998 and 1997 and for
each of the five years in the period then ended, including the
audited consolidated financial statements of Iusacell Celular as
of December&nbsp;31, 2001 and 2000 and for each of the three
years in the period ended December&nbsp;31, 2001, which we refer
to as the Consolidated Financial Statements, appearing elsewhere
in this Annual Report, and you should read this information in
conjunction with the Consolidated Financial Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Consolidated Financial Statements have been
prepared in accordance with Mexican generally accepted
accounting principles, which we refer to as Mexican GAAP, which
differs in certain significant respects from United States
generally accepted accounting principles, which we refer to as
U.S. GAAP. Pursuant to Mexican GAAP, we have prepared the
Consolidated Financial Statements and the selected financial
data presented below in accordance with Bulletin B-10 of the
Mexican Institute of Public Accountants (&#147;MIPA&#148;),
which provides for the recognition of certain effects of
inflation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Until December&nbsp;31, 1996, Bulletin&nbsp;B-10
required Iusacell Celular to restate non-monetary assets at
current replacement cost, and to restate non-monetary
liabilities using the National Consumer Price Index (<I>Indice
Nacional de Precios al Consumidor</I>), also referred to as the
INPC. Beginning on January&nbsp;1, 1997 and throughout the
periods presented in this Annual Report, Bulletin&nbsp;B-10 has
required Iusacell Celular to restate non-monetary assets (other
than inventory) using the INPC. Throughout the periods presented
in this Annual Report, Bulletin&nbsp;B-10 has also required
Iusacell Celular to restate the components of shareholders&#146;
equity using the INPC and to record gains or losses in
purchasing power from holding monetary liabilities or assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Bulletin B-10 requires restatement
of all financial statements to constant pesos as of the date of
the most recent balance sheet presented. Accordingly, we have
restated all data in the Consolidated Financial Statements and
in the selected financial data set forth below in constant pesos
with purchasing power as of December&nbsp;31, 2001. We have not
reversed the effect of these inflation accounting principles in
the reconciliation of Iusacell Celular&#146;s net profit
(loss)&nbsp;and stockholders&#146; equity to U.S. GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Note 23 to the Consolidated Financial Statements
presents the principal differences, other than inflation
accounting, between Mexican GAAP and U.S. GAAP applicable to us
and contains a reconciliation of Iusacell Celular&#146;s net
profit (loss)&nbsp;and stockholders&#146; equity to U.S. GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The U.S. dollar amounts provided in the selected
consolidated financial data below are translations from the
corresponding peso amounts, solely for the convenience of the
reader, at the Noon Buying Rate at December&nbsp;31, 2001, which
was Ps.9.156 per U.S.$1.00. You should not construe these
translations as representations that the peso amounts actually
represent such U.S. dollar amounts or could be converted into
U.S. dollars at the rate indicated as of any dates mentioned in
this Annual Report or at all.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">As of and for the Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Thousands of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S.&nbsp;dollars, except</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Thousands of constant pesos as of December 31, 2001,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">per share and</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">except per share and operating data)(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">operating data)(2)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="1">Income Statement Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="1">Mexican GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Services
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,338,563</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,129,223</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,285,910</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,200,997</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,681,689</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">620,543</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Telephone equipment sales and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">480,939</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">479,512</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">497,061</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">528,713</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">607,131</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">66,310</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,819,502</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,608,735</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,782,971</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,729,710</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,288,820</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">686,853</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cost of sales:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cost of services
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">779,275</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">979,220</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,221,938</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,464,120</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,476,595</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">161,271</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cost of telephone equipment sales and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">305,285</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">256,570</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">306,557</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">355,996</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">378,093</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">41,295</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,084,560</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,235,790</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,528,495</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,820,116</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,854,688</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">202,566</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,734,942</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,372,945</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,254,476</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,909,594</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,434,132</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">484,287</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,127,168</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,377,041</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,643,189</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,917,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,220,260</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">242,492</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">881,889</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,015,655</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,620,273</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,380,960</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,568,688</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">280,547</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">450 Project write-down
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,254,028</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Other Operating Income
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">307,886</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">33,627</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Operating (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(274,115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,273,779</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(8,986</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(388,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(46,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,125</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Other income (expense), net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">169,547</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(26,225</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Integral financing cost (gain):
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">376,139</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">285,378</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">305,669</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">509,789</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">385,896</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">42,147</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Foreign exchange loss (gain), net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">73,445</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,068,692</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(210,259</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,566</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(95,792</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(10,462</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">(Gain) on net monetary position
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(443,613</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(867,468</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(752,067</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(374,382</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(165,028</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(18,024</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,971</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">486,602</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(656,657</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">154,973</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">125,076</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,661</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Equity participation in net income (loss) of
    associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">238,971</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">31,763</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(54,160</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,478</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,518</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">712</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Provision for equipment impairment(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,406,352</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">(Loss) income before asset tax, income tax,
    minority interest, extraordinary item and discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,447,467</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,559,071</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">567,286</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(541,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(165,488</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(18,074</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Provision for:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Asset tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">68,705</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">82,048</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">150,889</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">156,335</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">146,404</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,990</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">461,707</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">68,705</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">82,048</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">612,596</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">156,335</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">146,404</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,990</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">(Loss) from continuing operations before minority
    interest, extraordinary item and discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,516,172</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,641,119</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(45,310</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(697,746</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(311,892</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(34,064</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">314</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,214</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">20,400</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,461</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">20,694</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,260</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">(Loss) from continuing operations before
    extraordinary item and discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,515,858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,633,905</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(24,910</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(681,285</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(291,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(31,804</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Extraordinary item(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">461,707</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cumulative effect of the adoption of the new
    accounting pronouncement
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,478</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">708</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Loss (gain) from discontinued operations(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(23,565</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,748</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,865</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Net (loss) profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,515,858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,657,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">435,049</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(32,512</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="1">U.S. GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,950,592</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,631,765</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,782,971</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,729,710</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,151,423</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">671,846</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Operating (loss) profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,879,991</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,077,832</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(95,350</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(380,050</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(422,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(46,107</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Net (loss) income
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,029,047</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,646,622</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">326,867</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(574,815</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(62,780</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">As of and for the Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Thousands of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S.&nbsp;dollars, except</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Thousands of constant pesos as of December 31, 2001,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">per share and</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">except per share and operating data)(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">operating data)(2)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">Mexican GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Working capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(394,759</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,535,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(598,344</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,396,638</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(282,797</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30,887</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,568,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,781,945</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,702,422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,256,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,860,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">967,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,116,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,685,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,034,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,811,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,192,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,550,090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,366,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,690,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,223,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,315,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,921,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">428,252</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,673,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,031,253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,870,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,870,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,870,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,405,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,043,988</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,684,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,938,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,817,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,512,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">929,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">U.S. GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Working capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(636,312</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,725,717</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(830,193</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,668,772</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(482,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(52,704</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,568,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,568,881</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,489,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,043,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,622,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">941,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,121,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,194,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,531,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,294,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,790,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,615,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,366,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,703,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,223,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,315,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,921,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">428,252</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,540</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,037</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(28,125</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,989,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,687,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,884,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,520,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,654,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">836,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Other Financial Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">Mexican GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">995,904</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,611,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,992,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,521,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275,421</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA margin(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures(8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,071,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,135,522</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,946,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,023,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,648,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">180,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">376,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285,378</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">509,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">385,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,147</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of earnings to fixed charges(9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">2.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">U.S. GAAP:(6)</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(998,103</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,198,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,532,764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,123,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">231,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash Flow Data:(10)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">Mexican GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net resources (used) provided by operating
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(341,860</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">870,685</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,290,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,797,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,236,104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">244,223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net resources used in investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,750,251</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,404,047</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,786,422</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,297,071</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,908,315</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(317,640</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net resources provided by financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,110,769</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,681,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,372,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">499,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">U.S. GAAP:</FONT></I></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,178,802</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,215,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,536,838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,540,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (used in) provided by investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,550,729</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,190,986</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,707,900</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,101,378</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,554,911</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(279,042</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,450,190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,160,216</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">408,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">678,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">869,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Covered POPs(11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,847,614</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,712,645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,591,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,376,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78,585,938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Subscribers(12)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Postpaid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">199,964</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">352,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">442,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">403,988</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepay
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">478,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">970,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,238,625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,450,709</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total subscribers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">755,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,322,798</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,681,219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,854,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross subscriber additions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">406,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">747,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">788,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,092,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,050,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average subscribers(13)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">387,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">742,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,290,558</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,637,481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,721,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average monthly postpaid churn(14)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.94%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">2.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">2.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">3.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">3.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Penetration(15)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.61%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">1.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">1.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">2.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">2.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average monthly MOUs per subscriber(16)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nominal average monthly mobile wireless revenue
    per subscriber(179)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nominal cost to acquire a new subscriber(18)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,677</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">4
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In accordance with Mexican GAAP, financial data
    for all periods covered by the Consolidated Financial Statements
    as well as the other financial data presented in this Annual
    Report, unless otherwise indicated, has been restated in
    constant pesos with purchasing power as of December&nbsp;31,
    2001. Restatement of peso amounts is made by multiplying the
    relevant nominal peso amount for the relevant period by the
    inflation index for the period from the end of the period to
    which such nominal peso amount relates through December&nbsp;31,
    2001. The inflation indices used in this Annual Report are
    1.5155 for 1997, 1.2777 for 1998, 1.1376 for 1999 and 1.0440 for
    2000.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Peso amounts were converted to U.S. dollars at
    the Noon Buying Rate for December&nbsp;31, 2001, which was
    Ps.9.156 per U.S.$1.00. Such conversions should not be construed
    as representations that the peso amounts actually represent such
    U.S. dollar amounts or could be converted into U.S. dollars at
    the rate indicated, or at all.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">In determining the peso amounts of our U.S.
    dollar-denominated obligations at December&nbsp;31, 2001 in the
    Consolidated Financial Statements, under Mexican GAAP, however,
    we applied the exchange rate published by <I>Banco de
    M&#233;xico</I> (the Mexican Central Bank) on December&nbsp;31,
    2001 which was Ps.9.1695 per U.S.$1.00. The difference between
    the Noon Buying Rate and the <I>Banco de M&#233;xico</I>
    exchange rate causes certain inconsistencies between references
    to U.S. dollar amounts in this Annual Report and the actual
    outstanding U.S. dollar amounts of our U.S. dollar-denominated
    obligations. For example, our actual total debt outstanding,
    excluding trade notes payable, at December&nbsp;31, 2001 was
    U.S.$436.7&nbsp;million. In preparing the Consolidated Financial
    Statements, we multiplied this dollar amount by Ps.9.1695; (the
    <I>Banco de M&#233;xico</I> exchange rate at December&nbsp;31,
    2001) to arrive at Ps.4,004.6&nbsp;million of total debt,
    excluding trade notes payable. For purposes of this Annual
    Report, we have converted this peso amount to U.S. dollars for
    the convenience of the reader by dividing it by Ps.9.156 (the
    Noon Buying Rate at December&nbsp;31, 2001) to arrive at
    U.S.$437.4&nbsp;million of total debt, excluding trade notes
    payable.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">As a result of the combined effect of the
    restatement of the financial data in constant pesos with
    purchasing power as of December&nbsp;31, 2001 and the
    convenience translation of peso amounts into U.S.&nbsp;dollars,
    the amounts shown for certain balance sheet items are not equal
    to the actual amounts outstanding.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For U.S. GAAP purposes, the impairment charge
    relating to the analog communications equipment is recorded as
    an operating expense.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For 1999, the extraordinary item represents the
    utilization of tax loss carryforwards available to us which,
    under Mexican GAAP, is required to be classified as an
    extraordinary item. Under U.S. GAAP, the utilization of tax loss
    carryforwards is recorded as a component of tax expense.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In December 1998, we discontinued the operations
    of our subsidiary Cellular Solutions de M&#233;xico, S.A. de
    C.V., which sold cellular handset accessories. This company
    transferred all its existing inventories as of December&nbsp;31,
    1998 to another of our subsidiaries and terminated all its
    employees during January and February 1999. See Note 19 to the
    Consolidated Financial Statements. Under U.S. GAAP, the closing
    of this subsidiary does not constitute a discontinued operation
    under APB No.&nbsp;30. Accordingly, the gain (loss) from
    discontinued operations is recorded as operating income
    (expense).(6) See Note&nbsp;23 to the Consolidated Financial
    Statements.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA as used in this Annual Report is operating
    (loss) plus the sum of depreciation and amortization and, in
    1997 under U.S. GAAP the 450 project non-cash write down and is
    presented because we believe that EBITDA provides useful
    information regarding our debt service ability. EBITDA should
    not be considered in isolation or as a substitute for our
    consolidated income statements or the consolidated statements of
    changes in financial position prepared in accordance with
    Mexican GAAP or as a measure of profitability or liquidity.
    EBITDA as presented in this Annual Report (under both Mexican
    GAAP and U.S. GAAP) differs from EBITDA as defined in the
    instruments governing Iusacell and Iusacell Celular&#146;s
    senior notes and Iusacell Celular&#146;s senior refinancing
    secured loan (as described herein). In particular, EBITDA in
    this Annual Report has not been reduced to reflect the
    additional expenses that Iusacell Celular would have incurred
    had it expensed the cost of cellular
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">5
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">telephones it gives to its postpaid customers
    rather than amortized such cost over 12&nbsp;months, in
    accordance with its current practice under Mexican GAAP, as
    permitted under U.S. GAAP. EBITDA is not (i)&nbsp;a measure
    determined under U.S. GAAP, (ii)&nbsp;an alternative to U.S.
    GAAP operating income (loss) or net income (loss), or
    (iii)&nbsp;a measure of liquidity or cash flows as determined
    under U.S.&nbsp;GAAP. EBITDA does not represent discretionary
    funds. EBITDA, as calculated by us, may not be comparable to
    similarly titled measures reported by other companies.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA margin is calculated by dividing EBITDA by
    the total revenues for the respective period.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(8)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Capital expenditures include fixed asset
    purchases, capitalized labor costs, the capitalization of
    interest costs related to long-term debt incurred in connection
    with the acquisition of property, plant and equipment, trade-in
    credits received from Lucent Technologies for exchanging our
    previous analog network for a digital and analog network
    supplied by Lucent Technologies and, in some cases, the net
    value of long distance fiber acquired in swaps for Iusacell
    Celular long distance fiber. In 1999 and 2000, pursuant to a
    waiver from its bank lenders, and beginning in 2001, pursuant to
    the terms of its senior refinancing secured loan, Iusacell
    Celular excluded capitalized interest cost from capital
    expenditures in determining its compliance with capital
    expenditure limitations set forth in its debt covenants. For
    1998 and 1999, pursuant to waivers from its lenders, Iusacell
    Celular excluded Lucent trade-in credits from capital
    expenditures in determining its compliance with the capital
    expenditures limitations set forth in its debt covenants.
    Beginning in 2001, pursuant to the terms of Iusacell
    Celular&#146;s senior refinancing secured loan, all Lucent
    trade-in credits have been excluded from capital expenditures in
    determining compliance with such debt covenants. See
    Item&nbsp;5, &#147;Operating and Financial Review and
    Prospects&nbsp;&#151; Liquidity and Capital
    Resources&nbsp;&#151; Capital Expenditures.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(9)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The ratio of earnings to fixed charges covers
    continuing operations. For this purpose, earnings are calculated
    as income or loss before taxes plus (i)&nbsp;integral financing
    cost, including amortization of capitalized interest,
    (ii)&nbsp;the interest portion of annual rent expense and
    (iii)&nbsp;losses from less than 50%-owned affiliates. Fixed
    charges include the expensed and capitalized portions of
    integral financing cost. Earnings were inadequate to cover fixed
    charges in 1997, 1998, 2000 and 2001. The fixed charge coverage
    deficiency for the years ended December&nbsp;31, 1997, 1998,
    2000 and 2001 amounted to Ps.1,517.8&nbsp;million
    (U.S.$165.8&nbsp;million), Ps.2,588.5&nbsp;million
    (U.S.$288.7&nbsp;million), Ps.463.9&nbsp;million
    (U.S.$50.7&nbsp;million) and Ps.77.3&nbsp;million (U.S.$8.4),
    respectively.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(10)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Under Mexican GAAP, the cash flow data represents
    changes in financial position and has been adjusted for
    inflation and includes certain non-cash items, such as monetary
    gains and losses and foreign exchange gains and losses and, as a
    result, is not comparable with the respective U.S. GAAP cash
    flow data. Under U.S. GAAP, the effect of inflation adjustments
    has been included in the separate line item &#147;Gain on net
    monetary position and foreign exchange losses&#148; in Note 23
    to the Consolidated Financial Statements.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(11)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Covered POPs is the aggregate number of POPs in
    the geographic regions in which we provide mobile wireless
    services for whom our mobile wireless signal is accessible and
    whom we therefore have the potential to serve. POPs means points
    of presence, or population, for a given area based on census
    data published by Mexico&#146;s National Institute of
    Statistics, Geography and Information Processing (<I>Instituto
    Nacional de Estad&#237;stica, Geograf&#237;a e
    Inform&#225;tica</I>).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(12)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Unless otherwise indicated, subscribers refer to
    the total number of mobile wireless customers included in our
    subscriber base in the geographic regions we cover at the end of
    the respective periods. A prepay customer is included as a
    subscriber if, at the end of the period, such customer&#146;s
    telephone number has not yet been deactivated. See Item&nbsp;4,
    &#147;Information on the Company&nbsp;&#151; Business
    Overview&nbsp;&#151; Cellular Services&nbsp;&#151; Prepay
    Customers.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(13)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Average subscribers represents the rolling
    monthly average number of subscribers for the respective periods.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(14)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Effective January&nbsp;1, 1998, we changed the
    methodology by which we determine average monthly postpaid
    churn. Average monthly postpaid churn for a given period is now
    calculated by dividing the sum of all postpaid subscribers
    disconnected during such period by the sum of the
    beginning-of-month postpaid subscribers for each of the months
    in such period, expressed as a percentage. Average monthly
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">postpaid churn for 1997, which was 2.88% under
    the old methodology, has been restated under the new
    methodology. See Item&nbsp;4, &#147;Information on the
    Company&nbsp;&#151; Business Overview&nbsp;&#151; Cellular
    Services&nbsp;&#151; Postpaid Churn&#148; and Item&nbsp;5,
    &#147;Operating and Financial Review and Prospects&nbsp;&#151;
    Results of Operations.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(15)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Penetration represents the end-of-period
    subscribers divided by the end-of-period population in the
    geographic regions we cover, expressed as a percentage.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(16)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Effective January&nbsp;1, 1998, we changed the
    methodology by which we determine average monthly minutes of use
    (MOUs) per subscriber. Average monthly MOUs per subscriber for a
    given period are now calculated by dividing total MOUs for the
    period by the sum of the monthly average number of subscribers
    for each of the months in such period. Average monthly MOUs per
    subscriber for 1997, which was 98 under the old methodology, has
    been restated under this methodology. Effective January&nbsp;1,
    2000, we again changed the methodology by which we determine
    average monthly MOUs in order to conform to standards applied by
    other Verizon international affiliates. Under the current
    methodology, average monthly MOUs now include minutes of use
    from incoming calls to postpaid customers, which had previously
    been excluded. Both the previous and the current methodologies
    include minutes of use from incoming calls to prepay customers.
    Average monthly MOUs for 1999, which were 77 under the
    methodology effective in 1998 and 1999, have been restated under
    the current methodology. See Item&nbsp;5, &#147;Operating and
    Financial Review and Current Prospects&nbsp;&#151; Results of
    Operations.&#148; When reporting average monthly MOUs per
    subscriber, we exclude &#147;incoming calls only&#148; prepay
    subscribers and the MOUs they generate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(17)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Effective January&nbsp;1, 1998, we changed the
    methodology by which we determine nominal average monthly mobile
    wireless revenue per subscriber (ARPU). ARPU for a given period
    is now calculated by dividing the sum of the monthly revenue and
    other cellular revenues for each of the months in the period by
    the sum of the monthly average mobile wireless subscribers for
    each of the months in such period. ARPU for 1997, which was
    Ps.451 under the old methodology, has been restated under this
    new methodology. Effective January&nbsp;1, 2000, we again
    changed the methodology by which we determine ARPU in order to
    conform to standards applied by other Verizon international
    affiliates. Under the current methodology, ARPU now excludes
    revenues generated from the sale of handsets and accessories to
    postpaid customers. Both the previous and the current
    methodologies exclude revenues generated from the sale of
    handsets and accessories to prepay customers. ARPU for 1999,
    which was Ps.346 under the methodology effective in 1998 and
    1999, has been restated under the current methodology. See
    Item&nbsp;5, &#147;Operating and Financial Review and
    Prospects&nbsp;&#151; Results of Operations.&#148; When
    reporting ARPU, we exclude &#147;incoming calls only&#148;
    prepay subscribers and the revenue they generate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(18)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Through December&nbsp;31, 1999, nominal cost to
    acquire a new subscriber represented sales, marketing and
    advertising costs associated with postpaid plans, plus the costs
    of cellular phones we gave to postpaid customers, for the
    respective period (in nominal pesos) divided by the gross
    postpaid customer additions for such period. Effective
    January&nbsp;1, 2000, we changed the methodology by which we
    determine nominal cost to acquire a new subscriber in order to
    conform to standards used by other Verizon international
    affiliates and more accurately reflect postpaid customer
    acquisition costs. The new methodology includes only handset
    subsidies and sales commissions and excludes allocations of
    advertising and overhead costs. Nominal cost to acquire a new
    subscriber for 1999, which was Ps.3,527 under the old
    methodology, has been restated under the new methodology.
    Nominal cost to acquire a new subscriber for 1997 and 1998 have
    not been restated under the new methodology.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Exchange Rates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth, for the periods
indicated, the period-end, average, high and low Noon Buying
Rates expressed in nominal pesos per U.S. dollar. The Noon
Buying Rate on June&nbsp;20, 2002 was Ps.9.785 per U.S.$1.00.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Noon Buying Rate(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period End</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 1997
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.070</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 1998
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.901</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.087</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.972</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="17"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Month ended December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Month ended January&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Month ended February&nbsp;28, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Month ended March&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.064</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Month ended April&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.3750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Month ended May&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.653</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Source:</FONT></I><FONT size="2"> Federal
    Reserve Bank of New York
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Average of month-end rates for annual data.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalization
and Indebtedness</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reasons for
the Offer and Use of Proceeds</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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<P align="left">
<B><FONT size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk
Factors</FONT></B>

<P align="left">
<B><FONT size="2">Risk Factors Relating to Iusacell
Celular</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are a holding company and depend on our subsidiaries to pay our
liabilities.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a holding company with no significant
assets other than the stock of our subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to pay our obligations, we rely on
income from dividends and other cash flow from our subsidiaries.
Because we are a holding company, the claims of all holders of
our subsidiaries&#146; debt rank senior to our obligations. At
December&nbsp;31, 2001, our consolidated indebtedness was
U.S.$441.7&nbsp;million, including trade notes payable, of which
U.S.$416.2&nbsp;million was secured indebtedness. For a
description of some of our obligations and liabilities, see
Item&nbsp;5, &#147;Operating and Financial Review and
Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Liquidity.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to pay our obligations will depend on
our ability to generate sufficient cash flow and/or to access
equity or debt financing. We cannot assure you that we will be
able to raise equity or debt or that our subsidiaries will
generate sufficient cash flow to pay dividends to enable us to
pay our obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, the ability of our subsidiaries to
pay dividends is subject to Mexican legal requirements, which in
general terms provide that a Mexican corporation may declare and
pay dividends only out of the profits reflected in its year-end
financial statements, if such payment is approved by its
stockholders and after the creation of required legal reserves
and the absorption or satisfaction of losses suffered in
previous fiscal years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, in the event we engage in business
activities at the holding company level and incur associated
liabilities, or otherwise incur liabilities at the holding
company level, we may not have the resources available to
satisfy those liabilities for the reasons discussed above. In
the event that we incur such liabilities, we could be required
to turn to the capital markets or to our principal shareholders
to help us satisfy those liabilities. At that time, we may not
have access to equity or debt financing. In addition, our
principal shareholders are under no obligation to provide
financial resources to us, and there can be no assurance that
they would do so. A material unsatisfied liability at the
holding company level could lead us to bankruptcy or
reorganization or otherwise make it difficult or impossible for
us to comply with our obligations.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I> We may be
unable to service our debt, access credit or pursue business
opportunities because we and our subsidiaries are highly
leveraged and have insufficient cash flow.</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, our cash generated from operating
activities has not been sufficient to meet our debt service,
working capital and capital expenditure requirements. We have
relied on the capital markets for new equity and debt financing,
vendor financing, borrowings and equity contributions from our
principal shareholders to meet such funding needs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, our total
consolidated indebtedness, including trade notes payable, was
Ps.4,044.6&nbsp;million (U.S.$441.7&nbsp;million), or
approximately 32.2% of our total capitalization.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the years ended December&nbsp;31, 2000 and
December&nbsp;31, 2001, our earnings were insufficient to cover
our fixed charges by Ps.463.9&nbsp;million (U.S.$50.7 million)
and Ps.77.3&nbsp;million (U.S.$8.4), respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The degree to which we are leveraged and the
covenants with which we must comply under our various financing
agreements may adversely affect our ability to finance future
operations, to finance necessary capital expenditures, to
service our indebtedness, to compete effectively against better
capitalized competitors and to withstand downturns in our
business or the Mexican economy generally. Our high level of
indebtedness could limit our ability to pursue business
opportunities that may be in our interest and that of holders of
our securities.
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>We are
subject to restrictive covenants.</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of our debt impose significant
operating and financial restrictions. These restrictions will
affect, and in many respects significantly limit or prohibit,
our ability and the ability of our subsidiaries to, among other
things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">borrow money;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">pay dividends on stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make capital expenditures and other investments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">use assets as security in other transactions; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">sell certain assets or merge with or into other
    companies.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we do not comply with these restrictions, we
could be in default even if we can currently pay our debt. In
addition, under our senior refinancing secured loan, we are
required to remain in compliance with certain financial ratios,
and the failure to do so could result in a default under the
facility. In the event of a default under any of our debt which
remains uncured after any applicable grace period, holders of
the relevant debt could demand immediate payment of the
aggregate amount of that debt. Furthermore, this could trigger a
default under certain of our other debt agreements which may
entitle the holders of such debt to accelerate that debt as
well. We may not be able to make such payments. This could lead
to a <I>concurso mercantil</I>, a two-stage procedure under
Mexican law commencing with negotiations with our creditors and,
if such negotiations fail to reach an agreement, we would be
declared bankrupt.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">We may lose money because of devaluation or
    fluctuation of the peso relative to the
    U.S.&nbsp;dollar.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While our sales are almost entirely denominated
in pesos, the vast majority of our obligations, and all of our
long-term debt, are denominated in U.S.&nbsp;dollars. As a
result, except for those obligations for which we have hedging
arrangements in place, we are exposed to the risk of devaluation
of the peso relative to the U.S.&nbsp;dollar. The peso
appreciated by 4.8% relative to the U.S.&nbsp;dollar during
2001, remained almost flat during 2000 and appreciated 4.3%
against the U.S.&nbsp;dollar in 1999. However, in the past, the
peso has depreciated substantially against the U.S.&nbsp;dollar
and may depreciate significantly in the future. For example, in
1998, the value of the peso depreciated 22.7% relative to the
U.S.&nbsp;dollar.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Declines in the value of the peso relative to the
U.S.&nbsp;dollar could adversely affect our ability to meet
U.S.&nbsp;dollar-denominated obligations, including those under
our debt securities. In addition, any devaluation of the peso
may negatively affect the value of the securities of a Mexican
company with sales in pesos and debt denominated in
U.S.&nbsp;dollars, such as our company.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face
increasing competition which may reduce our operating
margins.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We face significant competition in our core
cellular services business from Radiom&#243;vil Dipsa, S.A. de
C.V., commonly known as Telcel, in each region in which we
operate. As a subsidiary of Am&#233;rica M&#243;vil S.A. de
C.V., a company spun off from Tel&#233;fonos de M&#233;xico,
S.A. de C.V., the former state telephone monopoly known as
Telmex, Telcel has significantly greater internal financial and
other resources than those available to us, nationwide cellular
and personal communications services (PCS)&nbsp;concessions, a
nationwide cellular network and the ability to use Telmex&#146;s
installed telecommunications systems. Competition in the Mexican
wireless industry is substantial and we, like Telcel, bear
significant promotional expenses, including the cost of
providing cellular telephones to postpaid subscribers free of
charge or at a substantial discount. In addition, competition
from Telcel has not always allowed us to implement price
increases to keep pace with inflation and has occasionally
caused us to implement price rollbacks and reductions. We also
face competition from Pegaso Comunicaciones y Sistemas, S.A. de
C.V., which we refer to as Pegaso, a consortium which includes
Leap Communications International, Inc. (&#147;Leap&#148;),
Sprint PCS and a group of Mexican investors, and from Servicios
Profesionales de Comunicaci&#243;n, S.A. de C.V., which we refer
to as Unef&#243;n, an affiliate of TV Azteca, S.A. de C.V. and
Elektra, S.A. de C.V. Telef&#243;nica M&#243;viles, S.A.
(&#147;Telef&#243;nica&#148;), a Spanish telecommunications
service provider, recently announced that it entered into an
agreement to acquire a 65%
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV align="left">
<FONT size="2">stake in Pegaso, including the interests held by
Leap and Sprint PCS. Both these service providers own
concessions in all nine wireless service regions in Mexico and
have begun to provide service in Mexico&#146;s principal cities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also face increasing competition from Nextel
de M&#233;xico, S.A. de C.V., a provider of enhanced specialized
mobile radio services and satellite telephony.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we face increasing competition in
providing long distance, paging, wireless local telephony and
data transmission services. The Mexican government may grant
additional concessions to other companies to provide services
similar to or the same as those that we provide.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Besides Telcel and Telef&#243;nica, some other
competitors may also have greater financial and other resources,
which may limit our ability to compete effectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we do not obtain significant capital
    from outside sources, we will have to defer the building of our
    wireless infrastructure and our pursuit of long distance and
    data opportunities and may lose the opportunity to generate
    revenues.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to implement our operating strategy
through 2004, we will have to incur significant capital
expenditures. We expect our aggregate capital expenditures for
2002, 2003 and 2004, not including capitalized interest, to
total approximately U.S.$505.0&nbsp;million. We anticipate that
approximately U.S.$20.0&nbsp;million of such capital
expenditures will be invested during 2002, to increase the
quality and coverage of our cellular network in Region 8 in
southern Mexico. We expect capital expenditures to increase the
quality and coverage of our cellular network in southern Mexico
not to exceed U.S.$30.0&nbsp;million in the aggregate in 2002
and 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As we make additional investments in our cellular
network and pursue long distance and data opportunities, we will
also need additional external funding in 2003 and beyond. The
terms of our concessions may, in the future, require us to make
other significant network investments for which additional funds
would be required. Furthermore, the investments required to keep
pace with technological change, such as third-generation
wireless telecommunication equipment, will require additional
capital resources. We cannot assure you that we will be able to
obtain such additional funds, including funds from either of our
principal shareholders, the capital markets or bank or vendor
financing, on acceptable terms or at all.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Factors over which we have limited or no
    control could impair our ability to implement new services and
    maintain our existing services and, as a result, we may lose
    business to our competitors.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to extend the implementation of our
wireless cellular services and to expand our long distance and
data services in accordance with our strategic plan will depend
on a number of factors over which we have limited or no control.
These factors include, among others, our ability to acquire or
renew concessions for spectrum at commercially acceptable
prices, raise sufficient capital, obtain required governmental
approvals, negotiate reasonable interconnection agreements,
obtain rights of way for fiber optic cables, successfully deploy
technologies, secure leases and permits for cell sites, hire and
retain additional qualified personnel and develop an adequate
customer base. Any of these factors could delay, impede or
reduce the scope of the implementation of new services and have
a material adverse effect on our existing business, financial
condition and results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The technology we use may be made obsolete
    by the technology used by our competitors.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All companies in the global telecommunications
industry must adapt to rapid and significant changes in
technology. The technology that we have selected in our wireless
business may be challenged by competition from new or improved
digital technologies supporting wireless service or other
services in the near future. Technological changes may adversely
affect our competitive position, require substantial new capital
expenditures and/or require write-downs of obsolete technology.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not have enough management resources
    to be able to expand our business in accordance with our
    plans.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We plan to continue to access additional
opportunities in the wireless business in Mexico. In February
2002, we completed the acquisition of a 100% ownership interest
in Grupo Portatel, S.A. de C.V. and its subsidiaries, which we
refer to collectively as Portatel. Portatel holds the Cellular
A-Band concession and provides cellular services in
Region&nbsp;8 in southern Mexico. We will have to devote
substantial management resources to take advantage of these new
opportunities and business ventures. In so doing, we will have
to attract and retain qualified management personnel to keep
pace with our rate of growth. If we are unable to attract and
retain qualified management personnel, our existing business,
financial condition and results of operations could be harmed.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our strategy to expand our wireless
    footprint in Mexico leads us to consider significant
    acquisitions from time to time that may adversely affect our
    business, financial condition and results of
    operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">One of our business strategies is to provide our
customers with access to reliable and high-quality wireless
service throughout Mexico. Providing access in regions where we
do not own concessions through roaming agreements with other
operators does not afford us optimal control over the coverage,
quality and pricing of our service. As a result, from time to
time we explore possibilities of expanding our wireless
footprint in Mexico. For example, we recently acquired Portatel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we believe that transactions such as
acquisitions or joint ventures would significantly strengthen
our competitive position, at the same time they pose a number of
risks and uncertainties for us and for the holders of our
securities. These risks include the possibility that such
acquisitions or joint ventures could involve (i)&nbsp;additional
debt or other liabilities, or the acquisition of operational,
financial, legal, labor or other liabilities, risks or financial
needs, which we may not discover until after the acquisition or
joint venture has been consummated and (ii)&nbsp;an increase in
our capital expenditure requirements. Any of these risks could
result in a material adverse change in our financial condition
and/or ability to service debt. In addition, any acquisition
made with our shares could be dilutive to our shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because we cannot foresee all of the risks that
one or more of these acquisitions might involve, should they
occur, it is not possible for us to describe all these risks. As
a result, holders of our securities must be prepared to accept
any deterioration in our prospects, business, financial
condition, results of operations or cash flow stemming from one
or more of these acquisitions.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Cellular fraud increases our
    expenses.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fraudulent use of cellular telecommunications
networks imposes a significant cost upon cellular service
providers who must bear the cost of services provided to
fraudulent users. We suffer losses of revenue as a result of
fraudulent use and also incur cash costs due to our obligation
to reimburse carriers for the cost of services provided to some
fraudulent users. These cash costs approximated
Ps.39.5&nbsp;million (U.S.$4.3&nbsp;million) and
Ps.42.8&nbsp;million (U.S.$4.7&nbsp;million) in 2000 and 2001,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although technology has been developed to combat
the fraudulent use of telecommunications networks, this
technology does not eliminate fraudulent use entirely. We must
make expenditures periodically to acquire and use anti-fraud
technology. In 1998, we spent Ps.39.9&nbsp;million
(U.S.$4.4&nbsp;million) to acquire anti-fraud technology and to
cover other costs related to fraud detection and prevention. In
1999, 2000 and 2001, we incurred minimal expenses for these
purposes. However, we cannot assure you that the anti-fraud
technology that we have purchased will continue to be effective
in detecting and preventing fraud. If our anti-fraud technology
becomes obsolete, we will need again to make expenditures to
acquire and use new anti-fraud technology.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">A significant portion of our accounts
    receivable is represented by a small number of
    distributors.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, our three largest distributors accounted
for 44% and 24% of our net trade accounts receivable as of
December&nbsp;31, 2001 and 2000, respectively. We have
established certain measures to reduce the risk
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV align="left">
<FONT size="2">associated with this concentration such as
certain guarantees and liens. Although we believe that this
distributor concentration will be reduced over time as the size
of our operations grow, our results of operations could be
negatively affected, at least in the short-term, if any payment
defaults occur with respect to these distributors.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Risk Factors Relating to Our
Shareholders</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD>
    <B><I><FONT size="2">If Verizon sold all or a substantial part
    of its interest in us, that sale could result in Verizon no
    longer managing our operations, in which case we would have to
    make an offer to repurchase a substantial majority of our debt
    securities.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Verizon currently has the right and power to
elect a majority of the members of our Board of Directors and,
with certain exceptions, unilaterally determine our policies and
strategy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If Verizon were to sell all or a substantial part
of its indirect interest in Iusacell Celular, the sale would
cause Verizon to lose its ability to manage us. Verizon would
then no longer be in a position to determine our policies and
strategies, manage our operations or provide the technical and
financial support that we have historically relied on. It is not
possible for us to describe the strategy that Iusacell Celular
would implement following any such management change.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, any substantial sale by Verizon
would constitute a change of control under Iusacell Celular debt
instruments relating to up to approximately
U.S.$441.7&nbsp;million of indebtedness. In the event of any
such change of control, Iusacell Celular would have to make an
offer to repurchase that indebtedness. We cannot assure you that
Iusacell Celular would have sufficient funds or have the ability
to obtain sufficient funds on a timely basis to pay for any or
all of the indebtedness that we may have to repurchase if that
happened.
</FONT>

<DIV>&nbsp;</DIV>

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    <TD>
    <B><I><FONT size="2">We rely on Verizon and Vodafone personnel;
    if either Verizon or Vodafone recalled them, we would have fewer
    qualified employees.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our President and Director General, Chief
Financial Officer, Vice President, Technical Operations, Vice
President, Sales, and Vice President, Long Distance and Data,
are employees of Verizon, and our Senior Vice President,
Marketing, is an employee of Vodafone Group Plc, which we refer
to as Vodafone. The services of each such employee are provided
to us on a secondment basis. We also use the services of a
number of Verizon and Vodafone employees on a consulting basis,
primarily in the areas of network operations, information
systems, strategic planning, marketing and customer care
operations. So long as Verizon controls Iusacell (and indirectly
Iusacell Celular) and Vodafone holds a significant equity
interest in Iusacell (and indirectly Iusacell Celular), we
expect these or other seconded employees and consultants to
continue to provide services to us. If Verizon and Vodafone did
not make these employees available to us, our results of
operations and financial condition could be materially adversely
affected.
</FONT>

<P align="left">
<B><FONT size="2">Risk Factors Relating to Doing Business in
Mexico</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Mexican government may impose additional conditions on our
concessions or may take them away.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We provide our services pursuant to concessions
granted by the Mexican government. Our activities are subject to
significant government regulation and supervision. The
concessions may be subject to additional conditions or may not
be renewed when they expire. The Mexican government also
reserves the right to revoke, temporarily seize or expropriate
concessions or assets related to a concession for reasons, among
others, of public interest or order such as war, national
disaster or significant public disturbances. Moreover, the
Mexican government may grant additional concessions to potential
competitors to provide services similar to those that we
provide. Any of these developments or other government action
could harm the value of Iusacell Celular&#146;s concessions and
our financial condition and results of operations.
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
financial statements may not give you the same information as
financial statements prepared under U.S. generally accepted
accounting principles.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular prepares its financial
statements in accordance with Mexican GAAP. Mexican GAAP differs
in certain significant respects from U.S.&nbsp;GAAP, including,
but not limited to, the treatment of minority interest, purchase
accounting, deferred income taxes, capitalization of
pre-operating costs, derivative financial instruments, gains
from the exchange of non-monetary assets, the provisioning for
the consolidation of facilities and sale-leaseback transactions.
In particular, under Mexican GAAP companies must incorporate the
effects of inflation directly in their accounting records and in
published financial statements. The effects of inflation
accounting under Mexican GAAP are not eliminated in the
reconciliation to U.S.&nbsp;GAAP, as these inflation-adjusted
figures are considered a more meaningful presentation than
historical cost-based financial reporting for both Mexican and
U.S.&nbsp;accounting purposes. For this and other reasons, the
presentation of Mexican financial statements and reported
earnings may differ from that of companies in other countries.
See Note&nbsp;23 to our Consolidated Financial Statements.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Mexico experiences political and economic crises, we may lose
money.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a Mexican company, and all of our
operations are in Mexico. Accordingly, the political and
economic environment in Mexico has a significant impact on our
financial condition and results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican government has exercised, and
continues to exercise, significant influence over the Mexican
economy. Mexican governmental actions concerning the economy and
state-owned enterprises could have a significant impact on
Mexican private sector entities in general and on us in
particular, and on market conditions, prices and returns on
Mexican securities, including our securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2000, Mexico held national elections,
which were won by Vicente Fox Quezada, the candidate of the
National Action Party (<I>Partido Acci&#243;n Nacional</I>).
This represents the first time that a party other than the
Institutional Revolutionary Party (<I>Partido Revolucionario
Institucional</I>) has won the Presidency in more than
70&nbsp;years. In addition, no single party currently has a
majority in the National Congress. We cannot predict the impact
that this change in administration will have on the Mexican
economy in the years to come.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, Mexico has experienced economic
crises, caused by internal and external factors, characterized
by exchange rate instability, high inflation, high domestic
interest rates, economic contraction, a reduction of
international capital flows, a reduction of liquidity in the
banking sector and high unemployment. These economic conditions
substantially reduced the purchasing power of the Mexican
population and, as a result, the demand for telephony services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Crises such as these could harm our financial
condition and results of operations and the market value of our
securities.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Mexican government imposes exchange controls, we may not be
able to purchase imported goods or make dividend, principal and
interest payments in U.S.&nbsp;dollars.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, the Mexican economy has experienced
balance of payment deficits and shortages in foreign exchange
reserves. While the Mexican government does not currently
restrict the ability of Mexican or foreign persons or entities
to convert pesos to foreign currencies generally, and
U.S.&nbsp;dollars in particular, it has done so in the past and
could do so again in the future. We cannot assure you that the
Mexican government will not institute a restrictive exchange
control policy in the future. Any such restrictive exchange
control policy could prevent or restrict access to
U.S.&nbsp;dollars or other foreign currencies to purchase
imported goods and to meet our U.S.&nbsp;dollar obligations,
such as the payment of dividends or principal and interest under
any debt securities.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment
of judgments entered against us will be in pesos, which may
expose holders of our debt securities to exchange rate
risks.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a proceeding to enforce our obligations under
any debt securities is brought in Mexico, Mexican law permits us
to pay a resulting judgment in pesos. Under the Mexican Monetary
Law, an obligation payable in
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<FONT size="2">Mexico in a currency other than pesos may be
satisfied in pesos at the exchange rate in effect on the date
when payment is made.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Mexican court declares us to be in
<I>concurso mercantil</I>, our obligations under any debt
securities:
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">would be converted into pesos at the exchange
    rate prevailing at the time of the court&#146;s declaration of
    <I>concurso mercantil</I> and then to Unidades de Inversi&#243;n
    (UDI&#146;s) which are denominated in pesos and adjusted
    periodically for inflation by Banco de Mexico, and payment would
    occur at the time claims of the court-recognized creditors are
    satisfied subject to the priority established by law; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">would not be otherwise adjusted to take into
    account devaluation of the peso against the U.S. dollar
    occurring after the court&#146;s declaration.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
10% tax on telecommunications services approved by the Mexican
Congress may adversely affect the ability of wireless companies,
including us, to add new postpaid customers.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;1, 2002, the Mexican Congress
approved a surcharge that assesses an additional 10% federal
excise tax on certain wireless telecommunications services. In
February 2002, we filed an injunctive action <I>(amparo)</I>
challenging the Mexican government&#146;s implementation of the
tax. According to local media reports and government statements,
several other members of the industry have initiated similar
proceedings. The tax has resulted in a 10% increase in the
monthly bills of postpaid mobile wireless customers and in the
cost of prepay cards in denominations of Ps.200 or more.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;High
inflation rates in Mexico may decrease demand for our services
while increasing our costs.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In recent years, Mexico has experienced high
levels of inflation. The annual rate of inflation, as measured
by the Mexican National Consumer Price Index, was 12.3%, 9.0%,
4.4% and 1.4% in 1999, 2000, 2001 and the three-month period
ended March&nbsp;31, 2002, respectively. High inflation rates
can adversely affect our business and results of operations in
the following ways:
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Inflation can adversely affect consumer
    purchasing power, thereby adversely affecting consumer demand
    for our services and products; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To the extent inflation exceeds our price
    increases, our prices and revenues will be adversely affected in
    &#147;real&#148; terms.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

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    <TD></TD>
    <TD>
    <B><I><FONT size="2">High interest rates in Mexico could
    increase our financing costs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mexico has, and is expected to continue to have,
high real and nominal interest rates. The interest rates on
28-day Mexican government treasury securities averaged 21.4%,
15.2%, 11.3% and 7.4% for 1999, 2000, 2001 and the three-month
period ended March&nbsp;31, 2002, respectively. Accordingly, if
we need to incur peso-denominated debt in the future, it will
likely be at high interest rates.
</FONT>

<P align="left">
<B><FONT size="2">Other Risk Factors</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent
terrorist activities in the United States and their consequences
could adversely affect our operations</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the terrorist attacks in the
United States on September&nbsp;11, 2001, there was increased
short-term market volatility, and there may be long-term effects
on the U.S. and world economies and markets. Any future
terrorist attacks or the anticipation of any such actions may
have a further adverse impact on the U.S. and world economies
and thus on demand for our services
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<!-- link2 "ITEM 4. INFORMATION ON THE COMPANY" -->
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<TR valign="top">
    <TD><B><FONT size="2">ITEM&nbsp;4.</FONT></B></TD>
    <TD>
    <B><FONT size="2">INFORMATION ON THE COMPANY</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;History and
Development of the Company</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Grupo Iusacell Celular, S.A. de C.V., which was
known as Grupo Iusacell, S.A. de C.V. until February&nbsp;29,
2000, is a <I>sociedad an&#243;nima de capital variable</I> with
indefinite life organized under the laws of Mexico on
October&nbsp;6, 1992.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s commercial name is
&#147;Grupo Iusacell,&#148; but our operating subsidiaries
market their products under the single <I>Iusacell
Digital</I>&#153; brand name. Iusacell Celular currently
operates entirely in Mexico under Mexican legislation, although
our participation in the U.S.&nbsp;capital markets makes us also
subject to certain securities laws of the United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular was formed in 1992 to hold the
principal telecommunications interests of the Peralta Group,
which primarily comprises securities and entities controlled by
Mr.&nbsp;Carlos Peralta. Iusacell Celular&#146;s subsidiaries
are primarily engaged in the wireless telecommunications
business and hold concessions to operate cellular telephone
systems in five contiguous market regions in central and
southern Mexico. Mexico is divided into nine geographic regions
for the provision of mobile wireless service. Iusacell Celular
was granted an authorization to provide cellular service in
Region&nbsp;9 (which includes Mexico City) in 1989 and, in a
series of transactions from 1990 to 2002, purchased the
companies holding concessions to provide cellular service in
Region&nbsp;5 (which includes the city of Guadalajara),
Region&nbsp;6 (which includes the city of Le&#243;n),
Region&nbsp;7 (which includes the city of Puebla) and
Region&nbsp;8 (which includes the cities of Canc&#250;n and
M&#233;rida). In October 1995, a Iusacell Celular subsidiary
received a concession to provide long distance service and began
providing such service in August 1996. Also in August 1996, we
began to provide paging services through a joint venture between
Iusacell Celular and a third party concessionaire.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 1993 and August 1994, Bell Atlantic
acquired a 42.0% equity interest in Iusacell Celular for
U.S.$1.04&nbsp;billion. In June 1994, Iusacell Celular completed
an initial public offering of two of its four series of ordinary
shares and of American depositary shares representing two series
of its shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 1997, Bell Atlantic assumed
management control of Iusacell Celular. This change of control
was implemented when Bell Atlantic and the Peralta Group
effected certain conversions of shares from one series into
another that gave Bell Atlantic a majority of the Iusacell
Celular series A shares and control over the Iusacell Celular
Board of Directors. All these conversions were effected on a
one-for-one basis. In August 1997, Bell Atlantic acquired NYNEX
Corporation in a merger of equals to form the new Bell Atlantic.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 1997, in order to focus exclusively
on its core Mexican market, Iusacell Celular sold its direct and
indirect interests in Ecuadorian cellular and paging companies
for approximately U.S.$31.4&nbsp;million, net of taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1997, Iusacell Celular entered into
an agreement with subsidiaries of Lucent Technologies, Inc.
pursuant to which Iusacell Celular agreed (i)&nbsp;to replace
its existing analog wireless cellular network with a new Lucent
Technologies digital and analog network for a minimum
consideration of U.S.$188.0&nbsp;million which was completed in
August 1999 and (ii)&nbsp;to continue acquiring network
equipment and services under the agreement in order to improve
its digital network. Through December&nbsp;31, 2001, Iusacell
Celular has purchased approximately U.S.$409.9&nbsp;million of
network equipment and services under this agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell was formed on August&nbsp;6, 1998 for
the purpose of acquiring and holding the shares of Iusacell
Celular. On July&nbsp;6, 1999, Iusacell launched an offer to
exchange two classes of Iusacell voting ordinary shares for the
four classes of Iusacell Celular ordinary shares then
outstanding on a one-for-one basis. This offer was completed on
August&nbsp;10, 1999 and, as a result, Iusacell acquired 99.5%
of the outstanding Iusacell Celular shares. On January&nbsp;31,
2000, Iusacell launched a second exchange offer for the purpose
of exchanging American depositary shares representing
Iusacell&#146;s series&nbsp;V shares for the balance of American
depositary shares representing Iusacell Celular&#146;s
series&nbsp;D and series&nbsp;L shares on a one-for-one basis.
This offer was completed on February&nbsp;29, 2000 and, as a
result, Iusacell held 99.9% of the outstanding Iusacell Celular
shares. In May 2001, Iusacell Celular effected a reverse stock
split of 1 new Iusacell Celular share for every
</FONT>

<P align="center"><FONT size="2">16
</FONT>

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<DIV align="left">
<FONT size="2">30,000 old Iusacell Celular shares. As a result
of this reverse split, Iusacell now holds 100% of the capital
stock of Iusacell Celular.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, as a first step toward
minimizing its involvement in real estate management and tower
maintenance, Iusacell Celular entered into an agreement with
MATC Celular S. de R.L. de C.V., the Mexican subsidiary of
American Tower Corporation, which we refer to as MATC Celular,
pursuant to which MATC Celular could acquire the majority of
towers owned and/or operated by Iusacell Celular. In return,
Iusacell Arrendadora S.A. de C.V., a subsidiary of Iusacell,
would lease space on those towers and sublease it to the
operating subsidiaries of Iusacell Celular. Iusacell Celular
sold approximately 244&nbsp;towers to MATC Celular in 2001, and
an additional 25&nbsp;towers in May 2002. We expect to sell up
to 61&nbsp;additional towers to MATC Celular in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2000, Bell Atlantic acquired GTE
Corporation, one of the world&#146;s largest telecommunications
companies, in a merger of equals, renaming itself as Verizon
Communications Inc. The subsidiaries which directly hold
Iusacell capital stock remained unchanged. In April 2001,
Vodafone acquired the Peralta Group&#146;s 34.5% equity interest
in Iusacell for U.S.$973.4&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Over our last three full fiscal years, excluding
the effects of inflation accounting, capitalized interest and
certain non-cash trade-in credits, we have invested
approximately U.S.$500.0&nbsp;million in capital expenditures,
primarily for our cellular communications network, long distance
network and billing, customer care and administrative systems.
See Item&nbsp;5, &#147;Operating and Financial Review and
Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Capital Expenditures.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;19, 2001, we completed the
acquisition of a 78.3% ownership interest in Portatel, for
Ps.522.5&nbsp;million (U.S.$57.1&nbsp;million). We reached an
agreement to acquire the remaining 21.7% ownership in Portatel
for Ps.148.1&nbsp;million (U.S.$16.2&nbsp;million) and closed
the acquisition of this remaining ownership interest on
February&nbsp;8, 2002. Portatel is engaged in the wireless
communications business and holds the concession to provide
cellular services in Region&nbsp;8, which covers the states of
Yucat&#225;n, Campeche, Quintana Roo, Chiapas and Tabasco in
southern Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2002, we plan to invest at least
U.S.$150.0&nbsp;million in capital expenditures, not including
capitalized interest, to increase the coverage and improve the
quality of and enhance the features available through our
cellular and long distance networks, and to improve our billing
and customer care systems. We plan to spend approximately
U.S.$21.0&nbsp;million in 2002 to expand the coverage and
increase the quality of our cellular network in Region&nbsp;8 in
southern Mexico. All of this capital equipment will be deployed
in Mexico. We expect to finance our 2002 capital expenditure
plan through funds from our operations, vendor and project
financing, the capital markets and the net proceeds from the
sale of our cellular towers to MATC Celular. See Item&nbsp;5,
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
Liquidity and Capital Resources&nbsp;&#151; Capital
Expenditures.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal executive offices are located at
Prolongaci&#243;n Paseo de la Reforma 1236, Colonia Santa Fe,
Delegaci&#243;n Cuajimalpa, 05348, Mexico, D.F. Our telephone
number is (5255)&nbsp;5109-4400. Our agent in the United States
is Puglisi&nbsp;&#38; Associates, 850&nbsp;Library Avenue,
Suite&nbsp;204, P.O. Box 885, Newark, Delaware 19715. Our
internet website address is http://www.iusacell.com.mx. The
information on our website is not incorporated into this
document.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business
Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a leading wireless telecommunications
services provider in Mexico with nearly 1.9&nbsp;million mobile
wireless customers at December&nbsp;31, 2001. We hold and
operate concessions in the 800&nbsp;megahertz (MHz) band to
provide cellular wireless services in five contiguous geographic
regions comprising all of central and southern Mexico. Our
service regions include Mexico City, one of the world&#146;s
most populous cities, and the cities of Guadalajara, Le&#243;n,
Puebla, Canc&#250;n and M&#233;rida and combined represent
approximately 79&nbsp;million points of presence (POPs)
comprising 78% of Mexico&#146;s total population.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since February 1997, Iusacell Celular has been
under the management control of subsidiaries of Bell Atlantic
(now Verizon). From late 1993 through February 1997, Bell
Atlantic participated substantially in the
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV align="left">
<FONT size="2">financial and technological operations of
Iusacell Celular. Since Bell Atlantic assumed control of our
Board of Directors and management, Bell Atlantic personnel
seconded to Iusacell and Bell Atlantic consultants have been
integrally involved in managing our day-to-day operations and
defining and implementing our long-term strategy. Through
December&nbsp;31, 2001, Verizon has invested approximately
U.S.$1.3&nbsp;billion for its current 39.4% economic and voting
interest in Iusacell and its indirect 100% interest in Iusacell
Celular.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since Bell Atlantic took control of Iusacell
Celular&#146;s management, our subscriber base has grown from
approximately 245,000 subscribers in February 1997 to
1,855,166&nbsp;subscribers as of December&nbsp;31, 2001. Of
these subscribers, as of December&nbsp;31, 2001, 404,075 were
postpaid customers who purchase cellular services pursuant to
fixed-term contracts, and the remaining 1,451,091 were customers
who pay for their cellular services in advance primarily through
the purchase of prepay calling cards. As of December&nbsp;31,
2001, approximately 768,000 of these prepay customers were
&#147;incoming calls only&#148; customers who are only able to
receive incoming calls and not to make outgoing calls. These
customers generate little or no revenue. Iusacell Celular&#146;s
postpaid and prepay subscribers who can both make outgoing calls
and receive incoming calls had an average monthly cellular
revenue per subscriber&nbsp;(ARPU) during 2001 of Ps.370.0
(approximately U.S.$40.4), with prepay subscribers in this group
having an ARPU of Ps.146.0 (approximately U.S.$15.9) during 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 1998, we launched digital service using
Code Division Multiple Access&nbsp;(CDMA) technology, the
highest-capacity commercial digital technology available, in the
800&nbsp;MHz frequency band in the Mexico City area. Since
August 1999, we have offered digital coverage and services in
almost all areas where we provide mobile wireless services. In
addition to our core mobile wireless services, we also provide a
wide range of other telecommunications services, including long
distance, paging, wireless local telephony and data transmission
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The management team at Iusacell is able to draw
extensively upon Verizon&#146;s expertise in the development and
implementation of our operating strategy. Fares F. Salloum,
Iusacell&#146;s Chairman of the Board, has 29&nbsp;years of
global telecommunications experience. In addition,
Mr.&nbsp;Salloum is currently responsible for Verizon&#146;s
international wireline and wireless operations in the western
hemisphere, including Telus Corporation (Telus) in Canada,
Codetel, C.&nbsp;por&nbsp;A. (Codetel) in the Dominican
Republic, Compa&#241;&#237;a An&#243;nima Nacional
Tel&#233;fonos de Venezuela&nbsp;(CANTV) in Venezuela,
Telecomunicaciones de Puerto Rico Inc.&nbsp;(TELPRI) in Puerto
Rico and CTI Holdings, S.A.&nbsp;(CTI) in Argentina.
Iusacell&#146;s President and Director General, Peter H.
Burrowes, has nine years of telecommunications experience,
having served as President and Chief Executive Officer of
Comunicaci&#243;n Celular, S.A.&nbsp;(Comcel), a cellular
service provider in Colombia, for nearly eight years prior to
joining Iusacell Celular in April 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The management team is supported by an
experienced group of Mexican executives and other personnel from
Verizon and Vodafone.
</FONT>

<P align="left">
<B><FONT size="2">Verizon</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Verizon is one of the largest telecommunications
companies in the world, with extensive participation in and
knowledge of the wireless telecommunications business. In August
1997, Bell Atlantic and NYNEX Corporation, two of the original
seven regional Bell operating companies formed as a result of
the break-up of AT&#38;T in 1984, and completed their merger of
equals to form the new Bell Atlantic. On June&nbsp;30, 2000, the
new Bell Atlantic and GTE Corporation consummated a merger of
equals, in which GTE shareholders received 1.22&nbsp;shares of
Bell Atlantic common stock for each GTE share they owned, and
Bell Atlantic renamed itself Verizon. Verizon had operating
revenues and net income of approximately U.S.$67.2&nbsp;billion
and U.S.$38&nbsp;million, respectively, for the fiscal year
ended December&nbsp;31, 2001, and total assets of approximately
U.S.$170.8&nbsp;billion at such date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the United States, Verizon provides local
exchange telephone service in 31 states and the District of
Columbia, reaching 33&nbsp;million households, utilizing nearly
132&nbsp;million access lines and employing more than 261,000
people. Verizon Wireless, a partnership between Verizon (which
owns 55%) and Vodafone (which owns 45%) established in April
2000, is the largest wireless operator in the United States,
with more than
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<FONT size="2">29&nbsp;million subscribers. Verizon Wireless has
a presence in 49 states and the District of Columbia, and it
covers 232&nbsp;million POPs, nearly 90% of the United States
population, including 49 of the top 50 U.S. markets.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Outside the United States, Verizon has wireline
and/or wireless operations in 23&nbsp;countries and territories
in the Americas, Europe, Asia and the Pacific, with
3.2&nbsp;million attributable access lines and 9.6&nbsp;million
attributable wireless customers as of December&nbsp;31, 2001.
Through its interest in FLAG, the world&#146;s longest undersea
fiber optic cable, Verizon&#146;s global presence extends to
45&nbsp;countries. Verizon is also the world&#146;s largest
provider of print and on-line directory information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Verizon is a reporting company under the Exchange
Act. Bell Atlantic and GTE were reporting companies under the
Exchange Act. Reports and information filed by Verizon, Bell
Atlantic and GTE with the Commission may be inspected and copied
at the public reference facility maintained by the Commission at
Room&nbsp;1024, 450&nbsp;Fifth Street,&nbsp;N.W.,
Washington,&nbsp;D.C. 20549. Copies of such material may be
obtained by mail at prescribed rates by calling the SEC at
1-800-SEC-0330.
</FONT>

<P align="left">
<B><FONT size="2">Vodafone</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;4, 2001, Vodafone acquired a 34.5%
equity interest in Iusacell from the Peralta Group for
U.S.$973.4&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Vodafone is the largest wireless operator in the
world, with more than 101 million proportionate subscribers
(subscribers proportionate to Vodafone&#146;s stake in the
relevant wireless companies) and a presence in
28&nbsp;countries. Vodafone also owns stakes in wireless
carriers in Europe, the United States, the Asia/ Pacific region,
the Middle East and Africa. Vodafone companies are the leading
mobile phone operators in the United States (with a 45%
ownership interest in Verizon Wireless), Germany
(Vodafone&nbsp;D2) and the United Kingdom (Vodafone), among
others. Vodafone has grown substantially with its recent
acquisition of Mannesmann AG and is expanding its wireless data
services.
</FONT>

<P align="left">
<B><FONT size="2">Competitive Strengths</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Leading
Digital Technology Platform in All Our Markets</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that we are the Mexican market leader
in technology. In August 1999, upon completion of our deployment
of a CDMA digital network in nearly all areas where we provide
cellular service, we became the first company in Mexico to make
digital voice service broadly available to all of our customers.
Our digital network currently provides service to areas with
approximately 60&nbsp;million inhabitants, representing
approximately 59% of Mexico&#146;s total population.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Compared with analog cellular technology, our
digital technology increases system capacity by approximately
six to 10&nbsp;times, offers better call quality and clarity,
enables significantly longer telephone battery life, ensures
greater call confidentiality and fraud protection and provides a
wider variety of advanced features and applications, such as
short messaging service. Our network technology provides
superior switching and transmission capabilities. These features
allow for lower capital expenditures per subscriber and reduced
network operating costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From January&nbsp;1, 1997 through
December&nbsp;31, 2001, we made approximately
U.S.$864.4&nbsp;million in capital expenditures, most of which
was spent on our cellular and fiber optic telecommunications
network. For additional information regarding capital
expenditures, see Item&nbsp;5, &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Capital Expenditures.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to take advantage of the benefits of our
new digital network, we have stopped purchasing and providing
analog-only handsets to customers and have accelerated our
efforts to migrate existing higher-usage customers to digital
service. At December&nbsp;31, 2000 and December&nbsp;31, 2001,
Iusacell had 519,639 and 848,577&nbsp;digital customers,
respectively. In December 2001, our digital customers in the
aggregate generated approximately 65% of our total mobile
wireless traffic.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our analog service will continue
to operate in the near future because a significant number of
our prepay subscribers have analog-only telephones.
</FONT>

<P align="center"><FONT size="2">19
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, the Mexican telecommunications
regulator, the <I>Comisi&#243;n Federal de Telecomunicaciones
</I>(Mexican Federal Telecommunications Commission or COFETEL),
performed technical audits in the country&#146;s largest cities
in order to determine whether wireless carriers are offering
acceptable network quality. In these audits, we significantly
bettered COFETEL minimum standards for lost calls and
ineffective attempts of 6% and 5%, respectively, in all audited
cities in our core cellular regions, including Mexico City.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Verizon and
Vodafone Wireless Expertise and Support</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our management team draws extensively upon
Verizon&#146;s and Vodafone&#146;s expertise to develop and
implement our operating strategy. Verizon and Vodafone are the
managing partners in Verizon Wireless, the largest wireless
carrier in the United States. Verizon also has substantial
investments in other wireless telecommunications companies in
the Americas, Europe, Asia and the Pacific. Vodafone is the
largest wireless operator in the world. We believe that
Verizon&#146;s and Vodafone&#146;s extensive experience in the
development and implementation of marketing programs designed to
promote substantial subscriber growth provide us with a
competitive advantage in the Mexican mobile wireless market.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Experienced
Management Team</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The senior management team of Iusacell has an
aggregate of almost 100 years of experience in the
telecommunications industry. Individually, Iusacell
Celular&#146;s operating managers have established track records
of producing subscriber growth, penetrating new markets and
developing new telecommunications product offerings.
Iusacell&#146;s management team is complemented by experienced
Verizon and Vodafone telecommunications executives and
consultants.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Well-Recognized
Brand Name</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the services that we offer use the well
recognized <I>Iusacell Digital</I> brand name to increase
consumer awareness and customer loyalty. We believe that the
high &#147;top of mind&#148; and &#147;share of voice&#148; held
by the <I>Iusacell Digital</I> brand name has allowed us to make
more cost-efficient marketing investments compared with those of
our competitors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The <I>IUSACELL Digital </I>brand name is well
recognized not only in the regions where we currently provide
service, but also in the regions where we do not yet provide
service. We believe that this recognition has facilitated our
entry into Region 8 in southern Mexico, and will facilitate our
entry into other markets if and when we are able to do so.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Large
Cellular Subscriber Base</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, we had 1,854,697
mobile wireless subscribers, including both postpaid and prepay
subscribers. Of our mobile wireless subscriber base, 21.8%
consisted of customers that purchase cellular services pursuant
to fixed-term contracts and the remaining 78.2% of our cellular
customers purchase their services in advance, primarily through
prepay calling cards. Prepay customers include both those who
can receive and make calls and those who are only able to
receive incoming calls. We believe that our postpaid customers
seek the convenience of uninterrupted mobile wireless service
and access to high quality customer service and are willing to
pay a monthly fee for the choice of value-added services such as
wireless Internet, call waiting, emergency service (*911), short
messaging, voice-mail, three-way calling and caller
identification. On the other hand, prepay subscribers are also
attractive to us because of their higher average per-minute
airtime charges, lower acquisition costs and the absence of
billing costs, credit concerns and collection risk related to
their business.
</FONT>

<P align="center"><FONT size="2">20
</FONT>

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<P align="left">
<B><FONT size="2">Business Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s strategic and operating
plan is based on the wireless operating model that Verizon has
successfully deployed in the Americas, Europe, Asia and the
Pacific. This model focuses on:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">state-of-the-art network technology and
    performance;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">delivery of products and services which customers
    consider valuable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">strong distribution; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">superior customer service.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our strategic and operating plan
will enable us to increase our subscriber base, subscriber
usage, revenues and profitability in our core mobile wireless
businesses. This strategic plan incorporates the following key
elements:
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nationwide
Wireless Coverage</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that it is important to provide
reliable and high quality wireless service to our customers
throughout Mexico. We intend to continue doing so by holding
concessions in each region of Mexico or, in those areas where we
are unable to secure concessions, by enabling seamless roaming
services and offering our customers telephones that can access
nationwide services on different frequencies. As part of this
strategy, we acquired Portatel, which provides cellular services
in southern Mexico, in a two-part transaction on
October&nbsp;19, 2001 and February&nbsp;8, 2002 for
Ps.670.6&nbsp;million (U.S.$73.3&nbsp;million). Iusacell now
holds concessions covering approximately 79&nbsp;million
inhabitants, or 78% of Mexico&#146;s total population.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also believe that it is important for our
customers to be able to access wireless services throughout
North, Central and South America. Currently, Iusacell&#146;s
customers are able to roam in over 2,000 municipalities in the
United States, Canada and Europe, as well as in 85 other
countries in the Americas, Europe, Asia, Africa and the Pacific.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Significantly
Strengthen our Distribution Channels</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We continue to strengthen our product
distribution system to emphasize consistent, standardized
merchandising through a well-balanced mix of company-owned
stores and independent distributors conveniently located
throughout all of our operating regions. We continue to develop
additional long-term relationships with our distributors to
encourage them to sell our products and services, and seek to
make these relationships exclusive. We intend to continue to
increase our distribution system primarily by expanding the
number of locations where customers can purchase prepay cards.
To further this strategy, we or our distributors have entered
into agreements to allow our prepay cards to be marketed by or
at distributors of Mexico&#146;s national lottery tickets, PEMEX
franchise gas stations, NADRO pharmacies, one of the largest
drugstore chains in Mexico, OXXO and Seven Eleven franchise
convenience stores, BBVA Bancomer, Bital and Bancrecer automatic
teller machines, nationwide newsstands, CIFRA (Walmart) and
Comercial Mexicana stores, two of the largest retail chains in
Mexico, and Mexico City subway stations. In the past year, we
also launched a distribution program called &#147;Los
Rojos,&#148; implemented in Mexico City, Guadalajara, Toluca,
Cuernavaca, Puebla and Veracruz. The program, implemented
through a distributor, recruits existing street vendors and
provides them with an opportunity to directly sell our
VIVA&#153; cards and pre-activated prepaid handsets to drivers
and pedestrians. In its initial stage the program employed
approximately 1,200 people. Since Verizon took control of our
management, we have increased our points of distribution from
approximately 230 in February 1997 to more approximately 46,000
at December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also opened or remodeled 22 customer sales and
service centers in 1998, 17 in 1999, 8 in 2000 and 259 in 2001,
bringing the total number of customer sales and service centers
owned and operated by us at December&nbsp;31, 2001 to 127. All
of these centers present Iusacell Celular&#146;s new store
image, an environment which emphasizes retail merchandising
rather than transaction processing. In the second half of 2002,
we intend to open 10 new customer sales and service centers.
</FONT>

<P align="center"><FONT size="2">21
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Superior
Network and Customer Service</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that superior network technology and
proactive and timely customer service help us to attract and
retain customers. To build a superior network, we swapped out
our previous analog network for an analog and CDMA digital
network supplied by Lucent Technologies and, upon completion of
the swap-out in August 1999, became the first company in Mexico
to make digital voice services broadly available to all of our
customers. For our customers, our digital technology offers
better call quality and clarity, ensures greater call
confidentiality and fraud protection, enables significantly
longer telephone battery life, and provides a wider variety of
advanced features and applications as compared with analog
cellular technology. Over the last three years, Iusacell Celular
has experienced rapid growth in digital subscribers. As a
result, and in anticipation of further growth in digital
subscribers and digital usage, we decided to accelerate our
capital expenditure program in 1999 and 2000 to expand digital
capacity and improve digital service quality.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To provide proactive and timely customer service,
we operate two call centers that provide automated and efficient
service to our customers. Our call center service quality and
response speed has further improved with the implementation of
state-of-the-art customer service software in Region 9 in 2000
and in our other service regions in 2001. We also use welcome
packages, customer satisfaction calls, special programs for
corporate customers and customized billing to communicate our
commitment to our customers. Our customer service centers offer
&#147;one-stop shopping&#148; for cellular, long distance,
paging and data transmission services as a convenience to our
customers. Our customer service representatives undergo ongoing
rigorous training and are continually monitored and evaluated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 1999, Iusacell Celular completed the
installation of a new prepay operating system in its then four
cellular regions. The prepay operating system improved customer
satisfaction through automated card activation and account
information and by providing voice mail and other value-added
services. It has also lowered both the cost of support for
prepay services and prepay turnover and facilitated increased
per subscriber usage.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Committed to offering world class customer
service, in 2001 we began the implementation of a special
program called Customer Relationship Management, which we refer
as CRM. The program aimed to gather information from our various
systems to allow us to better tailor our services and strategies
to each of our customers. Following implementation of the CRM
strategy, we deployed the following applications to fulfill
customer needs: customer autoservice channels such as invoice
presentment, payments and airtime sales through the Internet, MQ
Series from IBM, a software tool that integrates new postpaid
customer information between our point of sale system and
billing system and some other administrative systems to enhance
the functionality of our call centers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, we also implemented a preferred customer
retention program targeting high-value postpaid customers in
order to improve customer loyalty and thereby reduce churn by
offering dedicated phone lines and customer care
representatives. We also implemented a high-value customer
campaign which consists of proactively contacting customers, to
assure that the provided service meet their needs and find out
how it can be improved. To strengthen the antichurn program for
all postpaid customers, we introduced a proactive contract
renewal program. A permanent outbound program was introduced to
contact those customers who have reported their phone stolen or
lost in order to arrange for a replacement. We are designing
similar programs for our higher-usage prepay customers and
expect to implement these programs during 2002.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Customer
Segmentation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We design our products and services for each
customer segment. For postpaid customers, we offer six pricing
packages tailored to meet the needs of high and mid-usage
customers and two additional pricing packages with a prepay
component tailored to lower-usage customers. We believe that our
postpaid customers seek the convenience of uninterrupted mobile
service and access to high quality customer service and wish to
purchase their long distance, paging, and other
telecommunications services bundled together as a single product.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also sell prepay cards to penetrate the
segment of lower-usage customers. We believe our prepay
customers seek service without a fixed financial commitment and
monthly billing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 1999, we introduced &#147;one-single
rate&#148; plans for postpaid customers who seek the convenience
of paying a single per-minute rate for local, national long
distance and long distance service to the United States. In
October 1999, we introduced a &#147;one-single rate&#148; plan
for prepay customers and extended coverage of all
&#147;one-single rate&#148; plans to include international long
distance service to Canada. In November 2000, we extended our
&#147;one-single rate&#148; plans to include most of western
Europe and Israel. At December&nbsp;31, 2001, we had 858,800
&#147;one-single rate customers,&#148; 72,323 of whom were
postpaid customers, representing 17.9% of our total postpaid
customer base, and 786,477 of whom were VIVA&#153; prepay
customers, representing 54.2% of the total prepay customer base.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Value-Added
Services</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our network permits us to provide our digital and
analog customers with a wide range of value-added services,
including caller identification, voice mail, and three-way
calling. To encourage our customers to migrate to digital
service, we offer short messaging service, Internet access,
mobile banking, and mobile e-mail accounts only to our digital
postpaid customers through wireless application
protocol&nbsp;WAP) enabled handsets, Lap Top computers and
Pocket PCs&nbsp;(PDAs).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2001, Iusacell Celular and Banco
Santander launched the first joint brand credit card in the
wireless service industry. This credit card will help Iusacell
Celular&#146;s customers finance the acquisition of a handset,
facilitate the credit and collection process and build customer
loyalty.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sales Force
Incentives</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With the objective of increasing the size and
quality of our subscriber base, we have a sales force
compensation plan which is largely performance-based. Our
compensation plan is based on sales volume and product mix and
rewards our sales force for upgrading analog postpaid customers
to digital service and qualified prepay customers to postpaid
plans. The compensation plan is also designed to encourage
salespersons to sell bundled products and value-added services.
During 2001, we implemented an incentive program for our
customer care representatives to promote customer retention. In
2002, the sales force compensation plan was restructured to
better reward individual performance.
</FONT>

<P align="left">
<B><FONT size="2">The Telecommunications Industry in
Mexico</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Market
Liberalization</I></FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Cellular
Services</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican government initiated its efforts to
liberalize the telecommunications industry in 1989, dividing
Mexico into nine geographic regions for the provision of
cellular service. In order to provide an alternative for
cellular customers, two concessions were granted in each region,
one to Telcel, the cellular subsidiary of Telmex, and the other
to an independent operator. In addition, Telmex was required to
interconnect all cellular operators to its network in an effort
to facilitate competition. The nine geographic Regions are
described in the table below.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Region</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Geographical Coverage</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Major Cities in the Region</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Baja California and Baja California
    Sur and the municipality of San Luis R&#237;o Colorado in
    northwestern Sonora state.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Tijuana, Mexicali, Ensenada, Tecate and La Paz.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Sonora and Sinaloa (except for the
    municipality of San Luis R&#237;o Colorado in northwestern
    Sonora).
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Hermosillo, Ciudad Obreg&#243;n, Culiac&#225;n
    and Mazatl&#225;n.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Region</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Geographical Coverage</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Major Cities in the Region</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Chihuahua and Durango and the
    municipalities of Torre&#243;n, Francisco I. Madero, Matamoros,
    San Pedro and Viesca in the state of Coahuila.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Ciudad Ju&#225;rez, Chihuahua, Durango,
    G&#243;mez Palacio and Torre&#243;n.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Tamaulipas, Nuevo Le&#243;n and
    Coahuila. (except for the municipalities of Torre&#243;n,
    Francisco I. Madero, Matamoros, San Pedro and Viesca).
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Monterrey, Saltillo, Tampico, Ciudad Victoria,
    Nuevo Laredo, Reynosa and Matamoros.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Colima, Jalisco (except for 12
    municipalities in northeastern Jalisco), Michoacan and Nayarit.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guadalajara (Mexico&#146;s second largest city),
    Morelia, Tepic, Colima and Manzanillo.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Aguascalientes, Guanajuato,
    Quer&#233;taro, San Luis Potos&#237; and Zacatecas and 12
    municipalities in northeastern Jalisco.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Le&#243;n, Quer&#233;taro, Aguascalientes, San
    Luis Potos&#237; and Zacatecas.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Guerrero, Oaxaca, Puebla, Tlaxcala
    and Veracruz.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Puebla, Acapulco, Veracruz and Oaxaca.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Yucat&#225;n, Quintana Roo,
    Campeche, Chiapas and Tabasco.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">M&#233;rida, Canc&#250;n, Villahermosa, Campeche,
    Tuxtla Guti&#233;rrez and San Cristobal de las Casas.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The states of Mexico, Hidalgo and Morelos and the
    Federal District.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Mexico City, Toluca, Cuernavaca and Pachuca.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1990, the Mexican government
initiated the privatization of Telmex, then the sole provider of
landline local, long distance and Cellular B-Band cellular
services, when it sold 20.4% of the equity and 50.1% of the
voting power in Telmex to a private consortium for
U.S.$1.76&nbsp;billion. The winning consortium consisted of
Grupo Carso, S.A.&nbsp;de&nbsp;C.V., a Mexican conglomerate
which owns or otherwise controls a majority of the
consortium&#146;s voting interest, SBC Communications Inc. and
France Telecom S.A. Subsequent to the original privatization,
the Mexican government further reduced its holdings in Telmex
through additional transactions and completed the privatization
process in June 1994. In 2001, Telcel and other wireless
international subsidiaries of Telmex were spun-off from Telmex
to form a new company named Am&#233;rica M&#243;vil, S.A. de
C.V., known as Am&#233;rica M&#243;vil.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Telcel holds the Cellular B-Band concession in
each of the nine cellular regions and is Mexico&#146;s largest
cellular operator. Our subsidiaries hold the Cellular A-Band
concession in each of Regions&nbsp;5, 6, 7, 8 and&nbsp;9, and
entities in which Telef&#243;nica is a controlling shareholder
hold the Cellular A-Band concession in Regions&nbsp;1, 2, 3
and&nbsp;4.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Wireless
Local Loop and PCS Services</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 1998, COFETEL completed auctions for
concessions for a range of spectrum frequencies in the
1.9&nbsp;gigahertz&nbsp;(GHz) band to provide PCS wireless
services and the 3.4-3.7&nbsp;GHz Wireless Local Loop band to
provide local wireless services in substantially the same nine
geographic Regions established for the provision of cellular
service. Four companies won nationwide concessions in the
Wireless Local Loop frequencies:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Telmex;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Axtel;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Midicel, S.A. de C.V. (Midicel); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Unef&#243;n.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Three companies won nationwide concessions to
provide PCS services in the 1.9&nbsp;GHz frequencies.
Unef&#243;n won the 30&nbsp;MHz PCS A-Band auction on a
nationwide level. Pegaso won a mix of 30&nbsp;MHz PCS
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">B-Band and 10&nbsp;MHz PCS E-Band concessions
across all nine regions. Telcel won the 10&nbsp;MHz PCS D-Band
auction on a nationwide level. Grupo Hermes,
S.A.&nbsp;de&nbsp;C.V. and Midicel won auctions for seven of the
remaining nine PCS B-Band and PCS E-Band properties. Each of
these concessions has a 20-year term and authorizes the
provision of mobile and fixed wireless service and other
value-added services.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Formal concessions for Wireless Local Loop and
PCS frequencies were issued in late 1998 to all auction winners,
except Unef&#243;n and Midicel, which received extensions to
May&nbsp;15, 1999 to pay accrued interest and to June&nbsp;15,
1999 to pay the balance of their concession fees. Midicel did
not meet its interest payment requirements in May 1999 and
forfeited its Wireless Local Loop and PCS concessions and
approximately U.S.$50&nbsp;million in deposits, letters of
credit and surety bonds. Midicel later offered full payment and
petitioned for a review (<I>recurso de revisi&#243;n</I>) of the
forfeiture order. After additional legal proceedings, the
<I>Secretar&#237;a de Comunicaciones y Transportes </I>(Mexican
Telecommunications and Transport Ministry or SCT), affirmed the
forfeiture order and is also assessing whether Midicel has
complied with its commitments under its long distance and public
telephony concessions in order to determine whether these
concessions should also be revoked. Unef&#243;n did meet its May
1999 and June 1999 payment requirements and received its
Wireless Local Loop and PCS concessions. Pegaso initiated
wireless PCS services in Tijuana, Monterrey, Guadalajara and
Mexico City in 1999, and now has coverage in 12&nbsp;cities.
Unef&#243;n commercially launched mobile prepay wireless
services in Acapulco, Toluca, Mexico City and Aguascalientes in
early 2000, and now has coverage in 15&nbsp;cities throughout
Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also face wireless competition from companies
providing mobile wireless telecommunications services utilizing
alternative existing technologies. Nextel de M&#233;xico,
S.A.&nbsp;de&nbsp;C.V., known as Nextel, began marketing its
enhanced specialized mobile radio services in 1998. We believe
that Nextel provides three types of services: trunking, access
to the telephone network and short messaging. It currently
covers 17&nbsp;cities principally in central Mexico.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Long
Distance Services</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the privatization of Telmex in
1990, the Mexican government granted Telmex a concession to
provide public domestic and international long distance
telephone service with an exclusivity period of six years. In
August 1996, the exclusivity period expired, and competition
with proprietary infrastructure commenced in January 1997. A
presubscription balloting process was conducted in Mexico&#146;s
150 largest cities, covering 85% of Mexico&#146;s total POPs, to
enable customers to choose a long distance provider.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The SCT has granted a total of 22 long distance
concessions, including the one held by us. Long distance
concessionaires include, among others:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Telmex;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Alestra S. de R.L., in which AT&#38;T Corporation
    is a shareholder;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Avantel, S.A. de C.V., in which MCI WorldCom Inc.
    and Citigroup Inc. are shareholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Telinor, S.A. de C.V. (Axtel), in which The Bell
    Telephone Company of Canada, commonly known as Bell Canada, is a
    shareholder; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Iusatel, S.A. de C.V., a subsidiary of Iusacell
    Celular which we refer to as Iusatel.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each concession has a nationwide scope and a
30-year term. Concession holders are authorized to offer
domestic, international and value-added services, including
voice and data transmission services.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Local
Telephone Services</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican government has also initiated the
liberalization process for competition in local telephony
service. Accordingly, the SCT has already granted 13 concessions
for wireline local telephone service. Maxcom Telecomunicaciones,
S.A. de&nbsp;C.V., MetroRed, S.A. de&nbsp;C.V. and Megacable
MCM, S.A. de&nbsp;C.V. have initiated service in the Mexico City
area.
</FONT>

<P align="center"><FONT size="2">25
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Underserved
Telephony Market</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Despite the significant increase in wireline and
wireless penetration in Mexico over the last three years, we
believe that there still is a substantial unmet demand for
telephone services in Mexico. According to the International
Telecommunication Union, an agency of the United Nations, as of
December&nbsp;31, 2001, there were approximately 13.5 wireline
telephone lines per 100 inhabitants in Mexico, which is lower
than the teledensity rates of some other Latin American
countries and substantially lower than those of developed
countries such as the United States. Due to the relatively low
wireline penetration in developing countries such as Mexico,
increases in the level of wireless penetration in these
countries may be partly attributable to users who purchase
wireless services as a principal means of telecommunications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents, for selected Latin
American countries and the United States, wireline telephone
lines in service per 100 inhabitants as of December&nbsp;31,
2000 and December&nbsp;31, 2001:
</FONT>

<P align="center">
<B><FONT size="2">Selected Wireline Telephony
Penetration</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Lines in service</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">per 100</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">inhabitants(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Country</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">United States
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Uruguay
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chile
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Brazil
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Argentina
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Colombia
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mexico
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Venezuela
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peru
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Source:</FONT></I><FONT size="2">
    International Telecommunication Union 2002 Website
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents, for selected Latin
American countries and the United States, the number of
subscribers of wireless telephone services per 100 inhabitants
as of December&nbsp;31, 2000 and December&nbsp;31, 2001:
</FONT>

<P align="center">
<B><FONT size="2">Selected Wireless Telephony
Penetration</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Wireless</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">subscribers</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">per&nbsp;100</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">inhabitants(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Country</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">United States
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chile
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Venezuela
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mexico
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Argentina
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Brazil
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Uruguay
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Colombia
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peru
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Source:</FONT></I><FONT size="2">
    International Telecommunication Union 2002 Website
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Calling Party
Pays</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;1, 1999, Mexico implemented the
&#147;calling party pays&#148; modality, or CPP, which had
already been implemented in some other Latin American and
European countries. Calling party pays is a wireless telephony
payment structure in which the party that places a call to a
wireless telephone is billed for interconnection access, and the
recipient is not billed for the airtime charges corresponding to
that call. The introduction of CPP triggered growth in wireless
penetration, particularly in the prepay segment and wireless
traffic.
</FONT>

<P align="left">
<B><FONT size="2">Cellular Services</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>History and
Overview</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We became the first Mexican provider of cellular
telecommunications services in 1989, when we commenced operation
of our Cellular A-Band network in Region&nbsp;9. Through a
series of transactions from 1990 to 2002, we acquired 100%
beneficial ownership interests in the entities which hold the
Cellular A-Band concessions in Regions&nbsp;5, 6, 7, and&nbsp;8.
The regions we serve cover a contiguous geographic area
comprising all of the regions in central and southern Mexico,
which allows us to achieve economies of scale.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s service regions are home
to a variety of industries. Region&nbsp;9 includes Mexico City,
which has the greatest concentration of service and
manufacturing industries in Mexico and is also the center of
Mexico&#146;s public and financial services sectors.
Region&nbsp;5 includes Guadalajara, Mexico&#146;s second largest
city and the commercial and service center of western Mexico,
which has recently begun to develop as a center for the
maquiladora industry. Region&nbsp;6 includes Le&#243;n,
Quer&#233;taro, Aguascalientes and San Luis Potos&#237; and has
historically been dominated by the agricultural sector, although
it has recently begun to develop as an automobile manufacturing
and high technology center. Region&nbsp;7 includes Puebla,
Acapulco, Veracruz and Oaxaca and contains major operations of
the Mexican petrochemical and automotive industries and
significant tourist resorts and attractions. Region&nbsp;8
includes M&#233;rida, Villahermosa, Canc&#250;n, Campeche and
Tuxtla Guti&#233;rrez and contains major operations of the
Mexican petroleum industry and significant tourist resorts and
attractions.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Subscribers
and System Usage</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">According to customer profiles, professionals
comprise a large portion of our Region&nbsp;9 postpaid cellular
subscriber base. Iusacell Celular offers a number of value-added
services designed specifically to fulfill the demands of this
important group of postpaid subscribers. For example, we offer
secretarial services and provide English-speaking operators to
serve the large English-speaking market in Region&nbsp;9.
Iusacell Celular also provides financial news reporting,
emergency services, entertainment information, reservations
services and sports reports. Moreover, CDMA digital postpaid
customers in Region&nbsp;9 have available caller identification,
short messaging service and data transmission services. We
believe that these value-added services help increase postpaid
subscriber usage and also enhance our market image as a full
service cellular provider.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Postpaid
Customers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our postpaid subscriber base in
the remaining regions consists of subscribers engaged in a
variety of occupations. Due to the lower wireline penetration
outside of Region&nbsp;9, the subscriber base in Regions&nbsp;5,
6, 7 and&nbsp;8 includes a number of users who purchase cellular
services as a principal means of telecommunications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that a strong distribution network is
necessary in order to develop and sustain a significant presence
in these markets.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Prepay
Customers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In contrast to postpaid subscribers, prepay
customers typically generate low levels of cellular usage, have
access to a limited number of value-added services, generally
already own a handset and often are unwilling to make a fixed
financial commitment or do not have the credit profile to
purchase postpaid plan cellular services.
</FONT>

<P align="center"><FONT size="2">27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Other prepay customers include vacationers and
traveling business people who require cellular service for short
periods of time. In addition to helping customers control costs,
our prepay programs have no monthly bill and allow customers to
prepay for cellular services in cash.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The prepay program markets prepay cards which
credit a specific peso amount worth of air-time usage to an
account to be utilized for outgoing and incoming calls over a
specified period of time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A prepay customer ceases to be considered a
customer of Iusacell Celular when a specified period of time has
elapsed since the customer purchased and activated, or last
added credit to, his or her last prepay card. The
customer&#146;s telephone number is then deactivated, and the
customer is considered to have turned over.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s current prepay customers
who want to continue to have wireless service after this time
must choose to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">continue to be prepay customers of Iusacell
    Celular by purchasing another card or otherwise recharge the
    airtime in their accounts;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">become postpaid customers of Iusacell Celular; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">become either postpaid or prepay customers of
    another wireless service provider.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">VIVA prepay customers normally have 60&nbsp;days
to use up an activated prepay card and activate a new card or
otherwise recharge the airtime in their account. If the customer
has not activated a new card or recharged the airtime in its
account at the end of 60&nbsp;days, the balance of the VIVA
customer&#146;s account becomes zero, and the customer loses the
ability to make outgoing calls for an additional period of
305&nbsp;days. During this 305-day period, a VIVA customer will
be able to receive local incoming calls, but not to make
outgoing calls, thereby becoming an &#147;incoming calls
only&#148; customer. If the customer activates a new card or
recharges the airtime in its account within the 305-day period,
the customer&#146;s account automatically returns to normal
status, and a new 60-day period begins. Otherwise, once the
305-day period elapses, the customer&#146;s telephone number is
deactivated. See Item&nbsp;5, &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Operating Results&nbsp;&#151;
Increase in Subscriber Base.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We evaluate alternative methods of determining
prepay customer turnover on an ongoing basis, as the current
method is dependent upon, among other things, the number of days
of use Iusacell permits before deactivating a telephone number.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, in order to evaluate whether we
could generate additional revenues from &#147;incoming calls
only&#148; customers for previously purchased cards, we extended
the period of time to use up an activated card and activate a
new card from 185&nbsp;days to April&nbsp;30, 2000 for
&#147;incoming calls only&#148; customers who otherwise would
have lost service before that date. Beginning May&nbsp;1, 2000,
we decided to return to our prior policy of maintaining
&#147;incoming calls only&#148; customers for only 185&nbsp;days
and began to turn over &#147;incoming calls only&#148; prepay
customers who had reached the 185-day limit without activating a
new prepay card. In July 2001 we reduced the initial period for
using up an activated prepay card and activating a new card from
185&nbsp;days to the current 60&nbsp;days. As a result, at the
time, approximately 345,000 incremental subscribers were
transferred to the &#147;incoming calls only&#148; prepaid
customer status.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, Iusacell Celular had
approximately 768,000 &#147;incoming calls only&#148; customers.
The substantial majority of &#147;incoming calls only&#148;
customers generate little or no traffic. Iusacell Celular&#146;s
prepay subscribers who can both make outgoing calls and receive
incoming calls had an average monthly revenue per subscriber
during 2001 of Ps.146 (approximately U.S.$15.9).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 1999, we substantially completed the
installation of the VIVA prepay operating system. The VIVA
platform better tracks customer turnover than its predecessor
system. This operating system, together with initiatives to
increase the number of distribution points for prepay cards,
adjust commissions to encourage distributors to sell prepay
cards of higher denominations, improve customer care and
otherwise improve the convenience of the prepay program, has
enhanced our ability to add and retain prepay customers and has
increased usage. In 2000, we implemented two important tools for
the sale of prepay airtime: sales through
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<DIV align="left">
<FONT size="2">automated teller machines at banks and sales over
the phone by dialing *AIRE. In early 2002, we introduced a tool
to sell prepay airtime through our website.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2000, we invested approximately
U.S.$8.0&nbsp;million in our VIVA platform in order to expand
its capacity to meet demand. In 2002, we will be evaluating
different payment platforms with intelligent network capability
that will enable us to launch new services and support third
generation wireless technology.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Given the higher turnover among our prepay
customers, we pursue plans to migrate our qualified prepay
customers to postpaid plans, where customer loyalty and
retention have been historically higher.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to better focus on active prepay
customers and reduce the potential turnover from prepay sales
through retail distribution channels, in 2001 we implemented a
new policy under which a pre-activated prepay sale will be
reported only when the end-user places the first outgoing call.
Accordingly, commissions related to this type of prepay sale are
now paid only after the end-user places the first outgoing call.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Postpaid
Churn</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Postpaid churn measures both voluntarily and
involuntarily disconnected subscribers. Through
December&nbsp;31, 1997, we calculated postpaid churn for a given
period by dividing, for each month in that period, the total
number of postpaid subscribers disconnected in such month by the
number of postpaid subscribers at the beginning of such month
and dividing the sum of the resulting quotients for all months
in such period by the number of months in such period. Effective
January&nbsp;1, 1998, we changed the methodology by which we
determine average monthly postpaid churn for a given period.
Average monthly postpaid churn for a given period is now
calculated by dividing the sum of all postpaid subscribers
disconnected during such period by the sum of the
beginning-of-month postpaid subscribers for each of the months
in such period, expressed as a percentage.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Voluntarily disconnected subscribers encompass
subscribers who choose to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">no longer subscribe to wireless service;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">become a prepay customer of Iusacell Celular; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">obtain wireless service on a postpaid or a prepay
    basis from another wireless service provider.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Involuntarily disconnected subscribers encompass
customers whose service is terminated after failing to meet
Iusacell&#146;s payment requirements.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Roaming</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Through our roaming agreements with other
operators, we offer nationwide roaming service to our prepay and
postpaid cellular subscribers, and international service only to
our postpaid subscribers. Through these agreements, subscribers
can place calls from any location in Mexico served by a Cellular
A-Band operator, and can receive a call made to the
subscriber&#146;s number (automatic call delivery) regardless of
the region in Mexico in which the subscriber is located. We also
provide cellular services to all subscribers of other
non-wireline cellular operators in Mexico while such subscribers
are temporarily located in a region served by Iusacell.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An operator (a host operator) providing service
to a subscriber of another operator (the home operator)
temporarily located in the host operator&#146;s service region
(an in-roamer) earns usage revenue. We bill the home operator of
an in-roamer for the in-roamer&#146;s usage in our service
region. In the case of roaming by a Iusacell Celular subscriber
in the region of a host operator (an out-roamer), Iusacell
Celular is billed by the host operator for the subscriber&#146;s
usage. We remit the billed amount to the host operator and bill
our own customer, the out-roamer, without any mark-up. As a
result, we retain the collection risk for roaming charges
incurred by our own subscribers. Conversely, roaming charges
billed by Iusacell for in-roaming usage by subscribers of other
non-wireline operators are the responsibility of those
operators. Roaming charges between wireless operators are
settled monthly.
</FONT>

<P align="center"><FONT size="2">29
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interconnection charges owed to Telmex and
long-distance charges owed to long distance carriers as a result
of roaming are the responsibility of the host operator. In
addition to higher per minute charges for airtime (as compared
to home region rates), the host operator is entitled to receive
a fee for each day roaming service is initiated. In-roaming fees
and usage revenue represented 1.6%, 1.3% and 1.7% of our total
revenues during 1999, 2000 and 2001, respectively. Out-roaming
charges represented 4.2%, 6.2% and 4.9% of Iusacell
Celular&#146;s total revenues during 1999, 2000 and 2001,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have more than 60 agreements with U.S.,
Canadian and other foreign operators to provide our subscribers
with international roaming capabilities. These operators include
Verizon International affiliates such as Verizon Wireless,
Movilnet in Venezuela, CTI in Argentina, Codetel in the
Dominican Republic, Telus in Canada, Puerto Rico Telephone
Company, AT&#38;T Wireless and Cingular Wireless. In addition,
we provide, through the National Automatic Cellular Network,
automatic call delivery throughout most of the United States,
including Puerto Rico, whereby our subscribers may receive
telephone calls from Mexico without the caller having to dial
access codes. Currently, our customers are able to roam in over
2,000 municipalities in the United States and Canada as well as
in 85 other countries in the Americas, Europe, Asia, Africa and
the Pacific.
</FONT>

<P align="left">
<B><FONT size="2">Long Distance Services</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 1996, we became one of Telmex&#146;s
first competitors in long distance service when we began to
provide long distance services to our cellular subscribers in
Mexico pursuant to the 30-year concession which was awarded to
Iusatel in October 1995 and was modified in December 1997. Our
competitors in long distance include 14 other companies
operating under concessions, including Telmex, the former long
distance monopoly. We believe that competition in the Mexican
long distance market has stimulated growth in demand for long
distance service. During 1998, there were no significant price
changes in our long distance rates, and our long distance
traffic increased approximately 11% compared with 1997. During
1999, our prices increased approximately 14%, and our long
distance traffic increased approximately 25% compared with 1998.
During 2000, our prices decreased approximately 13%, and our
long distance traffic increased approximately 22% compared with
1999. During 2001, we implemented an average 8% price increase
for our long distance customers, including cellular long
distance, while the rate of inflation in Mexico that year was
4.4%, and long distance traffic increased approximately 5%
compared with 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently provide long distance service using
our own switches and transmission equipment and a combination of
fiber optic lines, microwave links and lines leased from Telmex
and Alestra. At December&nbsp;31, 2001, we provided long
distance service in 52 cities to 1,872,967 customers, 1,864,045
of which were existing customers for our other services. We
chose not to commit significant marketing resources to the
presubscription balloting process in which telephone customers
were asked to elect their long distance carrier, which was
conducted in cities across Mexico in 1997, 1998 and 1999, and as
a result we fared poorly in the initial balloting results. Under
the Cofetel rules we were exempted from the presubscription
obligation for our cellular customers. This authorization
expired on April&nbsp;7, 2002. We requested an extension and
Cofetel granted us a temporary six-month extension, while it
decides on the final term of the extension, that will expire on
October&nbsp;7, 2002. Revenues related to long distance services
represented 9.3% and 10.4% of our total revenues for 2000 and
2001, respectively, not including dark fiber optic cable sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our long distance concession provides for
coverage and technological investment requirements. If we do not
satisfy such requirements, we may have to pay fines and
penalties and potentially lose our long distance concession.
After evaluating the commercial feasibility of complying with
our initial concession, we requested that the SCT and COFETEL
modify the terms of the concession to reflect a more rational
business plan. In December 1997, the government granted the
modification request, authorizing a change in the coverage
requirements and increasing flexibility in the choice of
transmission technology, significantly reducing our investment
requirements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We further reduced the capital investment for our
long distance business by entering into fiber optic cable swap
agreements with two other long distance companies, Marcatel and
Bestel, in March 1998 and December 1998, respectively. These
agreements will allow us to acquire fibers in the long distance
fiber optic networks
</FONT>

<P align="center"><FONT size="2">30
</FONT>

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<DIV align="left">
<FONT size="2">built by Marcatel and Bestel in central and
northern Mexico in exchange for fibers in the long distance
fiber optic network we recently completed in central Mexico. As
a result, we will be able to obtain redundancy in central Mexico
and access to the United States border at minimal cost. We
expect to complete the implementation of these fiber exchanges
in 2003.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, Iusatel agreed to swap dark
fiber optic cable in the amount of U.S.$17.3&nbsp;million and
sell approximately U.S.$7.4&nbsp;million of additional dark
fiber optic cable to Telereunion, S.A. de C.V., an affiliate of
Telscape International, Inc. Upon the signing of this swap
agreement, Telereunion issued promissory notes to Iusatel for
the purchase price but defaulted on the payment of each of these
notes. In April 2001, Telereunion&#146;s U.S. parent, Telscape
International, Inc, filed for reorganization under
Chapter&nbsp;11 of the U.S. Bankruptcy Code. As part of a
settlement arrangement, on September&nbsp;17, 2001, Telereunion
and Iusatel executed an agreement by means of which the former
transferred dark fiber optic assets in the amount of U.S.$7.4
million to the latter in exchange for full settlement of the
past notes receivable in the same amount. In addition, in 2001,
we entered into a fiber optic cable swap agreement worth
Ps.142.7&nbsp;million (U.S.$15.6&nbsp;million) to exchange
certain long-distance fiber optic cables.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1996, Iusatel executed an agreement with
Teleglobe USA, Inc. for the exchange of international long
distance traffic. On May&nbsp;28, 2002, Teleglobe USA, Inc.,
filed for reorganization under Chapter&nbsp;11 of the U.S.
Bankruptcy Code. In 2000, Iusatel entered into a second
agreement for the exchange of international long distance
traffic with AT&#38;T, giving Iusatel two alternative routes to
deliver international long distance traffic, thereby reducing
costs and enhancing its proportional return traffic.
</FONT>

<P align="left">
<B><FONT size="2">Other Services</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Paging</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;14, 1995, Iusacell Celular and
Infomin formed Infotelecom as a joint venture to market national
and international paging services. Iusacell Celular owns 49% of
Infotelecom, Infomin owns 49%, and the remaining 2% is owned by
Mr.&nbsp;Jos&#233; Ram&#243;n Elizondo, a former director of
Iusacell Celular. Infomin has a concession, which expires on
July&nbsp;20, 2009, to provide nationwide paging services in
Mexico. Under the Infotelecom joint venture agreement, Infomin
is obligated to contribute this concession to Infotelecom.
Infomin obtained the Infotelecom&#146;s Board of Directors
authorization to transfer its shares in Infotelecom to Banco
Mercantil del Norte, S.A. Instituci&#243;n de Banca Multiple, a
Mexican bank, in settlement of certain indebtedness. The
completion of such transaction has not been notified to Iusacell
Celular.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to a marketing agreement between
Iusacell Celular and Infomin, Infotelecom has the right to
market national paging services on behalf of Infomin, and
Infotelecom is required to make monthly payments to Infomin
equal to 5% of all gross revenues for the preceding month. This
payment represents the amount which Infomin, as the concession
holder, must pay the SCT for the right to provide paging
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Infotelecom began marketing paging services in
August 1996 and, at December&nbsp;31, 2001, provided service in
34 cities including Mexico City, Guadalajara, Monterrey, Puebla,
Cuernavaca, Toluca, Quer&#233;taro, Le&#243;n, Guanajuato, and
Ciudad Ju&#225;rez, Chihuahua.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, Infotelecom had
17,054 paging customers. Our revenues related to paging services
represented 0.8% and 0.5% of total revenues for 2000 and 2001,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under their joint venture agreement, Iusacell
Celular and Infomin valued the Infomin paging concession at
U.S.$10.5&nbsp;million, and we agreed to fund the first
U.S.$10.5&nbsp;million of Infotelecom&#146;s cash requirements
before Infomin would be required to make pro rata cash
contributions. In December 1998, Iusacell Celular and Infomin
determined the appropriate manner in which to capitalize
Infotelecom. Up to that time, we had been funding the joint
venture by means of loans. On December&nbsp;31, 1998, Iusacell
Celular capitalized Ps.141.9&nbsp;million
(U.S.$15.5&nbsp;million) in advances to Infotelecom, including
Ps.52.6&nbsp;million (U.S.$5.7&nbsp;million) in interest which
was not credited against the U.S.$10.5 million required to be
funded by us. However, U.S.$9.0&nbsp;million of such
capitalization was applied against the U.S.$10.5&nbsp;million to
be funded by us. In 1999, Iusacell Celular capitalized
approximately an additional U.S.$1.0 million against the
U.S.$10.5&nbsp;million
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<DIV align="left">
<FONT size="2">funding requirement. In 2000 and 2001, no amounts
were capitalized and applied against the funding requirement.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Public and
Rural Telephony and Local Fixed Wireless</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular operates public and rural
telephony programs, utilizing available cellular capacity. These
programs provide telecommunications services through cellular
telephones in phone booths, intercity buses and rural areas. The
provision of services in this way fulfills the terms of our
concessions for the provision of cellular telephone service and
utilizes our cellular network to provide telecommunications
coverage in areas with little or no basic service. As of
December&nbsp;31, 2001, we had 37,972 cellular telephones in
service under our public and rural telephony programs,
representing a 91% increase compared to 19,917 cellular phones
in service as of December&nbsp;31, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, we were providing,
on a trial basis pending approval from SCT, local wireless
service in the 450&nbsp;MHz frequency band to 9,869 customers in
selected markets in Region&nbsp;9. We do not charge our local
wireless customers fees for incoming calls. We believe that
there is substantial unmet demand for telephone service in
Mexico as demonstrated by the relatively low level of
residential wireline, business wireline and cellular penetration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We experienced substantial delays in obtaining
the SCT&#146;s approval of our technical and economic plans for
local wireless service in the 450&nbsp;MHz frequency band.
However, on June&nbsp;10, 1997, the SCT and Iusacell Celular
agreed on a process by which Iusacell Celular could obtain a
concession issued and recognized by the SCT to provide local
wireless service in the 450&nbsp;MHz frequency band. This
agreement allows us to convert and consolidate our existing
concessioned radiotelephony frequencies into 450&nbsp;MHz
spectrum in Regions&nbsp;4, 5, 6, 7 and 9 and grants us a right
of first refusal to acquire concessions to provide local
wireless service in these regions over such frequencies at
prices derived from the prices of the winning bids in the
auctions for 450&nbsp;MHz and 1.9&nbsp;GHz (PCS) frequency bands
concluded in May 1998. These auctions yielded a right of first
refusal exercise price estimated at U.S.$2.25&nbsp;million for
each of the five regions. However, neither the SCT nor COFETEL
has formally notified us of the exact right of first refusal
exercise price, the payment terms or the coverage and build-out
requirements relating to the concessions, all of which are
necessary for us to decide whether to exercise our right of
first refusal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of these delays and the uncertainty
relating to our ability, at a commercially acceptable cost, to
implement full scale local wireless service in the 450&nbsp;MHz
frequency band, we are exploring alternatives for providing
local telephony services, such as limited zone wireless services
in the 800&nbsp;MHz (cellular) or 1.9&nbsp;GHz (PCS) frequency
bands deploying digital technology that permits mobility or
fixed wireless services over such bands. If we were to determine
that it would be preferable to pursue such an alternative rather
than to continue to pursue local wireless service in the
450&nbsp;MHz frequency band, that alternative could require the
acquisition of concessions, other regulatory approvals and the
payment of substantial fees. Our management is currently
evaluating our overall strategy with respect to local telephony
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 1998, we determined that because of
many factors, including the impact of changing technology since
the initiation of the 450&nbsp;MHz fixed local wireless project
in 1994, an impairment of our investment in 450&nbsp;MHz TDMA
technology had occurred. As a result, we recorded a substantial
non-cash write-down of our investment in the 450&nbsp;MHz fixed
local wireless project. Given the obsolescence of our existing
450&nbsp;MHz network infrastructure, we may record a non-cash
write-down of substantially all of the remaining book value of
the 450&nbsp;MHz project fixed assets by the end of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In expanding our local telephone services, we
plan to capitalize on synergies between our mobile wireless and
local wireless services, utilizing our existing cellular network
for connections with the local subscribers&#146; premises.
Furthermore, we believe that local wireless service requires a
lower investment cost per line than landline service.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 1996, our long distance subsidiary
applied to modify its concession to allow it to provide local
wireline service, including dedicated circuits, local switching
and data service. This request was reasserted in Iusacell
Celular&#146;s October 1997 application to modify our long
distance concession. This request was rejected
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<DIV align="left">
<FONT size="2">for procedural reasons in July 1998. In January
1997, Iusatelecomunicaciones, S.A. de C.V., Iusacell&#146;s
450&nbsp;MHz local wireless subsidiary, also filed for a local
wireline concession. The SCT has not yet issued this concession.
While we currently do not anticipate that the provision of local
wireline service will become a significant part of our services,
we may provide, on a case-by-case basis, local wireline
telephone service as part of our overall provision of
telecommunications services.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Data
Transmission</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We began providing data transmission services in
1993. We provide both public and private data transmission
primarily using excess capacity in our microwave and fiber optic
backbone in our existing cellular network in Region 9 and, until
March 2001, we provided satellite transmission through
Satelitr&#243;n, S.A. de C.V., which we refer as
&#147;Satelitr&#243;n,&#148; a joint venture among Iusacell
Celular, Hughes Network Systems and another partner which
provided a shared hub for private networks. On March&nbsp;22,
2001 we sold our 65.9% equity interest in Satelitr&#243;n and
our ownership of the Satelitr&#243;n transmission hub, receiving
approximately U.S.$1.3&nbsp;million in proceeds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since the latter part of 2001 we started
providing data transmission services, our primarily targeted
customers are Mexican based carriers. As of the end of May 2002,
we had eight customers, all Mexico based carriers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2002, we installed and activated a
Genuity Internet POP in Mexico which allows Iusatel to deliver
Internet Access Services in conjunction to our leased line
service. The addition of this infrastructure will better
position Iusatel to deliver future Internet Protocol (IP)
services.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Microwave
Transmission</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1998, the SCT issued three 20-year
concessions to Punto-a-Punto Iusacell, S.A. de C.V., a joint
venture between Iusacell Celular and Mr.&nbsp;Jos&#233;
Ram&#243;n Elizondo, a former director of Iusacell Celular, for
short-haul microwave frequencies in the 15 GHz and 23 GHz
frequency bands won at auction. Punto-a-Punto Iusacell paid
approximately Ps.42.6&nbsp;million (U.S.$4.7&nbsp;million) for
these concessions. These frequencies are being used to
interconnect our cell sites, business customers and other
networks. Additionally, we have an obligation to provide the
right to use excess capacity in these frequencies to other users
to enable them to install their own microwave links.
Accordingly, during 2000, Punto-a-Punto Iusacell, S.A. de C.V.
started to provide services to other carriers allowing them to
use our excess capacity for installation of links. In 2001, we
continued providing these services, including services to other
carriers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Punto-a-Punto Iusacell participated in the
auctions for long-haul microwave frequencies in the 7&nbsp;GHz
frequency band that began in March 1999 and concluded in July
1999. However, Punto-a-Punto Iusacell did not win any
concessions in these auctions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 1999, Punto-a-Punto Iusacell entered
into an agreement with an affiliate of the service provider in
the four Cellular A-Band regions in northern Mexico to swap the
right to use long-haul microwave frequency links held by the
affiliate for short-haul microwave frequency links held by
Punto-a-Punto Iusacell plus U.S.$2.45&nbsp;million in cash.
Punto-a-Punto Iusacell closed this transaction in January 2000
and is currently operating and installing additional links in
those frequencies.
</FONT>

<P align="left">
<B><FONT size="2">Sales and Marketing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With the assumption of control of our management
by Verizon in 1997, we redefined our marketing strategy for
achieving profitable growth, particularly in our mobile wireless
business. More recently, we have focused our sales and marketing
strategy on the CDMA digital cellular business, where there is
greater per-subscriber usage and revenues than there is with
analog subscribers. We seek to increase our average monthly
revenue per subscriber, aggressively grow our cellular
subscriber base, decrease the cost of acquiring additional
subscribers and reduce postpaid churn and prepay turnover.
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cellular wireless subscribers consist of
postpaid and prepay customers who can be classified as high,
moderate or low-usage customers. We are implementing
distribution, advertising, customer service support and pricing
plans targeted to each specific customer segment and to increase
airtime usage.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Distribution</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently target the various segments of our
subscriber base through five sales and distribution channels:
Iusacell Celular owned and operated customer sales and service
centers, independent distributors, a direct sales force,
commission sales agents and telemarketing. We are aggressively
increasing the number of our points of distribution in order to
acquire additional subscribers. At December&nbsp;31, 2001,
Iusacell Celular had 45,985 points of distribution, as compared
to 20,762, 6,522 and 2,280 at December&nbsp;31, 2000, 1999 and
1998, respectively. As of December&nbsp;31, 2001 these points of
sale comprised 127 customer sales and service centers owned and
operated by Iusacell, 1,598 points of sale operated by
independent distributors who offer all of our products and
44,260 points of sale for distribution only of VIVA prepay
cards, also operated by independent distributors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our redesigned sales force compensation plan is
structured to motivate the sales force within each distribution
channel through monetary incentives. This plan provides training
and monetary incentives so that the sales force is encouraged to
activate profitable and loyal accounts, cross-sell the full line
of our service offerings and maintain our standards in
advertising, promotions and customer service.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Customer
Sales and Service Centers</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have reconfigured each of our customer sales
and service centers to offer one-stop-shopping for a variety of
cellular, long distance and paging services, as well as
accessories. Walk-in customers can subscribe to cellular service
postpaid plans, purchase prepay cards, sign up for long distance
service and purchase equipment such as handsets, pagers and
accessories. In an effort to maximize customer loyalty, reduce
postpaid churn and prepay turnover and increase average monthly
revenue per subscriber through cross-selling, we continue to
emphasize the customer sales and service centers that we own and
operate ourselves as a key distribution channel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1998, we opened 22 new customer sales and
service centers. In 1999, although we did not open any new
customer sales and service centers, we replaced one existing
customer sales and service center and remodeled 16 other
existing customer sales and service centers. In 2000, we opened
14 new customer sales and service centers and remodeled 6 other
existing customer sales and service centers. In 2001, we opened
25 new customer sales and service centers. As of
December&nbsp;31, 2001, Iusacell Celular owned and operated 127
customer sales and service centers throughout our cellular
regions.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Direct
Sales Force</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To service the needs of our customers, we have
created a dedicated direct sales force, which, at
December&nbsp;31, 2001, included 631 full-time sales
representatives, an increase from 117 full-time sales
representatives at December&nbsp;31, 2000. The increase in the
number of our direct sales representatives was the result of our
recent acquisition of Portatel which provides cellular service
in Region 8. This group of trained representatives seeks to
increase sales by:
</FONT>
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    <FONT size="2">aggressively pursuing the sales opportunities in
    the different niches of the market;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
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    <FONT size="2">&#147;bundling&#148; combinations of services
    into customized packages designed to meet customers&#146;
    requirements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
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    <FONT size="2">developing and marketing new services to satisfy
    the demands of such customers; and
    </FONT></TD>
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<TR>
    <TD>&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
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    <FONT size="2">educating corporate purchasing managers about
    alternative pricing plans and services.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These direct sales representatives are
distributed along our service regions to deliver personalized
service.
</FONT>

<P align="center"><FONT size="2">34
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, face-to-face customer service personnel
were integrated to 31 stores which we own and operate in an
effort to further personalize the service. In 2002, we expect to
include a customer service representative in all of the stores
we own.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Independent
Distributors</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to broaden our market, we maintain
relationships with a broad network of over 80 exclusive
distributors that, at December&nbsp;31, 2001, sold all of our
products at 1,598 points of sale in our core cellular regions in
central Mexico. In addition, VIVA prepay cards were distributed
at an additional 44,260 points of sale. In order to ensure that
our standards are maintained at all distribution points, we
provide assistance to our distributors in training, promotions
and advertising. We also provide them with information on our
customer base to allow the distributors to service our customers
effectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, we launched a program called &#147;los
Rojos&#148; which was implemented in Mexico City, Guadalajara,
Toluca, Cuernavaca, Puebla and Veracruz. The program,
implemented through a distributor, recruits existing street
vendors and provides them with an opportunity to increase their
income by directly selling our prepay VIVA cards and
preactivated prepaid handsets to car drivers and pedestrians.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Commission
Sales Agents</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We retain commission agents as a flexible sales
force in all of our mobile wireless regions. The agents function
as cellular service brokers for Iusacell Celular, working out of
their own premises to better target their customers. These
agents provide additional distribution outlets with minimal
support from Iusacell. We used to retain commission agents as a
flexible sales force throughout our regions. As of
December&nbsp;31, 2001, we had no agreements with commission
sale agents since we decided to incorporate these into our
direct sales force.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Telemarketing</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, Iusacell Celular engages
telemarketing service providers as a direct marketing mechanism
or to follow up on targeted mailings.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Electronic
Means</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2000, we implemented two important electronic
tools for the sale of prepay airtime: sales through automated
teller machines at banks and sales over the phone by dialing
*AIRE. Sales at ATM machines are charged against our
customer&#146;s bank account. Sales using *AIRE are charged to
our customer&#146;s credit card. We have implemented ATM sales
at BBVA Bancomer, Bital and Bancrecer. We intend to negotiate
additional ATM distribution agreements in 2002. The charges are
credited to our customer&#146;s account by using a personal
identification number.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Advertising</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular has launched an integrated media
plan emphasizing the benefits of our products and supported by
the Iusacell brand image, the logo for which was redesigned in
1997 and modernized in 2001. Since 1997, all product offerings
have been marketed under the single, well-recognized IUSACELL
brand name which was reinaugurated as <I>IUSACELL Digital </I>in
February 1998, in anticipation of the digitalization of our
network and product offerings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purpose of the media plan is to inform and
convince potential users and subscribers about the benefits of
the products and services offered by Iusacell Celular and to
target potential subscribers through a coordinated print, radio,
television and fixed and moving outdoor advertising campaign. A
key element of this integrated media plan is a periodic agency
review, where the sales results of a given campaign are
evaluated. The integrated media plan enables us to negotiate
more favorable advertising rates. Television and print
advertisements prominently feature an ad-response telephone
number to solicit new customer inquiries.
</FONT>

<P align="center"><FONT size="2">35
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Customer
Service</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We view superior customer service as essential in
order to distinguish ourselves in the competitive Mexican
cellular telecommunications market. We have trained customer
service representatives who are equipped to answer
customers&#146; questions regarding services and products and
are available from 8:00&nbsp;a.m. to 10:00&nbsp;p.m. daily. We
train our customer service representatives to ensure that each
customer receives prompt attention, informed answers to any
inquiries and satisfactory resolution of any concerns. We
believe that enhanced customer service, especially after-sales
support, is essential to developing brand loyalty and supports
the efforts of our sales force to cross-sell our services and
products. For prepay customers, the VIVA prepay operating system
better tracks the usage patterns and identities of these
subscribers. The system has improved customer satisfaction
through automated activation, automated self service menus
through the Integrated Voice Response (IVR) system, voice
messaging and other services and has lowered the cost of support
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To further enhance customer service, we have
installed dedicated personal computer terminals linked to our
billing system so that each customer service representative,
either at a Iusacell Celular customer sales and service center
or at a Iusacell Celular call center, can handle customer
inquiries, billing questions and account payments with real-time
data and a full customer profile in hand. These dedicated
personal computer terminals have been provided with a new
application, Computer Telephony Integration (CTI) which allows
us to give a proactive solution to our customers&#146; requests,
minimizing the time of response. Customer data gathered from
such sources as the activation process, the billing system and
exit interviews with customers who terminate service allows us
to better tailor our marketing strategy to each customer. Along
with providing information as to how we can improve our customer
service, this data is expected to enable representatives from
each of the distribution channels to better target their sales
approach to each customer when cross-selling Iusacell&#146;s
services and products. We are currently in the process of
upgrading our Automatic Call Distribution (ACD), monitoring and
workforce management systems and we believe we will have these
upgraded systems in place by the second half of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In early 1998, we opened two call centers that
provide more automated and efficient service to customers.
Iusacell Celular&#146;s call center service quality and response
speed in Region&nbsp;9 further improved in 2000 with the
implementation of state-of-the-art customer service software. We
implemented this software in Regions&nbsp;5, 6 and 7 in 2001. In
1998, we also began implementing the Customer Attention Support
Team (CAST) program in our busiest customer service centers in
order to accelerate the problem resolution process. This program
has also been expanded to include the majority of our customer
service centers in all five of our cellular operating regions.
Currently we have extended this program to all our corporate,
medium and small business accounts as well as government
accounts. Each of these customers has an assigned CAST, sales
and collections executive.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2000, the certifying company
<I>Societ&#233; Generale de Surveillance de M&#233;xico
</I>(SGS) granted ISO 9002 Certification under the <I>Entidad
Mexicana de Acreditaci&#243;n (EMA) </I>to Iusacell&#146;s
customer care process in the following areas:
</FONT>
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    <FONT size="2">*611;
    </FONT></TD>
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    <FONT size="2">explanations and complaints, including certain
    CAST sale centers;
    </FONT></TD>
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    <TD>&nbsp;</TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
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    <FONT size="2">activations;
    </FONT></TD>
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<TR>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
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    <FONT size="2">retention; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">service assurance.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since we received the ISO 9002 Certification, we
have had four quality audits by the certifying company and we
have maintained the certification.
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Pricing</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General.</FONT></I><FONT size="2"> Iusacell
Celular offers a variety of flexible pricing options for our
mobile cellular service. The primary components of the postpaid
pricing plans include monthly fees, per-minute usage charges and
a number of free minutes per month. The prepay program markets
cards which credit a specified number of pesos to a
customer&#146;s account. The cards can be utilized for outgoing
and incoming calls over a period of up to 60&nbsp;days and for
incoming local calls only for an additional period of
305&nbsp;days. See Item&nbsp;4, &#147;Information on the
Company&nbsp;&#151; Business Overview&nbsp;&#151; Cellular
Services&nbsp;&#151; Prepay Customers.&#148; Most of the
postpaid plans include a selection of free cellular handsets.
The prepay plans do not provide free cellular handsets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Postpaid Plans. </FONT></I><FONT size="2">The
digital and analog postpaid pricing plans are designed to target
primarily high and moderate usage postpaid subscribers.
High-usage customers are typically willing to pay higher monthly
fees in exchange for larger blocks of free minutes, value-added
services, a free high-end handset and lower per minute airtime
charges under a single contract. Moderate and lower-usage
subscribers typically prefer pricing options which have a lower
monthly charge, fewer free minutes, a less expensive handset and
higher per minute airtime charges than those options chosen by
high-usage customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 1999, in an effort to differentiate our
digital product, we drastically simplified our digital postpaid
plan offerings. We reduced the number of our postpaid plans from
11 to 6 and substantially increased the number of minutes
included with the monthly fee when compared with previous
comparable digital and analog postpaid plans. However, to
satisfy the more limited needs of low-usage postpaid
subscribers, we maintained one additional postpaid plan which
provides a moderately priced, fixed monthly charge coupled with
a high per-minute airtime charge and relatively few free minutes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Prepay Plans. </FONT></I><FONT size="2">In
contrast to postpaid subscribers, prepay customers typically
generate low levels of cellular usage, have access to a limited
number of value-added services, generally already own a handset
and often are unwilling to make a fixed financial commitment or
do not have the credit profile to purchase postpaid plan
cellular services. Other prepay customers include vacationers
and traveling business people who require cellular service for
short periods of time. In addition to helping customers control
costs, our prepay programs have no monthly bill and allow
customers to prepay for cellular services in cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 1997, we introduced our
next-generation VIVA prepay service. VIVA provides for automated
reactivation and value-added services such as voice-messaging.
As of December&nbsp;31, 2001, VIVA prepay cards were available
in denominations of Ps.100, Ps.150, Ps.200 and Ps.500. Since
January&nbsp;1, 2002, after the implementation of a new tax to
certain telecommunication services in Mexico, our VIVA prepay
cards are only available in denominations of Ps.100 and Ps.150.
See Item&nbsp;3, &#147;Key Information&nbsp;&#151; Risk
Factors&nbsp;&#151; Risk Factors Relating to Doing Business in
Mexico.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Hybrid Plans. </FONT></I><FONT size="2">In
2000, we launched the ID Pack, a hybrid plan with elements of
postpaid and prepay plans targeted at high school and
university-aged youths who want the status of a cellular phone
but want to control their usage. The plan had a low monthly fee
of Ps.99 and provided certain value-added services, with airtime
purchased through the activation of a VIVA prepay card. In 2001,
we launched the Lady Pack, a hybrid plan targeted at women in
their 20s. Both of these plans were discontinued in January
2002. In February 2002, we launched the IDEAL plan, a new hybrid
plan targeted at individuals who want the status of a cellular
phone but want to control their usage. This plan also has a low
monthly fee of Ps.165 and provides certain value-added services
and 30 minutes worth of airtime per month. Additional airtime is
purchased through the activation of a VIVA prepay card.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Discounts on Incoming
Calls.</FONT></I><FONT size="2"> In response to competitive and
market conditions, we offer discounts on the airtime charges of
up to 50% for incoming calls for our customers who are in their
home region and who have opted out of the CPP system. Beginning
in May 1999, with the advent of the CPP modality, cellular
customers who do not opt out of CPP do not pay airtime charges
for incoming local calls (other than incoming local calls while
roaming outside their home region).
</FONT>

<P align="center"><FONT size="2">37
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Off-peak Pricing.</FONT></I><FONT size="2">
Evidencing our commitment to innovation and our focus on
differentiation, we launched an off-peak pricing rate plan for
postpaid and prepaid subscribers in November 2001. For the first
time in Mexico, this plan offered wireless customers a
discounted per-minute tariff during nights and weekends. Our
competitors soon followed our initiative.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Strategy.</FONT></I><FONT size="2"> We intend
to continually review market pricing and will attempt to
increase prices, if economic and competitive conditions permit,
to keep pace with inflation. Constant adjustments to meet market
and competitive conditions may require that we increase or
decrease prices over short periods of time. See Item&nbsp;5,
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
Trend Information&nbsp;&#151; Price Increases and
Rollbacks.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Activation, Billing and Collection
Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We can activate a phone within 15 minutes or less
for any prepay and postpaid customers. For postpaid customers
who intend to pay their monthly charges with a credit card,
there is a credit approval process prior to the delivery and
activation of a cellular telephone. For postpaid customers who
intend to pay their monthly charges in cash, there is a credit
review process and a requirement of a security deposit,
depending on the postpaid plan, in a minimum amount equal to 1.5
times the corresponding monthly rental fee. In 2000, we started
to offer direct online activation to reduce the time of response
to our customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have also implemented a system to monitor MOU
levels and the number of calls to certain geographic areas in
order to identify abnormal usage by postpaid subscribers. When
abnormal usage is detected, we contact the subscriber to
determine whether such usage has been authorized. We believe
that these procedures are effective in reducing the number of
billing disputes with subscribers and losses due to cellular
fraud.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Billing is currently administered using five
different billing systems, including a cellular customer care
and billing system provided by LHS Communications Systems, Inc.
(LHS) in Regions&nbsp;5, 6, 7, 8 and 9 which we also use for our
450&nbsp;MHz fixed local wireless business, one point of sale
system that provides billing, administration and control
features, a proprietary residential long distance system, a
proprietary system for high-volume business long distance
customers and a purchased system for paging customers. We
compile billing information from our switches by electronic
transfer on an hourly basis for processing by our billing
systems. We take protective and disaster recovery measures in
connection with all billing information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From 1998 through 2001, we invested a total of
U.S.$32.6&nbsp;million in the cellular portion of our LHS
cellular customer care and billing system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We mitigate our credit exposure in five ways:
</FONT>
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    <FONT size="2">for all customers by obtaining a credit report
    from the <I>Bur&#243; Nacional de Cr&#233;dito </I>(National
    Credit Bureau), a Mexican affiliate of TransUnion Corporation;
    </FONT></TD>
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    <FONT size="2">by requiring payment to be made by credit card
    or, for those customers who do not pay by credit card, by
    requiring security deposits;
    </FONT></TD>
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    <FONT size="2">by requiring that postpaid customers purchase a
    bond, which provides for payment in the event of customer
    defaults;
    </FONT></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by establishing credit limits, and portfolio
    segmentation, according to customers&#146; credit quality; and
    </FONT></TD>
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    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by utilizing prepay services, which eliminate all
    credit risk.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For 1999 and 2000, we reserved approximately 2.7%
and 1.6% of our cellular revenues in each year for doubtful
receivables. For 2001, we reserved approximately 1.7%% of our
cellular revenues for doubtful receivables.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we also record a revenue provision
for those postpaid customers who had fallen behind in their
payments and whose service had been suspended. Toward the end of
the third quarter of 1999, we changed our billing practice for
these postpaid customers. Rather than continue our policy of not
charging
</FONT>

<P align="center"><FONT size="2">38
</FONT>

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<DIV align="left">
<FONT size="2">monthly fees upon suspension, in the hope of
receiving additional revenues from CPP tariffs for incoming
local calls and from suspended customers who ultimately pay
overdue amounts and reinitiate service, we began to permit
incoming call service and continue to charge monthly fees to
suspended customers for an additional two months, but reserved a
substantial portion of the monthly fees as a revenue provision.
This period was reduced to two months in the second quarter of
2000. This change in policy resulted in additional marginal
revenue and in the increase in 1999 and 2000 reserves discussed
above.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Network and Equipment</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cellular
Services</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, our integrated
mobile wireless network comprised 6 cellular switches, 537 cell
sites, 135 repeaters and 24 microwave repeaters, and covered
approximately 65% of all mobile wireless regional POPs,
representing 51&nbsp;million inhabitants or 65% of Mexico&#146;s
total population. In 2000, we added 63 cellular cell sites and
38 repeaters throughout our cellular regions. During 2001, we
added 83 new cellular cell sites, 43 repeaters and 1 switch. As
a result of the integration of Region&nbsp;8 into our business,
in 2001 we added 26 cell sites in Region 8 to our cellular
network.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1997, we signed an agreement with
subsidiaries of Lucent Technologies for the replacement of
Iusacell&#146;s existing analog network equipment with Lucent
Technologies analog and CDMA digital network equipment. This
replacement began in February 1998. All regions that we owned at
the time were completely swapped out as of August 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We elected to deploy CDMA digital technology
instead of TDMA technology based on our and Verizon&#146;s
evaluation of the two technologies. Verizon is successfully
using CDMA technology in most of its U.S. markets with favorable
customer response. CDMA offers significantly greater
call-carrying capacity, superior voice quality, longer telephone
battery life and greater fraud protection and is easier to
upgrade than TDMA. We will maintain transmitting equipment to
serve both analog and digital formats, and we are marketing
tri-mode cellular and PCS telephones capable of sending and
receiving both analog and digital transmissions in order to
support roaming service between our cellular and PCS regions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Digital microwave links between cell sites and
the landline system are supplied by various equipment
manufacturers. Taking advantage of the ability of our various
switching systems to run customized software, in 2000 we
developed a proprietary software package which is able to track
and report, in real-time, all aspects of network performance,
including traffic analysis, call quality and alarms. In 2001 we
began introducing the new Dense Wavelength Division Multiplexing
(DWDM) technology in some high-traffic areas of our fiber optic
network to increase capacity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a network operations and control center
(NOCC) in Mexico City which oversees, administers and provides
technical support to all our cellular regions. In 1999, we
upgraded our NOCC by installing a new network management system
that provides more complete and automated surveillance
capabilities and fault and performance management for all
network equipment. During 2000, we implemented a new network
administration system that provides better surveillance and
administration of network performance. We are installing another
center for network operations in Toluca that will provide an
alternative monitoring capability for the network in case of a
contingency in the center for network operations located in
Mexico City. We expect to start operations at the center to be
located in Toluca during the second half of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2002 we started providing two-way Short
Message Service (SMS) and we are evaluating the feasibility of
installing a Packet Switched Data (PSD) platform to provide data
services over the new 3G-1XRTT technology. Nevertheless, the
network is being currently enhanced to support 3G-1XRTT handsets
only for voice service in order to increase the network capacity.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other
Services</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We provide paging services primarily using our
own cellular network facilities as well as 69 owned and one
leased paging antennas. For long distance, we use fiber optics
and state-of-the-art digital systems. In
</FONT>

<P align="center"><FONT size="2">39
</FONT>

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<DIV align="left">
<FONT size="2">particular, we use our three long distance
switches and our own fiber optic network and transmission
equipment, as well as other redundant facilities leased from
Telmex and other competitors.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We provide private data transmission services,
primarily using excess capacity in our microwave backbone in our
existing cellular network in Region&nbsp;9.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect that our local wireless network, if
implemented in the 450&nbsp;MHz frequency band, will be based on
the most advanced digital switching, transmission and subscriber
connection equipment that is readily available and commercially
feasible. We would utilize our existing infrastructure,
including one switch and fourteen 450&nbsp;MHz cell sites, to
the extent possible. If we opt to provide local wireless service
through our 800&nbsp;MHz cellular band, the digital technology
that would be employed would offer additional features such as
out-of-zone mobility.
</FONT>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The offering of cellular services in Mexico is
currently a regulated duopoly in each region. Iusacell
Celular&#146;s cellular competitor in all regions in which it
provides service is Telcel, the holder of the Cellular B-Band
concession for service throughout Mexico and the country&#146;s
largest cellular provider. Cellular systems compete principally
on the basis of quality of telecommunications services, customer
service, price, breadth of coverage area, roaming capabilities
and value-added services. Operators are largely free to set
their own rates, provided they are set on the basis of cost.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are facing increasing competition from
companies providing mobile wireless telecommunications services
utilizing alternative existing technologies. Nextel de
M&#233;xico, S.A. de C.V. began marketing its enhanced
specialized mobile radio services in 1998. In 1999, we began to
face competition from the winners of 1.9&nbsp;GHz (PCS) spectrum
in the auctions concluded in May 1998. Pegaso commercially
launched its mobile wireless PCS services in Tijuana in February
1999, initiated PCS services in Monterrey, Guadalajara and
Mexico City later in 1999 and at the end of 2001 provided PCS
service in 12 cities in Mexico. In May 2002, Telef&#243;nica
M&#243;viles announced that it signed an agreement to buy 65% of
the share capital of Pegaso from Leap Wireless and Sprint PCS
and intends to merge this entity into its existing operating
company in Mexico. Unef&#243;n launched mobile wireless services
in Acapulco and Toluca in February 2000, and now provides fixed
and mobile wireless services in those two cities as well as in
Mexico City, Guadalajara, Monterrey and 12 more cities in Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In paging services, we compete with established
companies such as Comunicaciones Mtel, S.A. de C.V. (Skytel),
Operadora Biper, S.A. de C.V., Enlaces Radiof&#243;nicos, S.A.
de C.V. (Digitel), Comunicaci&#243;n Din&#225;mica
Metropolitana, S.A. de C.V. (Coditel), Grupo Radio Beep, S.A. de
C.V. and Buscatel, S.A. de C.V., a Telmex subsidiary. Some of
our paging competitors have already established nationwide
paging networks, giving them a significant operational and
marketing advantage over us. In 1999, COFETEL concluded auctions
for a series of nationwide and regional concessions for
frequencies to be used to provide two-way paging services in
which we did not participate. Moreover, we and other digital
wireless providers, including Telcel and Pegaso, have begun to
provide one-way and two-way short message services, which are
paging services, over wireless frequencies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In providing long distance telephone service, we
face or will face competition from 14 other concession holders,
including Telmex and joint venture companies in which AT&#38;T
and MCI WorldCom have beneficial ownership interests.
Presubscription balloting in which telephone customers were
asked to elect their long distance carrier was conducted in 150
cities across Mexico in 1997, 1998 and 1999. We chose not to
commit significant marketing resources to the balloting process
and fared poorly in the initial balloting results.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the local telephony market, we expect to face
significant competition from Telmex, the existing monopoly, and
new competitors providing service over the 1.9&nbsp;GHz (PCS)
frequency bands, and 3.4-3.7&nbsp;GHz (Wireless Local Loop)
frequency bands, such as Axtel and Unef&#243;n.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In providing data transmission services, we
compete for customers with Telmex, state-owned
Telecomunicaciones de M&#233;xico, which we refer to as Telecom,
and the operational long distance companies.
</FONT>

<P align="center"><FONT size="2">40
</FONT>

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<DIV align="left">
<FONT size="2">In addition, we believe that the current Mexican
data transmission industry includes over 1,000 private networks
that provide data transmission services.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Government Regulation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Telecommunications systems in Mexico are
regulated by the SCT and by COFETEL, a decentralized regulatory
body within the SCT, pursuant to the 1995 Telecommunications Law
(<I>Ley Federal de Telecomunicaciones</I>), which became
effective on June&nbsp;8, 1995. Regulations governing
international long distance, domestic long distance and local
telephony have been promulgated under the 1995
Telecommunications Law. However, some rules from the prior Law
of General Means of Communication (<I>Ley de V&#237;as Generales
de Comunicaci&#243;n</I>) and the rules promulgated under such
law, including, without limitation, the Telecommunications Rules
(<I>Reglamento de Telecomunicaciones</I>) which we collectively
refer to as the Original Communications Laws, generally remain
effective if they are not inconsistent with the 1995
Telecommunications Law and the rules promulgated under that law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These laws and regulations define the regulatory
structure applicable to the nationwide telecommunications
infrastructure and the provision of telecommunications services.
They govern, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">applications to obtain concessions to install,
    maintain and operate telecommunications systems;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the establishment of technical standards for the
    provision of telecommunications services;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the grant, revocation and modification of
    concessions and permits; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the auction of spectrum.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the first half of 2001, the SCT announced
that the 1995 Telecommunications Law would be amended to include
new provisions related to competition, customer protection,
spectrum auctions, permits for commercialization of
telecommunication services and universal service. Reportedly,
the amendments will focus more on networks than on services. The
SCT and the telecommunications industry have been recently
involved in discussions to define the content of the new law. We
believe that the initiative could be presented to Congress for
approval in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In particular, the terms and conditions of
concessions and permits granted under the Original
Communications Laws, which is the case for the cellular
concessions and permits granted to Iusacell and our
subsidiaries, should be governed by the Original Communications
Laws and respected under the new regulatory regime until their
expiration. The 1995 Telecommunications Law may grant rights
enhancing those set forth in the Original Communications Laws.
For instance, rates charged by holders of concessions and
permits granted under the Original Communications Laws no longer
require prior approval from the SCT, but only require
registration with COFETEL.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Concessions
and Permits</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To provide public telecommunications services in
Mexico through a public network, the service provider must first
obtain a concession from the SCT. Pursuant to the 1995
Telecommunications Law, concessions for public networks may not
exceed a term of 30&nbsp;years, and concessions for
radioelectric spectrum may not exceed a term of 20&nbsp;years.
Concessions may be extended for a term equivalent to the term
for which the concession was originally granted, but not to
exceed such 20- or 30-year limit, as the case may be.
Concessions specify, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the type of network, system or service;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the allocated spectrum, if applicable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the geographical region in which the holder of
    the concession may provide the service;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the required capital expenditure program;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the term during which such service may be
    provided;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">41
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the payment, where applicable, required to be
    made to acquire the concession, including, where applicable, the
    participation of the Mexican government in the revenues of the
    holder of the concession; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any other rights and obligations affecting the
    concession holder.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to concessions, the SCT may also
grant permits for (i) establishing, operating or exploiting
telecommunications services not constituting a public network
(i.e., reselling) and (ii)&nbsp;installing, operating or
exploiting transmission-ground stations. There is no specified
maximum term for permits. Under the 1995 Telecommunications Law,
only registration with the SCT is required to provide
value-added telecommunications services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the 1995 Telecommunications Law and the
Foreign Investment Law (<I>Ley de Inversi&#243;n
Extranjera</I>), concessions may only be granted to Mexican
individuals and to Mexican corporations in which non-Mexicans
hold no more than 49% of their voting shares or which are not
otherwise controlled by non-Mexicans, except that, in the case
of concessions for cellular communications services, foreign
investment participation may exceed 49% with the prior approval
of the Mexican Foreign Investment Commission of the Mexican
Ministry of Economy (formerly the Ministry of Commerce and
Industrial Development). The Mexican Foreign Investment
Commission has recently ruled, upon application of Unef&#243;n,
that concessions for PCS services should be treated identically
to concessions for cellular services for foreign investment
purposes. There are no foreign investment participation
restrictions in respect of operations conducted under permits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A concession or a permit may be terminated
pursuant to the 1995 Telecommunications Law upon:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">expiration of its term;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">resignation by the concession holder or the
    permit holder;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">revocation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">expropriation; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">dissolution or bankruptcy of the concession
    holder or the permit holder.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A concession or a permit may be revoked prior to
the end of its term under certain circumstances, such as:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">unauthorized or unjustified interruption of
    service;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the taking of any action that impairs the rights
    of other concessionaires or permit holders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to comply with the obligations or
    conditions specified in the concession or permit;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to provide interconnection services with
    other holders of telecommunications concessions and permits;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">loss of the concession or permit holder&#146;s
    Mexican nationality in instances in which Mexican nationality is
    legally required;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">unauthorized assignment, transfer or encumbrance
    of the concession or permit, of any rights under the concession
    or permit or of assets used for the exploitation of the
    concession or permit;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to pay to the Mexican government its fee
    for the concession or permit or, where applicable, its
    participation in the revenues of the holder of the concession or
    permit; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">participation of any foreign government in the
    capital stock of the holder of the concession or permit.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition, the SCT may establish for any
    concession further events which could result in revocation of
    that concession.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican government, through the SCT, may also
temporarily seize all assets related to a concession or permit
in the event of a natural disaster, war, significant public
disturbance or threats to internal peace and for other reasons
related to preserving public order or for economic reasons. In
addition, the government has
</FONT>

<P align="center"><FONT size="2">42
</FONT>

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<DIV align="left">
<FONT size="2">the statutory right to expropriate a concession
and assets related to its exploitation for public interest
reasons. Under Mexican law, the Mexican government is obligated
to compensate the owner of the assets in the case of a statutory
expropriation or temporary seizure, except in the event of war.
If the Mexican government temporarily seizes such assets, it
must indemnify the concession or permit holder for all losses
and damages, including lost revenues.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the case of an expropriation, the amount of
the compensation is to be determined by appraisers. If the party
affected by the expropriation disagrees with the amount
appraised, it may initiate judicial action against the
government. Should no agreement be reached on the amount of the
indemnity in the case of a seizure or expropriation, the
determination will be made by an independent appraiser. Iusacell
is not aware of any instance in which the SCT has exercised any
of these powers in connection with a cellular company.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">The
Original Concession</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our right to provide radiotelephony, local
wireless and data transmission services nationwide, as well as
cellular service in Region&nbsp;9, is based upon the concession
granted on April&nbsp;1, 1957, as amended, which we refer to as
the Original Concession, to Servicio Organizado Secretarial,
S.A., merged into SOS Telecomunicaciones, S.A. de C.V., which we
refer to as SOS. The term of the Original Concession is
50&nbsp;years, and it expires on April&nbsp;1, 2007. The
Original Concession may, however, be revoked prior to such date
in the event that SOS fails to comply with its terms or
applicable law. The Original Concession is renewable upon timely
application to the SCT, provided that SOS has complied with all
of the requirements of the Original Concession and agrees to any
new terms and conditions established by the SCT at the time of
renewal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In consideration for the Original Concession, SOS
must make payments to the Mexican government equal to 5% of all
gross revenues derived from services provided through its
Region&nbsp;9 cellular network and payments in an amount which
is the greater of (i)&nbsp;4% of all gross revenues and
(ii)&nbsp;10% of net income, in either case, derived from
services provided through its nationwide radiocommunications
network.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the Original Concession, SOS
must continually modernize its services. In updating its
services, SOS must submit technical and economic plans for
approval by the SCT. In determining whether to approve these
plans, the SCT is authorized to consider whether the plans
sufficiently address factors such as the public interest
(including, without limitation, teledensity) and efficiency and
uniformity in telecommunications throughout Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Initially, the Original Concession authorized
only the installation and commercial operation of nationwide
mobile (vehicle-installed) radiotelephone public service in the
132-144&nbsp;MHz frequency range. Since then, however, the
Original Concession has been amended numerous times, allowing us
to expand the types of telecommunications services which we may
offer. In 1978, the Original Concession was amended to grant SOS
an additional allocation in the 440-450 MHz and 485-495&nbsp;MHz
frequency ranges in return for yielding a portion of its
132-144&nbsp;MHz frequency range allocation. SOS retained the
frequencies between 138 and 144&nbsp;MHz.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Between 1986 and 1989, the Original Concession
was further amended to enable SOS to provide fixed rural
radiotelephony service, to offer telex and data transmission
with the obligation to link its subscribers to the network owned
by Telecom, and to interconnect its radiocommunications ground
stations through satellite.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1989, SOS was authorized to install, operate
and maintain a mobile public radiocommunications network with
cellular technology in the 825-835&nbsp;MHz and 870-880&nbsp;MHz
frequency bands in Region&nbsp;9. In 1990, SOS was authorized to
carry intra-regional cellular-to-cellular communications
throughout Region&nbsp;9 without being required to interconnect
with the long distance carrier. In 1992, SOS was authorized to
provide public data transmission service nationwide through its
radio communications networks without the obligation to link its
subscribers to the Telecom network.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1993, SOS was granted an additional 5&nbsp;MHz
band in the 800&nbsp;MHz frequency range for the provision of
cellular service, due to the high volume of cellular traffic
experienced in Region&nbsp;9. In the same year, SOS was
authorized to improve its radiocommunications public service in
the 440-450&nbsp;MHz and 485-495&nbsp;MHz frequency ranges by
utilizing digital technology and to interconnect its
telecommunications systems through
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<DIV align="left">
<FONT size="2">fiber optic, satellite and microwave
technologies. The SCT also clarified the ability, and indeed the
obligation, of SOS to interconnect customers of its nationwide
radio communications network regardless of whether such
customers use fixed, mobile or portable telephones.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with the 1995 Telecommunications
Law, SOS applied to renew the Original Concession in March 1997.
Moreover, in December 1996, we applied to divide the Original
Concession into two concessions, one relating to the provision
of cellular services over the 800&nbsp;MHz frequency band in
Region&nbsp;9, which would not be subject to restrictions on
foreign investment, and a second relating to the 450&nbsp;MHz
frequencies, which would be subject to restrictions on foreign
investment. We are currently negotiating the terms and
conditions for such extension and division with COFETEL.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Cellular
Concessions</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mexico is divided into nine cellular regions. The
SCT has allocated cellular telephone system frequencies in each
region in the Cellular A-Band and the Cellular B-Band. In each
region, Telcel holds the Cellular B-Band concession and its
cellular competitor in each region holds the Cellular A-Band
concession.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In Region&nbsp;9, we hold the right to provide
cellular service pursuant to an authorization granted to SOS by
the SCT in 1989 under the Original Concession. In
Regions&nbsp;5, 6, 7 and 8, we hold the right to provide
cellular service through our subsidiaries Comunicaciones
Celulares de Occidente, S.A. de C.V., known as Comcel, Sistemas
Telef&#243;nicos Port&#225;tiles Celulares, S.A. de C.V., known
as Portacel, Telecomunicaciones del Golfo, S.A. de C.V., known
as Telgolfo, and Portatel del Sureste, S.A. de C.V. known as
Portatel, respectively. Comcel, Portacel, Telgolfo and Portatel
each holds a 20-year concession expiring in 2010 which
authorizes these subsidiaries to install, operate, maintain and
exploit mobile public radiotelephone networks with cellular
technology for commercial use in the Cellular A-Band. In
consideration for these authorizations and concessions, the
subsidiaries made initial payments to the Mexican government
and, in addition, must make payments as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent of Gross</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Revenues Payable To</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Mexican Government</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comcel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portacel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telgolfo
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portatel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By the terms of their concessions, Comcel,
Portacel, Telgolfo and Portatel must continually modernize their
services after receiving approval of their technical and
economic plans from the SCT. In determining whether to approve
these plans, the SCT is authorized to consider whether the plans
sufficiently address factors such as the public interest
(including, without limitation, teledensity) and efficiency and
uniformity in telecommunications throughout Mexico. These
concessions may be revoked or terminated prior to their
expiration dates in the event the concession holder fails to
comply with the conditions established in the concessions or
applicable law. The concessions may, however, be renewed for a
term equal to the original term upon timely application to the
SCT, provided that the concession holder had complied with all
of the requirements of its concession and agrees to any new
terms and conditions established by the SCT at the time of such
renewal.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Paging</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;14, 1995, Iusacell Celular and
Infomin formed Infotelecom as a joint venture to market national
and international paging services. Infomin has a concession,
which expires on July&nbsp;20, 2009, to provide nationwide
paging services in Mexico. Although the joint venture agreement
between Iusacell Celular and Infomin contemplates that Infomin
will ultimately transfer its paging concession to Infotelecom,
Infomin&#146;s paging concession prohibits foreign ownership of
more than 49% of the voting shares of the entity holding the
concession. Infomin, therefore, would be unable to contribute
its paging license to the joint
</FONT>

<P align="center"><FONT size="2">44
</FONT>

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<DIV align="left">
<FONT size="2">venture so long as Verizon continued to control
the management of Iusacell Celular and Iusacell Celular
continued to hold more than 49% of the voting shares of
Infotelecom.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to eliminate this obstacle to the
transfer of the paging concession to Infotelecom, in December
1998 we sold a 2% interest in Infotelecom to Mr.&nbsp;Jos&#233;
Ram&#243;n Elizondo, a former director of Iusacell Celular. As a
result, we currently hold a 49% interest in Infotelecom.
Infotelecom is required to make monthly payments to Infomin
equal to 5% of all gross revenues for the preceding month. This
payment represents the amount which Infomin as concession holder
must pay to the SCT for the right to provide paging service. In
2000, Infomin received governmental approval to transfer its
paging concession to Infotelecom. We nevertheless expect the
transfer of the concession to be implemented in 2002. The
financial statements of Infotelecom are consolidated with the
financial statements of Iusacell. See Note&nbsp;2 to the
Consolidated Financial Statements.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Long
Distance</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our right to provide international long distance
services is based upon a long distance concession granted by the
SCT to Iusatel, on October&nbsp;16, 1995. The term of the long
distance concession is 30&nbsp;years and may be renewed upon
timely application to the SCT, for an equal period of time,
provided that Iusatel complies with certain requirements. Upon
our application, the SCT and COFETEL modified this concession on
December&nbsp;17, 1997, authorizing a change in the coverage
requirements and increasing flexibility in the choice of
transmission technology.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the modified concession, Iusatel is
required to comply with technical specifications and had to
serve with its own infrastructure a minimum of 11 specified
cities by July&nbsp;31, 1998, 26 additional specified cities by
December&nbsp;31, 1999 and another 13 additional specified
cities by December&nbsp;31, 2000. Iusatel complied with its
coverage commitments in all cities except for Saltillo in
Region&nbsp;4. Therefore, in 2001 the SCT substituted Tlaxcala
for Saltillo in our coverage commitment, and we are currently in
compliance with all our coverage commitments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 1997, the Mexican Foreign Investment
Commission conditioned its approval of Bell Atlantic assuming
management control over Iusacell Celular upon the requirement,
among others, that we transfer at least 51% of the voting shares
of Iusatel to Mexican investors on terms acceptable to the
Mexican Foreign Investment Commission. In November 1998, we
complied with this requirement by having Mr.&nbsp;Elizondo agree
to subscribe to 5.1% of the capital stock of Iusatel, comprising
51% of the voting shares thereof. We retained a 94.9% equity
interest in Iusatel, including a 90% equity interest through the
ownership of neutral limited voting stock (<I>inversi&#243;n
neutra</I>) and a 49% voting interest representing a 4.9% equity
interest. The financial statements of Iusatel are consolidated
with the financial statements of Iusacell Celular. See
Note&nbsp;2 to the Consolidated Financial Statements.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Local
Telephony</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe our right to provide local telephony
service is derived from the Original Concession. The Original
Concession, as originally granted, permitted SOS to provide
radiocommunications service to vehicle-mounted terminal
equipment nationwide.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1986, the SCT amended the Original Concession
to authorize SOS to provide fixed public radiotelephony service
in rural areas nationwide in accordance with plans to be
approved by the SCT. In 1990, the Telecommunications Rules were
promulgated by the Mexican government which further modified the
Original Concession.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These regulations classified radiocommunications
services on the basis of the networks used to provide such
services rather than upon the basis of subscriber terminal
equipment. Radiocommunications networks are generally classified
as either &#147;fixed&#148; or &#147;mobile.&#148; Our
radiocommunications network is a mobile network. In 1993, the
SCT clarified the ability, and indeed the obligation, of SOS to
interconnect customers of its nationwide radiocommunications
network regardless of whether such customers use fixed, mobile
or portable telephones.
</FONT>

<P align="center"><FONT size="2">45
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the Original Concession, the
commencement of construction and marketing of local wireless
service in the 450&nbsp;MHz frequency band on a commercial basis
requires the prior approval of the SCT. We have never received
the SCT&#146;s approval of our technical and economic plans for
local wireless service in the 450&nbsp;MHz frequency band.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">However, Iusacell Celular has reached an
agreement with the SCT on a technical process by which Iusacell
Celular can provide local wireless service in the 450&nbsp;MHz
frequency band in some of its existing service regions and has
received a right of first refusal to acquire the concessions to
provide local wireless service in such regions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our management is currently evaluating whether to
exercise our right of first refusal. See Item&nbsp;4,
&#147;Information on the Company&nbsp;&#151; Business
Overview&nbsp;&#151; Other Services&nbsp;&#151; Public and Rural
Telephony and Local Fixed Wireless.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In September 1998, we determined that, because of
many factors, including the impact of changing technology since
the initiation of the 450&nbsp;MHz fixed local wireless project
in 1994, an impairment of our investment in 450&nbsp;MHz TDMA
technology had occurred. As a result, we recorded a substantial
non-cash write-down of our investment in the 450&nbsp;MHz fixed
local wireless project. Given the obsolescence of our existing
450&nbsp;MHz network infrastructure, we may record a non-cash
write-down of substantially all of the remaining book value of
the 450&nbsp;MHz project fixed assets by the end of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 1998, Mr.&nbsp;Elizondo agreed to
subscribe 5.1% of the capital stock of Iusatelecomunicaciones,
S.A. de C.V., the Iusacell Celular subsidiary which provides
local wireless service in the 450&nbsp;MHz frequency band on a
trial basis, comprising 51% of our total voting shares. We
retained a 94.9% equity interest in Iusatelecomunicaciones,
including a 90% equity interest through the ownership of neutral
limited voting stock <I>(inversi&#243;n neutra)</I> and a 49%
voting interest representing a 4.9% equity interest. The
financial statements of Iusatelecomunicaciones are consolidated
with the financial statements of Iusacell Celular. See
Note&nbsp;2 to the Consolidated Financial Statements.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Data
Transmission</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our right to offer telex and provide public data
transmission service throughout Mexico is derived from the
Original Concession. We use our allocations in the
138-144&nbsp;MHz, 440-450&nbsp;MHz and 485-495&nbsp;MHz
frequency bands and excess capacity in our cellular microwave
backbone in Region 9 to provide data transmission services.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Satellite
Transmission Permit</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;15, 1991, Satelitr&#243;n, a
joint venture among Hughes Network Systems, Iusacell Celular and
one other investor, was granted a 15-year permit to provide
dedicated circuit services and private networks through Mexican
satellites or any other satellites designated by the Mexican
government. The Satelitr&#243;n permit is renewable for 15
additional years upon timely application to the SCT, provided
Satelitr&#243;n has complied with all of the requirements of the
permit and agrees to any new terms and conditions established by
the SCT at the time of such renewal. Under this permit,
Satelitr&#243;n is required to make monthly payments to the SCT
equal to 2.5% of all gross revenues derived from its provision
of access to its satellite bandwidth, and 2.5% of all such gross
revenues to Telecom for supervision and supporting services. On
March&nbsp;22, 2001, we sold our 65.9% equity interest in
Satelitr&#243;n and our ownership in the transmission hub to
Telepuertos Satelitales, S.A. de C.V. for U.S.$1.3&nbsp;million.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Dedicated
Microwave Circuit Services Permit</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;8, 1993, the SCT authorized SOS
to use its microwave network&#146;s excess capacity to provide
dedicated circuit services. In accordance with the terms of this
permit, these dedicated microwave circuits cannot be
interconnected to public exchange networks, and the service must
only be provided through the links of the microwave network
authorized by the SCT. On February&nbsp;1, 1994, the SCT
authorized SOS to carry voice, data and video conferencing
through these dedicated circuit services.
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Value-Added
Services Permit</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;17, 1993, SOS was granted a permit
to provide through its public network the following value-added
telecommunications services to its cellular subscribers:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">secretarial service;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">voice mail; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">data transmission.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term of this permit is the same as that of
the authorization for using the Region 9 cellular network
through which the value-added services are to be provided. Under
this permit SOS is required to make annual payments to the
Mexican government equal to 5% of all gross revenues derived
directly from the provision of these services. In October 1994,
Comcel, Telgolfo and Portacel were each granted a permit to
provide secretarial services under the same terms granted to
SOS, including the making of the annual payments to the Mexican
government.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Foreign
Ownership Restrictions</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the 1995 Telecommunications Law and
the 1993 Foreign Investment Law, holders of concessions to
provide telecommunications services in Mexico, excluding
providers of cellular service, cannot have a majority of their
voting shares owned by, and cannot be otherwise controlled by,
foreign persons. In February 1997, the Mexican Foreign
Investment Commission conditioned its approval of Verizon
assuming management control over Iusacell upon the requirement
that, within a renewable period of 180&nbsp;days, Iusacell
Celular would transfer at least 51% of the voting shares of
Iusatelecomunicaciones and Iusatel to Mexican investors on terms
acceptable to the Mexican Foreign Investment Commission. The
Mexican Foreign Investment Bureau twice extended the transfer
deadline.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 1998, we complied with this
requirement by transferring 51% of the voting shares of these
two subsidiaries to Mr.&nbsp;Elizondo by means of a subscription
to capital. We retained 49% of the voting shares of these
subsidiaries, representing 4.9% of their capital. We also hold
an additional 90% of the capital of these subsidiaries through
the ownership of neutral limited voting stock <I>(inversi&#243;n
neutra)</I> that does not constitute voting shares for purposes
of the Mexican foreign investment laws. Consequently, we hold a
94.9% equity interest in these two subsidiaries, whose financial
results we consolidate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To participate in the auctions for concessions
for microwave frequencies concluded in September 1997, we formed
Punto-a-Punto Iusacell, S.A. de C.V., a joint venture with
Mr.&nbsp;Elizondo. The Mexican Foreign Investment Bureau
approved a capital structure substantially similar to that
authorized for Iusatel and Iusatelecomunicaciones for the
microwave joint venture. The financial statements of
Punto-a-Punto Iusacell are consolidated with the financial
statements of Iusacell Celular. See Note 2 to the Consolidated
Financial Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Moreover, in December 1998 Mr.&nbsp;Elizondo
acquired a 2% interest in Infotelecom, from Iusacell Celular. As
a result, we currently hold only 49% of this entity, complying
with the condition precedent necessary to allow our other
partner, Infomin, a Mexican controlled company, to transfer its
paging concession to Infotelecom, as previously agreed with us.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Rates for
Telecommunications Services</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Original Communications Laws, SCT
approval was required for rates charged for all basic and
certain value-added cellular services and for data transmission
services. Historically, the SCT permitted rate increases based
on the cost of service, the level of competition, the financial
situation of the carrier and macroeconomic factors. Carriers
were not allowed to discount the rates authorized by the SCT,
although operators occasionally waived activation fees on a
promotional basis. Interconnection rates were also authorized by
the SCT. All terms of interconnection (such as point of
interconnection) other than interconnection rates were
negotiated between the regional non-wireline cellular carriers
and Telmex under
</FONT>

<P align="center"><FONT size="2">47
</FONT>

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<DIV align="left">
<FONT size="2">the SCT&#146;s supervision. Rates for dedicated
circuit services through microwave networks, and dedicated
circuits and private networks through satellites, were not
regulated under the Original Communications Laws.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the 1995 Telecommunications Law, rates for
telecommunications services, including cellular and long
distance services, are now freely determined by the providers of
such services. Providers are prohibited from adopting
discriminatory practices in the application of rates. In
addition, the SCT is authorized to impose specific rate
requirements on those companies determined by the Federal
Competition Commission to have substantial market power. All
tariffs for telecommunications services, other than value-added
services, must be registered with COFETEL prior to becoming
effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2001, we negotiated a rate reduction
with Telmex that decreases both long distance and local cellular
interconnection charges from U.S.$0.0330 to U.S.$0.0125 per
minute. Additionally, we negotiated with Telmex the terms
regarding payment for the projects Telmex undertook to prepare
its long distance network for competition. We paid Telmex a
fixed payment of approximately U.S.$13.0&nbsp;million and agreed
to pay a U.S.$0.0053 per minute, usage based, surcharge to the
local wireline interconnection rate for the next four years for
long distance calls terminated in Telmex&#146;s local networks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December, 2001, Telmex, Alestra and Avantel
reached an agreement to further reduce the long distance
interconnection rate from U.S.$0.0125 per minute to U.S.$0.00975
per minute. We are currently in negotiations with Telmex to
obtain similar terms for both our long distance business and
local cellular interconnection rate.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>United States
Regulation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1982 Bell Atlantic, like all other regional
Bell operating companies, was subject to a consent decree (the
&#147;Decree&#148;) resulting from anti-trust litigation between
the United States Department of Justice against AT&#38;T. The
Decree required AT&#38;T to divest itself of its local telephone
companies. Under the Decree, Bell Atlantic was prohibited, with
certain limited exceptions, from providing interLATA (long
distance) telecommunications, engaging in the manufacture of
customer premises equipment (CPE), or engaging in the
manufacture or sale of telecommunications equipment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Telecommunications Act of 1996 (the
&#147;1996 Act&#148;), which became effective on
February&nbsp;8, 1996, includes provisions that open local
telephony markets to competition and would permit regional Bell
operating companies, such as the local operating telephone
companies of the former Bell Atlantic, to provide interLATA
services (long distance) and video programming and to engage in
manufacturing. Under the 1996 Act, the former Bell Atlantic was
allowed to provide certain interLATA (long distance) services
immediately upon enactment, including interLATA (long distance)
services permitted under the Decree, interLATA (long distance)
services originating outside the states where its subsidiaries
provide local exchange telephone services and interLATA (long
distance) services that are &#147;incidental&#148; to other
permitted business such as wireless services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">However, the ability of Verizon and its
affiliates to engage in businesses previously prohibited by the
Decree, including providing interLATA (long distance) services
originating in the states where the former Bell Atlantic
subsidiaries provide local exchange telephone service, and
manufacturing CPE or telecommunications equipment, is largely
dependent on satisfying certain conditions contained in the 1996
Act and related regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since Iusacell Celular is a Verizon affiliate,
its operations must comply with the terms of the Decree. In 1986
and 1993, Bell Atlantic obtained waivers under the Decree that
allowed it to conduct business outside the United States,
subject to certain exceptions and restrictions. Under such
exceptions and restrictions, a foreign telecommunications entity
(FTE) affiliated with Verizon, such as Iusacell, could not
provide interexchange (long distance) telecommunications
services between points in the United States or own any
international telecommunications facilities in the United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As to telecommunications traffic between the
United States and a foreign country, an FTE could provide only
the foreign &#147;half&#148; of such traffic. An FTE was
prohibited from discriminating in handling traffic to and from
the United States and was limited as to interests it could own
in international cables and satellite
</FONT>

<P align="center"><FONT size="2">48
</FONT>

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<DIV align="left">
<FONT size="2">facilities to and from the United States.
Finally, an FTE was prohibited from exporting to the United
States any telecommunications equipment or CPE manufactured
outside the United States.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 1996 Act eliminated certain restrictions
under the Decree including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrictions that precluded an FTE from providing
    the U.S. &#147;half&#148; of traffic originating in a foreign
    country;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrictions on exporting to the United States
    telecommunications equipment or CPE manufactured outside the
    United States; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrictions on providing interLATA (long
    distance) telecommunications services between points in the
    United States or international long distance service originating
    in the United States, and from owning international
    telecommunications facilities in the United States subject to
    the same conditions that Verizon must satisfy under the 1996 Act
    and any regulations promulgated thereunder with respect to
    interLATA (long distance) telecommunications services
    originating in the states in which the former Bell Atlantic
    local exchange subsidiaries provide service.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the 1996 Act, we may now provide both the
foreign &#147;half&#148; and the United States &#147;half&#148;
of telecommunications traffic originating in Mexico (or any
other foreign country) and may now carry international
telecommunications traffic which, although routed through the
United States, neither originates nor terminates in the United
States. In addition, we may carry United States originated
traffic bound for Mexico (or other foreign countries) so long as
the traffic originates outside the states where the former Bell
Atlantic subsidiaries provide local exchange telephone service,
except from those states where Verizon has obtained
Section&nbsp;271 approval and subject to having appropriate
authority under Section&nbsp;214 of the United States
Communications Act of 1934.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1996, Iusatel applied for and received
authorization under Section&nbsp;214 of the Communications Act
to become a facilities-based provider of international long
distance services from the United States. This Section&nbsp;214
authorization was transferred to a Peralta Group entity in
January 1997 in order not to delay the proposed change of
control from the Peralta Group to Bell Atlantic. In 2002,
Iusatel USA, Inc., a subsidiary of Iusatel, applied for and
received authorization under Section&nbsp;214 of the
Communications Act to become a facilities-based provider of
international long distance services from the United States. We
have not yet determined whether we will engage in activities
permitted by the 1996 Act or any Section&nbsp;214 authorization
we may receive. If we choose to engage in such activities, we
cannot predict the specific impact of such activities on our
business, financial condition or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other laws of the United States may restrict
activities of Iusacell Celular by virtue of Verizon&#146;s
ownership interest, including laws and regulations that restrict
trade with, and investments in, specific countries, as well as
the United States Foreign Corrupt Practices Act. The Foreign
Corrupt Practices Act is also applicable to Iusacell because its
securities are listed on the New York Stock Exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Iusacell Shareholders&#146; Agreement
contains provisions designed to require us to refrain from
taking any actions that would cause Verizon to be in violation
of applicable law.
</FONT>

<P align="center"><FONT size="2">49
</FONT>

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<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Organizational
Structure</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows our principal direct
(unless otherwise noted) subsidiaries, the majority of which are
organized under the laws of Mexico, their principal line of
business and the percentage of our ownership interest and voting
power as of December&nbsp;31, 2001.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% Voting</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Line of Business</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Power</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SOS Telecomunicaciones, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Region 9 cellular
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comunicaciones Celulares de Occidente, S.A.
    de&nbsp;C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Region 5 cellular
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sistemas Telef&#243;nicos Port&#225;tiles
    Celulares, S.A. de&nbsp;C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Region 6 cellular
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telecomunicaciones del Golfo, S.A. de
    C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Region 7 cellular
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Grupo Portatel, S.A. de C.V. and subsidiaries
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Region 8 cellular
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">78.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">78.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Sales and marketing
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sistecel, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Administrative services
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusatel, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Long distance
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">94.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusatelecomunicaciones, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Local wireless
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">94.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Punto-a-Punto Iusacell, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Microwave transmission
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">94.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Infotelecom, S.A. de C.V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Paging
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusatel USA, Inc.<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Not currently operating
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Held through Iusatel, S.A. de C.V.; Iusatel USA,
    Inc. is a company established in the United States.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of the above companies, including those in
which we own directly or indirectly a minority voting interest,
are consolidated with the financial statements of Iusacell
Celular. See Note&nbsp;2 to the Consolidated Financial
Statements.
</FONT>

<P align="left">
<B><FONT size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property,
Plant and Equipment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, we operated in our
service regions a total of 127 customer sales and service
centers, 537 cellular cell sites, 135 repeaters, 24 cellular
microwave transmission repeaters, microwave transmission
repeaters, 14 fixed local wireless 450&nbsp;MHz cell sites, 69
paging antennas, 6 switches for cellular service, 1 switch for
local wireless service and 3 switches for long distance service.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We generally lease the land and cellular tower
space where our customer sales and service centers, cell sites,
antennas, microwave transmission equipment and switching centers
are located. We own and lease administrative offices in Mexico
City as well as in Guadalajara, Le&#243;n, Puebla, Monterrey,
M&#233;rida, Tijuana and Ciudad Ju&#225;rez. We generally own
our cellular network equipment, subject to liens.
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, the book value of
our property and equipment, before accumulated depreciation of
Ps.5,604.7&nbsp;million (U.S.$612.1&nbsp;million) for 2001,
consisted of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands of constant pesos</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Property and Equipment</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">as of December 31, 2001 and</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">millions of U.S. dollars)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings and facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">Ps.1,623.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">177.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Communications equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">9,820.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,072.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">195.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">79.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Computer equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,446.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">158.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular rental telephones
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">9.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Land
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">65.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Construction in progress
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,225.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">133.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Item&nbsp;5, &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Capital Expenditures&#148; for a
discussion of planned capital expenditures and existing
encumbrances on our property and equipment. See also notes 4 and
8 to the Consolidated Financial Statements.
</FONT>

<P align="center"><FONT size="2">51
</FONT>

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<!-- link1 "ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OPERATING
AND FINANCIAL REVIEW AND PROSPECTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">You should read the following discussion and
analysis in conjunction with the Consolidated Financial
Statements included elsewhere in this Annual Report. Unless
otherwise indicated, all financial information in this Annual
Report is presented in constant pesos with purchasing power as
of December&nbsp;31, 2001. The U.S. dollar translations provided
in this Annual Report are, unless otherwise indicated,
calculated at the Noon Buying Rate at December&nbsp;31, 2001,
which was Ps.9.156 per U.S.$1.00. Sums may not add due to
rounding.</FONT></I>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
Results</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion and analysis is intended
to help you understand and cellular assess the significant
changes and trends in the historical results of operations and
financial condition of Iusacell Celular and subsidiaries and
factors affecting our financial resources.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Consolidated Financial Statements have been
prepared in accordance with Mexican GAAP, which differs in
certain significant respects from U.S.&nbsp;GAAP. Note&nbsp;23
to the Consolidated Financial Statements provides a description
of the principal differences between Mexican GAAP and
U.S.&nbsp;GAAP as they relate to Iusacell Celular&#146;s.
Note&nbsp;23 to the Consolidated Financial Statements also
provides a reconciliation to U.S.&nbsp;GAAP of Iusacell&#146;s
net income (loss) for the years ended December&nbsp;31, 1999,
2000 and 2001 and of stockholders&#146; equity as of
December&nbsp;31, 2000 and 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a Mexican company, we maintain our financial
records in pesos. Pursuant to Bulletin&nbsp;B-10,
&#147;Recognition of the Effects of Inflation on Financial
Information,&#148; and Bulletin&nbsp;B-12, &#147;Statement of
Changes in Financial Position,&#148; issued by MIPA,
Iusacell&#146;s financial statements are reported in period-end
pesos to adjust for the inter-period effects of inflation. The
presentation of financial information in period-end, or
constant, currency units is intended to eliminate the distorting
effect of inflation on the financial statements and to permit
comparisons across comparable periods in comparable monetary
units. Bulletin B-10 requires us to restate non-monetary assets,
non-monetary liabilities and the components of
stockholders&#146; equity using the <I>Indice Nacional de
Precios al Consumidor </I>(&#147;INPC&#148;). We have not
eliminated the effects of these inflation accounting principles
in the reconciliation to U.S.&nbsp;GAAP. See Note&nbsp;23 to the
Consolidated Financial Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except where otherwise indicated, financial data
for all periods in the Consolidated Financial Statements and
throughout this Annual Report have been restated in constant
pesos as of December&nbsp;31, 2001, in accordance with the fifth
amendment to Bulletin B-10. References in this Annual Report to
&#147;real&#148; amounts are to inflation-adjusted pesos and
references to &#147;nominal&#148; amounts are to unadjusted
historical pesos. In calendar years 1999, 2000 and 2001, the
rates of inflation in Mexico, as measured by changes in the
INPC, were 12.3%, 9.0% and 4.4%, respectively. The inflation
indices used are 1.1376 for 1999 figures and 1.0440 for December
2000 figures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In reporting under Mexican GAAP and in accordance
with Bulletin&nbsp;B-10, we are required to quantify all
financial effects of operating and financing the business under
inflationary conditions. For presentation purposes,
&#147;integral financing cost (gain)&#148; refers to the
combined financial effects of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">net interest expense or interest income;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">net foreign exchange gains or losses; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">net gains or losses on monetary position.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net foreign exchange gains or losses reflect the
impact of changes in foreign exchange rates on monetary assets
and liabilities denominated in currencies other than pesos. A
foreign exchange loss arises if a liability is denominated in a
foreign currency which appreciates relative to the peso between
the time the liability is incurred and the date it is repaid, as
the appreciation of the foreign currency results in an increase
in the amount of pesos which must be exchanged to repay the
specified amount of the foreign currency liability. We incurred
a foreign exchange loss in 2000 on our U.S. dollar denominated
debt as the peso depreciated against
</FONT>

<P align="center"><FONT size="2">52
</FONT>

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<DIV align="left">
<FONT size="2">the U.S. dollar. A foreign exchange gain arises
if a liability is denominated in a foreign currency which
depreciates relative to the peso between the time the liability
is incurred and the date it is repaid, as the depreciation of
the foreign currency results in a decrease in the amount of
pesos which must be exchanged to repay the specified amount of
the foreign currency liability. In 1999 and 2001, we incurred a
foreign exchange gain on our U.S. dollar denominated debt as the
peso appreciated against the U.S. dollar.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gain or loss on monetary position refers to
the gains and losses realized from holding net monetary
liabilities or assets and reflects the impact of inflation on
monetary liabilities and assets. For example, a gain on monetary
position results from holding net monetary liabilities during
periods of inflation, such as in 1998, 1999, 2000 and 2001, as
the purchasing power of the peso declines over time.
</FONT>

<P align="left">
<B><FONT size="2">Devaluation and Inflation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mexico experienced a severe economic crisis
following the devaluation of the peso in December 1994, when the
Mexican government first allowed the peso to fluctuate freely
against the U.S. dollar. The value of the peso generally
continued to decline during subsequent years, depreciating by
54.8% relative to the U.S. dollar in 1995 and by 22.7% in 1998.
The peso has generally recovered and strengthened in recent
years, depreciating by only 1.5% against the U.S. dollar in 2000
and appreciating by 4.8% in 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation of the value of the peso has
contributed to sharp increases in inflation. Inflation, which
had been 7.1% in 1994 as measured by changes in the INPC,
increased to 52.0% and 27.7% in 1995 and 1996, respectively.
After a reduction to 15.7% in 1997, inflation was 18.6% for the
year 1998. Since then inflation has declined to 12.3% in 1999,
9.0% in 2000 and reached its lowest level in more than
30&nbsp;years in 2001 to 4.4%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, devaluation and depreciation of the
peso as well as inflation have negatively affected our results
of operations and financial condition and may do so in the
future.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Impact of
Devaluation and Inflation on our Results of
Operations</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The general economic conditions in Mexico
resulting from the devaluation of the peso and the resulting
inflation have had, and may have, an overall negative impact on
our results of operations primarily as a result of the following
factors:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Peso devaluations result in a decrease in the
    purchasing power of Mexican consumers, resulting in a decrease
    in the demand for all goods and services, including cellular
    telephony;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Due to competitive market conditions and the
    overall state of the Mexican economy, we have not been able to
    increase our prices in line with the inflation rate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Significant inflation leads to an upward
    restatement of our assets, resulting in a substantial increase
    in depreciation and amortization expense.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Given our net U.S. dollar liability position,
    devaluation of the peso as compared to the U.S. dollar results
    in the recording of net foreign exchange losses, and
    appreciation of the peso as compared to the U.S. dollar results
    in the recording of net foreign exchange gains.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Impact of
Devaluation and Inflation on our Financial
Condition</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The general economic conditions in Mexico
resulting from the devaluation of the peso and the resulting
inflation have had, and may have, an overall negative impact on
our financial condition as result of the following factors:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Substantially all of our indebtedness is
    denominated in U.S. dollars. As a result, in a period of peso
    devaluation, the peso-carrying amount of such debt increases to
    reflect the additional pesos required to meet such foreign
    currency liabilities; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Whenever the inflation rate exceeds the
    devaluation rate, as was the case in 1996, 1999, 2000 and 2001,
    the peso-carrying value of our assets purchased in foreign
    currencies is reduced. This is because, assuming that the
    foreign currency value of a given asset remains unchanged
    between periods, the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">53
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">value of such asset for the prior period is
    restated upwards using the inflation rate, while the valuation
    of such asset for the current period is restated using a foreign
    exchange rate which increased at a lower rate.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Item&nbsp;5, &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Hedging&#148; for a description of
contracts we use to hedge.
</FONT>

<P align="left">
<B><FONT size="2">Increase in Subscriber Base</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We use our automated VIVA prepay program in all
of our cellular markets. In October 1999, we introduced a
&#147;one-single rate&#148; plan for prepay customers.
One-single rate prepay customers pay a single per minute rate
for local, national long distance and international long
distance service to the United States and Canada.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The VIVA program has been extremely popular, with
prepay customers increasing from an insignificant percentage of
our subscriber base at its introduction to 73.4% at
December&nbsp;31, 1999 (970,509 subscribers), 73.7% at
December&nbsp;31, 2000 (1,238,625 subscribers) and 78.2% at
December&nbsp;31, 2001 (1,450,709 subscribers). Prepay customers
comprised 86.7%, 74.8% and more than 100% of our net subscriber
additions in 1999, 2000 and 2001, respectively. We expect that
prepay customers will continue to comprise the substantial
majority of new subscriber additions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The percentage of total service revenues derived
from prepay customers was 11.9% in 1999, 13.0% in 2000 and 23.4%
in 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1999 and 2000, we experienced a 27.2% and
25.6% increase in the aggregate number of postpaid customers,
respectively, compared to the beginning period number, with
limited migration by postpaid customers to prepay programs. In
2001 we experienced an 8.7% reduction in the number of postpaid
customers. Many of these postpaid customers migrated to our
prepay program or disconnected as a result of a higher postpaid
churn rate derived from the stricter activation policies and
retention programs implemented to increase the quality of
additions. Moreover, as part of a review of postpaid customers
implemented in the second quarter of 2001, including a targeted
retention program, we decided to delete 11,600 postpaid
customers from our subscriber base in that period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prepay customers, on average, have substantially
lower minutes of use than postpaid customers and do not pay
monthly fees and, as a result, generate substantially lower
average monthly revenues per subscriber, even though prepay
plans involve higher outgoing call per minute airtime charges
than the average postpaid plan. Consequently, as the proportion
of prepay customers to our total subscribers continues to
increase, we expect that average minutes of use per customer and
average monthly revenues per customer will continue to decrease.
The implementation of the CPP modality and the digitalization of
the postpaid subscriber base have moderated this decline.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 1998, we extended the life of our
VIVA prepay cards from a maximum of 135&nbsp;days to a maximum
of 180&nbsp;days to allow greater flexibility in their use. In
April 1999, in anticipation of the advent of the CPP modality
and for competitive reasons, we extended the life of our VIVA
prepay cards to a maximum of 365&nbsp;days. After the balance of
a prepay card becomes zero (which occurs automatically after
180&nbsp;days), the VIVA customer had 185&nbsp;days to activate
a new card before losing his phone number. During this 185-day
period, the VIVA customer was considered an &#147;incoming calls
only&#148; customer, able to receive incoming local calls, but
not able to make outgoing calls.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, in order to evaluate whether we
could generate additional revenues from &#147;incoming calls
only&#148; customers, we extended the period of time to activate
a new card from 185&nbsp;days until April&nbsp;30, 2000 for
those &#147;incoming calls only&#148; customers who otherwise
would have lost service before that date. Beginning May&nbsp;1,
2000, we determined to return to our prior policy of maintaining
&#147;incoming calls only&#148; customers for only 185&nbsp;days
and began to turn over &#147;incoming calls only&#148; prepay
customers who had reached the 185-day limit without activating a
new prepay card.
</FONT>

<P align="center"><FONT size="2">54
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Extending the life of VIVA prepay cards defers
the deactivation of prepay customers who may in fact not be
using the service. The November 1998 extension, by deferring
prepay turnover for 45 additional days, contributed to the
strong growth in subscriber net additions, particularly prepay
net additions, during the fourth quarter of 1998. Likewise, the
April 1999 and October 1999 extensions, by deferring prepay
turnover, increased overall subscriber net additions in the
second, third and fourth quarters of 1999 and the first quarter
of 2000. The May 2000 decision to no longer defer the
deactivation of prepay customers led to a decrease in overall
subscriber net additions in the second, third and fourth
quarters of 2000. Overall subscriber net additions in the second
quarter of 2000 were also negatively affected by our decision to
turn over approximately 25,000 prepay customers who had
purchased but never activated a prepay card. Overall subscribers
declined by approximately 14,000 in the third quarter of 2000 as
a result of our decision to examine our entire prepay subscriber
base and eliminate approximately 59,000 additional prepaid
customers who had not made or received any calls for an extended
period of time. In the second quarter of 2001 net prepay
additions were affected by our decision to change the policy for
reporting preactivated prepay sales in order to better focus on
active customers and reduce the potential future churn. Under
the new policy a preactivated prepay sale is now reported when
the end-user places the first outgoing call. Accordingly,
commissions related to this type of prepay sale are now paid
only after the end-user places the first outgoing call. This
policy change resulted in 88,300 disconnects of previously
pre-activated but never used prepay phones from our customer
base. As part of a restructuring of distribution processes, we
conducted a comprehensive review of the prepay base in the
second quarter of 2001. This review identified an additional
88,100 inactive prepay customers who were churned in that period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, we reduced the initial period for
using up an activated prepay card and activating a new card from
185&nbsp;days to 60&nbsp;days effective July&nbsp;1, 2001. This
measure is intended as an incentive for customers to recharge
their airtime on a more regular basis. As a result,
approximately 345,000 incremental customers were transferred to
the &#147;incoming calls only&#148; status in that quarter. The
reduction in the initial period is in line with Mexican market
practices. Any decision to further reduce or extend the VIVA
card life for &#147;incoming calls only&#148; customers will
also reduce or increase overall subscriber net additions for the
period of the reduction or extension.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, we had approximately
768,000 &#147;incoming calls only&#148; customers. The
substantial majority of &#147;incoming calls only&#148;
customers generate very low traffic.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In late March 1999, we implemented marketing
initiatives focused on increasing usage by and revenues derived
from prepay customers. These initiatives included an approximate
6% price increase, the implementation of a Ps.59 or Ps.79
activation fee for a customer activating a telephone number with
a Ps.250 or Ps.150 prepay card, an increase in the minimum
denomination of the prepay card with which a customer can
activate prepay service from Ps.100 to Ps.150, an adjustment of
commissions to encourage distributors to activate customers with
prepay cards of higher denominations and the sending of
electronic reminders to customers to replenish their cards.
During the second half of 2000, we began to migrate high-usage
prepay customers to digital service and to sell digital handsets
to new prepay customers. At the end of 2000 and 2001, 11% and
35% of the prepay subscriber base, respectively, were able to
access digital service. These initiatives, together with the
continuing efforts to increase the number of distribution points
for prepay cards in order to facilitate and encourage their
replenishment, appear to have had their intended results. Our
new and existing prepay customers are generating higher revenues.
</FONT>

<P align="left">
<B><FONT size="2">Digitalization</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Digital and dual-mode (i.e., digital-analog)
handsets are substantially more expensive than analog handsets,
although the prices for all types of handsets have declined over
time. As a result, the subsidies we provide for handsets are
higher than they would have been had we remained an exclusively
analog service provider. The sale of digital handsets to new
subscribers and the migration of analog postpaid subscribers to
digital service began in 1998, with our introduction of digital
service. During the second half of 2000, we began to migrate
high-usage prepay customers to digital service and to sell
dual-mode handsets to new prepay customers. In May 2001, we
decided to no longer purchase any analog-only handsets. Upon the
exhaustion of
</FONT>

<P align="center"><FONT size="2">55
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">our existing inventory of analog-only handsets,
we will only sell digital, dual mode and tri-mode handsets to
our customers.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that digitalization will increase
subscriber usage. Our experience has been that the average new
digital customer uses his or her cellular telephone more than
the average analog customer and that analog customers that
migrate to digital service tend to increase their usage upon
migration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Digital postpaid subscribers increased from
27,410 at December&nbsp;31, 1998 to 337,341 at December&nbsp;31,
2001. At December&nbsp;31, 2001, only 66,647 postpaid
subscribers were analog customers, the vast majority of which
were rural postpaid terminals. At December&nbsp;31, 2001, we had
511,236 digital prepay subscribers, representing approximately
35% of the total prepay customer base. We expect that the
percentage of our prepay customers who use digital service will
increase with our existing handset purchase and sale policy and
our continued migration of prepay customers to digital service.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with Iusacell&#146;s commercial
launch of PCS services in Monterrey and Tijuana in December
2001, we expect to begin providing tri-mode handsets (which
combine digital PCS, digital cellular and analog cellular modes)
to targeted new postpaid customers in our five Regions. Tri-mode
handsets are substantially more expensive than dual-mode
handsets, although the prices for all types of handsets have
declined over time. As a result, we expect that the subsidies we
provide for handsets will be higher than they otherwise would be
if we were only to provide dual-mode handsets in our cellular
regions.
</FONT>

<P align="left">
<B><FONT size="2">Tower Monetization</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, we entered into a series of
agreements with a Mexican affiliate of American Tower
Corporation, which we refer to as MATC Celular. These
agreements, among other things, give MATC Celular the right to
acquire approximately 330 of our existing non-strategic towers.
In 2001, we closed the sale of approximately 244 of these
non-strategic towers to MATC Celular, receiving in excess of
U.S.$34&nbsp;million in net gains. On May 2002, we closed the
sale of 25 additional non-strategic towers receiving
approximately U.S.$4.2&nbsp;million in net gains. We expect to
sell up to an additional 61 non-strategic towers to MATC Celular
during the remaining of 2002. Iusacell is leasing back these
towers from MATC Celular and subleasing them to its operating
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The difference between the sale price and book
value of the towers sold is being recorded as a reduction in
operating expense. In 2001, we recorded an expense reduction
under Mexican GAAP of Ps.215.9&nbsp;million in connection with
our sale of 244 towers to MATC Celular. However, the leasing of
the towers from MATC Celular results in an increase in our
operating expenses, which we experienced in 2001. However, this
effect was partially offset by the reduction in interconnection
rate expenses registered in January 2001. Under U.S.&nbsp;GAAP,
the majority of the gain was differed. See Note&nbsp;23 to the
Consolidated Financial Statements for a further discussion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under U.S.&nbsp;GAAP, this sale was deferred. See
Note&nbsp;23 to the Consolidated Financial Statements for a
further discussion.
</FONT>

<P align="center"><FONT size="2">56
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents results of
operations data for the years ended December&nbsp;31, 1999, 2000
and 2001.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% Change</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">% Change</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In millions of constant December&nbsp;31,&nbsp;2001 pesos,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">except percentages)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,783.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,729.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,288.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,528.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,820.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,854.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,643.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,917.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,220.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,381.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,568.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(388.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,221.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Integral financing gain (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(656.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss)&nbsp;profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(254.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(55.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Year Ended December&nbsp;31, 2001 Compared
    to Year Ended December&nbsp;31, 2000</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total revenues consist of service revenues and
telephone equipment and other revenues. Our cellular service
revenues are principally derived from the provision of mobile
wireless telephone service in Mexico and also include revenues
attributable to in-roaming and long distance service revenue
generated by our mobile wireless subscribers as well as revenues
from the provision of telecommunication services in Mexico other
than wireless, including long distance service revenue from
non-mobile subscribers and revenues from the provision of data
transmission, fixed local wireless and paging services. Our
service revenues also include all Bulletin&nbsp;B-10 inflation
adjustments on all service revenue line items, whether mobile
wireless service revenues or other service revenues. Telephone
equipment and other revenues consist primarily of revenues from
sales of mobile telephone equipment and accessories, as well as
revenues attributable to out-roaming and revenues from the sale
of dark fiber optic cable. Revenues attributable to out-roaming
are passed through to the applicable host operator.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents the source of our
revenues for the years ended December&nbsp;31, 2000 and 2001:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In millions of constant pesos as of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">December&nbsp;31,&nbsp;2001 except percentages)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,201.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,681.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telephone equipment and other revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">528.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,729.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,288.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">57
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below presents service revenues by
source for the years ended December&nbsp;31, 2001 and 2000:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2001(1)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In millions of constant pesos as of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">December&nbsp;31,&nbsp;2001, except percentages)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Airtime(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,533.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,840.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Monthly fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,710.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,743.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long distance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">532.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">649.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Value-added services and in-roaming(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">424.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total service revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,201.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,681.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Figures include intercompany eliminations.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Airtime includes amounts billed to other carriers
    for incoming minutes under CPP, additional outgoing postpaid
    minutes to those included in the package contracted and prepaid
    outgoing minutes net of unsuitable minutes. Incoming and
    outgoing airtime is charged on a per-minute basis for both peak
    (Monday to Friday, 8:00 a.m. to 10:00&nbsp;p.m.) and non-peak
    airtime.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes fees for value-added services, such as
    call waiting, call transfer, emergency service, secretarial
    service and three-way calling, and revenues from premiums for
    surety bonds, insurance-related charges payable by subscribers,
    rural and public telephony, Iusacell&#146;s cellular magazines
    and other revenues. Does not include charges for related
    airtime. Customers using value-added services such as news,
    weather, sports and entertainment reports are charged only for
    airtime. These revenues are therefore included in airtime.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We had 1,854,697 and 1,681,219 mobile wireless
subscribers at December&nbsp;31, 2001 and 2000, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prepay subscribers increased 17.1% from 1,238,625
subscribers or 73.7% of total subscribers, at December&nbsp;31,
2000 to 1,450,709 or 78.2% of total subscribers, at
December&nbsp;31, 2001. This figure includes 98,470 prepay
subscribers in Region 8 in southern Mexico as a result of our
acquisition of Portatel which represent 6.8% of the total prepay
subscriber base at December 2001. &#147;Incoming calls
only&#148; prepay customers, the substantially majority of whom
generate little traffic, grew by 179.3% from 275,001 at
December&nbsp;31, 2000 to 768,076 at December&nbsp;31, 2001.
Revenues from these customers do not have certain costs
associated with them which we incur in connection with postpaid
customers, such as commissions on sales, advertising or bad debt
expenses. Digital prepay customers grew by 270.6% from 137,943
at December&nbsp;31, 2000 to 511,236 at December&nbsp;31, 2001.
Long distance included (LDI) prepay customers grew by 88.9% from
416,442 at December&nbsp;31, 2000 to 786,477 at
December&nbsp;31, 2001. A prepay customer is included as a
customer if the customer&#146;s telephone number remains
activated at the end of the reporting period. In the third
quarter 2001, we reduced the initial period for using up an
activated prepay card from 185&nbsp;days to 60&nbsp;days
effective July&nbsp;1, 2001 and began to turn over
&#147;incoming calls only&#148; prepay customers who had reached
the 305-day limit without activating a new card or otherwise
recharging the airtime in their accounts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Postpaid subscribers decreased 8.7% from 442,594
subscribers or 26.3% of total subscribers at December&nbsp;31,
2000 to 403,988 or 21.8% of total subscribers at
December&nbsp;31, 2001. This figure includes 15,112 postpaid
subscribers in Region 8 in southern Mexico. Without including
the Region 8 postpaid subscribers as of December 2001, the
decline would have been 12.1% from period to period. Digital
postpaid subscribers decreased by 11.6% from 381,696 at
December&nbsp;31, 2000 to 337,341 at December&nbsp;31, 2001. LDI
postpaid customers decreased by 19.1% from 89,363 at
December&nbsp;31, 2000 to 72,323 at December&nbsp;31, 2001. The
December&nbsp;31, 2001 postpaid subscriber data includes
approximately 37,972 public telephony numbers who are considered
as postpaid customers since January&nbsp;1, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total service revenues increased by 9.2% to
Ps.5,681.7&nbsp;million (U.S.$620.5&nbsp;million) in 2001 from
Ps.5,201.0&nbsp;million (U.S.$568.0&nbsp;million) in 2000 and
represented 90.3% and 90.8% of total revenues in 2001
</FONT>

<P align="center"><FONT size="2">58
</FONT>

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<DIV align="left">
<FONT size="2">and 2000 respectively. Revenues increased
primarily as a result of total subscriber growth, greater usage
as a result of the digitalization of the postpaid subscriber
base and traffic growth.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Monthly fees from postpaid subscribers grew by
1.9% from Ps.1,710.7&nbsp;million (U.S.$186.8&nbsp;million) in
2000 to Ps.1,743.0&nbsp;million (U.S.$190.4&nbsp;million) in
2001. Monthly fees increased notwithstanding an increase in the
number of lower-end subscribers in 2001. Airtime revenues
increased 12.1% from Ps.2,533.4&nbsp;million
(U.S.$276.7&nbsp;million) in 2000 to Ps.2,840.8&nbsp;million
(U.S.$310.3&nbsp;million) in 2001, primarily as a result of
traffic growth related to calling party pays and greater usage
by postpaid subscribers. Long distance cellular revenue
increased by 22.0% to Ps.649.4&nbsp;million
(U.S.$70.9&nbsp;million) in 2001 from Ps.532.2&nbsp;million
(U.S.$58.1&nbsp;million) in 2000. This growth is the result of
higher usage by the subscriber base.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Average monthly MOU&#146;s for all subscribers
for 2001 (excluding &#147;incoming calls only&#148; prepay
customers) were 117, an increase of 24.5% as compared to the
average monthly MOU&#146;s of 94 in 2000. MOU&#146;s among
postpaid customers increased by 1.6% from 246 in 2000 to 250 in
2001. MOU&#146;s among prepay customers also increased by 40.6%
from 32 in 2000 to 45 in 2001. This increase in MOU&#146;s was
driven by traffic growth and greater usage by the total prepay
subscriber base and the reduction of the period to utilize the
prepay card from 180&nbsp;days to 60&nbsp;days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Nominal average monthly cellular revenue per
subscriber for all subscribers (excluding &#147;incoming calls
only&#148; prepay customers) increased 14.9% to Ps.370
(U.S.$40.4) in 2001 from Ps.322 (U.S.$35.2) in 2000. The
increase was driven mainly by higher usage by the subscriber
base, traffic growth and the reduction of the period to utilize
the prepay card from 180&nbsp;days to 60 days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Postpaid subscriber churn increased to an average
monthly level of 3.8% in 2001 from 3.5% in 2000. We have taken
strict collection procedures to reduce the bad debt expense and
have implemented new activation policies and retention programs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Telephone Equipment and
Other.</FONT></I><FONT size="2"> Telephone equipment and other
revenues increased 14.8% to Ps.607.1&nbsp;million
(U.S.$66.3&nbsp;million) in 2001 from Ps.528.7&nbsp;million
(U.S.$57.7&nbsp;million) in 2000. The 14.8% increase in revenues
comes mainly from out-roaming fees.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of
sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our cost of sales includes cost of services, cost
of telephone equipment and other costs. Total cost of sales
increased 1.9% to Ps.1,854.7&nbsp;million
(U.S.$202.6&nbsp;million) in 2001 from Ps.1,820.1&nbsp;million
(U.S.$198.8&nbsp;million) in 2000. As a percentage of total
revenues, cost of sales decreased to 29.5% in 2001 from 31.8% in
2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of Services.
</FONT></I><FONT size="2">Cost of services includes taxes and
fees on revenues payable to the Mexican government,
interconnection costs, technical costs such as maintenance,
repair costs, lease expenses, salaries of technical personnel
and utilities on a pro-rata basis. As a percentage of total
revenues, cost of services decreased to 23.5% in 2001 from 25.6%
in 2000. Cost of services slightly increased 0.9% to
Ps.1,476.6&nbsp;million (U.S.$161.3&nbsp;million) in 2001 from
Ps.1,464.1&nbsp;million (U.S.$159.9&nbsp;million) in 2000. The
increase was primarily driven by the higher access costs paid to
other carriers due to increased mobile-to-mobile CPP traffic as
well as lease costs following the sale of certain transmission
towers in 2001. See Item&nbsp;5 &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Operating Results&nbsp;&#151;
Tower Sales&#148;. Partially offsetting those items were the
reduction of interconnection rates in January 2001, the more
efficient use of our fiber network and the one-time adjustment
in provisions of gross cellular airtime revenues payable to the
Mexican government.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of Telephone Equipment and Other.
</FONT></I><FONT size="2">Cost of telephone equipment and other
includes that portion of handset and accessory costs that are
not capitalized, handset and accessory inventory obsolescence
charges and the cost of dark fiber optic cable sold. Cost and
telephone equipment and other increased 6.2% to
Ps.378.1&nbsp;million (U.S.$41.3&nbsp;million) in 2001 from
Ps.356.0&nbsp;million (U.S.$38.9&nbsp;million) in 2000 primarily
due to the three-month consolidation of Portatel, partial
subsidization of telephones sold to prepay customers and an
increase in accessory obsolescence charges. As a percentage of
the telephone equipment and other revenues, the cost of
telephone equipment and other decreased to 62.3% in 2001 from
67.3% in 2000. The cost of a cellular handset given to a
postpaid customer is amortized over 12&nbsp;months, the average
length of our
</FONT>

<P align="center"><FONT size="2">59
</FONT>

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<DIV align="left">
<FONT size="2">cellular contract, instead of being immediately
expensed in the period in which the customer received the
telephone.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating expenses increased 15.8% to
Ps.2,220.3&nbsp;million (U.S.$242.5&nbsp;million) in 2001 from
Ps.1,917.6&nbsp;million (U.S.$209.4&nbsp;million) in 2000. As a
percentage of total revenues, operating expenses increased from
33.5% in 2000 to 35.3% in 2001. As a percentage of total
revenues, sales and advertising expenses decreased to 22.3% in
2001 from 24.6% in 2000. In peso terms, sales and advertising
expenses increased 14.9%, to Ps.1,612.2&nbsp;million
(U.S.$176.1&nbsp;million) from Ps.1,403.3&nbsp;million
(U.S.$153.3&nbsp;million) in 2000, primarily because of higher
television advertising rates as well as expenses incurred in
association with the consolidation of Region 8 cellular service
into our business. General and administrative expenses increased
18.2% to Ps.608.0&nbsp;million (U.S.$66.4&nbsp;million) in 2001,
from Ps.514.3&nbsp;million (U.S.$56.2&nbsp;million) in 2000, due
to lower capitalization of engineering expenses, higher
consulting and vendor fees as well as charges associated with
the consolidation of Portatel, the provider of cellular service
in Region&nbsp;8 which we acquired. As a percentage of total
revenues, general and administrative expenses increased slightly
to 9.7% in 2001 from 9.0%.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
income</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We had other income of Ps.307.9&nbsp;million
(U.S.$33.6&nbsp;million) in 2001 mainly as a result of the sale
of 244 towers to MATC Celular. The same towers were immediately
leased back from MATC Celular by our parent&#146;s subsidiary
Iusacell Arrendadora, S.A de C.V. See Item&nbsp;5,
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
Operating Results&nbsp;&#151; Tower Monetization&#148;.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
amortization</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, management completed a review of its
depreciation and amortization policies related to certain analog
and digital network equipment and postpaid handsets. The aim of
the study was to align the estimated remaining useful lives of
those assets with current international benchmarks. As a result
of the review, a change in the weighted estimated useful life of
the network assets was made. The weighted average useful life
for the network equipment was extended to 10&nbsp;years,
compared to the 8.7&nbsp;years previously used. With regard to
the amortization of postpaid handset costs, we shortened the
average amortization period from 18&nbsp;months to
12&nbsp;months. Depreciation and amortization expenses increased
7.9% to Ps.2,568.7&nbsp;million (U.S.$280.5&nbsp;million) in
2001, from Ps.2,381.0&nbsp;million (U.S.$260.0&nbsp;million) in
2000 due primarily to the higher postpaid handset amortization
expense in 2001.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
loss</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We reported an operating loss of
Ps.46.9&nbsp;million (U.S.$5.1&nbsp;million) in our Consolidated
Financial Statements in 2001, compared to an operating loss of
Ps.388.9&nbsp;million (U.S.$42.5&nbsp;million) in 2000. The
lower operating loss was attributable to the benefit resulting
from the sale of our towers. Without considering this benefit,
our operating loss for 2001 would be Ps.354.8&nbsp;million
(U.S.$38.8&nbsp;million).
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Integral
financing (results)</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recorded an integral financing cost of
Ps.125.1&nbsp;million (U.S.$13.7&nbsp;million) in 2001 compared
to an integral financing cost of Ps.155.0&nbsp;million
(U.S.$16.9&nbsp;million) in 2000. The lower cost was
attributable to several factors. Net interest expense decreased
by 24.3% from Ps.509.8&nbsp;million (U.S.$55.7&nbsp;million) in
2000 to Ps.385.9&nbsp;million (U.S.$42.1&nbsp;million) in 2001
as a result of lower interest rates and a stronger peso which
appreciated by 4.8% against the U.S.&nbsp;dollar from December
2000 to December 2001. Also due to this appreciation of the
peso, we recorded a foreign exchange gain of
Ps.95.8&nbsp;million (U.S.$10.5&nbsp;million) in 2001 compared
to a foreign exchange loss of Ps.19.6&nbsp;million
(U.S.$2.1&nbsp;million) in 2000. We also posted a lower gain in
monetary position of Ps.165.0&nbsp;million
(U.S.$18.0&nbsp;million) in 2001 compared to a gain of
Ps.374.4&nbsp;million (U.S.$40.9&nbsp;million) in 2000 due to
the effect of our net peso liability position of the lower
period-over-period inflation rate of 4.4% in 2001 compared to
8.9% in 2000.
</FONT>

<P align="center"><FONT size="2">60
</FONT>

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<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
loss</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the factors described above, our
net loss was Ps.297.7&nbsp;million (U.S.$32.5&nbsp;million) in
2001 compared to a net loss of Ps.672.4&nbsp;million
(U.S.$73.4&nbsp;million) in 2000.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Year Ended December&nbsp;31, 2000 Compared
    to Year Ended December&nbsp;31, 1999</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents the source of our
revenues for the years ended December&nbsp;31, 1999 and 2000.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Change</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In millions of constant pesos as of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">December 31, 2001, except percentages)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,285.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,201.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telephone equipment and other revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">497.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">528.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,783.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,729.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Services</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below presents service revenues by
source for the years ended December&nbsp;31, 1999 and 2000.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">1999<SUP>(1)</SUP></FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000<SUP>(1)</SUP></FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ps.</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In millions of constant pesos as of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">December 31, 2001, except percentages)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Airtime<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,720.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,533.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Monthly fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,606.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,710.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long distance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">554.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">532.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Value-added services and in-roaming<SUP>(3)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">403.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">424.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total service revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,285.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,201.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Figures reflect intercompany eliminations.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Airtime includes amounts billed to other carriers
    for incoming minutes under CPP starting May&nbsp;1, 1999.
    Incoming and outgoing airtime is charged on a per-minute basis
    for both peak (Monday to Friday, 8:00&nbsp;a.m. to
    10:00&nbsp;p.m.) and non-peak airtime.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes fees for value-added services, such as
    call waiting, call transfer, emergency service, secretarial
    service and three-way calling, and revenues from premiums for
    surety bonds, insurance-related charges payable by subscribers,
    rural and public telephony and Iusacell&#146;s cellular
    magazine. Does not include charges for related airtime.
    Customers using value-added services such as news, weather,
    sports and entertainment reports are charged only for airtime.
    These revenues are therefore included in airtime.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Postpaid subscribers increased by 25.6% from
352,289 subscribers, or 26.6% of total subscribers, at
December&nbsp;31, 1999, to 442,594 subscribers, or 26.3% of
total subscribers, at December&nbsp;31, 2000. Digital postpaid
customers grew by 73.6% from 219,829 at December&nbsp;31, 1999
to 381,696 at December&nbsp;31, 2000. LDI postpaid customers
grew by 402.7% from 17,776 at December&nbsp;31, 1999 to 89,364
at December&nbsp;31, 2000. The December&nbsp;31, 2000 postpaid
subscriber data includes approximately 12,000 public telephony
customers who in the second quarter of 2001 were reclassified,
retroactively to January&nbsp;1, 2000, as postpaid customers
rather than prepay customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Service revenues increased by 21.4% to
Ps.5,201.0&nbsp;million (U.S.$568.0&nbsp;million) in 2000 from
Ps.4,285.9&nbsp;million (U.S.$468.1&nbsp;million) in 1999 and
represented 90.8% and 89.6% of total revenues in 2000 and 1999,
respectively. Revenues increased primarily as a result of
subscriber growth, greater usage as a result
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<DIV align="left">
<FONT size="2">of the digitalization of the postpaid subscriber
base and traffic growth related to calling party pays (which
resulted in a significant increase in incoming calls and
contributed to the growth in prepay subscribers). This increase
was offset in part by the decline in nominal average monthly
cellular revenue per subscriber and long distance cellular
revenues described below.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Monthly fees from postpaid customers increased
6.5% during 2000, Ps.1,710.7&nbsp;million
(U.S.$186.8&nbsp;million) as compared to Ps.1,606.8&nbsp;million
(U.S.$175.5&nbsp;million) in 1999. This was primarily a result
of a migration of postpaid customers from higher to lower
monthly fixed charge products, offset by the increase in the
postpaid subscriber base. Airtime revenues increased 47.2% from
Ps.1,720.9&nbsp;million (U.S.$188.0&nbsp;million) in 1999 to
Ps.2,533.4&nbsp;million (U.S.$276.7&nbsp;million) in 2000,
primarily as a result of subscriber growth, traffic growth
related to calling party pays and greater usage generated by the
digitalization of the postpaid subscriber base. Long distance
service revenues decreased 4.0% from Ps.554.3&nbsp;million
(U.S.$60.5&nbsp;million) in 1999 to Ps.532.2&nbsp;million
(U.S.$58.1&nbsp;million) in 2000. We believe this decline was
due to the increase in the postpaid and prepay LDI customer
base, which replaces per-minute long distance charges that are
allocated to long distance service revenues with higher
per-minute airtime charges that are not allocated to long
distance service revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the second quarter of 2000, in order to
conform to standards applied by other Verizon International
affiliates, we changed our methodology in calculating average
monthly MOUs and nominal ARPU to (i)&nbsp;include minutes of use
from incoming calls to postpaid customers, and (ii)&nbsp;exclude
revenues generated from the sale of handsets and accessories to
postpaid customers. The MOU and ARPU data presented below for
2000 and 1999 have been calculated using this new methodology.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Average monthly MOUs for all subscribers for 2000
(excluding &#147;incoming calls only&#148; prepay customers)
were 94, an increase of 3.3% as compared to the average monthly
MOUs of 91 in 1999. MOUs among postpaid customers increased
17.7% from 209 MOUs in 1999 to 246 MOUs in 2000. MOUs among
prepay customers increased 18.5% to 32 in 2000 from 27 in 1999.
This increase in MOUs was driven by the traffic growth related
to CPP and by the continuing digitalization of the customer base.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Nominal average monthly revenue per subscriber
for all subscribers (excluding &#147;incoming calls only&#148;
prepay customers) decreased 3.9% from Ps.335&nbsp;(U.S.$36.6) in
1999 to Ps.322 (U.S.$35.2) in 2000. This blended decline,
primarily due to the increase in the percentage of prepay
customers (excluding &#147;incoming calls only&#148; customers),
masks a 5.0% increase in postpaid customer nominal ARPU and a
7.5% increase in prepay customer nominal ARPU.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Postpaid subscriber churn increased to an average
monthly level of 3.51% in 2000 from 2.96% in 1999. We believe
that this increase in churn was related to inadequate credit and
collection procedures at the time of activation. We have taken
steps to correct this situation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Telephone Equipment and
Other.</FONT></I><FONT size="2"> Telephone equipment and other
revenues increased by 6.4% from Ps.497.1&nbsp;million
(U.S$54.3&nbsp;million) in 1999 to Ps.528.7&nbsp;million
(U.S.$57.7&nbsp;million) in 2000. The 71.1% increase in revenues
attributable to out-roaming fees, from Ps.199.7&nbsp;million
(U.S.$21.8&nbsp;million) in 1999 to Ps.341.7&nbsp;million
(U.S.$37.3&nbsp;million) in 2000, more than offset (i)&nbsp;the
12.6% decline in handset revenues, from Ps.125.6&nbsp;million
(U.S.$13.7&nbsp;million) in 1999 to Ps.109.8&nbsp;million
(U.S.$12.0&nbsp;million) in 2000 and (ii)&nbsp;the absence of
revenues from the sale of dark fiber optic cable in 2000, which
in 1999 represented Ps.68.7&nbsp;million (U.S.$7.5&nbsp;million)
in revenues.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of
Sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total cost of sales increased 19.1% to
Ps.1,820.1&nbsp;million (U.S.$198.8&nbsp;million) in 2000 from
Ps.1,528.5&nbsp;million (U.S.$166.9&nbsp;million) in 1999. As a
percentage of total revenues, cost of sales decreased to 31.8%
in 2000 from 32.0% in 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of services.
</FONT></I><FONT size="2">Cost of services increased 19.8% to
Ps.1,464.1&nbsp;million (U.S.$159.9&nbsp;million) in 2000 from
Ps.1,221.9&nbsp;million (U.S.$133.5&nbsp;million) in 1999. This
increase was mainly due to the 21.4% increase in service
revenues, which resulted in higher overall (i)&nbsp;taxes and
fees payable to the Mexican government and
</FONT>

<P align="center"><FONT size="2">62
</FONT>

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<DIV align="left">
<FONT size="2">(ii)&nbsp;Telmex interconnection fees. As a
percentage of service revenues, cost of services decreased
slightly from 28.5% in 1999 to 28.2% in 2000.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cost of telephone equipment.
</FONT></I><FONT size="2">Cost of telephone equipment and other
increased by 16.1% to Ps.356.0&nbsp;million
(U.S.$38.9&nbsp;million) in 2000 from Ps.306.6&nbsp;million
(U.S.$33.5&nbsp;million) in 1999 primarily due to the expensed
partial subsidization of telephones sold to prepay customers and
an increase in handset inventory obsolescence charges. As a
percentage of telephone equipment and other revenues, the cost
of telephone equipment and other increased to 67.3% in 2000 from
61.7% in 1999. The cost of a cellular handset given to a
postpaid customer was amortized over 18&nbsp;months, the average
maturity of our cellular contract in these periods.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
Expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating expenses increased 16.7% to
Ps.1,917.6&nbsp;million (U.S.$209.4&nbsp;million) in 2000 from
Ps.1,643.2&nbsp;million (U.S.$179.5&nbsp;million) in 1999. As a
percentage of total revenues, operating expenses decreased to
33.5% in 2000 from 34.4% in 1999. Sales and advertising expenses
increased 33.8% from Ps.1,048.7&nbsp;million
(U.S.$114.5&nbsp;million) in 1999 to Ps.1,403.3&nbsp;million
(U.S.$153.3&nbsp;million) in 2000, primarily because of
increased commissions to distributors resulting from higher
sales and revenue-related increases in advertising. General and
administrative expenses decreased by 13.5% from
Ps.594.5&nbsp;million (U.S.$64.9&nbsp;million) in 1999 to
Ps.514.3&nbsp;million (U.S.$56.2&nbsp;million) in 2000 mainly
due to cost containment programs and higher productivity.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
Amortization</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depreciation and amortization expenses increased
by 46.9% to Ps.2,381.0&nbsp;million (U.S.$260.0&nbsp;million) in
2000 from Ps.1,620.3&nbsp;million (U.S.$177.0&nbsp;million) in
1999. This increase was primarily due to the completion in late
1999 of the deployment of the new Lucent Technologies analog and
digital network and the additional investments made in 1999 and
2000 to satisfy the capacity and coverage requirements for
continued growth and quality standards. In addition, in the
fourth quarter of 1999, we completed the implementation of our
new LHS cellular billing system and we capitalized all
associated costs. The continued digitalization of the postpaid
subscriber base resulted in greater amortization expenses driven
mainly by increased purchases of more expensive digital handsets.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
Loss</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recorded an operating loss of
Ps.388.9&nbsp;million (U.S.$42.5&nbsp;million) in 2000 as
compared to an operating loss of Ps.9.0&nbsp;million
(U.S.$1.0&nbsp;million) in 1999.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Integral
Financing Results</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recorded an integral financing cost of
Ps.155.0&nbsp;million (U.S.$16.9&nbsp;million) in 2000 compared
to an integral financing gain of Ps.656.7&nbsp;million
(U.S.$71.7&nbsp;million) in 1999. Net interest expense increased
to Ps.509.8&nbsp;million (U.S.$55.7&nbsp;million) in 2000 from
Ps.305.7&nbsp;million (U.S.$33.4&nbsp;million) in 1999. In
addition, as a result of the slight peso devaluation in 2000 as
compared to the peso appreciation against the U.S. dollar in
1999, we recorded a foreign exchange loss of
Ps.19.6&nbsp;million (U.S.$2.1&nbsp;million) in 2000 as compared
to a foreign exchange gain of Ps.210.3&nbsp;million
(U.S.$23.0&nbsp;million) in 1999. We also experienced a decrease
in gain in monetary position from Ps.752.1&nbsp;million
(U.S.$82.1&nbsp;million) in 1999 to Ps.374.4&nbsp;million
(U.S.$40.9&nbsp;million) in 2000 due to the effect on our net
peso liability position of a lower period-over-period inflation
as measured by changes in the INPC, 12.3% in 1999 as compared to
8.9% in 2000.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Income
(loss)</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the factors described above, our
net loss was Ps.672.4&nbsp;million (U.S.$73.4&nbsp;million) in
2000 compared to a net income of Ps.435.0&nbsp;million
(U.S.$47.5&nbsp;million) in 1999.
</FONT>

<P align="center"><FONT size="2">63
</FONT>

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<P align="left">
<B><FONT size="2">Income Tax, Asset Tax and Employees&#146;
Profit Sharing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Beginning January&nbsp;1, 1999, as a result of
Mexican income tax law amendments, we must limit our tax
consolidation to 60% of all our subsidiaries, except for four
entities (Iusatel, S.A. de C.V., Iusatelecomunicaciones, S.A. de
C.V., Infotelecom, S.A. de C.V., and Punto-a-Punto Iusacell,
S.A. de C.V.) which are not included in our consolidated tax
return (although they are consolidated for financial reporting
purposes), because we do not hold at least 51% of the voting
shares of such subsidiaries. We filed an injunctive action
(amparo)&nbsp;against the new income tax law amendments on the
basis that the law is unconstitutional. This injunctive action
was rejected on technical grounds and we are not allowed to file
another motion on the same grounds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2000, the Mexican Treasury Department
(<I>Secretar&#237;a de Hacienda y Cr&#233;dito P&#250;blico</I>)
ruled that we could prepare consolidated tax returns for
ourselves and the subsidiaries in which we hold a majority of
voting shares and thereby apply our net operating loss
carryforwards against our and such subsidiaries&#146; profits.
In April 2001, the Mexican Treasury Department ruled that
Iusacell Celular&#146;s net operating loss carryforwards would
be transferred to Iusacell, so that Iusacell could apply such
net operating loss carryforwards against its and its
majority-owned subsidiaries&#146; tax result.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell and its subsidiaries pay an alternative
net asset tax, which is levied on the average value of
substantially all assets less certain liabilities. This tax,
which is 1.8% of the taxable base, is required to be paid if the
amount of the asset tax exceeds the computed income tax
liability. We provided for Ps.150.9&nbsp;million
(U.S.$16.5&nbsp;million), Ps.156.3&nbsp;million
(U.S.$17.1&nbsp;million) and Ps.146.4&nbsp;million
(U.S.$16.0&nbsp;million) as asset tax for 1999, 2000 and 2001,
respectively. These taxes may be applied in subsequent years
against income tax payments, to the extent income tax
liabilities for such years exceed the net asset tax calculation.
Due to net losses, we paid no income taxes in 2001 and paid the
asset taxes specified above. In 2000, as a result of the new tax
consolidation rules, we paid Ps.82.4&nbsp;million
(U.S.$9.0&nbsp;million) in income taxes as well as the asset tax
specified above, even though Iusacell recorded a net loss on a
fully consolidated basis. See Note 12 to the Consolidated
Financial Statements for a discussion of our carryforward tax
losses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While we have no employees at the holding company
level, our subsidiaries are required under Mexican law to pay
their employees, in addition to their required compensation and
benefits, profit sharing in an aggregate amount equal to 10% of
the taxable income of the relevant subsidiary (calculated
without reference to inflation adjustments or amortization of
tax loss carryforwards). There was no statutory profit sharing
in any periods presented.
</FONT>

<P align="left">
<B><FONT size="2">New Mexican Accounting
Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2001, the MIPA issued the revised
Bulletin&nbsp;C-9, &#147;Liabilities, Provisions, Contingent
Assets and Liabilities and Commitments&#148;
(Bulletin&nbsp;C-9), which establishes a methodology for
valuation, presentation and disclosure of liabilities and
provisions, as well as for valuation and disclosure of
contingent assets and liabilities, and for disclosure for
commitments. The revised Bulletin&nbsp;C-9 states that
(i)&nbsp;all contingent assets that have a practical true
realization must be accounted and disclosed in the financial
statements; (ii)&nbsp;contingent assets that have a probable
realization cannot be accounted for in the financial statements,
but must be disclosed; and (iii)&nbsp;contingent assets that do
not have a probable realization and cannot be accounted for in
the financial statements are not required to be disclosed.
Bulletin&nbsp;C-9 requires disclosure of committed amounts when
it represents significant fixed assets additions. The provisions
of Bulletin&nbsp;C-9 are required to be applied beginning on
January&nbsp;1, 2003, although early adoption is recommended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, in December 2001, the MIPA issued
revised Bulletin&nbsp;C-8, &#147;Intangible Assets&#148;
(Bulletin&nbsp;C-8), which defines intangible assets as costs
incurred and rights or privileges acquired that will generate a
future economic benefit. Revised Bulletin&nbsp;C-8 states that
pre-operating costs should be expensed as a period cost, unless
they could be classified as development costs. Bulletin&nbsp;C-8
requires that intangible assets with finite useful lives should
be amortized over its useful life. The provisions of
Bulletin&nbsp;C-8 are required to be applied beginning on
January&nbsp;1, 2003, although early adoption is recommended.
</FONT>

<P align="center"><FONT size="2">64
</FONT>

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<P align="left">
<B><FONT size="2">U.S. GAAP Reconciliation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The principal differences between Mexican GAAP
and U.S.&nbsp;GAAP as they relate to Iusacell are the adjustment
for the effects of inflation, minority interest, purchase
accounting, deferred income taxes, capitalization of
pre-operating costs, derivative financial instruments,
provisions for consolidation of facilities and accounting for
non-monetary exchanges, and sale-leaseback transactions. See
Note&nbsp;23 to the Consolidated Financial Statements for a
reconciliation to U.S.&nbsp;GAAP of stockholders&#146; equity
and net profit (loss)&nbsp;for the respective periods presented.
</FONT>

<P align="left">
<B><FONT size="2">New U.S. Accounting Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2001, the FASB issued FAS No.&nbsp;141,
&#147;Business Combinations,&#148; which supercedes APB
No.&nbsp;16, &#147;Business Combinations&#148; and amends or
supercedes a number of related interpretations of APB
No.&nbsp;16. The Statement is effective for all business
combinations initiated after June&nbsp;30, 2001 and for all
business combinations accounted for by the purchase method that
are completed after June&nbsp;30, 2001. FAS No.&nbsp;141
addresses financial accounting and reporting for business
combinations, eliminates the pooling-of-interests method of
accounting for business combinations, and prescribes the initial
recognition and measurement of goodwill and other intangible
assets, accounting for negative goodwill and the required
disclosures in respect of business combinations. The Company
applied SFAS&nbsp;141 to the Portatel acquisition and SFAS 142
to the intangible assets acquired therein.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2001, the FASB also issued FAS
No.&nbsp;142, &#147;Goodwill and Other Intangible Assets&#148;,
which supercedes APB No.&nbsp;17, &#147;Intangible Assets.&#148;
The Statement is effective for fiscal years beginning after
December&nbsp;15, 2001 and may not be retroactively applied to
financial statements of prior periods. FAS No.&nbsp;142 requires
that goodwill, including previously existing goodwill and
intangible assets with indefinite useful lives not be amortized
but should be tested for impairment annually, or more frequently
if impairment indicators arise. Goodwill and intangible assets
with indefinite useful lives will no longer be tested for
impairment under FAS No.&nbsp;121, &#147;Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of.&#148; The Company expects that due to the adoption
of SFAS&nbsp;141 and 142, amortization of approximately
Ps.169,833, corresponding to all of the Company&#146;s goodwill
at December&nbsp;31, 2001, will not be recorded during 2002,
which previously would have been.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Financial Accounting Standards Board
(&#147;FASB&#148;) recently issued SFAS&nbsp;143,
&#147;Accounting for Obligations Associated with the Retirement
of Long-Lived Assets&#148;, which is effective for fiscal years
beginning after June&nbsp;15, 2002. The objectives of
SFAS&nbsp;143 are to establish accounting standards for the
recognition and measurement of an asset retirement obligation
and its associated asset retirement cost.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, the FASB issued SFAS&nbsp;144,
&#147;Accounting for the Impairment of Long-Lived Assets&#148;,
which supersedes SFAS&nbsp;121, &#147;Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of&#148;, and APB&nbsp;30, &#147;Reporting the Results
of Operations-Reporting the Effects of Disposal of a Segment of
a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions&#148;. SFAS&nbsp;144 provides
new guidance on (1)&nbsp;the recognition of impairment losses on
long-lived assets to be held and used or to be disposed of and
(2)&nbsp;how the results of a discontinued operation are to be
measured and presented. It also broadens the definition of what
constitutes a discontinued operation. It is effective for fiscal
years beginning after December&nbsp;15, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April of 2002, the FASB issued SFAS&nbsp;145,
&#147;Rescission of FASB Statements No.&nbsp;4, 44, and 64,
Amendment of FASB Statement No.&nbsp;13, and Technical
Corrections.&#148; As a result, companies will no longer be
allowed to classify gains and losses from extinguishments of
debt as extraordinary items unless they meet the criteria of
APB&nbsp;30. Gain and losses from extinguishments of debt that
have been classified as extraordinary in prior years that do not
meet the criteria of APB&nbsp;30 shall be reclassified on a go
forward basis. In addition, SFAS&nbsp;145 requires that capital
leases that are modified so that the resulting lease agreement
is classified as an operating lease be accounted for under the
sale-leaseback provisions of SFAS 28 or 98, as applicable,
instead of SFAS&nbsp;13. The provisions of this statement with
regard to SFAS&nbsp;4 will be effective for fiscal years
beginning after May&nbsp;15, 2002, and those for SFAS&nbsp;13
will be effective for transactions occurring after May&nbsp;15,
2002.
</FONT>

<P align="center"><FONT size="2">65
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are currently evaluating the adoption of
SFAS&nbsp;143, 144 and 145 will have on our results of
operations and financial position.
</FONT>

<P align="left">
<B><FONT size="2">Critical Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have identified certain key accounting
policies on which our consolidated financial condition and
results of operations are dependent. These key accounting
policies most often involve complex matters or are based on
subjective judgments or decisions. In the opinion of our
management, our most critical accounting policies under both
Mexican GAAP and U.S.&nbsp;GAAP are those related to the
accounting for revenue recognition, allowance for doubtful
accounts, the evaluation of long-lived assets, depreciation and
amortization and deferred taxes. For a full description of all
of our accounting policies, see Notes&nbsp;4 and 23 to the
Consolidated Financial Statements included in this Annual Report.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue
recognition</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The recognition of revenue from the sale of
prepay cards to mobile wireless customers requires a certain
degree of management estimates. For periods presented we
recognized revenue at the date of the sale, rather than on a
deferred basis, because the length of the average consumption
period for such prepay cards is approximately one to one and
one-half months, which we believe is not a significant period
and is not material to our results of operations. We estimate
the average consumption period taking into consideration the
date cards are shipped to distributors and vendors to when the
minutes are registered in our systems. In 2002, based on more
precise methods of monitoring card usage, we modified our
revenue recognition methodology.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for
doubtful accounts</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The allowance for doubtful accounts represents
our estimate of the probable loss inherent in all accounts
receivable. We consider a number of factors in determining the
proper level of the allowance including historical collection
experience, current economic trends, the aging of the accounts
receivable portfolio and changes in the credit-worthiness of our
customers. Systems to detect fraudulent call activity are in
place within our network, but if these systems fail to identify
such activity, we may realize a higher degree of uncollectible
accounts. While we believe that our estimates are reasonable,
changes in our customers trends or any of the above mentioned
factors could materially affect our bad debt expense.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluation of
long-lived assets</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have recognized on our balance sheets certain
long-lived assets and capitalized costs including goodwill,
property, plant and equipment, pre-operating expenses and Telmex
special projects. These assets are assigned useful lives which
impact annual depreciation and amortization expense, the
assignment of which involves significant judgments and
estimates. These long-lived assets are evaluated for impairment
on a periodic basis and we recognize an impairment to the extent
we believe that the carrying value is no longer recoverable from
future cash flows. Factors we take into consideration include
the future cash flows to be generated by the assets and the
possible impact that inflation may have in our ability to
generate cash flow since, with inflation accounting, the
carrying value is restated by inflation prior to an impairment
analysis. Key assumptions we evaluate include inflation,
currency fluctuations and future revenue growth. If our
assumptions are not correct, we would have to recognize a
write-off or accelerated amortization of the carrying value of
these assets.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
amortization</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We depreciate property, plant and equipment and
amortize goodwill and other intangible assets using
straight-line methods over the period of time we estimate we
will benefit from each asset. For US&nbsp;GAAP purposes we do
not amortize goodwill related to Portatel and beginning January
2002 we no longer amortize goodwill of indefinite-lived
intangible assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost of mobile wireless telephones given to
customers under exclusive service contracts is amortized on a
straight-line. During 2001, we reduced the amortization period
of mobile wireless telephones from an
</FONT>

<P align="center"><FONT size="2">66
</FONT>

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<DIV align="left">
<FONT size="2">average of 18&nbsp;months to 12&nbsp;months. The
term of service contracts varies on a customer by customer
basis. Due to the cost-ineffectiveness of tracking phones on an
individual contract basis for amortization purposes, we estimate
the average term of our contracts based on current trends.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Deferred taxes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have recorded a net deferred tax asset mainly
reflecting the benefit of tax loss carryforwards, which expire
in varying amounts in the future. Realization is dependent on
generating sufficient taxable income prior to expiration of the
loss carryforwards. Although realization is not assured,
management believes it is more likely than not that a portion of
the net deferred tax asset will be realized based on our
business plan estimate of future taxable income over the next
five years in an amount sufficient to utilize the net deferred
tax losses recorded. Although we feel we will use our loss
carryforwards, given the fact that we&#146;ve experienced
significant losses, a valuation allowance for a majority of the
asset has been recognized.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our estimate of future taxable income is based
primarily on and supported by (i)&nbsp;the significant
improvement in operating performance through 2001, as evidenced
by the success of the implementation of the Verizon wireless
business model which has produced strong subscriber annual
compound growth of 50% through 2001, improved revenues mainly
driven by subscriber growth and lower network and operating
costs, (ii)&nbsp;Vodafone&#146;s strong experience and success
in the prepaid market, (iii)&nbsp;additional increases in
revenues generated by the CPP feature with an important taxable
operating margin, (iv)&nbsp;the change in Mexican income tax law
to increase the useful lives for network equipment from 3.3
years to 12.5&nbsp;years, representing an important decrease in
depreciation expense for income tax purposes and (v)&nbsp;an
increase in 2002 of the potential effects of additional cost
cutting. We will continue to evaluate our deferred tax asset
every year.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidity and
Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the equity recapitalization and
restructuring of Iusacell completed in August 1999, Iusacell
acquired 99.5% of the capital stock of Iusacell Celular. Prior
to that time, Iusacell had nominal assets and no operations,
indebtedness or liabilities. As a result of a second exchange
offer launched in the United States by Iusacell for the
remaining Iusacell Celular ADSs and completed on
February&nbsp;29, 2000, Iusacell held 99.9% of the capital stock
of Iusacell Celular. On March&nbsp;30, 2001, Iusacell
Celular&#146;s shareholders approved a 30,000 to 1 reverse stock
split, which became effective in May 2001. As a result of such
transactions, Iusacell now holds 100% of the capital stock of
Iusacell Celular.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our liquidity requirements arise from cash used
in operating activities, purchases of network equipment,
interest and principal payments on outstanding indebtedness and
acquisitions of and strategic investments in businesses. We have
financed our growth to date through equity contributions from
our principal shareholders, public offerings and private
placements of debt and equity securities, bank debt and vendor
financing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that funds from operating activities,
vendor financing and proceeds from tower monetization
transactions will be sufficient to meet our debt service and
principal amortization requirements, working capital
requirements and capital expenditure needs for our existing
businesses through 2003, although we cannot provide any
assurance in this regard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to our new businesses, our strategic
plan is to significantly increase the quality and coverage of
our newly acquired cellular network in Region&nbsp;8 in southern
Mexico. Our capital expenditure needs and working capital
requirements to develop these business will require certain
amount of additional funding in the second half of 2002 and
beyond. We are seeking to obtain this financing from equipment
vendors and other sources. There can be no assurance that we
will be able to obtain any such financing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our future operating performance and ability to
service and repay our indebtedness will be subject to future
economic and competitive conditions and to financial, business
and other factors, many of which are beyond our control.
</FONT>

<P align="center"><FONT size="2">67
</FONT>

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<P align="left">
<B><FONT size="2">Changes in Financial Position</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, our cash generated from operating
activities has not been sufficient to meet our debt service,
working capital and capital expenditure requirements. We have
relied on the capital markets for new equity and debt financing,
vendor financing and borrowings and equity contributions for our
principal shareholders to meet such funding needs. For the year
ended December&nbsp;31, 1999, our ratio of earnings to fixed
charges was 0.81:1.00. For the years ended December&nbsp;31,
2000 and 2001, our earnings were insufficient to cover our fixed
charges by Ps.914.0&nbsp;million (U.S.$99.8&nbsp;million) and
Ps.279.6&nbsp;million (U.S.$30.5&nbsp;million), respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Cash Flows From Operating Activities</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We generated positive cash flows from operating
activities in the years ended December&nbsp;31, 2001 and
December&nbsp;31, 2000. Net cash provided by operating
activities was Ps.2,236.1&nbsp;million (U.S.$244.2&nbsp;million)
for 2001 compared to Ps.1,797.2&nbsp;million
(U.S.$196.3&nbsp;million), for 2000. The increase in 2001
resulted mainly from a smaller loss from continuing operations
than in 2000, and an increase in depreciation and amortization
of Ps.187.7&nbsp;million (U.S.$20.5&nbsp;million), partially
offset by resources used in working capital of
Ps.115.3&nbsp;million (U.S.$12.6&nbsp;million). We also
generated positive cash flows from operating activities in the
year ended December&nbsp;31, 1999, of Ps.1,290.4&nbsp;million
(U.S.$140.9&nbsp;million).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Cash Flows from Financing Activities</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2001, net
cash provided by financing activities amounted to
Ps.499.4&nbsp;million (U.S.$54.5&nbsp;million) compared to
Ps.589.7&nbsp;million (U.S.$64.4&nbsp;million) for the year
ended December&nbsp;31, 2000. The decrease was mainly
attributable to an increase in the principal payments on
long-term debt of Ps.1,898.9&nbsp;million
(U.S.$207.4&nbsp;million), a decrease in the amount of proceeds
received from effect of rights and primary offerings of Iusacell
of Ps.408.8&nbsp;million (U.S.$44.6&nbsp;million), partially
offset by an increase in the proceeds received from long-term
debt of Ps.2,435.6&nbsp;million (U.S.$266.0&nbsp;million). Net
cash provided by financing activities in 1999 was
Ps.1,372.5&nbsp;million (U.S.$149.9&nbsp;million). The decrease
in 2000 from 1999 was mainly due to a decrease in the proceeds
received from long-term debt of Ps.373.7&nbsp;million
(U.S.$40.8&nbsp;million) and capital stock from the
capitalization of stockholders debt of Ps.1,839.2&nbsp;million
(U.S.$200.9&nbsp;million) and an increase in the principal
payments on long-term debt of Ps.920.5&nbsp;million
(U.S.$100.5&nbsp;million), partially offset by an increase in
the issuance of notes payable of Ps.852.8&nbsp;million
(U.S.$93.1&nbsp;million).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Cash Flows Used for Investing
    Activities</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in investing activities was
Ps.2,908.3&nbsp;million (U.S.$317.6&nbsp;million) in 2001. We
purchased Ps.2,912.3&nbsp;million (U.S.$318.1&nbsp;million) of
property, equipment and other assets including the acquisition
of Portatel. Net cash used in investing activities was
Ps.2,297.1&nbsp;million (U.S.$250.9&nbsp;million) in 2000 and
was primarily attributable to purchases of
Ps.3,144.1&nbsp;million (U.S.$343.4&nbsp;million) consisting of
property, equipment and other assets, partially offset by the
sale of other assets of Ps.778.8&nbsp;million
(U.S.$85.1&nbsp;million) compared to purchases of
Ps.297.4&nbsp;million (U.S.$32.5&nbsp;million), and a lower
amount of sales of common stock of associated companies of
Ps.64.3&nbsp;million (U.S.$7.0&nbsp;million).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net cash used in investing activities in 1999 was
Ps.2,786.4&nbsp;million (U.S.$304.3&nbsp;million). In 1999, we
made investments in an aggregate amount of
Ps.2,799.9&nbsp;million (U.S.$305.8&nbsp;million). Substantially
all of these expenditures were for the purchase of property,
equipment and other assets.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Tax Loss Carryforwards</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have recorded a net deferred tax asset of
Ps.172.0&nbsp;million (U.S.$18.8&nbsp;million) mainly reflecting
the benefit of tax loss carryforwards, which expire in varying
amounts between 2005 and 2010. Realization is dependent on
generating sufficient taxable income prior to expiration of the
loss carryforwards. Although realization is not assured,
management believes it is more likely than not that a portion of
the net deferred tax asset at December&nbsp;31, 2001 will be
realized based on our business plan estimate of future taxable
income over
</FONT>

<P align="center"><FONT size="2">68
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">the next five years in an amount sufficient to
utilize the net deferred tax losses recorded as of
December&nbsp;31, 2001.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our estimate of future taxable income is based
primarily on and supported by (i)&nbsp;the significant
improvement in operating performance through 2001, as evidenced
by the success of the implementation of the Verizon wireless
business model which has produced strong subscriber annual
compound growth of 50% through 2001, improved revenues mainly
driven by subscriber growth and lower network and operating
costs, (ii)&nbsp;Vodafone&#146;s strong experience and success
in the prepaid market, (iii)&nbsp;additional increase in
revenues generated by the CPP feature with an important taxable
operating margin, (iv)&nbsp;the change in the income tax law to
increase the useful lives for network equipment from 3.3 years
to 12.5&nbsp;years, representing an important decrease in
depreciation expense for income tax purposes and (v)&nbsp;an
increase in 2002 of the potential effects of additional cost
cutting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount of the deferred tax asset considered
realizable could be reduced in the near term if estimates of
future taxable income during the carry forward periods are
reduced.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, we had a valuation
allowance of Ps.238.5&nbsp;million (U.S.$26.0&nbsp;million), to
reduce our deferred tax assets to estimated realizable value.
The valuation allowance primarily relates to the deferred tax
assets arising from tax loss carryforwards and tax credits. To
the extent that the Mexican tax loss carryforwards cannot be
used by our subsidiaries, 60% of such tax loss carryforwards can
be used to offset our future consolidated income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, we had net operating
losses for income tax purposes that may be carried forward and
applied against future taxable earnings of
Ps.2,512.6&nbsp;million (U.S.$274.4&nbsp;million) expiring in
various amounts from 2005 through 2011. See Note&nbsp;12 to the
Consolidated Financial Statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Capital Expenditures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2002 and 2003, we expect to make capital
expenditures to extend our network infrastructure, build out our
cellular and long distance networks, enhance our new billing
systems, and support existing operations and new business
opportunities. The degree and timing of capital expenditures
will remain strongly dependent on the competitive environment
and economic developments in Mexico, including inflation and
exchange rates, as well as on the timing of regulatory actions
and on the availability of suitable debt and/or equity financing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we acquire additional mobile wireless
concessions in Mexico, we may be required to increase our
capital expenditure budget. We would expect to finance these
capital expenditures through a combination of debt and vendor
financing, equity capital and operating cash flow.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect capital expenditures for 2002 and 2003
to total approximately U.S.$340.0&nbsp;million, not including
amounts in respect of capitalized interest. We expect to invest
up to U.S.$170.0&nbsp;million of this amount during 2002,
including approximately U.S.$21.0&nbsp;million to increase the
quality and coverage of our cellular network in Region 8 in
southern Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect to make capital expenditures of
approximately U.S.$170.0&nbsp;million in 2003, including
U.S.$10.0&nbsp;million to develop our cellular network in
Region&nbsp;8 in southern Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total capital expenditures in 2001 were
U.S.$180.0&nbsp;million. Approximately U.S.$2.6&nbsp;million of
this amount was used to develop and increase the quality of the
wireless network in the recently acquired Region&nbsp;8 in
southern Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that funds from operating activities,
other vendor financing, existing short-term facilities and the
proceeds from tower monetization transactions will be sufficient
to meet our debt service and principal amortization requirements
and the working capital requirements and capital expenditure
needs of our existing businesses through 2003, although we
cannot provide any assurance in this regard.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total capital expenditures in 2000 were
approximately U.S.$175.0&nbsp;million used for the development
of the Iusacell Celular wireless network.
</FONT>

<P align="center"><FONT size="2">69
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total capital expenditures in 1999 were
U.S.$144.5&nbsp;million, not including Lucent Technologies
trade-in credits in the amount of U.S.$19.2&nbsp;million and
capitalized interest in the amount of U.S.$17.1&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Capital expenditure amounts were derived using
historical pesos translated at the exchange rate in effect at
the end of the corresponding year.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Contractual Obligations</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table outlines Iusacell
Celular&#146;s obligations for payments under its indebtedness,
including notes payable to suppliers and operating leases for
the periods indicated using balances as of December&nbsp;31,
2001.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">Payments Due by Period</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(Figures in thousands of U.S. Dollars as of December&nbsp;31, 2001)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell Celular Indebtedness(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior notes due 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior refinancing secured loan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132,811</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">Short-term credit lines:</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Banco Santander Mexicano
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Motorola Credit Corporation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vendor Financing (notes payable)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total indebtedness
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,468</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132,811</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">441,090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating leases(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">MATC Celular
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">842,995</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,685,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings and others
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,987</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">349,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total operating leases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">273,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">246,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">232,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">224,586</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">842,995</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,035,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">These amounts include principal payments.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">These amounts include the minimum lease payments.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The degree to which we are leveraged and the
covenants with which we must comply under our various financing
agreements may adversely affect our ability to finance future
operations, to finance necessary capital expenditures, to
service our indebtedness, to compete effectively against better
capitalized competitors and to withstand downturns in our
business or the Mexican economy in general. Our high level of
indebtedness could limit our ability to pursue business
opportunities that may be in our interest and that of holders of
our securities. In addition, in the event that the Iusacell
Celular senior notes have not been refinanced by March&nbsp;31,
2004, the outstanding amount of the senior refinancing secured
loan will become due on that date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of our debt impose significant
operating and financial restrictions. These restrictions will
affect, and in many respects significantly limit or prohibit,
our ability and the ability of our subsidiaries to, among other
things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">borrow money;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">pay dividends on stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make capital expenditures and other investments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">use assets as security in other transactions; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">sell certain assets or merge with or into other
    companies.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we do not comply with these restrictions, we
could be in default even if we can currently pay our debt. In
addition, under our senior refinancing secured loan, we are
required to remain in compliance with certain financial ratios,
and the failure to do so would result in a default under the
facility. In the event of a default under any of our debt which
remains unsecured after any applicable grace period, holders of
the relevant debt
</FONT>

<P align="center"><FONT size="2">70
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">could demand immediate payment of the aggregate
amount of that debt. Furthermore, this could trigger a default
under certain of our other debt as well. We may not be able to
make such payments. This could lead to a <I>concurso
mercantil,</I> a two-stage procedure under Mexican law
commencing with negotiations with our creditors and, if such
negotiations fail to reach an agreement, we would be declared
bankrupt.
</FONT>
</DIV>

<P align="left">
<B><I><FONT size="2">Long-Term Indebtedness</FONT></I></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Iusacell
Celular senior notes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 1997, Iusacell Celular issued
U.S.$150.0&nbsp;million of its 10% Senior Notes due 2004, which
we refer to as the Iusacell Celular senior notes, under an
indenture dated as of July&nbsp;25, 1997 among Iusacell Celular,
the subsidiaries of Iusacell Celular guaranteeing such senior
notes and First Union National Bank, as trustee, which we refer
to as the Iusacell Celular indenture. Substantially all of the
Iusacell Celular senior notes were exchanged in January 1998 for
identical 10% senior notes due 2004 which are also governed by
the Iusacell Celular indenture, pursuant to an exchange offer
registered with the SEC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Iusacell Celular indenture limits the ability
of Iusacell Celular to make dividend payments to Iusacell. In
addition, it restricts the ability of Iusacell Celular and its
principal subsidiaries to incur indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the senior refinancing secured
loan described below, Iusacell Celular was required, under the
terms of the Iusacell Celular indenture, to equally and ratably
secure all amount due under the Iusacell Celular senior notes by
a second priority lien on its cellular concessions, certain
equipment and suppliers.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Senior
Refinancing Secured Loan</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;29, 2001, Iusacell Celular
completed the refinancing of its senior secured credit facility
by entering into an Amended and Restated Senior Secured Credit
Loan Agreement, which we refer to as the senior refinancing
secured loan, which consists of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a Tranche A Loan in an aggregate principal amount
    of U.S.$189.8&nbsp;million for the purpose of refinancing
    existing indebtedness under the senior secured credit facility
    and under a certain bridge loan used to make a principal
    amortization payment under the senior secured credit facility in
    January 2001; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a Tranche B Loan in an aggregate principal amount
    of U.S.$75.8&nbsp;million for the purpose of paying existing
    indebtedness under certain Eximbank facilities and under a
    certain bridge loan used to make a principal amortization
    payment under the Eximbank facilities in January 2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The senior refinancing secured loan bears
interest at a rate per annum equal to one-, two-, three- or
six-month LIBOR (at Iusacell Celular&#146;s option) plus a
spread ranging from 1.75% to 2.25%, depending on Iusacell
Celular&#146;s leverage ratio. Iusacell Celular&#146;s
obligations under the senior refinancing secured loan are
unconditionally guaranteed, jointly and severally, by the
principal operating subsidiaries of Iusacell Celular and its
subsidiaries holding cellular concessions and are secured by a
pledge of substantially all the capital stock and equity
interests held by Iusacell Celular and substantially all assets
used in connection with or related to such cellular concessions.
Upon the acquisition of Portatel, the cellular concession
covering Region&nbsp;8 was mortgaged under this loan, and all
capital stock and equity interests of Portatel are in the
process of being pledged under this loan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The senior refinancing secured loan begins
amortizing on May&nbsp;31, 2004 in equal quarterly amounts and
matures on February&nbsp;28, 2006. However, in the event that
the Iusacell Celular senior notes have not been refinanced by
March&nbsp;31, 2004, the outstanding amount of the senior
refinancing secured loan will become due on that date.
</FONT>

<P align="center"><FONT size="2">71
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Loan
Covenant Waivers and Modifications</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;7, 2001 the senior refinancing
secured loan was amended, and a waiver and consent were granted
by the lenders allowing Iusacell Celular to (i)&nbsp;create
liens encumbering initial deposits and margin deposits securing
indebtedness under any interest rate protection agreement or
other interest hedging agreement up to the principal amount of
indebtedness of Iusacell Celular and its subsidiaries with
floating rates of interest; (ii)&nbsp;make loans or advances to
Iusacell in lieu of paying dividends at such times and in such
amounts as necessary to permit Iusacell to pay scheduled
interest (including any tax gross-up with respect thereto) and
principal payments as and when due in respect of the Iusacell
senior notes and (iii)&nbsp;make loans or advances to Iusacell
in lieu of paying dividends in an amount not to exceed U.S.$5.0
million, so long as an event of default has not occurred, to
discharge other liabilities of Iusacell incurred in the ordinary
course of business.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Short-term
debt</I></FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Banco
Santander Mexicano</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2001, Iusacell Celular obtained a
one-year unsecured term credit facility from Banco Santander
Mexicano in the principal amount of U.S.$12&nbsp;million to be
used solely to acquire cellular handsets. Loans outstanding
under this facility bore interest at an annual rate of 6.99%.
Interest was paid quarterly and the principal was paid in
February&nbsp;25, 2002.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Motorola
Credit Corporation Loan</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the acquisition of Portatel, Iusacell
Celular assumed a U.S.$9.1&nbsp;million loan that Portatel del
Sureste, S.A. de C.V., a subsidiary of Portatel, had incurred
from Motorola Credit Corporation in March 2000 to purchase
certain cellular infrastructure equipment. Interest under this
loan was calculated at a floating annual rate equal to six-month
LIBOR plus 6%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the acquisition of Portatel
and its subsidiaries, Iusacell Celular, Portatel del Sureste,
S.A. de C.V., and Motorola Credit Corporation entered into a
series of agreements pursuant to which a partial payment of
U.S.$3.0&nbsp;million was paid on this loan on March&nbsp;27,
2002, and the remaining U.S.$6.1&nbsp;million was paid on
April&nbsp;26, 2002.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Vendor
Financing</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, we incur indebtedness with
vendors in order to finance purchases of equipment, hardware,
software and services. As of December&nbsp;31, 2001, we had
U.S.$4.4&nbsp;million of such vendor financing outstanding.
Vendor financing is classified as notes payable to suppliers.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Building
and others</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Building and others consisted of operating leases
for our administrative offices, sales branches and service
facilities. Building leases are Pesos-denominated and contain
escalation clauses for inflation. Amounts represents the future
annual minimum rental payments on leases current at
December&nbsp;31, 2001.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Risks
Associated With Our Ability to Service or Refinance Our
Debt</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to satisfy our obligations under our
debt in the future will depend upon our future performance,
including our ability to increase revenues significantly and
control expenses. Our future operating performance depends upon
prevailing economic, financial, business and competitive
conditions and other factors, many of which are beyond our
control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s debt agreements severely
restrict the ability of Iusacell Celular and its subsidiaries to
pay cash dividends or otherwise make cash available to Iusacell,
except, under some circumstances, for scheduled interest
(including any tax gross-up with respect thereto) and principal
payments in respect of the Iusacell senior notes and loans or
advances or dividend payments to Iusacell in an amount up to
</FONT>

<P align="center"><FONT size="2">72
</FONT>

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<DIV align="left">
<FONT size="2">U.S.$5.0&nbsp;million in order to discharge other
liabilities of Iusacell incurred in the ordinary course of
business. While such restrictions exist, we expect to meet
Iusacell&#146;s other liquidity requirements with funds provided
by future equity and debt offerings and capital contributions
from our principal shareholders. Our principal shareholders are
under no obligation to make capital contributions to us.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total Iusacell debt, including notes payable to
suppliers, was Ps.7,601.8 million (U.S.$830.3&nbsp;million) at
December&nbsp;31, 2001. At December&nbsp;31, 2001,
Iusacell&#146;s average cost of outstanding bank debt was
approximately 10.3%, with a remaining average maturity of
approximately 3.8&nbsp;years. At December&nbsp;31, 2001,
Iusacell&#146;s ratio of debt to total capitalization was 51.5%
compared to 54.8% at December&nbsp;31, 2000 and 60.1% at
December&nbsp;31, 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s liquidity has been
provided by cash from operations, short and long-term
borrowings, vendor financing and capital contributions. Total
Iusacell Celular debt, including trade notes payable, was
Ps.4,044.6 million (U.S.$441.7&nbsp;million) outstanding at
December&nbsp;31, 2001, 6.3% lower than the total debt of
Ps.4,315.2&nbsp;million (U.S.$471.3&nbsp;million) outstanding at
December&nbsp;31, 2000. At December&nbsp;31, 2001, Iusacell
Celular&#146;s average cost of outstanding bank debt was
approximately 6.9%, with a remaining average maturity of
approximately 3.0&nbsp;years. At December&nbsp;31, 2001,
Iusacell Celular&#146;s ratio of debt to total capitalization
was 32.2% compared to 36.2% at December&nbsp;31, 2000 and 46.8%
at December&nbsp;31, 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we do not have sufficient funds to satisfy our
obligations, we may take specific actions, including delaying or
reducing capital expenditures, attempting to refinance our debt
at or prior to its maturity or, in the absence of such
refinancing, attempting to sell assets quickly in order to make
up for any shortfall in payments under circumstances that might
not be favorable to getting the best price for the assets, or
seeking additional equity capital. Our ability to refinance our
debt and take other actions will depend on, among other things,
our financial condition at the time, the restrictions in the
instruments governing our debt and other factors, including
market conditions, the macroeconomic environment, and the level
of such variables as the Peso-Dollar exchange rate and benchmark
money-market rates in Pesos and Dollars.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our and substantially all of Iusacell
Celular&#146;s debt outstanding at December&nbsp;31, 2001 was
U.S. dollar-denominated and only partly hedged against foreign
exchange risk. See Item&nbsp;5, &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Liquidity&nbsp;&#151; Hedging&#148; and
&#147;Item&nbsp;11 Quantitative and Qualitative Disclosures
About Market Risk.&#148;
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Certain
Trading Activities</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;30, 1999, Iusacell Celular
entered into a foreign exchange hedge using forward rate
contracts to hedge its exchange rate exposure for
U.S.$77.0&nbsp;million, representing approximately 50% of the
principal and interest payments on its indebtedness coming due
over the period from April 2000 to April 2001. This transaction
resulted in a U.S.$9.8&nbsp;million loss. On November&nbsp;22,
2000, Iusacell Celular entered into a second foreign exchange
hedge for U.S.$15.0&nbsp;million. This transaction resulted in a
U.S.$1.7&nbsp;million loss. On August&nbsp;9, 2001, Iusacell
Celular entered into a third foreign exchange hedge using
forward rate contracts for U.S.$11.0&nbsp;million on its
indebtedness coming due over the period from November 2001 to
November 2002. As of December&nbsp;31, 2001, the fair value of
the hedge resulted in an unrealized loss of
U.S.$1.4&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August and October 2001, Iusacell Celular
entered into a foreign exchange hedge using forward rate
contracts to hedge 100% of the principal amount of
U.S.$150&nbsp;million and interest of U.S.$34.5&nbsp;million on
its 10% senior notes due 2004. This hedge was intended to
benefit from the strength of the U.S. dollar relative to the
peso to mitigate foreign exchange exposure. This hedge becomes
due between July 2002 and July 2004. As of December&nbsp;31,
2001, the fair value of the hedge resulted in an unrealized loss
of U.S.$17.0&nbsp;million. In accordance with the terms of the
foreign exchange hedge, we posted cash collateral in the amount
of U.S.$2.0&nbsp;million. We determine the fair value of
derivative financial instruments using an external third-party
expert.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, Iusacell Celular
maintained forward-rate contracts for U.S.$201.0&nbsp;million
partially hedging its principal and interest payments due in the
period from January 2002 to July 2004.
</FONT>

<P align="center"><FONT size="2">73
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Interest
Rate Collars</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 1998, Iusacell Celular entered into an
interest rate collar agreement for a notional amount of
U.S.$35&nbsp;million until July&nbsp;30, 2002. The collar
agreement limits the maximum effective LIBOR cost to 6.12% if
six-month LIBOR is lower than 7.12%, and 7.12% if LIBOR equals
or exceeds 7.12%. Iusacell Celular can participate in a decline
in LIBOR to 5.30%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;26, 1999, Iusacell Celular
entered into an additional interest rate collar agreement to
limit the maximum interest rate which must be paid on
U.S.$15.0&nbsp;million of its floating rate debt until July
2002. This collar agreement limits the maximum effective LIBOR
cost to 5.82% if six-month LIBOR is lower than 6.82%, and 6.82%
if LIBOR equals or exceeds 6.82%. Iusacell Celular can
participate in a decline in LIBOR to 4.75%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2001, due to
the significant decrease in the LIBOR interest rates, Iusacell
Celular recognized additional interest expense of
Ps.5.4&nbsp;million (U.S.$0.6&nbsp;million) for the interest
rate collars, which was offset by the lower interest expense on
its floating rate debt. Accordingly, these derivatives were
highly effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The U.S.$50.0&nbsp;million aggregate notional
amount of the above interest rate collar agreements does not
quantify risk or represent assets or liabilities of Iusacell,
but is used in the determination of cash settlements under the
agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are exposed to credit loss from counterpart
non-performance, but we do not anticipate any such loss from the
interest rate collar agreements, which are with a major
financial institution.
</FONT>

<P align="left">
<B><FONT size="2">Recent Equity Offerings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1999, Iusacell contributed
Ps.6,128.2&nbsp;million (U.S.$637.1&nbsp;million) in additional
equity to Iusacell Celular. In 2000, Iusacell contributed
Ps.2,346.6 million (U.S.$244.0&nbsp;million) in additional
equity to Iusacell Celular. Neither Iusacell or Iusacell
Celular&#146;s principal shareholders, Verizon or Vodafone, have
any obligation to contribute equity to Iusacell Celular.
</FONT>

<P align="left">
<B><FONT size="2">Tower Monetization</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, Iusacell Celular entered into a
series of agreements with MATC Celular. These agreements, among
other things, gave MATC Celular the right to acquire
approximately 330 existing Iusacell Celular non-strategic
towers. In 2001, we sold 244 towers to MATC Celular, receiving
in excess of U.S.$34&nbsp;million in net gains. In May 2002, we
sold 25&nbsp;additional non-strategic towers, receiving
U.S.$3.7&nbsp;million in net gain. We expect to sell up to 61
additional non-strategic towers to MATC Celular during 2002.
Iusacell is leasing back the sold towers from MATC Celular and
subleasing them to Iusacell Celular&#146;s operating
subsidiaries.
</FONT>

<P align="left">
<B><FONT size="2">Dividend Policy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have never paid dividends in the past, and we
currently have no plans to initiate dividend payments. In
addition, the Iusacell Celular indenture and the senior
refinancing secured loan limit Iusacell Celular&#146;s ability
to pay dividends.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and
Development, Patents and Licenses, Etc.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular does not undertake research and
development activities.
</FONT>

<P align="center"><FONT size="2">74
</FONT>

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<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trend
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the events and developments
identified elsewhere in this Item&nbsp;5, &#147;Operating and
Financial Review and Prospects,&#148; our financial condition
and results of operations could also be materially affected by
the following events and developments:
</FONT>

<P align="left">
<B><FONT size="2">New Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a direct result of the spectrum auctions
organized by COFETEL, which concluded in May 1998, we are now
facing additional mobile wireless competition operating in the
1.9&nbsp;GHz (PCS)&nbsp;spectrum in our cellular territories and
additional local telephony competition operating in the
3.4-3.7&nbsp;GHz (Wireless Local Loop) spectrum. The experience
of other countries suggests that, although overall demand for
wireless telephony services will increase, prices will
experience downward pressure, especially at the time of market
entry by the new competitors. New competition has not caused us
to decrease prices, we did not increase prices from March 1999
until mid-April 2001, when we apply a 4.5% increase on a
weighted average basis, in the regular monthly fees of our
postpaid plans.
</FONT>

<P align="left">
<B><FONT size="2">Price Increases and Rollbacks</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have attempted, and continue to attempt, to
exercise price leadership in the Mexican cellular market, with a
strategy of having our prices keep pace with inflation if
economic and competitive conditions permit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In late March 1999, we raised airtime prices on
our postpaid plans by approximately 12% on a weighted average
basis and approximately 6% for prepay customers. These price
increases remained in place as the competition followed our lead.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In mid-April 2001, after not having raised our
prices for more than two years, we increased the regular monthly
fees of our postpaid plans by approximately 4.5% on a
weighted-average basis and the monthly fees for one-single rate
service of our postpaid plans by approximately 15% on a weighted
average basis. We also increased the airtime charges of one of
our postpaid plans by 4.8%. These price increases have remained
effective despite the fact that the competition has not followed
us. Our revenues will be adversely affected to the extent that
our price increases cannot keep pace with inflation. We believe
that the implementation of the CPP modality accelerated the
prepay subscriber growth and increased the subscriber usage
throughout the Mexican wireless market.
</FONT>

<P align="left">
<B><FONT size="2">Regulatory Developments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican authorities resolved several critical
regulatory issues over the last several years and will likely
continue to resolve additional important regulatory issues
during 2002 which may have a material effect on Iusacell&#146;s
financial condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Local
Interconnection</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;27, 1998, COFETEL issued a
resolution which established the per-minute interconnection rate
for telephone calls made from wireless customers to wireline
customers at Ps.0.2573 per full minute payable on a per-second
basis, which will be indexed on a monthly basis for inflation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">COFETEL declined to provide for any amount of
reciprocity in the interconnection fee payable by Telmex to
wireless operators for interconnection services that Iusacell
and other wireless operators provide Telmex for calls made by
wireline customers to mobile wireless customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, we negotiated a rate reduction
with Telmex, retroactive to January&nbsp;1, 2001, that decreases
the interconnection rate per minute for telephone calls made
from wireless customers to wireline customers from Ps.0.31 per
full minute, payable on a per-second basis, to the peso
equivalent of U.S.$0.0125 per full minute, payable on a
per-second basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December, 2001, Telmex, Alestra and Avantel
reached an agreement to further reduce the long distance
interconnection rate from U.S.$0.0125 per minute to U.S.$0.00975
per minute. We are currently in
</FONT>

<P align="center"><FONT size="2">75
</FONT>

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<DIV align="left">
<FONT size="2">negotiations with Telmex to obtain similar terms
for both our long distance business and local cellular
interconnection rate.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Calling Party
Pays</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;27, 1998, COFETEL ruled that the
calling party pays modality would be implemented by May&nbsp;1,
1999 as an option for the wireless customer. CPP is a cellular
telephony payment scheme similar to the existing wireline
payment scheme, where the wireline or fixed wireless party that
places a local call to a cellular telephone, and not the
cellular subscriber receiving the call, will be billed for
interconnection access, and the recipient will not be billed for
the airtime charges corresponding to that call. COFETEL
established the CPP interconnection tariff at Ps.1.80 per minute
or fraction of a minute, which was to be indexed on a monthly
basis for inflation as of October&nbsp;1, 1998, for calls from
Telmex wireline customers to mobile wireless customers. CPP
would only apply to local calls, and the &#147;mobile party
pays&#148; modality would continue to apply to incoming long
distance and incoming calls to a roamer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 1999, after a legal action by Telmex to
attempt to suspend the scheduled implementation of CPP, Telmex
and the Cellular A-Band carriers completed negotiating a new
mobile wireless-Telmex local wireline interconnection agreement
with the approval of COFETEL. The calling party pays modality
was implemented on May&nbsp;1, 1999. All mobile wireless
customers were automatically converted to CPP, with the right to
revert to the mobile party pays modality. The interconnection
rate was frozen for six months at Ps.1.90 per minute or fraction
of a minute. Had the indexing established by the
November&nbsp;27, 1998 COFETEL resolution been applied, the rate
for May 1999 would have been Ps.2.06 per minute or fraction of a
minute. The price which Telmex may charge its customers was
frozen at Ps.2.50 per minute or fraction of a minute, plus
Telmex&#146;s applicable per-call local charge. Iusacell cannot
predict whether COFETEL intends to extend the same tariff and
surcharge at the same rates and for how long. Telmex greeted the
May&nbsp;1, 1999 implementation of CPP with an advertising
campaign critical of the high costs to wireline customers, whom
Telmex urged to block CPP calls. But after a moderate decline in
traffic during the first two weeks of May 1999, we began to
experience a gradual increase in traffic over the last two weeks
of May 1999, slightly exceeding pre-CPP traffic levels by the
end of the month. Since then, we experienced traffic growth in
1999 and 2000. In particular, since the initiation of CPP we
experienced an increase in the percentage of total calls that
were incoming calls from 39% to 60% in 2000. In early 2000,
Telmex reversed its opposition to CPP, publicly announcing
support for it. In 2001, the percentage of total calls that were
incoming calls experienced a reduction to 56%, which makes us
believe the CPP effect has been exhausted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The overwhelming majority of our cellular
customers have chosen not to opt out of the CPP modality. We
believe that the implementation of the CPP modality has
accelerated prepay subscriber growth and increased subscriber
usage throughout the Mexican wireless market.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are currently discussing with COFETEL and
Telmex the possibility of extending the CPP modality to incoming
national long distance calls. If this proposal is accepted, the
mobile party pays modality would continue to apply only to
incoming international long distance calls.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Long Distance
Interconnection</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In a separate resolution issued on
November&nbsp;27, 1998, COFETEL also established the
interconnection tariff between long distance and local wireline
carriers at Ps.0.2573 per full minute payable on a per-second
basis, which will be indexed on a monthly basis for inflation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, we negotiated a rate reduction
with Telmex, retroactive to January&nbsp;1, 2001, that decreases
the per-minute interconnection rate for terminating long
distance telephone calls made by our long distance customers in
Telmex&#146;s local wireline network to the peso equivalent of
U.S.$0.0125 for a full minute.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December, 2001, Telmex, Alestra and Avantel
reached an agreement to further reduce the long distance
interconnection rate from U.S.$0.0125 per minute to U.S.$0.00975
per minute. We are currently in negotiations with Telmex to
obtain similar terms for both our long distance business and
local cellular interconnection rate.
</FONT>

<P align="center"><FONT size="2">76
</FONT>

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<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Long Distance
Concession</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1997, COFETEL authorized a
modification of our concession to provide long distance
services, modifying coverage requirements and permitting the use
of microwave and other non-fiber technologies for transmission
purposes. Together with fiber-swapping agreements reached by
Iusacell with two of our competitors, the modified concession
permits a more efficient, more technologically flexible long
distance network and eliminated more than U.S.$200&nbsp;million
in Iusacell capital expenditure requirements from 1999 to 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;1, 2001, Telmex, Avantel and
Alestra announced a preliminary agreement with respect to how
much, through what means and over how much time Avantel and
Alestra will pay for the special projects implemented by Telmex
prior to January 1997 in order to permit competition in long
distance telephony, including the numbering and signaling plans
and expenditures to facilitate interconnection. Avantel, Alestra
and Telmex agreed that the total amount reimbursable to Telmex
for such special projects by all long distance carriers was
U.S.$777.0&nbsp;million, including interest payable from
December 1997 until October 1999. In March 2001, Iusatel
negotiated a similar agreement with Telmex, in which Iusatel
agreed to pay for its portion of such special projects in two
parts: (i)&nbsp;a fixed payment of approximately
U.S.$13.6&nbsp;million, payable in twelve equal monthly
installments beginning in April 2001, and (ii)&nbsp;a
U.S.$0.0053&nbsp;per full minute, usage-based surcharge to the
local wireline interconnection rate from January&nbsp;1, 2001
through December&nbsp;31, 2004 for long distance calls
terminated in Telmex&#146;s local wireline network. Since these
special projects payments relate to capital investments made by
Telmex, we are recording them as a deferred asset and
consequently we are amortizing them.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Quality
Standards</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 1999, we entered into an agreement
with COFETEL to maintain certain cellular quality standards
measured in terms of connection time, dropped calls and
ineffective attempts. We currently meet these quality standards.
Failure to maintain these quality standards may result in refund
obligations to subscribers and governmental sanctions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we met COFETEL&#146;s quality standards
in 2000, we nevertheless determined voluntarily to compensate
our subscribers in Region 9 in light of perceived quality
problems during 1999 due to network digitalization and rapid
traffic growth. Our subscribers as of December&nbsp;31, 1999
received, if a postpaid subscriber, 20% more included minutes in
their postpaid package in April and May 2000, or if a prepay
customer, five free minutes. The financial impact of this
voluntary compensation program was not material.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We met successfully COFETEL&#146;s quality
standards, that in 2001 were set as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Drop calls 6%
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ineffective attempts 5%
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Portatel significantly increased its quality
standards in the fourth quarter of 2001, the rate in ineffective
attempts improved to 0.7% after receiving in initial audits in
the city of M&#233;rida, a 14.9% rate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms and conditions for the 2002 quality
standards agreed by concessionaires and COFETEL are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Drop calls 4%
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ineffective attempts 5%
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Connection time 12 seconds
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 2002 quality tests began June&nbsp;3, 2002
and will end December&nbsp;13, 2002, and will held revisions in
the 30 largest cities in terms of number of wireless mobile
users, that represents 70% of the total wireless mobile users in
Mexico.
</FONT>

<P align="center"><FONT size="2">77
</FONT>

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<P align="left">
<B><FONT size="2">Other Developments</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Distributor
Defection</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, SAGO Interamericana, S.A. de C.V.,
a distributor that represented at that time slightly less than
10% of our monthly gross postpaid additions and approximately 2%
of our monthly gross prepay additions, notified us that it was
immediately terminating its distribution agreement with us. We
believe that this action violated the termination provisions of
the distribution agreement and we are seeking compensatory
damages. In addition, we are seeking to recover approximately
Ps.44.0&nbsp;million in net receivables owed to us by SAGO.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Telereunion
Default</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, Iusatel agreed to swap dark
fiber optic cable in the amount of U.S.$17.3&nbsp;million and
sell approximately U.S.$7.4&nbsp;million of additional dark
fiber optic cable to Telereunion, S.A. de C.V., an affiliate of
Telscape International, Inc. Upon the execution of this
agreement, Telereunion issued promissory notes to Iusatel for
the purchase price but defaulted on the payment of each of these
notes. In April 2001, Telereunion&#146;s United States parent
Telscape International, Inc. filed for reorganization under the
Chapter&nbsp;11 of the United States Bankruptcy Code. As part of
a settlement arrangement, on September&nbsp;17, 2001,
Telereunion and Iusatel executed an agreement by means of which
the former transferred dark fiber optic assets in the amount of
U.S.$7.4&nbsp;million to the latter in exchange for full
settlement of the past notes receivable in the same amount.
</FONT>

<P align="center"><FONT size="2">78
</FONT>

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<!-- link1 "ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DIRECTORS, SENIOR MANAGEMENT AND
EMPLOYEES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A five-member Board of Directors manages Iusacell
Celular. Under the Iusacell Shareholders Agreement, Vodafone has
the right to nominate one director. As a result, the other four
directors have the power under our by-laws to approve, without
the affirmative vote of any other directors, all resolutions of
the Board of Directors, except with respect to some transactions
which require approval by a general extraordinary meeting of the
shareholders (and over which the Iusacell Shareholders Agreement
grants Vodafone supermajority rights).
</FONT>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and
Senior Management</FONT></B>

<P align="left">
<B><FONT size="2">Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;30, 2002, Iusacell Celular elected
new directors. The following table presents information with
respect to our directors at April&nbsp;30, 2002:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Position(s)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peter H. Burrowes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board and Series&nbsp;A Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Russell A. Olson
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Series&nbsp;A Director
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Henry M. Ruiz
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Series&nbsp;A Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Alan Bowers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Series&nbsp;B Director
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Javier Martinez del Campo
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Series&nbsp;B Director
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term of each director expires upon the
election of his successor at a duly convened general ordinary
shareholders meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our by-laws authorize alternate directors to
serve on the Board of Directors in place of directors who are
unable to attend meetings or otherwise participate in the
activities of the Board of Directors. The alternate directors as
of April&nbsp;30, 2002 are: any of Juan Carlos Merodio and Norma
E. Urzua for any of Messrs.&nbsp;Burrowes, Olson or Ruiz,
Ignacio Gomez Morin for Mr. Martinez del Campo, and Richard
Harman for Mr.&nbsp;Bowers.
</FONT>

<P align="left">
<B><FONT size="2">Biographies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Peter H. Burrowes
</FONT></I><FONT size="2">has been a member of the Board of
Directors of Iusacell Celular since April 2002.
Mr.&nbsp;Burrowes also has been a member of the Board of
Directors of Iusacell since September 2001. Mr.&nbsp;Burrowes
was appointed President and Director General of Iusacell on
April&nbsp;23, 2001. Prior to this appointment Mr.&nbsp;Burrowes
was for 8&nbsp;years President and Chief Executive Officer of
Comunicaci&#243;n Celular,&nbsp;S.A., a leading Colombian
cellular services provider. Before that, Mr.&nbsp;Burrowes
served in different key positions in multinational corporations,
including Director General of Parker Gillete,&nbsp;S.A.
de&nbsp;C.V., Director General of Givaudan Roure,&nbsp;S.A., a
Colombian subsidiary of Hoffman La Roche, Finance and
Administration Director of Compa&#241;&#237;a Qu&#237;mica
Borden and Regional Finance Director of General Foods
International, among others. Mr.&nbsp;Burrowes holds an
Economics degree from the Universidad de los Andes, Colombia, an
administration and marketing degree from the Ealing Technical
College of London, Great Britain and participated in the
Executive Program on Competition and Strategy at the Harvard
School of Business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Russell A. Olson </FONT></I><FONT size="2">has
been a member of the Board of Directors of Iusacell Celular
since April&nbsp;30, 2002, Mr.&nbsp;Olson has also served as
Executive Vice President of Finance and CFO of Iusacell since
October 2001, after serving as Executive Director of Business
Analysis for Verizon International for the Americas since June
2000. Mr.&nbsp;Olson has served in a variety of financial
positions within Verizon and its predecessor company, GTE, for
over 16&nbsp;years, including financial reporting, auditing,
treasury, international, strategic planning and business
analysis. Mr.&nbsp;Olson holds a B.A. degree in Business
Administration&nbsp;&#151; Finance from the University of
Arizona and a M.S. degree in Finance from Fairfield University.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Henry M. Ruiz </FONT></I><FONT size="2">has
been a member of the Board of Directors of Iusacell Celular
since March&nbsp;30, 2001. Mr.&nbsp;Ruiz has also served as
Vice-President of Technical Operations of Iusacell since
July&nbsp;31, 2000 as an alternate director of Iusacell since
August 2000 and as a director of Iusacell Celular since April
2001.
</FONT>

<P align="center"><FONT size="2">79
</FONT>

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<DIV align="left">
<FONT size="2">Mr.&nbsp;Ruiz also served as Director of
Engineering and Operations for Iusacell in Region&nbsp;5 from
March 1998 to September 1998 and as Director of Executive
Support for Iusacell&#146;s Vice-President of Technical
Operations from January 1997 until March 1998. Mr.&nbsp;Ruiz has
been an employee of Verizon and Bell Atlantic for 16&nbsp;years.
From October 1998 until June 2000, he served as Chief Technology
Officer of Excelcomindo Pratama in Indonesia, where he was
responsible for network, engineering operations and information
technology. From August 1990 until December 1996, Mr.&nbsp;Ruiz
supported business development efforts worldwide for Bell
Atlantic International Inc. Prior to that, Mr.&nbsp;Ruiz worked
for New Jersey Bell for six years in various engineering and
operations capacities. Mr.&nbsp;Ruiz received a B.S. in
Mathematics and Computer Science at Stevens Institute of
Technology and a degree from the Professional Program for
Managers of Telecommunications and Information Technology at
Carnegie Mellon University.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Alan Bowers </FONT></I><FONT size="2">has been
a member of the Board of Directors of Iusacell Celular since
April&nbsp;30, 2002. Mr.&nbsp;Bowers is the Managing Director of
International Operations for Vodafone Americas Region, with
responsibility for oversight of the company&#146;s operations in
Mexico. Prior to his appointment as Managing Director on
July&nbsp;1, 2000, Mr.&nbsp;Bowers was the country manager for
Korean operations. Mr.&nbsp;Bowers has held a variety of other
international positions with the company including the position
of Chief Financial Officer of Belgacom Mobile, Vodafone&#146;s
joint-venture with Belgacom in Belgium. Prior to working for
Vodafone, Mr.&nbsp;Bowers was an economist at the World Bank in
Washington, D.C. Mr.&nbsp;Bowers has a M.S. degree in Economics
from Georgetown University, and an M.B.A. from the University of
California at Berkeley.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Javier Mart&#237;nez del Campo Lanz
</FONT></I><FONT size="2">has been a member of the Board of
Directors of Iusacell Celular since February&nbsp;7, 1997. He
has been a partner with the Mexico City based law firm of De
Ovando y Mart&#237;nez del Campo, S.C. since 1984.
Mr.&nbsp;Mart&#237;nez del Campo holds a law degree from the
Universidad An&#225;huac and a master&#146;s degree from the
University of San Diego. Mr.&nbsp;Mart&#237;nez del Campo is a
member of the Mexican Bar Association and an international
associate of the American Bar Association.
Mr.&nbsp;Mart&#237;nez del Campo serves as the secretary of the
board of directors of various Mexican corporations, including
Grupo Gigante, S.A. de C.V., one of Mexico&#146;s largest
retailers.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate amount of compensation, including,
without limitation, base salary and benefits, paid by Iusacell
in 2001 to all directors and executive officers as a group was
Ps.84.1&nbsp;million (U.S.$9.2&nbsp;million), compared to
Ps.85.9 million (U.S.$9.4&nbsp;million) in 2000. The aggregate
amount excludes any amounts paid by Verizon and Vodafore to
their employees who are directors and executive officers of
Iusacell. See Item&nbsp;7, &#147;Major Shareholders and Related
Party Transactions&nbsp;&#151; Related Party Transactions.&#148;
As part of our general compensation policy, we conduct periodic
reviews of our management and employees to determine bonus
compensation. Iusacell also provides executive officers with use
of an automobile. In addition, we provide our executive officers
and other employees with food stamps (up to Ps.1,226.1 per
month), gas stamps (up to 320&nbsp;liters per month) and with
contributions to a savings plan (up to Ps.1,665.8 per month).
</FONT>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board
Practices</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2000, Iusacell Celular and
our subsidiaries had an aggregate of 1,933 full-time and
part-time employees, 139 temporary employees and 4 full time
Verizon seconded employees or consultants. Approximately 34.7%
of the full time employees were members of a labor union. We
have never experienced a work stoppage and management considers
our relationship with our employees to be good.
</FONT>

<P align="left">
<B><FONT size="2">E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share
Ownership</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell owns, directly or indirectly, 100% of
our shares. As a result, our directors and officers as a group
own, in aggregate, none of our shares.
</FONT>

<P align="center"><FONT size="2">80
</FONT>

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<!-- link1 "ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</FONT></B>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Major
Shareholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell owns, directly or indirectly, 100% of
our outstanding 27,967 series&nbsp;A shares and 26,865
series&nbsp;B shares. Iusacell has two principal shareholders.
The first, Verizon, is comprised of various subsidiaries of
Verizon. Since February 1997, we have been under management
control of subsidiaries of Bell Atlantic. Our second principal
shareholder is a subsidiary of Vodafone Group Plc. No other
shareholder owns more than 5% of any class of Iusacell&#146;s
shares. At April&nbsp;30, 2002, based on the information made
available to us, the shareholders of Iusacell were as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Number of Shares</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shareholders</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">A Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">V Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Verizon(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">657,966,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,152,002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">734,118,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vodafone(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">303,326,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,617,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">642,943,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Public investors(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">484,962,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">484,962,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">961,292,484</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">900,732,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,862,024,794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The address of Verizon Communications Inc. is:
    1095 Avenue of the Americas, New York, New York.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The address of the Vodafone Group Plc is: Max
    Eunvelaan&nbsp;61, 3062&nbsp;MA. Rotterdam, The Netherlands.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes the series V shares held by the trust
    administering our executive employee stock purchase plan.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
directors and officers as a group own, in the aggregate, less
than 1% of Iusacell&#146;s shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In August 1999, a reorganization of Iusacell and
Iusacell Celular was completed. The reorganization included
U.S.$132.5&nbsp;million in borrowings from our principal
shareholders between August 1998 and March 1999 that were
immediately converted into Iusacell Celular equity, an offer to
exchange the shares of Iusacell Celular for shares of Iusacell,
primary equity offerings that raised U.S.$33.7&nbsp;million in
net proceeds for Iusacell and a U.S.$106.5&nbsp;million
secondary offering by our principal shareholders. This
reorganization more than doubled the number of Iusacell&#146;s
publicly held shares. Before the August 1999 primary and
secondary offerings, Verizon (then Bell Atlantic) had a 47.2%
interest in Iusacell Celular and the Peralta Group had a 43.8%
interest. After the August 1999 reorganization, Verizon and the
Peralta Group each had a 40.4% interest in Iusacell. On
January&nbsp;31, 2000, Iusacell launched a second exchange offer
to acquire the remaining 0.5% interest in Iusacell Celular held
by public shareholders. This offer was completed on
February&nbsp;29, 2000 and, as a result, Iusacell then held
99.9% of the outstanding Iusacell Celular shares. See
Item&nbsp;4, &#147;Information on the Company&nbsp;&#151;
History and Development of the Company.&#148; Since this second
exchange offer placed additional series V shares with public
shareholders, both Verizon and the Peralta Group were slightly
diluted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;30, 2000, Iusacell Celular&#146;s
shareholders approved a 30,000&nbsp;for&nbsp;1 reverse split of
its shares which became effective in May 2001. Iusacell now
holds 100% of the outstanding Iusacell Celular shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the fourth quarter of 1999 and the first
quarter of 2000, relatives of Mr.&nbsp;Carlos Peralta sold
approximately 34,900,000 series V shares on the open market. In
April and May 2000, Iusacell sold 10,529,700 American Depositary
Shares for U.S.$15.125 per ADS in a public offering, receiving
approximately U.S.$153.0&nbsp;million in net proceeds. As a
result, as of May&nbsp;31, 2000, Verizon held a 37.2% interest
in Iusacell and the Peralta Group and associated individuals
held a 34.5% interest in Iusacell.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;4, 2001, Vodafone closed the
purchase of the Peralta Group&#146;s 34.5% interest in Iusacell.
In connection with this purchase, the shareholders agreement
among Iusacell, Verizon and the Peralta Group terminated and
Iusacell, Verizon and Vodafone entered into a new shareholders
agreement, which we refer to as the Iusacell Shareholders
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;27, 2001, our shareholders
authorized a rights offering to holders of our outstanding
series&nbsp;V shares and ADSs. The rights offering involved
newly issued series&nbsp;V shares representing ADSs and
series&nbsp;A shares for up to U.S.$100&nbsp;million. The
subscription period started on October&nbsp;5, 2001 and ended on
November&nbsp;1, 2001. Iusacell&#146;s principal shareholders,
Verizon and Vodafone, purchased their pro rata portion
</FONT>

<P align="center"><FONT size="2">81
</FONT>
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<DIV align="left">
<FONT size="2">of series&nbsp;A and series&nbsp;V shares. 67% of
the non-Verizon and Vodafone shareholders exercised their rights
on the series&nbsp;V shares. In addition, Verizon&#146;s
subscription included all of the series&nbsp;V shares offered
to, but not subscribed by, public shareholders.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of April&nbsp;30, 2002, Verizon held a 39.4%
interest in Iusacell and Vodafone held a 34.5% interest in
Iusacell.
</FONT>

<P align="left">
<B><FONT size="2">Governance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s by-laws provide that
resolutions of the Board of Directors will be valid when
approved by a majority vote of the members present, including
the favorable vote of one of the Series&nbsp;A directors and the
favorable vote of one of the Series&nbsp;B directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s by-laws also provide that
resolutions of our shareholders will be valid when approved by a
majority of our outstanding shares, including a majority of the
outstanding series&nbsp;A shares and Series&nbsp;B shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following transactions should be approved by
the shareholders at a general ordinary or extraordinary meeting
in accordance with the by-laws:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">acquisitions of non-telecommunications businesses
    for a purchase price in excess of U.S.$30.0&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain investments, joint ventures and mergers
    within the telecommunications business involving assets in
    excess of U.S.$100.0&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain dispositions of assets for consideration
    in excess of U.S.$30.0&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">incurrence of indebtedness in an amount exceeding
    U.S.$100.0&nbsp;million in the aggregate within any fiscal year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain issuances of capital stock in an amount
    exceeding U.S.$50.0&nbsp;million in the aggregate within any
    fiscal year;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">entering into, amending or terminating contracts
    with or for the benefit of certain affiliates of Iusacell
    Celular, except for any renewals or extensions on terms
    substantially similar to those of certain consulting and
    seconded employee arrangements of Iusacell Celular with Verizon
    affiliates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">termination or disposition of any
    telecommunication transmission business with annual revenues of
    more than U.S.$10.0&nbsp;million in each of the two most recent
    fiscal years;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">termination of concessions relating to
    telecommunications operations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the determination of how Iusacell Celular will
    vote its shares and grant proxies to vote its shares on any
    supermajority transaction within entities in which Iusacell
    Celular holds 10% or more of the capital stock; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the granting of powers-of-attorney in connection
    with any such supermajority transactions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Iusacell Shareholders Agreement and our
by-laws also effectively provide that Vodafone be entitled to
elect one of the chief operations officer, the chief financial
officer, the chief marketing officer or the chief technical
officer of Iusacell and certain Iusacell subsidiaries.
Iusacell&#146;s Board of Directors or Executive Committee
determines the officer to be so designated. The Iusacell
Executive Committee has determined that Vodafone have the right
to designate the chief marketing officer. Koren Borges has been
elected as Senior Vice President, Marketing for Iusacell.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party
Transactions</FONT></B>

<P align="left">
<B><FONT size="2">General Policy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We adopted a policy on transactions with related
parties in November 1993 in connection with the acquisition by
Bell Atlantic of its initial holdings in Iusacell. This policy
provides that we will not, and will not
</FONT>

<P align="center"><FONT size="2">82
</FONT>

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<DIV align="left">
<FONT size="2">permit any of our subsidiaries to, enter into any
contract or transaction with or for the benefit of any of their
affiliates (excluding transactions with, between or among wholly
owned subsidiaries), which is not at a price and on other terms
at least as favorable to us or the subsidiary as those which
could be obtained on an arm&#146;s-length basis from an
unaffiliated third party. This policy has been formalized in the
Iusacell Shareholders Agreement.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Consulting and Secondment Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular and Verizon have entered into a
series of consulting and secondment agreements pursuant to which
Verizon has agreed, for an indefinite term, to provide Iusacell
Celular with management, technical, marketing, legal and other
consulting services and seconded employees. Seconded employees
generally agree to expatriate assignments of two to three years
duration, with such employees&#146; compensation being paid by
Verizon and reimbursed by Iusacell Celular. Verizon charges
Iusacell Celular for the provision of seconded employees at
cost, and for the provision of consulting services at or below
market rates. Vodafone has recently entered into a similar
agreement with Iusacell applicable to Iusacell Celular.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to consulting services and seconded
employees provided in 2001, Iusacell Celular has been credited
by Verizon for a total of U.S.$7.2&nbsp;million to adjust
previous overcharges. At December&nbsp;31, 2001, Iusacell
Celular owed Verizon U.S.$6.3&nbsp;million for consulting
services and seconded employees provided in 1999, 2000 and 2001.
Vodafone charged to Iusacell for consulting fees and secondment
agreements a total of U.S.$219,216 in 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, Verizon and Iusacell Celular
agreed that Verizon would accept a transfer of all rights in
connection with a U.S.$15.0&nbsp;million advance paid by
Iusacell Celular to an affiliate of Nortel Networks Inc. in
exchange, on a dollar-for-dollar basis, for the cancellation of
all existing charges invoiced by Verizon to Iusacell Celular
with respect to consulting services and seconded employees and a
credit against any and all future such charges until the sum of
all canceled and credited against charges equals
U.S.$15.0&nbsp;million. See Item&nbsp;8 &#147;Financial
Information&nbsp;&#151; Consolidated Statements and Other
Financial Information&nbsp;&#151; Legal Proceedings&nbsp;&#151;
Non Judicial Disputes.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Roaming Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">GTE Telecommunications Services, Inc., which we
refer to as TSI, provides clearinghouse services for roaming
arrangements. In 2001, TSI paid Iusacell Celular U.S.$134,821
for such services. In October 2001, we entered into an
inter-carrier roaming agreement with Verizon Wireless in the
United States.
</FONT>

<P align="left">
<B><FONT size="2">Interests of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Peralta Group, which was one of our principal
shareholders until April&nbsp;4, 2001, owns Fraccionadora y
Constructora Mexicana, S.A. de C.V., known as Fracomex, a
company engaged in real estate investment and management that
has entered into 13&nbsp;lease agreements with Iusacell Celular
and some of its subsidiaries. In 2001, Iusacell Celular paid
Fracomex rent for U.S.$392,858. Additionally, in 2001 Iusacell
acquired some equipment from Fracomex for a total of U.S.$9,671.
Payments totaled U.S.$402,529.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Two Peralta Group members lease land to Iusacell
Celular at the Peralta Group industrial complex in Pastej&#233;,
Mexico, upon which Iusacell has built and operates warehouses.
These land leases expire in December 2015, but can be terminated
before then if either party gives the other one year&#146;s
prior written notice. Currently, Iusacell Celular pays these two
Peralta Group entities U.S.$23,064 per month for these land
leases. In 2001, payments for these leases totaled U.S.$299,835.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, Manufacturas Electr&#243;nicas
Pastej&#233;, S.A. de C.V., a joint venture between the Peralta
Group and Mr.&nbsp;Marco Antonio de la Torre Barranco, an
alternate director of Iusacell until April 2001, provided
telephone and accessory repair services to Iusacell Celular in
the amount of Ps.14.8&nbsp;million (U.S.$1.6&nbsp;million).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Fernando de Ovando, a director of
Iusacell until April 2000, Mr.&nbsp;Javier Mart&#237;nez del
Campo, a director of Iusacell since April 2001 and a director of
Iusacell Celular since February 1997, and Mr.&nbsp;Ignacio
G&#243;mez Morin, a director of Iusacell since April 2001 and an
alternate director of Iusacell Celular since
</FONT>

<P align="center"><FONT size="2">83
</FONT>

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<DIV align="left">
<FONT size="2">February 1997, are members of the law firm of De
Ovando y Mart&#237;nez del Campo, S.C., which, in 2001, provided
legal services to Iusacell and Iusacell Celular in the amount of
approximately Ps.2.2&nbsp;million (U.S.$240,280).
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interests of
Experts and Counsel</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not Applicable.
</FONT>

<P align="center"><FONT size="2">84
</FONT>

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<!-- link2 "ITEM 8. FINANCIAL INFORMATION" -->
<DIV align="left"><A NAME="008"></A></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">ITEM&nbsp;8.</FONT></B></TD>
    <TD>
    <B><FONT size="2">FINANCIAL INFORMATION</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
Statements and Other Financial Information</FONT></B>

<P align="left">
<B><FONT size="2">Financial Statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Item&nbsp;19(a) for a list of financial
statements filed under Item&nbsp;18.
</FONT>

<P align="left">
<B><FONT size="2">Legal Proceedings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we are a party to legal proceedings in
the ordinary course of our business, management believes that
none of these proceedings, individually or in the aggregate, are
likely to have a material adverse effect on Iusacell.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <I><FONT size="2">Suit by Mitsubishi</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mitsubishi Electronics America, Inc. filed a
complaint with the Circuit Court of Cook County, Illinois,
United States, on July&nbsp;28, 1996 against Iusacell Celular,
Bell Atlantic Corporation and Bell Atlantic Latin American
Holdings, Inc. Mitsubishi&#146;s complaint alleged, among other
things, that we breached a purported contract for the purchase
of 60,000&nbsp;local wireless telephone terminals at a cost of
U.S.$510 each. Mitsubishi later filed an amended complaint
against Iusacell Celular adding a fraud allegation against
Iusacell Celular. Mitsubishi sought judgment in an amount in
excess of U.S.$50,000 for each of the three counts against
Iusacell Celular, plus punitive damages for one of those counts.
Mitsubishi filed answers to interrogatories claiming damages in
an amount of U.S.$8,825,343.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our motions to dismiss the complaint for lack of
personal jurisdiction and on substantive grounds were rejected,
although the court reserved judgment on Iusacell Celular&#146;s
motion to dismiss for <I>forum non conveniens</I>. Although we
believed the lawsuit had no basis, we nevertheless created a
contingency reserve of U.S.$3.0&nbsp;million with respect to
such litigation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After discovery, we filed a motion for summary
judgment. On December&nbsp;7, 2000, the Circuit Court granted
our motion and all counts of the complaint against Iusacell
Celular were dismissed. As a result, in the fourth quarter of
2000, we reversed Ps.23&nbsp;million (U.S.$2.4&nbsp;million) of
the contingency reserve. In January 2001, in order to avoid
further litigation, we reached a settlement with Mitsubishi.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <I><FONT size="2">Suit against SAGO</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, SAGO Interamericana, S.A. de C.V. a
distributor that at that time represented slightly less than 10%
of our monthly gross post paid additions and approximately 2% of
our monthly gross prepay additions, notified us that it was
immediately terminating its distribution agreement. We believe
that this action violated the termination provisions of the
distribution agreement, and have filed a lawsuit seeking
compensatory damages. We cannot predict whether we will prevail
in this lawsuit.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <I><FONT size="2">Telemedic lawsuit</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2002 Telemedic S.A de C.V. filed a
lawsuit against Iusacell, S.A de C.V. seeking compensatory
damages. We are now in the process of submitting evidence to the
judge. Those compensatory damages, if any, shall be determined
by the judge at the end of the process.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <I><FONT size="2">Non-Judicial Disputes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 1998, we discovered that our former
corporate headquarters in Mexico City, of which one of Iusacell
Celular subsidiaries is the owner, is encumbered by liens
incurred by the prior owner for an amount in excess of the
estimated fair market value of the property. In March 2001, we
filed suit against the Director of the Public Registry of
Property of the Federal District of Mexico in the
48th&nbsp;Civil Superior Tribunal in the Federal District of
Mexico, seeking cancellation of the liens in the public registry
on the basis that the underlying obligation has been discharged.
We prevailed in the lawsuit and consequently the lien will be
cancelled in the Public Registry of Property of the Federal
District of Mexico.
</FONT>

<P align="center"><FONT size="2">85
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Dividend Policy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since becoming a public company in 1999, we have
not paid any dividends. We do not contemplate paying dividends
in the foreseeable future.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant
Changes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">86
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "ITEM 9. THE OFFER AND LISTING" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE OFFER
AND LISTING</FONT></B>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Offer and
Listing Details</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s series&nbsp;D and L
shares were listed on the Mexican Stock Exchange until
February&nbsp;29, 2000. ADSs representing 10 Iusacell Celular
series&nbsp;D shares were listed on the New York Stock Exchange
from June&nbsp;21, 1994 until August&nbsp;10, 1999 and traded
under the symbol CEL.d. ADSs representing 10 Iusacell Celular
series&nbsp;L shares were listed on the New York Stock Exchange
from June&nbsp;21, 1994 until February&nbsp;29, 2000 and traded
under the symbol CEL until August&nbsp;4, 1999 and thereafter,
until February&nbsp;29, 2000 under the symbol CEL.y.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables present, for the periods
indicated, the high, low and period end sales prices of
(i)&nbsp;the Iusacell Celular series&nbsp;D and series&nbsp;L
shares on the Mexican Stock Exchange, as reported by the Mexican
Stock Exchange until their delisting, and (ii)&nbsp;the Iusacell
Celular series&nbsp;D and series&nbsp;L ADS on the New York
Stock Exchange, as reported by the New York Stock Exchange until
their delisting. We present the average trading volume of the
shares and ADSs for the indicated periods in 1997, 1998, 1999
and 2000. We do not have average trading volume information for
1996.
</FONT>

<P align="left">
<B><FONT size="2">Mexican Stock Exchange (in Ps.)</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average Daily</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Trading Volume</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period-end</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Shares)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SERIES D
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Second Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fourth Quarter 1999<SUP>(1)(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SERIES L
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Second Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Quarter 1999<SUP>(2)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">New York Stock Exchange (in U.S.$)</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average Daily</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Trading Volume</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period-end</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(ADSs)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SERIES D
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.063</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Second Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,747</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Quarter 1999<SUP>(3)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,954</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SERIES L
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Second Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132,798</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fourth Quarter 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter 2000<SUP>(3)</SUP>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">There was no trading during this period.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The series&nbsp;D shares and the series&nbsp;L
    shares were delisted from the Mexican Stock Exchange on
    February&nbsp;29, 2000.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">87
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The series&nbsp;D ADSs were delisted from the New
    York Stock Exchange on August&nbsp;10, 1999. The series&nbsp;L
    ADSs were delisted from the New York Stock Exchange on
    February&nbsp;29, 2000.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Source:</FONT></I><FONT size="2">&nbsp;Bloomberg
L.P.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan of
Distribution</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Markets</FONT></B>

<P align="left">
<B><FONT size="2">Trading on the New York Stock
Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">ADSs representing ten Iusacell Celular
series&nbsp;D shares were listed on the New York Stock Exchange
from June&nbsp;21, 1994 until August&nbsp;10, 1999 and traded
under the symbol CEL.d. ADSs representing ten Iusacell Celular
series L shares were listed on the New York Stock Exchange from
June&nbsp;21, 1994 until February&nbsp;29, 2000 and traded under
the symbol CEL until August&nbsp;4, 1999 and thereafter until
February&nbsp;29, 2000, under the symbol CEL.y.
</FONT>

<P align="left">
<B><FONT size="2">Trading on the Mexican Stock
Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s series D and L shares
were listed on the Mexican Stock Exchange until
February&nbsp;29, 2000.
</FONT>

<P align="left">
<B><FONT size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling
Shareholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dilution</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses of
the Issue</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">88
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "ITEM 10. ADDITIONAL INFORMATION" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADDITIONAL
INFORMATION</FONT></B>

<P align="left">
<B><FONT size="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share
Capital</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Memorandum and
Articles of Association</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular was incorporated on
October&nbsp;6, 1992 as a variable capital corporation
(<I>sociedad an&#243;nima de capital variable</I>) established
under the laws of Mexico. Iusacell Celular was registered in the
Public Registry of Commerce of the Federal District of Mexico
under Commercial Number 168528 on November&nbsp;3, 1998. On
March&nbsp;30, 2001, Iusacell Celular&#146;s shareholders
approved new by-laws, which became effective on April&nbsp;4,
2001, upon the closing of the sale by the Peralta Group to
Vodafone of its series&nbsp;A and series&nbsp;V shares in
Iusacell.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s corporate purpose is
found under Article&nbsp;Two of its by-laws. Iusacell&#146;s
primary purpose is to act as a holding company. The duration of
our existence under our by-laws is indefinite.
</FONT>

<P align="left">
<B><FONT size="2">Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, any member of the Board of
Directors who has a conflict of interest with Iusacell Celular
in any transaction must disclose such fact to the other members
of the Board of Directors and abstain from voting on such matter
at the relevant meeting of the Board of Directors. Any member of
the Board of Directors who violates such provision may be liable
for damages caused to us. Additionally, members of the Board of
Directors may not represent any shareholders at any
shareholders&#146; meeting.
</FONT>

<P align="left">
<B><FONT size="2">Voting Rights and Shareholders&#146;
Meetings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell holds, directly or indirectly, 100% of
the series&nbsp;A and B shares of Iusacell Celular.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each series&nbsp;A and series&nbsp;B share
entitles the holder to one vote at any general meeting of the
shareholders of Iusacell Celular.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our by-laws, any shareholder or group of
shareholders holding Iusacell Celular shares representing at
least 25% of the total capital stock of Iusacell Celular, shall
be entitled to designate one director corresponding to such
series of shares and the corresponding alternate director.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, the holders of shares of any
series are also entitled to vote at a special meeting of the
holders of shares of such series on any action that would
prejudice the rights of such holders, and such a holder would be
entitled to judicial relief against any such action taken
without the approval of the required majority of holders of the
relevant series at such a meeting. Any determination that an
action does not require a vote at a special meeting would be
subject to judicial challenge by an affected shareholder, and
the necessity for a vote at a special meeting would ultimately
be determined by a court. Mexican law does not provide extensive
guidance on the criteria to be applied in making such a
determination.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General shareholders&#146; meetings may be
ordinary or extraordinary meetings. Extraordinary general
meetings are meetings called to consider the matters specified
in Article&nbsp;182 of the Ley General de Sociedades
Mercantiles, which we refer to as the Mexican Companies Law,
including, principally, changes in the fixed share capital, any
amendments to the by-laws, liquidation, issuance of preferred
stock, merger, transformation from one type of company to
another, change in nationality and change of corporate purpose.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">General meetings called to consider all other
matters are ordinary meetings. An ordinary general meeting of
the shareholders of Iusacell Celular must be held at least
annually during the four months following the end of each fiscal
year to consider matters specified in Article&nbsp;181 of the
Mexican Companies Law, including, principally, the approval of
the report of the Board of Directors regarding the performance
of Iusacell Celular, the approval of the financial statements of
Iusacell Celular for the preceding fiscal year, appointment of
directors and statutory auditors and determination of their
compensation, and the declaration of dividends.
</FONT>

<P align="center"><FONT size="2">89
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our by-laws, the quorum on a first call for
an ordinary general shareholders meeting is at least 51% of the
outstanding shares. If a quorum is not available on the first
call, a second meeting may be called and validly held regardless
of the number of shares represented. In order for a resolution
of the ordinary general meeting to be validly adopted as a
result of a first or subsequent call, attendance by and the
favorable vote of the holders of each of a majority of the
outstanding series&nbsp;A and series&nbsp;B shares is required.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The quorum on a first call for an extraordinary
general meeting is 75% of the outstanding shares. If a quorum is
not available on the first call, a second meeting may be called
and convened, provided that at least 51% of the outstanding
shares are present. Whether on a first or second call, in order
for a resolution of an extraordinary general meeting to be
validly adopted, the favorable vote of the holders of a majority
of each of the outstanding series&nbsp;A and series&nbsp;B
shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, holders of 20% of our
outstanding capital stock may have any shareholder action set
aside by filing a complaint with a Mexican court of competent
jurisdiction within 15&nbsp;days after the close of the general
shareholders&#146; meeting at which such action was taken, by
showing that the challenged action violates Mexican law or our
by-laws. Relief under these provisions is only available to
holders:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whose shares were not represented when the action
    was taken or, if represented, were voted against it; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whose complaint makes reference to the clause of
    the by-laws or the legal provision that was infringed.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shareholders&#146; meetings may be called by the
Board of Directors, the Chairman of the Board of Directors, the
Secretary and alternate Secretary, any two directors, any of the
statutory auditors or any Mexican court of competent
jurisdiction. In addition, the Board of Directors or any of the
statutory auditors may be required to call a meeting of
shareholders upon the written request of holders of 10% of the
outstanding capital stock. In addition, the Board of Directors
or the statutory auditors must call a shareholders&#146; meeting
at the written request of any shareholder if no ordinary general
shareholders&#146; meeting has been held for two consecutive
years or if the shareholders&#146; meetings held during such
period have not considered the items mentioned in
Article&nbsp;181 of the Mexican Companies Law discussed above.
Notice of a meeting must be published in the Official Gazette of
the Federation (<I>Diario Oficial de la Federaci&#243;n</I>) and
in a newspaper of general circulation in Mexico City at least
15&nbsp;days prior to the meeting. In order to attend a
shareholders&#146; meeting, a shareholder must request and
obtain an admission card by furnishing, at least 48&nbsp;hours
before the time set for holding the shareholders&#146; meeting,
appropriate evidence of its ownership of shares or depositing
such shares with our corporate secretary of the Board or with an
institution authorized to accept such deposit. If so entitled to
attend the meeting, a shareholder may be represented by proxy
signed before two witnesses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, an action for civil
liabilities against members of the Board of Directors may be
initiated by a shareholders&#146; resolution taken at a general
shareholders&#146; meeting. In the event shareholders decide to
bring such an action, the persons against whom such action is
brought will immediately cease to be members of the Board of
Directors. Additionally, shareholders representing not less that
15% of the outstanding shares of Iusacell may directly take such
action against members of the Board of Directors, provided that
(i)&nbsp;such shareholders have not voted in favor of a
resolution approved at the relevant general shareholders&#146;
meeting pursuant to which it was resolved not to take any action
against the directors who are to be sued, and (ii)&nbsp;the
claim in question covers damages alleged to have been caused to
Iusacell and not only to the individual plaintiffs&#146;
interests.
</FONT>

<P align="left">
<B><FONT size="2">Shareholder Conflicts of Interest</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, any shareholder that has a
conflict of interest in connection with any transaction must
abstain from voting at the relevant shareholders&#146; meeting.
A shareholder that votes on a business transaction in which his
interest conflicts with that of Iusacell may be liable for
damages if the transaction would not have been approved without
such shareholder&#146;s vote.
</FONT>

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<P align="left">
<B><FONT size="2">Dividend Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The series A and series B shares have the same
dividend rights. The declaration and payment of such dividends
will depend upon Iusacell&#146;s results of operations,
financial conditions, cash requirements, future prospects and
other factors deemed relevant by the shareholders. In addition,
Mexican law provides that Mexican companies may only pay
dividends from retained earnings included in the year-end
financial statements that have been approved by their
shareholders. Dividends may be paid only after all losses for
previous years have been paid for, a legal reserve equal to 20%
of paid-in capital has been achieved and shareholders have
approved the dividend payment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the annual ordinary general meeting of
shareholders of Iusacell Celular, the Board of Directors will
generally submit the financial statements of Iusacell Celular
for the previous fiscal year, together with a report by the
Board of Directors, to the series A and series B shareholders
for their approval. The series A and series B shareholders,
having approved the financial statements, will determine the
allocation of Iusacell Celular&#146;s net profits for such
fiscal year. At least 5% of such net profits must be allocated
to a legal reserve until the amount of the legal reserve equals
20% of Iusacell Celular&#146;s capital stock. Such reserve is
not available for distribution except as a stock dividend.
Additional amounts may be allocated to other reserve funds as
the shareholders determine including a reserve to repurchase
shares. The remaining balance of net profits, if any, is
available for distribution as dividends but only after losses,
if any, of previous years have been paid for.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All shares of each series outstanding at the time
a dividend or other distribution is declared are entitled to
share pro rata in such dividend or other distribution.
Partially-paid shares participate in any distribution to the
extent that such shares have been paid at the time of the
distribution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The covenants contained in the Iusacell Celular
Indenture and in the terms of the Senior Refinancing Secured
Loan limit Iusacell Celular&#146;s ability to declare and
distribute dividends to Iusacell. Iusacell Celular and its
subsidiaries may agree to similar restrictions in the future as
they incur additional debt.
</FONT>

<P align="left">
<B><FONT size="2">Liquidation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that we are liquidated, one or more
liquidators must be appointed at an extraordinary general
shareholders&#146; meeting to wind up our affairs. All
outstanding shares would be entitled to participate equally in
any distribution upon liquidation. Partially-paid shares
participate in any distribution to the extent that such shares
have been paid at the time of the distribution.
</FONT>

<P align="left">
<B><FONT size="2">Changes in Share Capital and Rights of
Shareholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An increase of capital stock may be effected
through the issuance of new shares for payment in cash or in
kind, by capitalization of indebtedness or by capitalization of
certain items of shareholders&#146; equity. No increase of
capital stock may be effected until all previously issued shares
of capital stock have been fully paid. A reduction of capital
stock may be effected to absorb losses, to make reimbursements
to shareholders , or to release shareholders from payments not
made. A reduction of capital stock to absorb losses may be
effected by reducing the value of all outstanding shares. A
reduction of capital stock shall also be effected on a pro rata
basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shareholders may also approve the redemption of
fully-paid shares with retained earnings. Such a redemption
would be effected by a repurchase by lot.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The by-laws require that, unless a
shareholders&#146; meeting resolves otherwise, any capital
increase effected pursuant to a capital contribution be
represented by new series&nbsp;A and series&nbsp;B shares in
proportion to the number of shares of each such series
outstanding. Our by-laws provide that the series&nbsp;B shares
may not exceed 49% of our capital stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fixed portion of our capital stock may only
be increased or decreased by resolution of an extraordinary
general meeting and an amendment to the by-laws, whereas the
variable portion of our capital stock may be increased or
decreased by resolution of an ordinary general meeting of
shareholders.
</FONT>

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<P align="left">
<B><FONT size="2">Preemptive Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a capital increase through the
issuance of new shares for payment in cash or in kind, a holder
of existing shares has a preferential right to subscribe for a
sufficient number of new shares to maintain the holder&#146;s
existing proportionate holdings of shares. Preemptive rights
must be exercised within the period and under the conditions
established for such purpose by the shareholders, and under
Mexican law and our by-laws in no case may such period be less
than 15&nbsp;days and no greater than 30&nbsp;days following the
publication of notice of the capital increase in the Official
Gazette of the Federation or following the date of the
shareholders&#146; meeting at which the capital increase was
approved if all shareholders were represented. Otherwise, such
rights will lapse.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, preemptive rights may not be
waived in advance by a shareholder, and cannot be represented by
an instrument that is negotiable separately from the
corresponding share.
</FONT>

<P align="left">
<B><FONT size="2">Other Provisions</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Fixed
and Variable Capital</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a <I>sociedad an&#243;nima de capital
variable</I>, we may issue shares constituting fixed capital and
shares constituting variable capital. The issuance of variable
capital shares, unlike the issuance of fixed capital shares,
does not require an amendment of our by-laws, although it does
require approval at an ordinary general meeting of shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The covenants contained in the Iusacell Celular
Indenture and the Senior Refinancing Secured Loan limit Iusacell
Celular&#146;s ability to issue variable capital shares.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Forfeiture
of Shares</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As required by Mexican law, Iusacell
Celular&#146;s by-laws provide that &#147;current or future
foreign shareholders of the Company agree with the Ministry of
Foreign Relations to consider themselves as Mexican nationals
with respect to the shares that they may acquire or of which
they may be owners, as well as with respect to the assets,
rights, concessions, participations or interests of which the
Company is the owner and of the rights and obligations that
derive from the contracts to which the Company is a party, and
therefore not to invoke the protection of their governments with
respect to such shares under penalty, should they violate this
agreement, of forfeiting for the benefit of the Nation the
shares that they may have acquired.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the opinion of de Ovando y Mart&#237;nez del
Campo, S.C., special Mexican counsel to Iusacell Celular, under
this provision a non-Mexican shareholder is deemed to have
agreed not to invoke the protection of his own government by
requesting such government to interpose a diplomatic claim
against the Mexican government with respect to its rights as a
shareholder, but is not deemed to have waived any other rights
it may have with respect to its investment in Iusacell Celular,
including any rights under U.S. securities laws (the
enforceability of which may be challenged in Mexico).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the shareholder should invoke such
governmental protection in violation of this agreement, its
shares could be forfeited to the Mexican government. Mexican law
requires that such a provision be included in the by-laws of all
Mexican corporations unless such by-laws prohibit ownership of
capital stock by foreign investors.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Appraisal
Rights</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whenever the shareholders approve a change of
corporate purpose, change of nationality, spin-off or
transformation from one type of corporate form to another, any
shareholder entitled to vote on such change or transformation
who has voted against it has the right to withdraw from Iusacell
and receive an amount generally equivalent to the book value of
our shares (in accordance with our last balance sheet approved
by a shareholders&#146; meeting), provided such shareholder
exercises its right to withdraw within 15&nbsp;days following
the adjournment of the meeting at which the change or
transformation was approved.
</FONT>

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<P align="left">
<FONT size="2">Foreign Investment Regulation
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Foreign investment in capital stock of Mexican
corporations in certain economic sectors, including telephone
and cellular services, is regulated by the 1993 Foreign
Investment Law, as amended, and the regulations issued under
that law in 1998, which we refer to as the 1998 Regulations.
Under the 1993 Foreign Investment Law, foreign investment is
defined in general as the participation of foreign investors in
the voting capital stock of Mexican corporations and in
activities which are regulated by the 1993 Foreign Investment
Law. Foreign investors are defined as non-Mexican individuals,
non-Mexican legal entities and foreign entities without legal
personality.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican Foreign Investment Commission, the
Mexican Foreign Investment Bureau and the Mexican National
Registry of Foreign Investment are responsible for the
administration of the 1993 Foreign Investment Law and the 1998
Regulations. In order to comply with foreign investment
restrictions, Mexican companies that are engaged in specified
restricted industries typically limit particular classes of
their stock to ownership by Mexican individuals and by Mexican
corporations in which foreign investment has a minority
participation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a general rule, the 1993 Foreign Investment
Law allows foreign investment in up to 100% in the capital stock
of Mexican companies, except for those engaged in specified
restricted industries, such as basic telephone service, where
foreign investment is limited to 49% of the voting capital
stock. Foreign investment may, however, participate in a
proportion in excess of 49% of the voting capital stock of a
Mexican corporation engaged in the cellular telephone business
previous approval of the Mexican Foreign Investment Commission.
Iusacell has received such approval and, as a result, neither
our series A nor our series V shares are restricted to Mexican
ownership. See Item&nbsp;4, &#147;Information on the
Company&nbsp;&#151; Business Overview&nbsp;&#151; Government
Regulation&nbsp;&#151; Foreign Ownership Restrictions.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Foreign states and foreign governments are
prohibited under the 1995 Telecommunications Law from holding a
concession or permit to provide telecommunications services,
from receiving any such concession or permit as a guarantee, or
from being the beneficiary of any such guarantee or from
directly or indirectly owning shares of Iusacell.
</FONT>

<P align="left">
<B><FONT size="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material
Contracts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1997, Iusacell Celular entered into
an agreement with subsidiaries of Lucent Technologies, Inc.
pursuant to which Iusacell Celular agreed (i)&nbsp;to replace
its existing analog wireless cellular network with a new Lucent
Technologies digital and analog network for a minimum
consideration of U.S.$188.0&nbsp;million. which network swap-out
was completed in August 1999, and (ii)&nbsp;to continue
acquiring network equipment and services under the agreement in
order to improve its digital and analog network. Through
December&nbsp;31, 2001, Iusacell Celular has purchased
approximately U.S.$409.9&nbsp;million of network equipment and
services under this agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, Iusacell Celular, as a first
step toward minimizing its involvement in real estate management
and tower maintenance business, entered into an agreement with
MATC Celular, a Mexican subsidiary of American Tower Corporation
pursuant to which MATC Celular could acquire the majority of
towers currently owned and/or operated by Iusacell Celular. In
return, Iusacell would lease space on those towers and sublease
them to its operating subsidiaries, including operating
subsidiaries of Iusacell Celular. In 2001, we sold 244 towers to
MATC Celular, receiving in excess of U.S.$34&nbsp;million in net
book gains. In May 2002, we sold 25 additional non-strategic
towers receiving in excess of U.S.$4.2&nbsp;million in net
gains. We expect to sell up to an additional 61 towers to MATC
Celular during the remainder of 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See also, Item&nbsp;5, &#147;Operating and
Financial Review and Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Liquidity,&#148; for a summary of Iusacell
Celular&#146;s material credit agreements and indentures.
</FONT>

<P align="left">
<B><FONT size="2">D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange
Controls</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are currently no exchange controls in
Mexico; however, Mexico has imposed foreign exchange controls in
the past. Pursuant to the provisions of the North American Free
Trade Agreement and in the event
</FONT>

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<DIV align="left">
<FONT size="2">Mexico experiences serious balance of payment
difficulties or the threat thereof in the future, Mexico remains
free to impose foreign exchange controls on investments made in
Mexico, including those made by U.S. and Canadian investors.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a general summary of material
U.S. and Mexican federal income tax consequences of the
acquisition, ownership and disposition of Iusacell
Celular&#146;s senior notes (the &#147;Note&#148; or the
&#147;Notes&#148;) by U.S. holders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of this summary, a &#147;U.S.
holder&#148; is any holder of any of such securities that is,
for United States federal income tax purposes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a citizen or resident of the United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a corporation, partnership, or other entity
    created or organized in or under the laws of the United States,
    or any political subdivision thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an estate the income of which is includible in
    gross income for United States federal income tax purposes
    regardless of source; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a trust if a court within the United States is
    able to exercise primary supervision over the administration of
    the trust and one or more United States persons have the
    authority to control all substantial decisions of the trust.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This summary does not constitute, and should not
be construed as, legal or tax advice to holders of the Notes.
This summary does not purport to consider all the possible U.S.
or Mexican federal income tax consequences of the purchase,
ownership and disposition of the Notes and is not intended to
reflect the individual tax position of any beneficial owner
thereof. The summary is based upon Mexican federal tax laws,
their regulations and administrative rules issued by the Mexican
Ministry of Finance and Public Credit, the Tax Treaty mentioned
below and the Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;), U.S.&nbsp;Treasury regulations promulgated
thereunder, published rulings by the U.S.&nbsp;Internal Revenue
Service (&#147;IRS&#148;) and court decisions, all as in effect
as of the date hereof, all of which authorities are subject to
change or differing interpretations, which changes or differing
interpretations could apply retroactively. Readers are cautioned
that this is not a complete analysis or listing of all potential
tax effects that may be relevant to a decision to purchase, hold
or dispose of the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This summary of U.S. federal income tax
consequences is limited to investors who hold the Notes as
&#147;capital assets&#148; within the meaning of
section&nbsp;1221 of the Code (i.e., generally, property held
for investment) and does not purport to deal with investors in
special tax situations, such as financial institutions, tax
exempt organizations, insurance companies, regulated investment
companies, dealers in securities or currencies, persons holding
notes as a hedge against currency risks or as a position in a
&#147;straddle,&#148; &#147;conversion transaction,&#148; or
&#147;constructive sale&#148; transaction for tax purposes,
persons owning (actually or constructively) 10% or more of the
voting shares of the Company, or persons whose functional
currency (as defined in section&nbsp;985 of the Code) is not the
U.S.&nbsp;dollar.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders and prospective purchasers of the Notes
should consult their own tax advisors concerning the application
of Mexican and U.S. federal income tax laws to their particular
situations as well as any consequences of the purchase,
ownership and disposition of the Notes arising under the laws of
any state, locality or foreign government or other taxing
jurisdiction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mexico and the United States have signed and
ratified a Convention for the Avoidance of Double Taxation and
the Prevention of Tax Evasion with Respect to Taxes on Income
and related Protocols (collectively, the &#147;Tax
Treaty&#148;). The Tax Treaty is currently in effect and
provisions of the Tax Treaty that may affect holders of Iusacell
ADSs or Notes are summarized below. Holders should consult with
their tax advisors as to their entitlement to the benefits
afforded by the Tax Treaty. Mexico has also executed treaties to
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">avoid double taxation with other countries as
well as agreements providing for the exchange of information
with respect to tax matters, some of which presently are in
force. The following summary does not take into account the
effect of any such treaties. Readers should consult their tax
advisors as to their entitlement to the benefits afforded by
such other treaties.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">United States Tax Consequences to Holders of
Notes</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Payments
of Interest and Additional Amounts</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, payments of interest and any
additional amounts (<I>i.e</I>., &#147;gross-up payment&#148;)
paid by Iusacell Celular (the &#147;Additional Amounts&#148;)
will be taxable to a U.S. holder as ordinary income at the time
such payments are accrued or are received, in accordance with
the U.S. holder&#146;s regular method of accounting for Federal
income tax purposes.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Market
Discount</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a U.S. holder purchases a Note for less than
its principal amount, the difference will be treated as a
&#147;market discount&#148; for U.S. federal income tax purposes
subject to a <I>de minimis </I>exception.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the market discount rules, a U.S. holder
will be required to treat any payment on a Note, or any gain on
its sale, exchange, retirement or other disposition, as ordinary
income to the extent of the accrued market discount which was
not previously included in income. If the Note is disposed of in
a non-taxable transaction (other than a non-recognition
transaction described in section&nbsp;1276(c) of the Code),
accrued market discount will be includible as ordinary income to
the U.S. holder as if it had sold the Note at its fair market
value. In addition, a U.S. holder may be required to defer,
until the maturity of a Note or its earlier disposition
(including a non-taxable transaction other than a transaction
described in section&nbsp;1276(c) of the Internal Revenue Code),
the deduction of all or a portion of the interest expense in
respect of any indebtedness incurred or continued to purchase or
carry the Note. Market discount will be considered to accrue on
a straight-line basis during the period from the date of
acquisition to the maturity date of the Note, unless the U.S.
holder elects to accrue on a constant-yield basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A U.S. holder of a Note may elect to include
market discount in income as it accrues on either a ratable or a
constant yield basis. If a U.S. holder makes this election, the
rules regarding the treatment of gain upon the disposition of
the Note and upon the receipt of certain cash payments as
ordinary income and regarding the deferral of interest
deductions will not apply. Currently, if a U.S. holder elects to
include market discount in income as it accrues, the election
will apply to all market discount obligations acquired during or
after the first taxable year to which the election applies.
Currently this election may not be revoked without the consent
of the Internal Revenue Service.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Amortizable
Bond Premium</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a U.S. holder purchases a Note for more than
the amount payable at maturity (or on an earlier call date),
that excess will be considered an &#147;amortizable bond
premium.&#148; This holder may elect to amortize the premium to
offset the interest and Additional Amounts from the Note such
holder would otherwise be required to include in income (subject
to special rules for early redemption provisions). In any tax
year, the holder can only use as much of the premium as the
constant yield method would allocate to that year. The U.S.
holder&#146;s basis in the Note will be reduced by the amount of
bond premium offset against interest and Additional Amounts.
Currently, if a U.S. holder elects to amortize the premium to
offset the interest from a Note, the election will apply to all
debt instruments acquired during or after the first taxable year
to which the election applies. Currently, this election may not
be revoked without the consent of the Internal Revenue Service.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Sale,
Exchange or Retirement of a Note</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as discussed above, upon the sale,
exchange or retirement of a Note, a U.S. holder generally will
recognize taxable gain or loss equal to the difference between
the amount realized on the sale, exchange or
</FONT>

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<DIV align="left">
<FONT size="2">retirement and such U.S. holder&#146;s adjusted
tax basis in the Note. For this purpose, the amount realized
does not include any amount attributable to accrued interest on
the Note (which will be taxable as such). A
U.S.&nbsp;holder&#146;s adjusted tax basis in a new note will
generally be the cost of the Note plus the market discount, if
any, the U.S. holder previously included in income <I>minus
</I>any amortizable bond premium and any payments other than
payments of stated interest made on the Note. Such gain or loss
generally will be long-term capital gain or loss if the Note has
been held for more than one year at the time of such sale,
exchange or retirement. The deductibility of capital losses is
subject to limitations. Gain or loss recognized by a U.S. holder
on a sale or other disposition of a Note generally will be
treated as from sources within the United States for U.S.
federal income tax purposes.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Foreign
Tax Credit and Effect of Withholding Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest and Additional Amounts paid on Notes
will constitute income from sources outside the United States
for United States federal income tax purposes, and, with certain
exceptions, will be grouped together with other items of
&#147;passive&#148; income (or, in the case of some holders,
&#147;financial services income&#148;), for purposes of
computing the foreign tax credit allowable to a U.S. holder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A U.S. holder will be required to include foreign
withholding taxes, if any, imposed on payments on a Note
(including any Additional Amounts payable by Iusacell Celular)
in gross income as interest income. Such treatment will be
required regardless of whether, as will generally be true,
Iusacell Celular is required to pay additional amounts so that
the amount of Mexican withholding taxes does not reduce the net
amount actually received by the holder of the Note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to certain limitations, a U.S. holder may
be entitled to a credit against its United States Federal income
tax liability, or a deduction in computing its United States
Federal taxable income, for foreign income taxes withheld by
Iusacell Celular (which, as described above, would include
amounts withheld on Additional Amounts paid by Iusacell Celular
with respect to Mexican taxes). The foreign tax credit
provisions are complex, and U.S. holders are urged to consult
their own tax adviser as to the availability, if any, of a tax
credit or deduction to them.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Information
Reporting and Backup Withholding</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For each calendar year in which the Notes are
outstanding, each DTC participant or indirect participant
holding an interest in a Note on behalf of a beneficial owner of
a Note and each paying agent making payments in respect of a
Note will generally be required to provide the IRS with certain
information, including such beneficial owner&#146;s name,
address and taxpayer identification number (either such
beneficial owner&#146;s Social Security number or its employer
identification number, as the case may be), and the aggregate
amount of interest, principal and Additional Amounts paid to
such beneficial owner during the calendar year. These reporting
requirements, however, do not apply with respect to certain
beneficial owners, including corporations, securities
broker-dealers, other financial institutions, tax-exempt
organizations, qualified pension and profit sharing trusts and
individual retirement accounts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that a beneficial owner of a Note
fails to establish its exemption from such information reporting
requirement or is subject to the reporting requirements
described above and fails to supply its correct taxpayer
identification number in the manner required by applicable law,
or underreports its tax liability, as the case may be, a holder
may be subject to backup withholding at the rate of 30% in 2002
and 2003 (and at a lower rate in subsequent years) of each
payment of interest, principal and Additional Amounts with
respect to Notes. This backup withholding tax is not an
additional tax and will be allowed as a refund or credit against
the beneficial owner&#146;s United States Federal income tax
liability if the required information is furnished to the IRS.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prospective purchasers of Notes are advised to
consult their own tax advisers as to the consequences of
acquiring and disposing of the Notes, including, without
limitation, (i)&nbsp;the applicability and effect of any state,
local or non-U.S. tax laws to which they may be subject, and of
any legislative or administrative changes in law, (ii)&nbsp;the
United States Federal income tax consequences of foreign
withholding taxes by Iusacell Celular
</FONT>

<P align="center"><FONT size="2">96
</FONT>

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<DIV align="left">
<FONT size="2">(and of the payment by Iusacell Celular of
Additional Amounts with respect thereto) and (iii)&nbsp;the
availability of a credit or deduction for foreign withholding
taxes.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Mexican Tax Consequences to Holders of
Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the principal
consequences under current Mexican federal tax law, their
regulations and administrative rules issued by the Mexican
Ministry of Finance and Public Credit and the Tax Treaty, in
force as of the date of this report, of the purchase, ownership
and disposition of Notes by a Foreign Holder. A &#147;Foreign
Holder&#148; is a holder who (i)&nbsp;is not a resident of
Mexico for tax purposes and (ii)&nbsp;will not hold Notes or a
beneficial interest in Notes in connection with the conduct of a
trade or business through a permanent establishment or a fixed
base in Mexico.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Taxation
of Payments of Interest and Principal</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Mexican Income Tax Law, payments of
interest made by Iusacell Celular to a Foreign Holder in respect
of their respective Notes will be subject to Mexican withholding
taxes assessed at a rate of 4.9% if, (i)&nbsp;the Notes have
been placed through banks or brokers in a country with which
Mexico has executed a treaty to avoid double taxation and such
treaty is in force, (ii)&nbsp;the Notes have been registered in
the Special Section of the National Registry of Securities (the
&#147;Special Section&#148;), and (iii)&nbsp;as has been the
case in the past, the issuer provides the information required
under general rules issued by the Ministry of Finance and Public
Credit (the &#147;Reduced Rate Regulation&#148;), which is
described below. Otherwise, payments of interest made by
Iusacell Celular to a Foreign Holder in respect of their
respective Notes will be subject to Mexican withholding taxes
assessed at a rate of 10%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information requirements under the
&#147;Reduced Rate Regulation&#148; are generally described
below:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that Iusacell Celular, as is the case, have
    timely filed with the Mexican Ministry of Finance and Public
    Credit information relating to the registration of their
    respective Notes in the Special Section and to the issuance of
    their respective Notes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that Iusacell Celular timely file each quarter of
    the calendar year with the Mexican Ministry of Finance and
    Public Credit information representing that no &#147;party
    related&#148; to Iusacell Celular, as the case may be, directly
    or indirectly, is the effective beneficiary of 5% or more of the
    aggregate amount of the interest payment, and Iusacell Celular
    maintain records evidencing compliance with this requirement.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Mexican Income Tax Law and the Reduced
Rate Regulation any of the following would be a &#147;party
related&#148; to Iusacell Celular, as the case may be:
(1)&nbsp;shareholders of Iusacell Celular, as the case may be,
that own, directly or indirectly, individually or collectively
with related persons (within the meaning of the Mexican Income
Tax Law and the Reduced Rate Regulation) more than 10% of the
voting stock of Iusacell Celular, as the case may be, or
(2)&nbsp;corporations if more than 20% of their stock is owned
directly or indirectly, individually or collectively by related
persons of Iusacell Celular, as the case may be.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Apart from the Reduced Rate Regulation, other
special rates of Mexican withholding income tax may apply. In
particular, under the Tax Treaty, the Mexican withholding tax is
reduced to 4.9% (the &#147;Treaty Rate&#148;) for some holders
that are residents of the United States within the meaning of
the Tax Treaty provided they satisfy the circumstances
contemplated in the Tax Treaty and provided that the Notes are
considered to be regularly and substantially traded on a
recognized securities market, which is not expected to be the
case. During 2002, the Tax Treaty is not expected, generally, to
have any material effect on the Mexican tax consequences to
holders of Notes because, as described above, with respect to a
Foreign Holder and Iusacell Celular will be entitled to withhold
taxes in connection with interest payments under their
respective Notes at the Reduced Rate so long as the Reduced Rate
Regulation requirements described above are met. From March 2003
and beyond, holders of the Notes should consult their tax
advisors as to the possible application of the Treaty Rate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest paid on Notes held by a non-Mexican
pension or retirement fund will be exempt from Mexican
withholding tax if the fund (i)&nbsp;has been duly incorporated
as a fund pursuant to the laws of its country of
</FONT>

<P align="center"><FONT size="2">97
</FONT>

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<DIV align="left">
<FONT size="2">origin, (ii)&nbsp;is the effective beneficiary of
the interest paid, (iii)&nbsp;is registered with the Mexican
Ministry of Finance and Public Credit for that purpose, and
(iv)&nbsp;the relevant interest income is exempt from taxes in
that country.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular has agreed, subject to the
exceptions and limitations contained in the indenture under
which the Notes were issued, to pay additional amounts in
respect of the Mexican withholding taxes mentioned above to the
holders of the Notes. Payment of these additional amounts with
respect to the Notes will be subject to Mexican withholding tax
at the same rate generally applicable to interest paid in the
Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Mexican Income Tax Law, a Foreign
Holder will not be subject to any Mexican income taxes in
respect of payments of principal made by Iusacell Celular in
connection with the Notes.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Taxation
of the Sale and other Disposition of the Notes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Income Tax Law it is not clear if a tax
will apply to gains resulting from a Foreign Holder&#146;s sale
or other disposition of Notes. Iusacell Celular believes, but
has not verified, that the tax in question applies only to the
gains resulting from a Foreign Holder&#146;s sale or other
disposition of debt securities placed among the investment
public at large in Mexico.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Transfer
and other Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are no Mexican stamp, registration, or
similar taxes payable by a Foreign Holder in connection with the
purchase ownership or disposition of the Notes. A Foreign Holder
of Notes will not be liable for Mexican estate, gift,
inheritance or similar tax with respect to the Notes, although
gratuitous transfers of the Notes may in some circumstances
cause a Mexican income tax to be imposed on the recipient.
</FONT>

<P align="left">
<B><FONT size="2">F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends and
Paying Agents</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable, but see Item&nbsp;5,
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
Liquidity and Capital Resources&nbsp;&#151; Dividend
Policy&#148; and Item&nbsp;8, &#147;Financial
Information&nbsp;&#151; Consolidated Statements and Other
Financial Information&nbsp;&#151; Dividend Policy.&#148;
</FONT>

<P align="left">
<B><FONT size="2">G.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statement by
Experts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="left">
<B><FONT size="2">H.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Documents on
Display</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file Annual Reports with and furnish other
information to the SEC as may be applicable from time to time.
You may read and copy any documents filed or furnished by
Iusacell Celular at the SEC&#146;s public reference rooms in
Washington, D.C., New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public
reference rooms.
</FONT>

<P align="left">
<B><FONT size="2">I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsidiary
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">98
</FONT>

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<!-- link2 "ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK</FONT></B>

<DIV>&nbsp;</DIV>

<!-- link2 "Interest Rate Risks" -->
<DIV align="left"><A NAME="012"></A></DIV>

<DIV align="left">
<B><FONT size="2">Interest Rate Risks</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s earnings are affected by
changes in interest rates as a result of long-term borrowings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular has fixed rate debt under its
Iusacell Celular senior notes. Iusacell Celular also had, as of
December&nbsp;31, 2000, variable debt which was refinanced in
March 2001 with other variable debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell Celular&#146;s Senior Refinancing
Secured Loan bears interest at a variable rate per annum equal
to one, two, three or six-month LIBOR (at Iusacell
Celular&#146;s option) plus a spread ranging from, depending on
Iusacell Celular&#146;s leverage ratio, of 1.75% to 2.25%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not enter into derivative financial
contracts for trading or speculative purposes. However, we have
managed the exposure to interest rate risk through the use of
interest rate collars and the exposure to foreign exchange risk
through forward rate contracts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 1998, Iusacell Celular entered into an
interest rate collar agreement on a notional amount of
U.S.$35.0&nbsp;million until July&nbsp;30, 2002. The collar
agreement limits the maximum effective LIBOR cost to 6.12% if
six-month LIBOR is lower than 7.12% and 7.12% if LIBOR equals or
exceeds that level. On February&nbsp;26, 1999, Iusacell Celular
entered into a second interest rate collar agreement to limit
the maximum interest rate Iusacell Celular must pay on
U.S.$15.0&nbsp;million of its floating rate debt until July
2002. Under the terms of this second collar agreement, Iusacell
Celular&#146;s maximum effective LIBOR cost is limited to 5.82%
if six-month LIBOR is lower than 6.82% and, if six-month LIBOR
equals or goes above 6.82%, then Iusacell Celular&#146;s maximum
effective LIBOR cost is limited to 6.82%. These interest rate
collar agreements remain applicable through July 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the debt
obligations and derivative instruments that are sensitive to
changes in interest rates held by Iusacell as of
December&nbsp;31, 2001. For the debt, the tables present
principal payment obligations that exist by maturity date and
the related average interest rate. For the collars, the table
present the notional amounts and average cap and floor rates
that exist by contractual date. Average interest rates for
liabilities are calculated based on weighted averages. Dollar
denominated amounts have been converted to Mexican Pesos based
on the exchange rate of December&nbsp;31, 2001, which was 1
U.S.$1 = Ps9.1695
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><B><FONT size="1">As of December 31, 2001 Expected Maturity Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair Value</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><B><FONT size="1">In thousands of Mexican Pesos (U.S. Dollars)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Fixed Rate Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">U.S. Dollar denominated</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,375,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,485,459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,526,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">Mexican Peso denominated</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Variable Rate Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">U.S. Dollar denominated</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">913,356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,519,114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,519,114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">Mexican Peso denominated</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Interest Rate Derivatives</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">Interest Rate Collars</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average Cap Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average Floor Rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">Note: To determine the weighted-average interest
rate for variable rate debt, Libor interest rate was forecasted
by CIEMEX-WEFA assuming 2.40% for 2002, 4.30%. for 2003, 5.30%
for 2004 and beyond. Foreign Currency Risk
</FONT>

<P align="center"><FONT size="2">99
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusacell&#146;s primary foreign currency exposure
relates to our foreign currency denominated debt.
Iusacell&#146;s debt obligations are denominated in U.S. dollars
while it generates revenues in Mexican pesos. Therefore,
Iusacell is exposed to currency exchange rate risks that could
significantly affect our ability to meet our obligations. The
exchange rate of pesos to the U.S. dollar is a freely floating
rate and the peso has experienced significant devaluations in
recent years. Any significant decrease in the value of the peso
relative to the U.S. dollar in the near term may have a material
adverse effect on Iusacell and on our ability to meet our
long-term debt obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1999, Iusacell Celular used
forward-rate contracts to hedge its exchange rate exposure for
U.S.$77.0&nbsp;million, approximately 50% of the principal and
interest payments coming due over the period April 2000 to April
2001. In November 2000, Iusacell Celular entered into another
forward-rate contract to hedge its exchange rate exposure for
U.S.$15.0&nbsp;million of interest payments coming due between
then and January 2002. In August 2001, Iusacell entered into
another forward-rate contract for U.S.$11.0&nbsp;million to
hedge its exchange rate exposure of interest payments coming due
between then and November 2002. In August and October 2001
Iusacell Celular hedged using forward rate contracts 100% of the
principal U.S.$150&nbsp;million and U.S.$34.5&nbsp;million of
associated interest of its 10% senior notes due 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes Iusacell&#146;s
debt and derivative instruments that are sensitive to changes in
foreign currency exchange rates as of December&nbsp;31, 2001.
For the debt, the tables present principal payment obligations
that exist by maturity date and the related average interest
rate. For the forward exchange contracts, the table presents the
amount of foreign currency that Iusacell has contracted to
purchase and the average exchange rates by contractual dates.
Average interest rates for liabilities are calculated based on
weighted average. Dollar denominated amounts have been converted
to Mexican Pesos based on the exchange rate of December&nbsp;31,
2001, which was 1&nbsp;U.S.$1 = Ps9.1695.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><B><FONT size="1">As of December 31, 2001 Expected Maturity Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair Value</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><B><FONT size="1">In thousands of Mexican Pesos (U.S. Dollars)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Fixed Rate Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">U.S. Dollar denominated</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,375,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,485,459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,526,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Variable Rate Debt</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">U.S. Dollar denominated</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">913,356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,519,114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,519,114</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Forward Exchange Derivatives</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">Receive Mexican Pesos/ Pay
    U.S.&nbsp;Dollars</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average exchange rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">Receive U.S. Dollars/ Pay
    Mexican&nbsp;Pesos</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">209,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,984,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average exchange rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.955</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">Note:&nbsp;To determine the weighted-average
interest rate for variable rate debt, Libor interest rate was
forecasted by CIEMEX-WEFA assuming 2.40% for 2002, 4.30%. for
2003, 5.30% for 2004 and beyond.
</FONT>

<P align="center"><FONT size="2">100
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DESCRIPTION OF SECURITIES OTHER
THAN EQUITY SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">101
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PART II" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center">
<B><FONT size="2">PART II</FONT></B>

<!-- link2 "ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES" -->
<DIV align="left"><A NAME="015"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DEFAULTS, DIVIDEND ARREARAGES
AND DELINQUENCIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See Item&nbsp;5, &#147;Operating and Financial
Review and Prospects&nbsp;&#151; Liquidity and Capital
Resources&nbsp;&#151; Loan Covenants Waivers and
Modifications&#148; for a description of any default and the
correspondent waiver.
</FONT>

<!-- link2 "ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable
</FONT>

<!-- link2 "ITEM 15. RESERVED" -->
<DIV align="left"><A NAME="017"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESERVED</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<!-- link2 "ITEM 16. RESERVED" -->
<DIV align="left"><A NAME="018"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESERVED</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Not applicable.
</FONT>

<P align="center"><FONT size="2">102
</FONT>

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<!-- link1 "PART III" -->
<DIV align="left"><A NAME="019"></A></DIV>

<P align="center">
<B><FONT size="2">PART III</FONT></B>

<!-- link2 "ITEM 17. FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="020"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have responded to Item&nbsp;18 in lieu of
responding to this Item.
</FONT>

<P align="center"><FONT size="2">103
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "ITEM 18. FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="021"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Grupo Iusacell Celular, S.A. de C.V.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Report of Independent Accountants
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consolidated Balance Sheets&nbsp;&#151;
    December&nbsp;31, 2001 and 2000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consolidated Income Statements&nbsp;&#151; Fiscal
    Years Ended December&nbsp;31, 2001, 2000 and 1999
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consolidated Statements of Changes in
    Stockholders&#146; Equity&nbsp;&#151; Fiscal Years Ended
    December&nbsp;31, 2001, 2000 and 1999
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consolidated Statements of Changes in Financial
    Position&nbsp;&#151; Fiscal Years Ended December&nbsp;31, 2001,
    2000 and 1999
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Notes to the Consolidated Financial Statements
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <I><FONT size="2">Financial Statement Schedules</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Schedule&nbsp;II&nbsp;&#151; Valuation and
    Qualifying Accounts
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">S-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">104
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT ACCOUNTANTS</FONT></B>

<P align="left">
<FONT size="2">Mexico City, March&nbsp;1, 2002, except for
Note&nbsp;25 for which the date is May&nbsp;29, 2002.
</FONT>

<P align="left">
<FONT size="2">The Board of Directors and Stockholders of
</FONT>

<DIV align="left">
<FONT size="2">Grupo Iusacell Celular, S. A. de C. V.:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Grupo Iusacell Celular, S.&nbsp;A. de
C.&nbsp;V. and subsidiaries (the Company) as of
December&nbsp;31, 2001 and 2000, and the related consolidated
statements of income, of changes in stockholders&#146; equity
and of changes in financial position for each of the three years
in the period ended December&nbsp;31, 2001 and the financial
statement schedule included in this Form&nbsp;20-F. These
financial statements and financial statement schedule are the
responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
generally accepted auditing standards in Mexico and 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 and are prepared in
accordance with generally accepted accounting principles. 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the consolidated financial
statements and financial statement schedule referred to above
present fairly, in all material respects, the consolidated
financial position of Grupo Iusacell Celular, S.&nbsp;A. de
C.&nbsp;V. and subsidiaries as of December&nbsp;31, 2001 and
2000, and the consolidated results of its operations, changes in
stockholders&#146; equity and changes in its consolidated
financial position for each of the three years in the period
ended December&nbsp;31, 2001, in conformity with accounting
principles generally accepted in Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounting principles generally accepted in
Mexico vary in certain significant respects from accounting
principles generally accepted in the United States. The
application of the latter would have affected the determination
of consolidated net income for each of the three years in the
period ended December&nbsp;31, 2001 expressed in Mexican Pesos
and the determination of consolidated stockholders&#146; equity
at December&nbsp;31, 2001 and 2000 also expressed in Mexican
Pesos to the extent summarized in Note 23 to the consolidated
financial statements.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">PRICEWATERHOUSECOOPERS
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Juan Manuel Ferr&#243;n Sol&#237;s
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Audit Partner
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S.A. DE C.V. AND
SUBSIDIARIES</FONT></B>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S.A. de
C.V.)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- link1 "CONSOLIDATED BALANCE SHEETS" -->
<DIV align="left"><A NAME="022"></A></DIV>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Notes 1, 2, 3 and 4)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Expressed in thousands of</FONT></B>

<DIV align="center">
<B><FONT size="2">constant Mexican pesos as of December&nbsp;31,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">CURRENT ASSETS:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents (Note&nbsp;4c.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade, net of Ps.210,891 and Ps221,684 of
    allowance for doubtful accounts in 2001 and 2000, respectively
    (Note&nbsp;4e.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">595,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">637,101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Due from related parties (Note&nbsp;5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recoverable taxes and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">533,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">514,189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,172,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,201,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories&nbsp;&#151; Net (Note&nbsp;6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,531,367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,743,386</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investments (Note&nbsp;7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,063</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment&nbsp;&#151; Net
    (Note&nbsp;8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,860,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,256,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other assets&nbsp;&#151; Net (Note&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,881,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,889,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Excess of cost of investments in subsidiaries
    over book value&nbsp;&#151; Net of accumulated amortization of
    Ps.793,552 in 2001 and Ps.662,976 in 2000 (Note&nbsp;4j.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,885,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,888,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,192,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,811,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND STOCKHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">CURRENT LIABILITIES:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes payable (Note&nbsp;10d.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt (Note&nbsp;10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,344,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">549,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493,735</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes payable to suppliers, short-term
    (Note&nbsp;11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Due to related parties (Note&nbsp;5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">813,002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">988,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax (Note&nbsp;12)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee profit sharing (Note&nbsp;12)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,814,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,140,024</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt (Note&nbsp;10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,811,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,850,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other accounts payable, long-term (Notes&nbsp;4d.
    and 4m.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,742</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,679,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,994,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commitments and contingencies (Note&nbsp;13)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="63%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">STOCKHOLDERS&#146; EQUITY:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contributed capital (Notes&nbsp;14, 15 and 16):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,870,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,870,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital contributed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,963,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,963,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contributions for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,195,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earned capital (Note&nbsp;16):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated (losses) profits:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal reserve
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">For prior years
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,835,793</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,163,373</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">For the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,106,641</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,808,965</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(664,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(664,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total majority stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,387,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,791,690</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,512,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,817,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities and stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,192,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,811,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED INCOME STATEMENTS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Notes 1, 2, 3 and 4)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Expressed in thousands of</FONT></B>

<DIV align="center">
<B><FONT size="2">constant Mexican pesos as of December&nbsp;31,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,681,689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,200,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,285,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telephone equipment sales and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">528,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">497,061</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,288,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,729,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,782,971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of sales:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,476,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,464,120</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,221,938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of telephone equipment sales and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">378,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">355,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">306,557</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,854,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,820,116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,528,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,434,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,909,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,254,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,220,260</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,917,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,643,189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,568,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other operating income (Note 8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">307,886</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(388,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,986</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other expenses (income)&nbsp;&#151; Net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Integral financing cost (gain):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense&nbsp;&#151; Net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">385,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">509,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign exchange (gain) loss&nbsp;&#151; Net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(95,792</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(210,259</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from monetary position
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,028</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(374,382</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(752,067</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">154,973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(656,657</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity participation in net (profit) loss of
    associated companies and net (gain) loss on sale of equity
    investments (Notes&nbsp;2 and 7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Loss) profit from continuing operations before
    assets tax, income tax and minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,488</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(541,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">567,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provisions for:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assets tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">461,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">612,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from continuing operations before minority
    interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(311,892</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(697,746</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(45,310</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(291,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(681,285</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,910</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Profit) loss from discontinued operations (net
    of income tax) (Note&nbsp;19)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,865</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss after discontinued operations and before
    extraordinary item
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(291,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,658</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Extraordinary item:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of tax loss carry forwards
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">461,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Loss) profit after extraordinary item
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(291,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effect of the adoption of the new
    accounting pronouncement (Note&nbsp;4d.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss) profit for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS&#146; EQUITY</FONT></B>

<DIV align="center">
<B><FONT size="2">FOR THE YEARS ENDED DECEMBER 31, 2001, 2000
AND 1999</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Notes 1, 2, 3 and 4)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Expressed in thousands of constant Mexican
pesos as of December&nbsp;31, 2001</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="14%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Contributions</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Accumulated profits (losses)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">for future</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capital stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">capital stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Legal</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">comprehensive</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Minority</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">stockholders&#146;</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">subscribed</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">contributions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">increases</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">reserve</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Prior years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">income</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">interest</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">equity</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Balance at December&nbsp;31, 1998
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,031,253</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,831</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,076</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,919,200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,657,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(868,820</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,037</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,684,707</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Application of 1998 net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,657,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,657,470</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Increase in capital stock from the capitalization
    of stockholders&#146; debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,839,160</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,839,160</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Decrease in minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(29,162</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(29,162</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Comprehensive profit for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">435,049</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,381</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">443,430</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Balance at December&nbsp;31, 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12,870,413</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,831</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,076</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,576,670</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">435,049</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(860,439</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(28,125</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,938,135</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Application of 1999 net profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,752</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">413,297</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(435,049</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Contribution for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,302,158</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,302,158</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Increase in minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">53,567</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">53,567</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Comprehensive loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">195,692</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(476,728</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Balance at December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12,870,413</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,831</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,302,158</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26,828</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,163,373</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(664,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25,442</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,817,132</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Application of 2000 net loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">672,420</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Increase in capital stock from the capitalization
    of stockholders&#146; debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">110</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">110</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Decrease in capital stock from the effects of the
    reverse stock split
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Increase in capital stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">321</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">321</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Contribution for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">893,386</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">893,386</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Increase in minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">99,644</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">99,644</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Comprehensive loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Balance at December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12,870,602</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,831</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,195,544</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26,828</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,835,793</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(664,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">125,086</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,512,675</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2"> GRUPO IUSACELL CELULAR, S.&nbsp;A. DE
C.&nbsp;V. AND SUBSIDIARIES</FONT></B>

<DIV>&nbsp;</DIV>

<!-- link1 "CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION" -->
<DIV align="left"><A NAME="023"></A></DIV>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CHANGES IN
FINANCIAL POSITION</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Notes&nbsp;1, 2, 3 and 4)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">Expressed in thousands of constant</FONT></B>

<DIV align="center">
<B><FONT size="2">Mexican pesos as of December&nbsp;31,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended ?December&nbsp;31,?</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from continuing operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(291,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(681,285</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,910</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Items not requiring the use of resources:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,568,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity participation in net (profit) loss of
    associated companies and net (gain)&nbsp;loss on sale of equity
    investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,694</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,461</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,250,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,680,736</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,629,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Resources provided by (used for) operating
    activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(417,981</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recoverable taxes and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,973</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(66,439</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39,706</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235,974</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(388,630</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(252,647</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(18,004</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,984</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,968</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(60,217</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee profit sharing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,664</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(426</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(572</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Resources provided by operating activities before
    discontinued operations, extraordinary item and cumulative
    effect of the adoption of the new accounting pronouncement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,242,582</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,788,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">830,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effect of the adoption of the new
    accounting pronouncement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of tax loss carry forwards
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">461,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit (loss)&nbsp;from discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,748</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Resources provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,236,104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,797,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,290,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financing activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,435,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">373,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Principal payments on long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,819,434</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(920,529</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Decrease) increase in notes payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,357</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,340</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(840,432</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contribution for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">893,386</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in capital stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Decrease in capital stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(242</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated effect of deferred taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">195,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in capital stock from the capitalization
    of stockholders&#146; debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,839,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Resources provided by financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">499,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">589,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,372,474</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Investing activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,597,768</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,055,998</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,708,907</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sale of common stock of associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,976</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition of Portatel, net of cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(495,320</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in telephones to be amortized
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(521,782</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,088,139</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(862,577</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Purchase) sale of other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,421</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">778,805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(228,424</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Resources used for investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,908,315</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,297,071</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,786,422</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (decrease)&nbsp;increase in cash and cash
    equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(172,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123,545</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents at the beginning of the
    year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,551</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">326,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents at the end of the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,551</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<!-- link1 "NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="024"></A></DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">As of December 31, 2001, 2000 and
1999</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Except as otherwise noted, expressed</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">in thousands of constant Mexican pesos as of
December&nbsp;31, 2001.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Amounts expressed in U.S. Dollars are in
thousands.</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Note 1&nbsp;&#151; Entity, Nature of Business
and Principal Stockholders</FONT></B>

<P align="left">
<B><FONT size="2">Entity and nature of business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Grupo Iusacell Celular, S.A. de C.V. (the
Company) is a holding company incorporated on October&nbsp;6,
1992, and starting August&nbsp;4, 1999, is subsidiary of Grupo
Iusacell, S.A. de C.V. (New Iusacell). The Company was
previously named Grupo Iusacell, S.A. de C.V. and on
March&nbsp;1, 2000, changed its name from Grupo Iusacell, S.A.
de C.V. to Grupo Iusacell Celular, S.A. de C.V. (Old Iusacell).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a part of the recapitalization and
restructuring plan of New Iusacell, a new holding company, it
was incorporated on August&nbsp;6, 1998 to acquire and hold all
of the outstanding shares of Old Iusacell. In July 1999, New
Iusacell initiated an offer to exchange its two series of common
stock for the four series of common stock of Old Iusacell then
outstanding on a one for one basis. As a result of the exchange,
New Iusacell acquired 99.5% of Old Iusacell shares when the
offer expired on August&nbsp;10, 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;1, 2000, New Iusacell launched a
second exchange offer and at its conclusion, Old Iusacell&#146;s
ADS depositary, The Bank of New York, converted the remaining,
non-exchanged Old Iusacell ADSs into New Iusacell shares. As a
result of these transactions, New Iusacell increased its
ownership in Old Iusacell to 99.99%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;15, 2000, New Iusacell launched a
private purchase offer under which the Company expected to
purchase the remaining Old Iusacell shares not tendered during
the two exchange offers. When this offer expired on
September&nbsp;29, 2000, there was 1 share of Old Iusacell not
owned by New Iusacell. This share represented 0.002% of the
total outstanding shares of Old Iusacell at December&nbsp;31,
2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;30, 2001, Old Iusacell&#146;s
stockholders approved a 30,000 to 1 reverse stock split. Upon
implementation of the reverse split in May 2001, New Iusacell
increased its ownership in Old Iusacell to 100% (Note&nbsp;14).
All references to the number of shares, per share amounts and
any other reference to shares in the consolidated financial
statements and the accompanying notes to the consolidated
financial statements, unless otherwise noted, have been adjusted
to reflect the reverse split on a retroactive basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Old Iusacell&#146;s subsidiaries are primarily
engaged in the wireless telecommunications business and hold
concessions to operate cellular telephone systems in five market
areas (each a Region) in Mexico. Old Iusacell through its
subsidiaries, holds the non-wire line cellular concessions for
Region&nbsp;5 (Guadalajara), Region&nbsp;6 (Leon), Region&nbsp;7
(Puebla), a cellular authorization for Region&nbsp;9 (Mexico
City), and in 2001, acquired the company that holds the
concession for Region&nbsp;8 (M&#233;rida) (Note&nbsp;2).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Old Iusacell subsidiaries also provide long
distance services and nationwide and international paging
services.
</FONT>

<P align="left">
<B><FONT size="2">Principal stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 1997, after execution of a definitive
agreement between Old Iusacell&#146;s principal stockholders and
approval by the Mexican government, Bell Atlantic Corporation
(Bell Atlantic) assumed management control of Old Iusacell from
Carlos Peralta and companies and individuals controlled by or
related to him (together, the Peralta Group). After the
incorporation of New Iusacell, Bell Atlantic also has management
control of New Iusacell.
</FONT>

<P align="center"><FONT size="2">F-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;30, 2000, Bell Atlantic and GTE
Corporation, completed their merger, creating Verizon.
References made to Verizon with respect to dates prior to
June&nbsp;30, 2000 are references to Bell Atlantic prior to its
acquisition of GTE Corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;4, 2001, after obtaining the
authorization of the Mexican regulatory agencies and the
finalization of a stockholders&#146; agreement between the
Peralta Group and Vodafone Group Plc (Vodafone), the Peralta
Group and Vodafone closed the transaction under which the
Peralta Group sold its 34.5% ownership in New Iusacell to
Vodafone. Verizon and Vodafone hold substantial ownership
interests (direct or indirect) in New Iusacell.
</FONT>

<P align="left">
<B><FONT size="2">Note 2&nbsp;&#151; Acquisitions, Dispositions
and Company Structure</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 1999, the Company liquidated its
investment in Compa&#241;&#237;a Colombiana de Telefon&#237;a
Celular, S.A. (Telecel) and recorded a loss of Ps.56,622 before
taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2000, subsidiary Cellular Solutions de
M&#233;xico, S.A. de C.V. (Cellular Solutions) was merged into
another subsidiary, Iusacell, S.A. de C.V. The merger was
recorded as of December&nbsp;31, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;1, 2001, through a capital
contribution, New Iusacell acquired the control of Iusacell PCS,
S.A. de C.V. (Iusacell PCS), substantially diluting Old
Iusacell. Consequently, the Company no longer consolidates
Iusacell&nbsp;PCS.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, the Company incorporated Iusatel
USA, Inc. to be engaged in the long distance business in the
United States of America.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;22, 2001, the Company sold its 65%
equity interest in Satelitr&#243;n, S. A. de C. V. As a result
of the sale, the Company recorded a gain of Ps.3,976 (U.S.$429)
before taxes.
</FONT>

<P align="left">
<B><FONT size="2">Acquisition of Grupo Portatel, S. A. de C.
V.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;19, 2001, Old Iusacell completed
the acquisition of a 78.34% ownership in Grupo Portatel,
S.&nbsp;A. de C.&nbsp;V. and its subsidiaries (Portatel) for
Ps.522,533 (U.S.$56,588). The Company also reached an agreement
to acquire the remaining the 21.66% ownership in Portatel for
U.S.$16,150. The Company closed the acquisition of this
remaining ownership on February&nbsp;8, 2002. Portatel is
engaged in the wireless communications business and holds the
concession to operate cellular telephone systems in Region 8,
which covers the Mexican states of Yucat&#225;n, Campeche,
Quintana Roo, Chiapas and Tabasco in the southeast of Mexico.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated income statements of the Company
include the consolidated results of Portatel beginning
October&nbsp;19, 2001. The assets acquired and liabilities
assumed were recorded at estimated fair values as determined by
the Company&#146;s management based on information currently
available, on current assumptions as to future operations and
independent appraisals. A summary of the assets acquired and
liabilities assumed in the acquisition is as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated fair values:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assets acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Liabilities assumed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(152,831</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill (amortized by the straight-line method
    over the remaining life of the concession)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">159,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">522,533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Company Structure</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the laws established by the Mexican
government, due to Verizon&#146;s control of New Iusacell, New
Iusacell may not own the majority of the voting stock of Mexican
companies that hold concessions to provide telecommunications
services other than cellular service. As of November 1998, Old
Iusacell and Jos&#233; Ram&#243;n Elizondo, a then director of
New Iusacell (the Mexican National), entered into a joint
venture formation agreement (the Agreement) pursuant to which
they agreed to participate together in the microwave frequencies
leasing, long distance, local telephony, PCS and paging
businesses. Old Iusacell and the Mexican National agreed that
Old Iusacell would own 94.9% of the economic interest and 49% of
the voting shares of Iusatel, S. A. de C. V. (Iusatel), the
Company&#146;s long distance concessionaire,
Iusatelecomunicaciones, S. A. de C. V. (Iusatelecomunicaciones),
the Company&#146;s fixed wireless local telephony operation,
Punto-a-Punto Iusacell, S. A. de C. V. (Punto-a-Punto Iusacell),
a microwave frequencies concessionaire and Iusacell PCS, S. A.
de C. V. (Iusacell PCS), which holds concessions for 1.9GHz
frequencies in Regions&nbsp;1 and 4.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Iusatel, Iusatelecomunicaciones, Punto-a-Punto
Iusacell and Iusacell PCS are each referred herein as a
Non-Cellular Subsidiary and together, the Non-Cellular
Subsidiaries. The Mexican National owns 5.1% of the economic
interest and 51% of the voting shares of these companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Mexican National does not have the unilateral
right to approve actions at the stockholder or board level of
the Non-Cellular Subsidiaries. Under each company&#146;s
by-laws, all stockholder or board actions must also be approved
by the majority of the shares held by Old Iusacell (or New
Iusacell) or a majority of the board members designated by Old
Iusacell (or New Iusacell), respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Agreement, together with each joint venture
company&#146;s by-laws, enable Old Iusacell or New Iusacell, as
the case may be, to have management control over the day-to-day
operations and financial administration of the Non-Cellular
Subsidiaries. The Mexican National cannot alone, among other
things, select, terminate or determine the compensation of
management or establish operating and capital decisions in the
ordinary course of business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Old Iusacell signed a joint venture agreement
with a Mexican company, which holds a fifteen-year concession to
provide nationwide and international paging services through
July 2009. As of December&nbsp;31, 2001, Infotelecom is owned
49%, 49% and 2%, by Old Iusacell, Banorte, S. A. (which acquired
Infomin, S.A de C.V.&#146;s interest in Infotelecom in exchange
for the retirement of debt) and the Mexican National,
respectively. Old Iusacell committed to contribute up to
U.S.$10,500. As of December&nbsp;31, 2000, Old Iusacell had
invested all U.S.$10,500. If a partner does not fulfill its
responsibilities under the joint venture agreement, sanctions
could cause such partner to lose its investment and incur a
penalty of up to U.S.$1,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The subsidiaries of the Old Iusacell, which are
included in the consolidated financial statements, are as
follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Economic interest</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(direct or indirect)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">as of December 31</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(%)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(%)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">S.O.S. Telecomunicaciones, S. A. de C. V.
    (Region&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell, S. A. de C. V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sistecel, S. A. de C. V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comunicaciones Celulares de Occidente, S. A. de
    C. V. (Region&nbsp;5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sistemas Telef&#243;nicos Port&#225;tiles
    Celulares, S. A. de C. V. (Region&nbsp;6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telecomunicaciones del Golfo, S. A. de C. V.
    (Region&nbsp;7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inflight Phone de M&#233;xico, S.A de C.
    V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-9
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Economic interest</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(direct or indirect)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">as of December 31</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(%)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(%)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inmobiliaria Montes Urales 460, S. A. de C.
    V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mexican Cellular Investments, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusanet, S. A. de C. V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Promotora Celular, S. A. de C. V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusatelecomunicaciones
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Grupo Iusacell Nicaragua, S.A.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Satelitr&#243;n, S. A. de C. V.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Infotelecom
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Punto a Punto Iusacell
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Grupo Portatel, S. A. de C. V. and subsidiaries
    (Region&nbsp;8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusatel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusatel USA, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 3&nbsp;&#151; Basis of
Presentation</FONT></B>

<P align="left">
<B><FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of
presentation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s consolidated financial
statements have been prepared in conformity with Mexican GAAP.
The consolidated financial statements have been presented in
thousands of constant Mexican pesos as of December&nbsp;31, 2001
as required by Bulletin&nbsp;B-10, &#147;Recognition of the
Effects of Inflation on Financial Information&#148;, as amended,
issued by the MIPA (Bulletin&nbsp;B-10).
</FONT>

<P align="left">
<B><FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated
financial statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Those companies in which the Company holds 50% or
more of the capital stock and/or exercises control over
operating and financing activities are included in the
consolidated financial statements. In addition, while the
Company owns less than 50% of the voting common stock of the
Non-Cellular Subsidiaries, it consolidates them because it
exercises management control over their day-to-day operations
and financial administration by appointment of the stockholders
and other arrangements (Note&nbsp;2). All significant
inter-company balances and transactions have been eliminated in
consolidation.
</FONT>

<P align="left">
<B><FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of
estimates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with Mexican GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
</FONT>

<P align="center"><FONT size="2">F-10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 4&nbsp;&#151; Accounting
Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A summary of the Company&#146;s significant
accounting policies is as follows:
</FONT>

<P align="left">
<B><FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Monetary
unit</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements are presented in Mexican
pesos (Ps.), the currency that, based on Mexican laws, must be
used to prepare the accounting records of the Company and its
Mexican subsidiaries.
</FONT>

<P align="left">
<B><FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effects of
inflation on the financial statements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of the
Company have been prepared in accordance with Bulletin B-10. The
Third Amendment to Bulletin B-10 requires the restatement of all
comparative financial statements to constant Mexican pesos as of
the date of the most recent balance sheet presented.
Accordingly, the consolidated financial statements have been
restated as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The balance sheet amounts as of December&nbsp;31,
    2000 presented in the consolidated financial statements have
    been restated to constant Mexican pesos as of December&nbsp;31,
    2001 based on the National Consumer Price Index (NCPI) published
    by Banco de M&#233;xico (the Mexican Central Bank).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Consolidated income statements for the current
    and prior years have been restated to constant Mexican pesos as
    of December&nbsp;31, 2001 using the NCPI from the periods in
    which the transactions occurred.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Bulletin B-12, &#147;Statement of Changes in
    Financial Information&#148;, issued by the MIPA (Bulletin B-12),
    addresses the presentation of the statement of changes in
    financial position when financial statements have been restated
    to constant Mexican pesos as of the latest balance sheet date.
    Bulletin B-12 identifies the origin and application of resources
    representing differences between beginning and ending balance
    sheet amounts in constant Mexican pesos, excluding the effect of
    holding non-monetary assets. Bulletin B-12 also provides that
    monetary and foreign exchange gains and losses should not be
    eliminated from resources provided by operating or financing
    activities.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The items that originate from the recognition of
effects of inflation on financial information are as follows:
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restatement
of non-monetary assets</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories are valued at the average price of
the purchases made during the period and are restated using the
NCPI, without exceeding net realizable value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on the Fifth Amendment to Bulletin B-10,
property and equipment, net, and depreciation for the year are
restated using the NCPI, without exceeding net realizable value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property and equipment are depreciated using the
straight-line method, based on the restated values. During the
second quarter of 2001, the Company completed a technical review
of the remaining useful lives of certain analog and digital
network equipment. As a result, the weighted-average useful life
for certain communications equipment is now ten years compared
with the previous 8.7&nbsp;years. This change represented a
</FONT>

<P align="center"><FONT size="2">F-11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">reduction of approximately Ps.452,000 in
depreciation expense for the year. The average annual rates of
depreciation used by the Company are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(%)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(%)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings and facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Communications equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Computer equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular rental telephones
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company does not capitalize integral
financing cost for assets under construction, unless the
integral financing cost generated by loans are directly
attributable to those assets. For the years ended
December&nbsp;31, 2001 and 2000, the Company did not capitalize
integral financing cost. Integral financing costs capitalized
during 1999 were Ps.184,718.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investments in associated companies are accounted
for using the equity method based on the associated
company&#146;s equity and are adjusted for the effects of
inflation in accordance with Bulletin B-10.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Restatement
of stockholders&#146; equity</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The contributed and earned capital accounts
include the effect of restatement determined by applying the
NCPI factor from the date capital was contributed or earned. The
restatement represents the amount required to maintain the
contributions and accumulated results in constant Mexican pesos
as of December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The excess or deficit from restatement of capital
account is an element of stockholders&#146; equity that includes
surplus or deficit from holding non-monetary assets, which
represents the excess or deficit in specific values of net
non-monetary assets in comparison with the increase attributable
to general inflation as measured by the NCPI.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Integral
financing (gain) cost</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Integral financing (gain)&nbsp;cost is comprised
of net interest expense, foreign exchange gains and losses,
gains and losses from net monetary position and fluctuations in
the market value of hedge derivative contracts on
foreign-denominated debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Foreign exchange gains and losses on transactions
denominated in currencies other than Mexican pesos result from
fluctuations in exchange rates between the date transactions are
recorded and the date of settlement or period end.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gains and losses from net monetary position
represent the effects of inflation, as measured by the NCPI, on
the Company&#146;s monetary assets and liabilities at the
beginning of each month. If monetary liabilities exceed monetary
assets, there is a gain from monetary position. If monetary
liabilities are less than monetary assets, there is a resulting
loss from monetary position.
</FONT>

<P align="left">
<B><FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash
equivalents</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the MIPA issued Bulletin C-1,
&#147;Cash&#148;, applicable to all Mexican companies beginning
January&nbsp;1, 2001. This Bulletin provides guidance for the
valuation of foreign currencies and precious metals as currency.
</FONT>

<P align="center"><FONT size="2">F-12
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents consist primarily of
bank deposits. The Company invests its excess cash in deposits
with major banks.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As the Company follows the practices mentioned in
the Bulletin, the adoption of this Bulletin did not have a
material effect on the Company&#146;s financial statements and
disclosures.
</FONT>

<P align="left">
<B><FONT size="2">d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
instruments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective January&nbsp;1, 2001, Bulletin C-2,
&#147;Financial Instruments&#148;, issued by the MIPA (Bulletin
C-2), requires that all financial instruments be recorded in the
balance sheet at their fair value and changes in the fair value
be recorded in each period in the income statement. Bulletin C-2
also requires that derivative financial instruments used for
hedging purposes be recorded in the balance sheet and valued
using the same valuation criteria used to value the hedged asset
or liability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s financial instruments consist
principally of cash and cash equivalents, accounts receivable
and payable, notes payable, long-term debt, and foreign currency
and interest hedge contracts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company use derivative financial instruments
to manage the risk of variable interest rates and foreign
currency exchange fluctuations, which under Bulletin&nbsp;C-2,
are classified as hedge transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The carrying amounts of financial instruments, as
reflected in the balance sheet, approximate their fair value as
of December&nbsp;31, 2001, except for long-term debt which has a
quoted market value and for the foreign currency and interest
rate hedge contracts, which as of January&nbsp;1, 2001, are
valued using the same valuation criteria used to value the
hedged asset or liability (Note&nbsp;21).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the adoption of this new
accounting pronouncement, the Company recognized a cumulative
loss on derivative financial instruments of Ps.6,478 as of
January&nbsp;1, 2001. Prior to January&nbsp;1, 2001, the Company
recorded interest rate and foreign currency hedge contracts on a
cash basis.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">e.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Allowance for doubtful accounts</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company cancels service to customers with
invoices that are 60&nbsp;days past due. The allowance for
doubtful accounts represents the Company&#146;s estimate of the
probable loss inherent in all accounts receivable due to general
historical trends of customer performance and factors
surrounding the specific customer&#146;s credit risk. The
Company wrote off accounts receivable for Ps.119,225 and
Ps.42,657 in 2001 and 2000, respectively. The charge to income
for the year for the allowance for doubtful accounts amounted to
Ps.108,432, Ps.94,531 and Ps.105,526 in 2001, 2000 and 1999,
respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">f.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Investment in associated companies</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company carries under the equity method
long-term investments in associated companies in which it owns
between 20% and 50% of the company&#146;s voting common stock
and over which the Company can exercise significant influence.
Under the equity method, such investments are carried at cost
adjusted for the Company&#146;s share of the net income or
losses of these companies and the effects of restatement of
non-monetary assets in the associated companies. The effects of
transactions with such associated companies are eliminated
before applying the equity method.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">g.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Cellular telephones</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost of cellular telephones given to
customers under exclusive service contracts is amortized on a
straight-line basis based on the nature and terms of the service
contracts to match costs with the timing of earned revenues.
During the second quarter of 2001, the Company decided to reduce
the amortization period of cellular telephones from an average
of eighteen months to twelve months. This change represented an
</FONT>

<P align="center"><FONT size="2">F-13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">increase of approximately Ps.184,347 in
amortization expense for the year. The cost of such telephones
is included in other assets, net of accumulated amortization,
and does not exceed market value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the end of the contract term, the customer
keeps the cellular telephone. In the event of an early
termination of an exclusive service contract, the customer
either (i)&nbsp;is required to return the phone to the Company
or (ii)&nbsp;acquires the telephone at its book value on the
date of termination.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost of cellular telephones sold to customers
is recorded as cost of sales based on the average cost of such
telephones. Telephones leased to customers are included in fixed
assets and are depreciated over the initial lease period,
generally two years.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">h.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Concessions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Costs related to the acquisition of concessions
granted by the Mexican government to provide cellular telephone
services have been capitalized and are included in other assets.
Such costs are amortized on a straight-line basis over the
initial term of the respective concession. The Mexican
government requires the Company&#146;s compliance with the
specific terms of each concession. Through December&nbsp;31,
2001, the Company had complied substantially with such
requirements, except for certain informational requirements of
the Mexican authorities. The Company believes that such
noncompliance does not expose it to any risk of concession
forfeiture, or any other material liability.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">i.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Advertising</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising costs are expensed as incurred. The
cost of prepaid media advertising (including television air
time, magazine, directory and other print media) is deferred and
recorded in other assets until the advertising airtime or space
is used, at which time, such cost is recognized as an operating
expense. Advertising expense amounted to Ps.430,993, Ps.349,851
and Ps.260,344 for 2001, 2000 and 1999, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">j.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Excess of cost of investment in subsidiaries
    over book value</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The excess of cost over the book value of net
assets of acquired subsidiaries is amortized on a straight-line
basis over twenty years. Amortization expense was Ps.159,030,
Ps.154,293 and Ps.192,273 in 2001, 2000 and 1999, respectively.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">k.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Evaluation of long-lived assets</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company evaluates the recoverability of its
long-lived assets when events and circumstances indicate that
such assets might be impaired. The Company determines impairment
by comparing the undiscounted cash flows estimated to be
generated by these assets to their respective carrying amounts.
In the event impairment exists, a loss is recognized based on
the amount by which the carrying value exceeds the fair value of
the asset. If quoted market prices for an asset are not
available, fair market value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with
the risk involved. Losses on property and equipment to be
disposed of are determined in a similar manner, except that fair
market values are reduced for the cost to dispose.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">l.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Deferred income taxes and employee profit
    sharing</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of January&nbsp;1, 2000, the Company adopted
the provisions of revised Bulletin&nbsp;D-4, &#147;Accounting
Treatment of Income Tax, Assets Tax and Employee Profit
Sharing&#148;, issued by the MIPA, (Bulletin&nbsp;D-4). This
revised Bulletin significantly modifies the previous accounting
treatment for the calculation of deferred taxes by the partial
liability method to a method based on comprehensive assets and
liabilities. The new method requires the recognition of future
tax consequences based on the difference between the financial
</FONT>

<P align="center"><FONT size="2">F-14
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">statements and tax basis of assets and
liabilities&nbsp;&#151; temporary differences&nbsp;&#151; as of
the date of the financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accumulated effect at the beginning of the
year, because of the adoption of Bulletin&nbsp;D-4, increased
the deferred tax asset by Ps.172,031 and increased
stockholders&#146; equity by the same amount. There was no net
effect to income for the years ended December&nbsp;31, 2001 and
2000, since the Company decided to increase the net deferred
income tax asset and offset it by the creation of an allowance
to reduce the value of the tax losses carry forward
(Note&nbsp;12).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Employee profit sharing is a statutory labor
obligation payable to employees and determined, for each
subsidiary with employees, on its pretax income, as adjusted, in
accordance with the provisions of Mexican labor and tax laws.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">m.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Seniority premiums</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with Mexican labor law, the
Company&#146;s employees are entitled to seniority premiums upon
retirement after 15&nbsp;years of service or upon dismissal,
disability or death. The Company follows Bulletin&nbsp;D-3,
&#147;Labor Obligations&#148;, issued by the MIPA
(Bulletin&nbsp;D-3). Under Bulletin&nbsp;D-3, the actuarially
determined projected benefit obligation is computed using
estimates of salaries that will be in effect at the time of
payment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Personnel not yet eligible for seniority premiums
are also included in the determination of the obligation with
necessary adjustments made in accordance with the probability
that these employees will reach the required seniority. At
December&nbsp;31, 2001, the average seniority of the eligible
employees was less than 4&nbsp;years. The Company&#146;s
liability and related costs for seniority premiums are
immaterial for all periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with Mexican labor law, the Company
is liable for severance payments to employees who are dismissed
under certain circumstances. Such compensation is expensed when
paid.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has no employee pension plans and
does not provide for post-retirement benefits.
</FONT>

<P align="left">
<B><FONT size="2">n.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Profit (loss)
per share</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Bulletin&nbsp;B-14, &#147;Earnings per
Share&#148;, issued by the MIPA (Bulletin&nbsp;B-14), requires
disclosure in the income statement of the basic net profit
(loss) per share and diluted profit (loss) per share, and the
per share effect of any extraordinary item affecting the net
profit or loss for the year. Basic profit (loss) per share is
computed by dividing profit (loss) available to common
stockholders by the weighted-average number of common shares
outstanding for the year. The computation of diluted profit
(loss) per share is similar to basic profit (loss) per share,
except that the denominator is increased to include the number
of additional common shares that would have been outstanding if
the potentially dilutive common shares had been issued. For the
years ended December&nbsp;31, 2001, 2000 and 1999, the Company
did not compute nor disclose diluted profit (loss) per share
since it was not required by Bulletin&nbsp;B-14 because, for
those years, the Company incurred losses from continuing
operations.
</FONT>

<P align="left">
<B><FONT size="2">o.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue
recognition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cellular air time is recorded as revenue as
service is provided except for revenue from the sale of prepay
cards which is recognized at the date of sale. The Company
recognizes the revenue on the sale of prepay cards at the date
of sale rather than on a deferred basis because the length of
the average consumption period for such prepay cards is not
significant, i.e., approximately one to one and a half months,
and it is not material to results of operations for all periods
presented. Sales and cost of sales of equipment and related
services are recorded when goods are delivered and services are
provided. Cellular access charges are billed in advance and
</FONT>

<P align="center"><FONT size="2">F-15
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">recognized when the services are provided. Other
revenues, mainly from paging and long distance services, are
recognized when the related services are provided.
</FONT>

<P align="left">
<B><FONT size="2">p.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
currency transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Foreign currency transactions are recorded at the
exchange rates in effect at the transaction date. Assets and
liabilities denominated in foreign currencies are translated to
Mexican pesos using the exchange rates in effect at the time of
settlement or valuation at each balance sheet date, with the
resulting exchange differences being recognized as exchange
gains or losses.
</FONT>

<P align="left">
<B><FONT size="2">q.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
income (loss)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company adopted Bulletin&nbsp;B-4,
&#147;Comprehensive Income&#148;, issued by the MIPA,
(Bulletin&nbsp;B-4), effective January&nbsp;1, 2001. Based on
Bulletin&nbsp;B-4, the comprehensive income (loss) includes the
Company&#146;s consolidated net loss and any other item that,
because of specific accounting guidance, is recorded directly as
a part of stockholders&#146; equity, and which are not capital
stock increases, decreases and/or distributions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The comprehensive income (loss) line included in
the consolidated statement of stockholders&#146; equity
represents the result of the performance of the Company during
the year (Note&nbsp;20).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">r.</FONT></B></TD>
    <TD>
    <B><FONT size="2">New accounting pronouncements</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2001, the MIPA issued the revised
Bulletin&nbsp;C-9, &#147;Liabilities, Provisions, Contingent
Assets and Liabilities and Commitments&#148;
(Bulletin&nbsp;C-9), which establishes a methodology for
valuation, presentation and disclosure of liabilities and
provisions, as well as for valuation and disclosure of
contingent assets and liabilities, and for disclosure for
commitments. The revised Bulletin&nbsp;C-9 states that
(i)&nbsp;all contingent assets that have a practical true
realization must be accounted and disclosed in the financial
statements; (ii)&nbsp;contingent assets that have a probable
realization cannot be accounted for in the financial statements,
but must be disclosed; and (iii)&nbsp;contingent assets that do
not have a probable realization and cannot be accounted for in
the financial statements are not required to be disclosed.
Bulletin&nbsp;C-9 requires disclosure of committed amounts when
it represents significant fixed assets additions. The provisions
of Bulletin&nbsp;C-9 are required to be applied beginning on
January&nbsp;1, 2003, although early adoption is recommended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, in December 2001, the MIPA issued
revised Bulletin&nbsp;C-8, &#147;Intangible Assets&#148;
(Bulletin&nbsp;C-8), which defines intangible assets as costs
incurred and rights or privileges acquired that will generate a
future economic benefit. Revised Bulletin&nbsp;C-8 states that
pre-operating costs should be expensed as a period cost, unless
they could be classified as development costs. Bulletin&nbsp;C-8
requires that intangible assets with finite useful lives should
be amortized over its useful life. The provisions of
Bulletin&nbsp;C-8 are required to be applied beginning on
January&nbsp;1, 2003, although early adoption is recommended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management is currently evaluating the impact
that the adoption of Bulletin&nbsp;C-8 and Bulletin&nbsp;C-9
will have on its consolidated financial statements.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;5&nbsp;&#151; Related
Parties</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Until April&nbsp;4, 2001, the Peralta Group held
substantial ownership interest in the Company. The Peralta Group
holds ownership interests in various other entities, primarily
Industrias Unidas, S.&nbsp;A. de&nbsp;C.&nbsp;V. (IUSA) and
related entities, which still are customers of or suppliers to
the Company.
</FONT>

<P align="center"><FONT size="2">F-16
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A summary of related party accounts and notes
receivable, including interest, as of December&nbsp;31, is as
follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IUSA and related entities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,788</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell PCS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">New Iusacell
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts receivable result from the financing of
related parties&#146; operations, the sale of cellular telephone
services and operating lease contracts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts and notes payable to related parties,
including interest, as of December&nbsp;31, are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Verizon
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vodafone
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">New Iusacell
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell Arrendadora, S.A. de C.V.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell Infraestructura, S.A. de C.V.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,535</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iusacell Infraestructura de M&#233;xico, S.A. de
    C.V.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,634</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts payable result from services rendered by
the seconded employees assigned by Verizon and operating lease
contracts for certain communications equipment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Old Iusacell made advance payments of U.S.$15,000
to Northern Telecom (CALA) Corporation (Nortel) in 1994. Legal
counsel believed that Nortel is legally obligated to refund the
U.S.$15,000 advance to Old Iusacell. Therefore in 2000, Verizon
acquired rights to a refund of the advance from Nortel to be
applied in future purchases by Verizon from Nortel, in exchange
for a dollar-for-dollar reduction in payables by the Company to
Verizon.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is an analysis of the related party
transactions described above:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years ended December 31</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lease income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular telephones repair expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Technical expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,285</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lease expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,397</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,624</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">233,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note&nbsp;6&nbsp;&#151; Inventories,
Net</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, inventories, net,
consisted of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular telephones and accessories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">343,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: Allowance for obsolete and slow-moving
    inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(110,756</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(51,329</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">232,574</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goods in transit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advances to suppliers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note&nbsp;7&nbsp;&#151; Investments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, the Company&#146;s
investments were as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Entity</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Investment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ownership</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Investment</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Editorial Celular, S. A. de C. V
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">40.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">AMCEL
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,178</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,063</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Editorial Celular, S.A. de C.V. is accounted for
by the equity method. For each of the three years in the period
ended December&nbsp;31, 2001, the Company&#146;s share of net
earnings (losses)&nbsp;of Editorial Celular, S.A. de C.V. was of
Ps.2,542, Ps.2,478 and Ps.2,462, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the years ended December&nbsp;31, 2001 and
1999, the gain (loss)&nbsp;on sale of equity investments was of
Ps.3,976 and (Ps.56,622), respectively.
</FONT>

<P align="center"><FONT size="2">F-18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note&nbsp;8&nbsp;&#151; Property and
Equipment, Net</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, property and equipment, net consisted of:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings and facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,623,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,605,917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Communications equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,820,210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,334,971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transportation equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Computer equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,446,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,142,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular rental telephones
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,173,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,332,079</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,604,699</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,207,703</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,568,930</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,124,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Land
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Construction in progress
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,225,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">924,881</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advances to suppliers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,860,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,256,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
expense was Ps.1,226,130, Ps.1,292,146 and Ps.788,430 for 2001,
2000 and 1999, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1999,
the Company entered into a series of agreements with MATC
Celular, S. de R.&nbsp;L. de C. V. (an affiliated company of
American Tower Corporation) (&#147;MATC Celular&#148;). These
agreements, among other things, gave MATC Celular the right to
acquire approximately 350 existing Old Iusacell non-strategic
towers. During 2001, Old Iusacell and some of its subsidiaries
sold 244 non-strategic towers to MATC Celular, for Ps.348,754
(U.S.$36,600) generating a gain on the sale, before taxes, of
Ps.307,886. As a part of this agreement, a subsidiary of New
Iusacell signed a lease contract for the same towers with MATC
Celular for a minimum mandatory term of ten years, a term that
could be automatically extended for two additional periods of
five years each (Note&nbsp;13a.).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, Bulletin&nbsp;D-5,
&#147;Leases&#148;, (Bulletin&nbsp;D-5) establishes the general
criteria for capital and operating lease transactions.
Sale-leaseback transactions are recognized with the use of the
general criteria of Bulletin&nbsp;D-5. The timing of the
recognition of a gain derived from sale-leaseback transactions
should be based on the subsequent lease classification criteria
of the leaseback portion of the transaction. If the subsequent
leaseback is accounted for as an operating lease, full immediate
gain recognition is allowed, whereas, if the subsequent
leaseback is accounted for as a capital lease, the gain is
deferred and amortized in proportion with the estimated useful
life of the asset leased. Based upon this criteria, the
sale-leaseback agreement with MATC Celular was recorded by the
Company as an operating lease and consequently, the Ps.307,886
gain was recognized at the date of the sale and has been
recorded as other operating income in the consolidated income
statement for the year ended December&nbsp;31, 2001.
</FONT>

<P align="center"><FONT size="2">F-19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 9&nbsp;&#151; Other Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, other assets consisted of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Concessions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 806,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 428,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular telephones to be amortized
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,322,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,919,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">351,094</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">341,823</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advance payments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">374,567</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161,593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">259,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes (Note 12)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,308,067</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,322,991</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,426,763</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,433,372</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 1,881,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 1,889,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concessions and
cellular telephone amortization expense was Ps.1,183,528,
Ps.934,521 and Ps.639,570 in 2001, 2000 and 1999, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Note 10&nbsp;&#151; Notes Payable and
Long-Term Debt</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001 and 2000, the
long-term debt of the Company consisted of the following:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S. Dollars 2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior notes due 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">U.S.$150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.1,375,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.1,504,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amended and restated syndicated loan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,435,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term bank loan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,057,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revolving credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">846,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Eximbank financing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">504,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commerzbank financing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256,389</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BBVA Bancomer handset facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">415,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,811,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,194,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,344,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">415,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.3,811,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.2,850,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior notes
due 2004</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;25, 1997, Old Iusacell completed an
offering of long-term, senior notes due July&nbsp;15, 2004 for
U.S.$150,000, accruing interest at a fixed rate of 10%, payable
semi-annually starting January 15, 1998 (the Notes Due 2004).
The Notes Due 2004 are redeemable at the option of Old Iusacell,
in whole or in part, at any time on or after July&nbsp;15, 2001
starting at a redemption price of 105.0% of principal amount
plus accrued interest, if any, declining to 102.5% after
July&nbsp;15, 2002, and finally to 100.0% after July&nbsp;15,
2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes Due 2004 may also be redeemed at a
price equal to 100.0% of principal amount plus accrued interest,
if any, in the case of legal changes adversely affecting the
treatment of the withholding taxes on payments to holders of the
Notes Due 2004.
</FONT>

<P align="center"><FONT size="2">F-20
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amended and
restated syndicated loan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;29, 2001, Old Iusacell completed
the restructuring of its long-term bank loan, its revolving
credit facility, and the payment of the Eximbank financing and
the Commerzbank financing by entering into an amended and
restated senior secured loan agreement (the amended and restated
syndicated loan), which consists of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;The Tranche A Loan for an aggregate
    principal amount of U.S.$189,805 for the purpose of refinancing
    existing indebtedness under the long-term bank loan and the
    revolving credit facility and under a certain bridge loan used
    to pay the January 2001 principal amortization payments under
    the long-term bank loan and the revolving credit facility.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;The Tranche&nbsp;B Loan for an
    aggregate principal amount of U.S.$75,817 for the purpose of
    paying existing indebtedness under the Eximbank financing and
    the Commerzbank financing and under a certain bridge loan used
    to pay also in January 2001 a principal amortization payment
    under the Commerzbank financing.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amended and restated syndicated loan provides
for interest at a rate per annum equal to one, two, three or six
month LIBOR at Old Iusacell&#146;s option plus a spread ranging
from, depending on Old Iusacell&#146;s leverage ratio, 1.75% to
2.25% with quarterly interest payments which began on
May&nbsp;29, 2001. Principal installments will be due beginning
2004 through 2006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There was no gain or loss recognized from this
loan restructuring.
</FONT>

<P align="left">
<B><FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Covenants and
collateral</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amended and restated syndicated loan and the
Notes Due 2004 contain certain restrictive covenants, including
the maintenance of certain financial ratios, restrictions on
incurring additional debt, limitations on capital expenditures
and restrictions on the sale or lease of Old Iusacell&#146;s
assets. As of December&nbsp;31, 2001 and 2000, Old Iusacell had
complied with such covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;30, 2000, Old Iusacell obtained
the Fourth Amendment to the long-term bank loan and the
revolving credit facility. On the same date, Old Iusacell also
obtained a waiver, consent and second amendment to the Eximbank
financing and to the Commerzbank financing (the Second
Amendment). The Second Amendment and the Fourth Amendment
allowed the Company, among other things, to: (i)&nbsp;dispose of
certain telecommunications equipment (Note&nbsp;8c.) under
certain conditions such as the funds obtained on the sale be
used to acquire additional assets; (ii)&nbsp;the sublease of
such communications equipment by Old Iusacell or any of its
subsidiaries; (iii)&nbsp;the sale of one of Old Iusacell&#146;s
subsidiaries, Satelitr&#243;n, S. A. de C. V.; (iv)&nbsp;the
release of the mortgage of a real property and (v)&nbsp;Old
Iusacell&#146;s incurrence on or before March&nbsp;31, 2001 of
unsecured indebtedness with maturities not to exceed
12&nbsp;months of an aggregate principal amount of not more than
U.S.$20,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;7, 2001 the Amended and Restated
syndicated loan was amended and a waiver and consent was granted
in order to allow Old Iusacell to (i) create liens encumbering
initial deposits and margin deposits securing indebtedness under
any interest rate protection agreement or other interest hedging
agreement up to the principal amount of indebtedness of Old
Iusacell and its subsidiaries with floating rate of interest;
(ii)&nbsp;loan or advance to New Iusacell in lieu of paying
dividends at such times and in such amounts as shall be
necessary to permit New Iusacell to pay scheduled interest
(including any tax gross&nbsp;&#151; up with respect thereto)
and principal payments as and when due in respect of the Notes
due 2006; and (iii)&nbsp;loan or advance to New Iusacell in lieu
of paying dividends in an amount not to exceed U.S.$5,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Old Iusacell&#146;s obligations under the amended
and restated syndicated loan are unconditionally guaranteed,
jointly and severally, by the principal operating and
concession-holding subsidiaries of Old Iusacell and
</FONT>

<P align="center"><FONT size="2">F-21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">are secured by the pledge of substantially all
capital stock and equity interests held by Old Iusacell and by
all cellular concessions, and by a first lien on substantially
all assets used in connection with or related to such
concessions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the Company&#146;s
long-term debt matures as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Years ended December 31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S. Dollars</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Mexican pesos</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,288,781</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">132,811</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,217,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">415,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,811,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
payable</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, notes payable consisted
of the following:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S. Dollars</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Handset facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2001, Old Iusacell obtained a handset
acquisition financing facility from Banco Santander Mexicano,
which consisted of a one-year senior unsecured credit facility
in a principal amount of U.S.$12,000. Loans outstanding under
this facility provided for interest at an annual rate of
6.9938%. Interest is paid quarterly and the principal was paid
on February&nbsp;19, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December&nbsp;2000, Old Iusacell obtained a
credit facility from Banco Santander Mexicano, to be used solely
to acquire cellular handsets, in the principal amount of
U.S.$12,000. Loans outstanding under this facility provided for
interest at an annual rate of LIBOR plus 1.85%. The Company drew
down the entire U.S.$12,000 during December 2000. This facility
was repaid on February&nbsp;8, 2001.
</FONT>

<P align="left">
<B><FONT size="2">Note 11&nbsp;&#151; Notes Payable to
Suppliers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, notes payable to
suppliers consisted of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Short-term:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The Motorola Facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The TV Azteca Facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total short-term
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">The Motorola Facility</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;31, 2000, Portatel, through one of
its subsidiaries, obtained a five-year credit facility from
Motorola Credit Corporation (Motorola) to be used solely to
acquire communications equipment, in the principal amount of
U.S.$9,106 (the Motorola Facility). Drawdowns under the Motorola
Facility were
</FONT>

<P align="center"><FONT size="2">F-22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">available for one year. Loans outstanding under
the Motorola Facility accrue interest at a variable annual rate
of six-month LIBOR plus 6%. Principal and interest are payable
in April&nbsp;2002. Portatel drew down the entire U.S.$9,106
during 2000 and 2001. As a part of the agreement, Portatel was
required to keep an escrow account to deposit monthly the
accrued interest on the loans outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Motorola Facility contains certain
restrictive covenants including the maintenance of certain
financial ratios and restrictions on the payment of dividends.
As of December&nbsp;31, 2001, Portatel had complied with such
covenants.
</FONT>

<P align="left">
<B><FONT size="2">The TV Azteca Facility</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;5, 2001, the Company, through
one of its subsidiaries, obtained a credit facility from TV
Azteca, S. A. de C. V. to be used solely to acquire television
air time, in the principal amount of Ps.40,000 (the TV Azteca
Facility). The facility provides for interest at a variable
annual rate of TIIE times 1.5. Principal and interest are
payable in six monthly installments starting January&nbsp;31,
2002.
</FONT>

<P align="left">
<B><FONT size="2">Note 12&nbsp;&#151; Income Tax, Net Assets Tax
and Employee Profit Sharing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, 2000 and 1999, the
provision for income taxes consisted of current income tax and
assets tax of Ps.146,404, Ps.156,335 and Ps.612,596,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Old Iusacell has filed annual consolidated income
tax returns since the tax year beginning January&nbsp;1, 1994.
Starting the year ended December&nbsp;31, 2000, New Iusacell is
the holding company for tax consolidation purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The statutory income tax rate in Mexico is 35%.
As a result of the amendment to the income tax law enacted on
January&nbsp;1, 2002, the 35% statutory income tax rate will be
reduced annually starting in 2003, and continue to decrease
until the statutory rate is 32% in 2005. Consequently, the
effect of the gradual decrease in the statutory Income Tax rate
will reduce the deferred tax asset in 2003. For the years ended
December&nbsp;31, 2001 and 1999, the Company generated tax
profits of Ps.117,751 and Ps.1,319,163, which were totally
offset by the application of tax loss carry forwards. For the
year ended December&nbsp;31, 2000, the Company generated a tax
loss Ps.716,875.
</FONT>

<P align="center"><FONT size="2">F-23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001 and 2000, the main
temporary differences the Company recognizes for the calculation
of deferred income taxes were as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">221,684</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Liability accruals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax losses carry forwards and tax credits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,495,151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,316,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(253,689</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(249,388</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,867,485</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,211,122</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telephones to be amortized
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(174,968</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(731,636</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Concessions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(308,269</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,847</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Temporary differences
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,172,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,399,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income tax asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">410,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">489,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valuation allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238,465</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(310,167</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income tax asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has recorded a net deferred tax asset
of Ps.172,031 reflecting, mainly, the benefit of tax loss carry
forwards, which expire in varying amounts between 2005 and 2010.
Realization is dependent on generating sufficient taxable income
prior to expiration of the loss carry forwards. Although
realization is not assured, management believes it is more
likely than not that most of the net deferred tax asset at
December&nbsp;31, 2001 will be realized based on the
Company&#146;s business plan estimate of future taxable income
over the next five years in an amount sufficient to utilize the
net deferred tax losses recorded as of December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s estimate of future taxable
income is based primarily on and supported by (i)&nbsp;the
significant improvement in operating performance through 2001,
as evidenced by the success of the implementation of the Verizon
wireless business model. This model has produced strong
subscriber annual compound growth of 50% through 2001, improved
revenues mainly driven by subscriber growth and lower network
and operating costs, (ii)&nbsp;Vodafone&#146;s strong experience
and success in the prepay market, (iii)&nbsp;additional increase
in revenues generated by the Calling Party Pays feature with an
important taxable operating margin, (iv)&nbsp;the change in the
income tax law to increase the useful lives for network
equipment from 3.3&nbsp;years to 12.5&nbsp;years, representing
an important decrease in depreciation expense for income tax
purposes and (v)&nbsp;an increase in 2001 of the potential
effects of additional cost cutting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount of the deferred tax asset considered
realizable could be reduced in the near term if estimates of
future taxable income during the carry forward periods are
reduced.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001 and 2000, the
Company had a valuation allowance of Ps.238,465 and Ps.310,167,
respectively, to reduce its deferred tax assets to estimated
realizable value. The valuation allowance primarily relates to
the deferred tax assets arising from tax loss carry forwards and
tax credits.
</FONT>

<P align="center"><FONT size="2">F-24
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the Company had the
following net operating losses for income tax purposes that may
be carried forward and applied against future taxable earnings:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Year of loss</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of loss</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">year</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1995
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.771,716</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1996
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,087</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1997
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">545,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1998
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">461,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">716,875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These losses are indexed for inflation from the
year incurred to the sixth month of the year utilized.
Accordingly, these amounts include inflation up to June 2001.
Due to the restructuring of the Company related to
Verizon&#146;s assumption of management control (Note 2), the
Company did not include additional tax losses for Ps.982,749,
relating to one of its subsidiaries, Iusatelecomunicaciones, and
may not be able to apply these losses against other
subsidiaries&#146; profits in 2002 and beyond.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 1.8% net assets tax is calculated on the
average value of substantially all assets less certain
liabilities. This tax is required to be paid if this computation
exceeds the amount of income tax. The 1.8% net assets tax paid
may be utilized as a credit against future income tax in the
years in which the Company generates an income tax in excess of
the assets tax. The assets tax is available as a carry forward
for up to ten years and is subject to restatement based on the
NCPI when used. As of December&nbsp;31, 2001, net assets tax
available as a carry forward was Ps.428,025 which expires in
2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Employee profit sharing, generally 10%, is
computed on taxable income, with adjustments to exclude
inflationary effects and the restatement of depreciation
expense. In the years ended December&nbsp;31, 2001 and 2000, the
Company did not generate any taxable income for profit sharing
purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The effective rate reconciliation as of
December&nbsp;31, is as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Loss) profit on continuing operations before
    taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,488</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(541,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">567,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Statutory Income Tax rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax (benefit)&nbsp;expense at statutory
    rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(57,921</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(189,494</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Add (deduct):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory purchases less cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,505</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13,897</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(229,727</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(122,727</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(333,843</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Differences between interest and inflationary
    gains or losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,398</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,778</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,414</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Telephones to be amortized
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194,834</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(41,492</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,557</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39,600</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income Tax expense (benefit)&nbsp;for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(250,907</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">461,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effective rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net assets tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 13&nbsp;&#151; Commitments and
Contingencies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001, the Company had the
following commitments and contingent liabilities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has
    entered into operating lease agreements for administrative
    offices, sales branches and service facilities and since 2001,
    operating lease agreements with MATC Celular for the lease of
    towers (Note&nbsp;8c.). These lease agreements expire at various
    dates through 2011, and some agreements contain options for
    renewal. Lease expense was Ps.157,159, Ps.164,074 and Ps.129,954
    for the years ended December&nbsp;31, 2001, 2000 and 1999,
    respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">Future annual minimum rental payments under
    existing leases as of December&nbsp;31, 2001 are as follows:
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">273,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">246,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">232,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">224,586</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">842,995</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,035,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company may
    have contingent liabilities for taxes and penalties that the tax
    authorities may assess based on audits of prior years&#146; tax
    returns. During 1997, the Mexican tax authorities completed an
    audit of Old Iusacell and two of its subsidiaries (Iusacell,
    S.A. de C.V. and SOS Telecomunicaciones, S.&nbsp;A. de
    C.&nbsp;V.). As a result of those investigations, Old Iusacell
    was assessed and paid a Ps.21,881 penalty in 1999 by the tax
    authorities for an incorrectly deducted interest expense. The
    tax authorities have claimed no other assessment.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April 1998,
    Old Iusacell learned that the Montes Urales property was subject
    to two liens. Such liens were not identified when Inmobiliaria
    Montes Urales 460, S.&nbsp;A. de C.&nbsp;V. was acquired in
    1994, nor was Old Iusacell notified of such liens subsequent to
    the acquisition. To date, the liens have not been removed and it
    is uncertain as to when the liens will be removed, if at all and
    consequently, Old Iusacell is not able to sell the property.
    Such property is being leased to third parties.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Old Iusacell has
    certain commitments derived from its joint venture agreement
    with Infomin, S.&nbsp;A. de C. V. (Note&nbsp;2).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During April
    2001, Iusatel, a subsidiary of the Company, reached an agreement
    to settle the outstanding amounts due related to the special
    projects implemented by Tel&#233;fonos de M&#233;xico,
    S.&nbsp;A. de C.&nbsp;V. (Telmex) to permit competition in long
    distance telephony. Iusatel agreed to pay for its portion of
    such special projects in two parts: (i)&nbsp;a fixed payment of
    approximately U.S.$13,600, payable in twelve equal monthly
    installments beginning in April 2001, and (ii)&nbsp;a
    U.S.$0.0053 per full minute, usage-based surcharge to the local
    wire line interconnection rate from January&nbsp;1, 2001 through
    December&nbsp;31, 2004 for long distance calls terminated in
    Telmex&#146;s local wire line network.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell,
    S.&nbsp;A. de C.&nbsp;V., a subsidiary of the Company, decided
    to sue and seek compensatory damages from one of the
    Company&#146;s distributors as a result of the latter&#146;s
    decision to breach its distribution agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-26
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">g.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
    January&nbsp;1, 2002 the Mexican Congress approved a tax law
    reform that assesses an additional 10% excise tax on certain
    wireless telecommunications services. In February 2002 the
    Company filed an injunction action to challenge the Mexican
    government&#146;s implementation of the tax.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Note&nbsp;14&nbsp;&#151; Contributed
Capital</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the years ended December&nbsp;31, 2001,
2000 and 1999, the following transactions took place:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;10, 1999, the Technical
Committee approved the subscription of 2&nbsp;series&nbsp;L
shares of Old Iusacell for the Executive Employee Stock Purchase
Plan (the Stock Purchase Plan).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;3, 1999, Old Iusacell converted an
amount of Ps.446,805 (U.S.$31,000) into 1,476 series&nbsp;A
shares of Old Iusacell. The 1,476 series&nbsp;A shares of Old
Iusacell were initially subscribed by Verizon, of which 50%, or
738, of such shares, were then sold to Carlos Peralta. There was
no gain or loss recognized from the sale.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;10, 1999, the Company concluded a
corporate reorganization. The Company&#146;s corporate
reorganization included the following transactions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An exchange offer
    by New Iusacell of its series A and V ADSs and shares, for Old
    Iusacell&#146;s series A, B, D and L ADSs and shares on a
    one-for-one basis. At the end of the exchange offer,
    approximately 230 series&nbsp;D and L shares were not tendered.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The stockholders
    of Old Iusacell who participated in the exchange were also
    offered the option to purchase an aggregate of 747 series&nbsp;V
    shares of New Iusacell, in the form of ADSs or shares. A total
    of 613 series&nbsp;V shares were subscribed.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Primary and
    secondary offerings under which New Iusacell sold 787
    series&nbsp;V shares, and Verizon and the Peralta Group sold
    3,380 series&nbsp;V shares of New Iusacell.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;31, 1999, a total of 12,167
series A shares were subscribed through the capitalization of
stockholders&#146; debt. The total amount converted was of
Ps.1,392,355. The Board of Directors of the Company ratified
this increase on February&nbsp;21, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the February&nbsp;21, 2000, ordinary and
extraordinary stockholders&#146; meetings, the series&nbsp;D and
series&nbsp;L shares and a portion of series&nbsp;A shares, were
converted into series&nbsp;B shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;30, 2001, 1&nbsp;series&nbsp;A
share was subscribed through the capitalization of
stockholders&#146; debt. The total amount converted was of
Ps.110. After this capital stock increase, Company&#146;s
stockholders&#146; approved a 30,000 to 1&nbsp;reverse stock
split. The reverse stock split became effective on May&nbsp;7,
2001. This resulted in the cancellation of fractions of shares
and a corresponding decrease of Ps.242 in capital stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;24, 2001, 3&nbsp;series&nbsp;A
shares were subscribed by the Company&#146;s stockholders for an
amount of Ps.321.
</FONT>

<P align="center"><FONT size="2">F-27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The changes in the number of shares of common
stock for the period January&nbsp;1, 2000 through
December&nbsp;31, 2001 are analyzed as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of shares</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">January&nbsp;1, 1999 balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">February&nbsp;10,1999&nbsp;&#151; issuance of
    common stock for the Stock Purchase Plan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">March&nbsp;3,1999&nbsp;&#151; issuance of common
    stock for the Stock Purchase Plan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December&nbsp;31, 1999&nbsp;&#151; issuance of
    common stock through the capitalization of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December&nbsp;31, 1999 balance (restated to give
    effect to the reverse stock split)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">No changes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December&nbsp;31, 2000 balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">March&nbsp;30, 2001&nbsp;&#151; issuance of
    common stock through the capitalization of stockholders&#146;
    debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">August&nbsp;24, 2001&nbsp;&#151; issuance of
    common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December&nbsp;31, 2001 balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001 and 2000, New Iusacell has made
contributions to the Company, for future capital stock increases
in an aggregate amount of Ps.2,195,544.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001 and 2000, the issued
and outstanding shares of common stock of the Company, without
par value, are as follows (the 2000 number of issued and
outstanding shares has been restated to give effect to the
reverse stock split):
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">series A
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">series B
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Series&nbsp;A and B represent shares entitling
the holder of each share to one vote at the Company&#146;s
stockholders&#146; meetings. Stockholder actions on certain
matters require approval by both series&nbsp;A and series B
stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Series&nbsp;A shares must always represent no
less than 51% of the capital stock with full voting rights and
may be acquired by Mexicans or foreigners. Series B shares may
also be acquired by foreigners or Mexicans.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;15&nbsp;&#151; Executive Employee
Stock Purchase Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After the exchange offer in 1999, Old Iusacell
participates in the Stock Purchase Plan of its parent company,
New Iusacell.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;16&nbsp;&#151; Earned
Capital</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican law, a legal reserve must be
created and increased annually by 5% of the annual net earnings
until it reaches 20% of the nominal amount of a
corporation&#146;s capital stock. This reserve is not available
for dividends, but may be used to reduce a deficit or be
transferred to capital.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividends paid will be free of income tax if paid
out of the Net Taxable Income Account (CUFIN). A 35% rate will
be paid on the amount exceeding the balance of the CUFIN by
multiplying the dividend paid by
</FONT>

<P align="center"><FONT size="2">F-28
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">a factor of 1.5385. The applicable tax will be
payable by the Company, and it may be credited against the
income tax the Company is subject to in the following three
fiscal years. Dividends paid will not be subject to any tax
withholding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2001, the balance on the
CUFIN is approximately Ps.133,419.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The contributed capital and earned capital
accounts consist of the following:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December 31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">adjustments for</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">inflation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital stock subscribed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;5,748,813</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;7,121,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.12,870,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contribution for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,134,320</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,224</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,195,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal reserve
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated losses from prior years
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,140,737</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,695,056</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,835,793</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,221</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(292,455</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(836,778</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(664,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;3,916,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;4,471,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;8,387,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December 31, 2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">adjustments for</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Historical value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">inflation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital stock subscribed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;5,748,627</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;7,121,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.12,870,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contribution for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,247,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal reserve
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated losses from prior years
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,548,501</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,614,872</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,163,373</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(592,236</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(80,184</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(836,778</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(664,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.&nbsp;3,034,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;<FONT size="2">Ps.4,757,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;<FONT size="2">Ps.7,791,690</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note 17&nbsp;&#151; Foreign Currency
Position</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The balance sheet as of December&nbsp;31 includes
assets and liabilities denominated in U.S. Dollars, as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Monetary assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163,715</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Monetary liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">477,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">497,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net monetary liability position in U.S. Dollars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">313,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">428,905</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equivalent in nominal Mexican pesos
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.2,873,630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.4,121,691</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2001 and 2000, most of
the communications equipment and inventories of cellular
telephones and accessories are of foreign origin (Notes&nbsp;6
and 8).
</FONT>

<P align="center"><FONT size="2">F-29
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, 2000 and 1999, interest income and
interest expense on assets and liabilities denominated in U.S.
Dollars were as follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">769</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equivalent in nominal Mexican pesos
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.312,570</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.234,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.335,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Operating results for the years ended
December&nbsp;31, 2001, 2000 and 1999 include depreciation and
amortization expenses, related to fixed assets and inventories
of foreign origin.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The exchange rates as of December&nbsp;31, 2001
and 2000 were Ps.9.1695 and Ps.9.6098 per U.S. Dollar,
respectively. At the issuance date of these financial
statements, March&nbsp;1, 2002, the exchange rate in effect was
Ps.9.1303 per U.S. Dollar.
</FONT>

<P align="left">
<B><FONT size="2">Note 18&nbsp;&#151; Project 450</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 1994, Old Iusacell created a subsidiary to
provide fixed wireless local telephony services using the 450
MHz frequency band (Project 450). At December 31, 2001 and 2000,
Old Iusacell&#146;s investment in Project 450 amounted to
Ps.31,080 and Ps.35,309, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Given the capabilities of digital technology and
the success the Company has had thus far with its deployment,
the Company is exploring alternatives for providing local
telephony service, including fixed or limited zone wireless
service in the 800 MHz and 1.9 GHz bands.
</FONT>

<P align="left">
<B><FONT size="2">Note 19&nbsp;&#151; Discontinued
Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1998, Old Iusacell decided to
discontinue the operations of Cellular Solutions, a subsidiary
entity dedicated to the sale of accessories for cellular
handsets. Cellular Solutions transferred all its existing
inventories as of December&nbsp;31, 1998 to another subsidiary
of Old Iusacell and terminated all of Cellular Solutions&#146;
employees during January and February 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial information regarding Cellular
Solutions as of and for the years ended December&nbsp;31, 2000
and 1999, was as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,070</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,755</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,070</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,755</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,821</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from operations before income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Profit) loss on disposal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,865</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (profit)&nbsp;loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,865</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-30
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 20&nbsp;&#151; Comprehensive
Income</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the years ended December&nbsp;31, 2001, 2000
and 1999, comprehensive income consisted of the following:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss)&nbsp;profit for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other comprehensive income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deficit from restatement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated effect of deferred taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">195,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">195,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(476,728</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">443,430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note&nbsp;21&nbsp;&#151; Financial
Instruments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company determines the fair value of
outstanding financial instruments as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash
    equivalents: the carrying value approximates fair value due to
    its short-term nature.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
    receivable and payable: the carrying value approximates fair
    value due to its short-term nature.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable:
    Carrying value approximates fair value due to its short-term
    nature.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt:
    the Company estimates the fair value of its long-term debt based
    on public and current rates available for debt of the same
    remaining duration.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivatives: the
    Company determines the fair value of derivative financial
    instruments as follows:
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Foreign-currency exchange forward
contracts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company purchases foreign-currency exchange
forward contracts with contract terms of up to three years to
protect itself against the adverse effect that exchange rate
fluctuations may have on foreign currency-denominated
liabilities, principally U.S. dollars.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, 2000 and 1999, the Company used
derivative instruments to hedge its foreign-currency exposure of
approximately 50% of the principal and interest payments coming
due over the next year. In August and October 2001, the Company
also used foreign-currency exchange forward contracts to hedge
its exchange rate exposure on the senior notes due 2004 for
U.S.$150,000 and its interest payments of U.S.$51,000. These
derivatives were highly effective since a foreign currency rate
change on the forward contract is offset by a corresponding
change in the value of the hedged loan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These contracts are at a fixed price and have
maturity dates through July 2004 and forward rates ranging from
U.S.$9.1707 to U.S.$12.8035.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2001, due to
the strength of the Mexican Peso to the U.S. Dollar, the Company
recognized an exchange loss of Ps.16,759 on the derivatives,
which was offset by the gain on the hedged liabilities.
</FONT>

<P align="center"><FONT size="2">F-31
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is exposed to credit loss from
counterpart nonperformance, but does not anticipate any such
loss from the foreign-currency exchange forward rate contracts,
which are with major financial institutions.
</FONT>

<P align="left">
<B><FONT size="2">Interest rate collars</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 1998, Old Iusacell entered into an
interest rate collar agreement for a notional amount of
U.S.$35,000 until July&nbsp;30, 2002. The collar agreement
limits the maximum effective LIBOR cost to 6.12% if six-month
LIBOR is lower than 7.12% and 7.12% if LIBOR equals or exceeds
7.12%. Old Iusacell can participate in a decline in LIBOR to
5.30%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;26, 1999, Old Iusacell entered
into an additional interest rate collar agreement to limit the
maximum interest rate, which must be paid on U.S.$15,000 of its
floating rate debt until July 2002. This collar agreement limits
the maximum effective LIBOR cost to 5.82% if six-month LIBOR is
lower than 6.82% and 6.82% if LIBOR equals or exceeds 6.82%. Old
Iusacell can participate in a decline in LIBOR to 4.75%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the year ended December&nbsp;31, 2001, due to
the significant decrease in the LIBOR interest rates, the
Company recognized additional interest expense of Ps.5,390 for
the interest rate collars, which was offset by the lower
interest expense on its floating rate debt. Accordingly, these
derivatives were highly effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The U.S.$50,000 aggregate notional amount of the
interest rate collar agreements does not quantify risk or
represent assets or liabilities of the Company, but is used in
the determination of cash settlements under the agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is exposed to credit loss from
counterpart nonperformance, but does not anticipate any such
loss from the interest rate collar agreements, which are with a
major financial institution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, the fair values of financial
instruments were as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fair value</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,172,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,172,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,201,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,201,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,362,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,362,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,482,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,482,277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign currency hedge contracts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(169,416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(44,181</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest rate collars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,460</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior notes due 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,375,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,416,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,504,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,459,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amended and restated syndicated loan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,435,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,435,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term bank loan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,057,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,057,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revolving credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">846,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">846,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Eximbank financing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">504,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">504,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commerzbank financing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256,389</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256,389</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BBVA Bancomer handset facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-32
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note&nbsp;22&nbsp;&#151; Segment
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s segment data is prepared in
accordance with International Accounting Standard No.&nbsp;14
(revised). Reportable segments are those that are based on the
Company&#146;s method of internal reporting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has three reportable segments that it
operates and manages as strategic business units that offer
different products and services. The Company measures its
reportable segments based on operating profit (loss), including
inter-segment revenues and corporate expenses that are allocated
to the operating segments and excluding any non-recurring items.
Inter-segment transactions are accounted for at current market
prices. The Company evaluates the performance of its segments
and allocates resources to them based on earnings before
interest, taxes, depreciation and amortization (EBITDA) and
operating income (loss). The accounting policies underlying the
reported segment data are the same as those described in the
summary of significant accounting policies (Note&nbsp;4).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s three reportable segments and
their principal activities are:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cellular</FONT></I><FONT size="2">&nbsp;&#151;
The Company operates and provides wireless cellular telephone
services in five of the nine Regions in the Mexican market. The
Company serves customers in large metropolitan areas such as
Mexico City, Guadalajara, Le&#243;n, Puebla and M&#233;rida. The
Company&#146;s services include &#147;value added services&#148;
such as voice mail and caller identification of incoming calling
numbers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Long
distance</FONT></I><FONT size="2">&nbsp;&#151; The Company
provides long distance services for which its first natural
market is its cellular subscriber base. The Company is also
providing these services to residential and commercial entities.
The Company uses its own switches and transmission equipment and
a combination of fiber optic lines, microwave links, satellite
transmission and lines leased from Telmex to provide these
services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other
businesses</FONT></I><FONT size="2">&nbsp;&#151; The Company
provides paging, local telephony, microwave links and data
transmission services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tables below present information about
reportable segments for the years ended December&nbsp;31, 2001,
2000 and 1999 under Mexican GAAP measurement:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December 31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Long</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Reconciling</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cellular</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">distance</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">businesses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">segments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">items(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">consolidated</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues&nbsp;&#151; third party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,881,162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">293,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114,180</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,288,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,288,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues&nbsp;&#151; affiliates
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,012,463</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">632,848</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,228,656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,873,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,873,967</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,447,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101,916</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,761</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,073</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,568,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating profit (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(378,814</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(117,818</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(207,887</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(704,519</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">657,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,068,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,902</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(180,649</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,872,242</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">649,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,521,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,146,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">934,973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">652,690</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,733,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,541,314</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,192,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,541,316</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,482</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,648,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,648,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December 31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Long</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Reconciling</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cellular</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">distance</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">businesses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">segments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">items(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">consolidated</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues&nbsp;&#151; third party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,550,534</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112,785</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,732,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,729,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues&nbsp;&#151; affiliates
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,773,585</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">529,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">668,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,971,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,971,291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275,309</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,388,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,740</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(97,234</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123,002</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(160,486</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(380,722</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,194</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(388,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,178,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(32,408</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(137,689</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,007,978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,934</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,992,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,646,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,120,341</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">890,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,657,528</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,846,153</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,811,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,762,368</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">178,968</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,023,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,023,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Year Ended December 31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Long</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Reconciling</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cellular</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">distance</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">businesses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">segments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">items(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">consolidated</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues&nbsp;&#151; third party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,470,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,781,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,782,971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues&nbsp;&#151; affiliates
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,065,321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">392,312</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">509,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,966,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,966,765</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,557,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,097</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,627,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,702</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(136,279</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(81,571</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(116,403</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,986</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,658,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(75,182</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72,213</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,511,572</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,715</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,611,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,086,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">362,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">817,651</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,267,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,232,724</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,034,515</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,817,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,513</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,949,657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,949,657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA as used by the Company is operating profit
    (loss) plus the sum of depreciation and amortization. The
    Company&#146;s reconciliation of EBITDA to consolidated net
    profit (loss) under Mexican GAAP as of December&nbsp;31, 2001,
    2000 and 1999, is as follows:
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,521,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,992,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,611,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,568,688</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,380,960</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,620,273</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (expense)&nbsp;income, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,225</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Integral financing (cost)&nbsp;gain
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(125,076</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(154,973</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">656,657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity participation in net profit (loss)&nbsp;of
    associated companies and net gain (loss) on sale of equity
    investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(54,160</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax and assets tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(146,404</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(156,335</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(150,889</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit (loss)&nbsp;from discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,748</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effect of the adoption of the new
    accounting principle
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss)&nbsp;profit for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Reconciling items primarily reflect inter-segment
    eliminations and certain non-recurring items.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">Note 23&nbsp;&#151; Significant Differences
Between Mexican GAAP and United States Generally Accepted
Accounting Principles</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s consolidated financial
statements are prepared on a Mexican GAAP basis, which differs
in certain significant respects from United States generally
accepted accounting principles (U.S. GAAP).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The reconciliation to U.S. GAAP does not include
the reversal of the adjustments to the financial statements for
the effects of inflation required under Mexican
Bulletin&nbsp;B-10. The application of Bulletin&nbsp;B-10
represents a comprehensive measure of the effects of price-level
changes in the financial statements based on historical cost for
Mexican and U.S. accounting purposes. The principal differences,
other than inflation accounting, between Mexican and U.S. GAAP
are listed below together with an explanation, where
appropriate, of the adjustments that affect consolidated net
income for each of the three years in the period ended
December&nbsp;31, 2001, and stockholders&#146; equity as of
December&nbsp;31, 2001 and 2000.
</FONT>

<P align="left">
<B><FONT size="2">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
income taxes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As mentioned in Note&nbsp;4m., as of
January&nbsp;1, 2000, the Company adopted revised
Bulletin&nbsp;D-4. Under the new methodology of
Bulletin&nbsp;D-4, the Company recognized future tax
consequences based on the difference between the financial
statements and tax basis of assets and liabilities&nbsp;&#151;
temporary differences&nbsp;&#151; as of the date of the
financial statements. Until December&nbsp;31, 1999, deferred
income taxes were provided for identifiable, non-recurring
timing differences (those expected to reverse over a definite
period of time) at rates in effect at the time such differences
originated, and benefits from tax loss carryforwards were not
allowed to be recognized before the period in which the
carryforward was utilized. For purposes of the reconciliation to
U.S. GAAP, the Company has applied Statement of Financial
Accounting Standards (SFAS)&nbsp;No.&nbsp;109, &#147;Accounting
for Income Taxes&#148;, for all periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS&nbsp;109 requires an asset and liability
method of accounting whereby deferred taxes are recognized for
the tax consequences of all temporary differences between the
financial statement carrying amounts and the related tax basis
of assets and liabilities. Under U.S. GAAP, the effect on
deferred taxes of a change in tax rate is recognized in income
in the period that includes the enactment date.
</FONT>

<P align="left">
<B><FONT size="2">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-operating
costs</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, the Company capitalized
certain pre-operating costs. Under U.S.&nbsp;GAAP, pre-operating
costs are expensed as incurred. As mentioned in Note&nbsp;2, the
Company no longer consolidates Iusacell PCS. Consequently, in
2000, the investment is recorded at cost and the pre-operating
costs which were expected to be amortized under Mexican GAAP
once operations commenced will now form part of the basis of the
investment.
</FONT>

<P align="left">
<B><FONT size="2">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative
financial instruments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As mentioned in Note&nbsp;21, the Company has
entered into interest rate collar agreements to hedge an
aggregate notional amount of U.S.$50,000 of its floating rate
debt. Additionally, the Company purchased foreign-currency
forward exchange contracts, which at December&nbsp;31, 2001,
hedged a notional amount of U.S.$201,000 in debt. The Company
employs risk management strategies using foreign currency
forwards and interest rate collar agreements. The Company does
not hold derivatives for trading purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As mentioned in Note&nbsp;4e., effective
January&nbsp;1, 2001, the Company adopted Bulletin&nbsp;C-2,
which requires that all financial instruments, including those
used for hedging purposes, be recorded in the balance sheet at
their fair value and changes in the fair value to be recorded in
the income statement for each period. Bulletin&nbsp;C-2 also
requires that derivative financial instruments used for hedging
purposes, be recorded in the balance sheet and valued using the
same valuation criteria used to value the hedged asset or
liability. Based on
</FONT>

<P align="center"><FONT size="2">F-35
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<FONT size="2">this valuation criteria, under Mexican GAAP since
the hedged liabilities are not carried at fair value, the
Company did not record the derivative financial instruments
related to those hedged liabilities at fair value but rather,
the Company keeps the derivative financial instrument
instruments valued at the exchange rate at the end of the year.
Prior to January&nbsp;1, 2001, derivative financial instruments
were recorded on a cash basis under Mexican GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under U.S. GAAP, effective January&nbsp;1, 2001,
the Company adopted SFAS&nbsp;133, &#147;Accounting for
Derivative Instruments and Hedging Activities&#148;, as amended
by SFAS&nbsp;137 and 138. Under FAS&nbsp;133, all derivatives
are also recognized on the balance sheet at their fair value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s derivative financial
instruments are classified as cash flow hedges based on certain
criteria established by SFAS&nbsp;133. Accordingly, the
effective portion of the gain or loss of the hedged instrument
is reported in accumulated other comprehensive income, and its
ineffective portion is reported in earnings. All of the
Company&#146;s derivatives were considered highly effective. The
portion of accumulated other comprehensive income to be
reclassified into earnings over the next 12&nbsp;months is
expected to be immaterial.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to January&nbsp;1, 2001, the differential
to be paid or received as interest rates changed was accrued and
recognized as an adjustment of interest expenses at the balance
sheet date. Additionally, the related amount payable or
receivable from counter-parties was included in accrued other
expenses at the balance sheet date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cumulative effect on the adoption of this new
accounting pronouncement amounted to Ps.6,478 as of
January&nbsp;1, 2001.
</FONT>

<P align="left">
<B><FONT size="2">d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain from the
exchange of non-monetary assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, the Company entered into a fiber optic
cable swap agreement with Telereuni&#243;n to exchange certain
long-distance fiber optic cables fair valued at Ps.142,679.
Under Mexican GAAP, the Company recorded the transaction as both
an acquisition (at the carrying value of the asset sold) and
sale of fixed assets based on the contract amount, resulting in
a gain on the sale of Ps.137,397, for the year ended
December&nbsp;31, 2001. Under U.S. GAAP, because the assets
exchanged are similar productive assets and, on a net basis, no
cash was exchanged, the transaction does not result in the
recognition of earnings. Consequently, under U.S. GAAP, the
acquisition and sale would not have been recorded.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 1998, the Company entered into
another similar fiber optic cable swap agreement with Bestel for
Ps.244,663, resulting in a gain on the sale of Ps.213,063 that
was not recorded under U.S. GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cumulative effect of this type of
transactions at December&nbsp;31, 2001 is Ps.350,460.
</FONT>

<P align="left">
<B><FONT size="2">e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale-leaseback
transaction with MATC Celular</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As mentioned in Note 8c., during 2001 the Company
sold and leased-back 244 non strategic towers to MATC Celular.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, sale-leaseback transactions
are recognized with the use of the general criteria for capital
and operating lease transactions pursuant to Bulletin&nbsp;D-5,
&#147;Leases&#148;. The timing of the recognition of a gain
derived from sale-leaseback transactions should be based on the
subsequent lease classification criteria of the leaseback
portion of the transaction. If the subsequent leaseback is
accounted for as an operating lease, full immediate gain
recognition is allowed whereas if the subsequent leaseback is
accounted for as a capital lease, the gain is deferred and
amortized in proportion with the estimated useful life of the
asset leased. Based upon these criteria, the sale-leaseback
agreement with MATC was recorded by the Company as an operating
lease and consequently, the Ps.307,886 gain was recognized at
the date of the sale.
</FONT>

<P align="center"><FONT size="2">F-36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under U.S. GAAP, SFAS&nbsp;28, &#147;Accounting
for Sales with Lease Backs&#148;, this sale-leaseback
transactions should be recognized as a single financing
transaction in which any profit or loss on the sale is deferred
and amortized by the seller, who becomes the lessee. As the
Company retained &#147;more than a minor part but less than
substantially all&#148; of the use of the assets leased and the
profit on the sale does not exceed the present value of the
minimum lease payments, the Company deferred Ps.270,879 of the
gain at the transaction date. In addition, as the leaseback
qualified as an operating lease, the Company is amortizing the
deferred gain against the gross rental charged to expense over
the lease term. Consequently, the U.S. GAAP net income for the
year ended December&nbsp;31, 2001 was decreased Ps.261,124.
</FONT>

<P align="left">
<B><FONT size="2">f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized
interest</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mexican GAAP allows, but does not require,
capitalization of financing costs as part of the cost of assets
under construction. Financing costs capitalized include interest
costs, gains from monetary position and foreign exchange losses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">U.S. GAAP requires the capitalization of interest
during the construction of qualifying assets. In an inflationary
economy, such as Mexico, acceptable practice is to capitalize
interest net of the monetary gain on the related Mexican Peso
debt, but not on U.S. dollar or other stable currency debt.
U.S.&nbsp;GAAP does not allow the capitalization of foreign
exchange losses.
</FONT>

<P align="left">
<B><FONT size="2">g.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization
of goodwill</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, the Company amortizes
goodwill on a straight-line basis over a period of 20&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2001, the FASB issued SFAS 141,
&#147;Business Combinations,&#148; and No.&nbsp;142,
&#147;Goodwill and Other Intangible Assets.&#148; SFAS&nbsp;141
supercedes Accounting Principles Board Opinion
(APB)&nbsp;No.&nbsp;16, &#147;Business Combinations&#148; and
amends or supercedes a number of related interpretations of APB
16. SFAS 141 eliminates the pooling-of-interests method of
accounting for business combinations and changes the criteria to
recognize intangible assets apart from goodwill. SFAS&nbsp;142
supercedes APB&nbsp;17, &#147;Intangible Assets.&#148; Under
SFAS&nbsp;142, goodwill and indefinite-lived intangible assets
are no longer amortized but are reviewed annually, or more
frequently if impairment indicators arise, for impairment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS 141 is effective for any business
combination accounted for by the purchase method that is
completed after June&nbsp;30, 2001. Accordingly, the Company
applied SFAS&nbsp;141 to the Portatel acquisition and
SFAS&nbsp;142 to the intangible assets acquired therein.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions of SFAS&nbsp;142 are required to
be applied to goodwill and other intangible assets acquired
prior to July&nbsp;1, 2001 starting with fiscal years beginning
after December&nbsp;15, 2001. The Company expects that due to
the adoption of SFAS&nbsp;141 and 142, amortization of
approximately Ps.169,833, corresponding to all of the
Company&#146;s goodwill at December&nbsp;31, 2001, will not be
recorded during 2002, which previously would have been.
</FONT>

<P align="left">
<B><FONT size="2">h.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of
inflation accounting on U.S. GAAP adjustments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to determine the net effect on the
financial statements of recognizing certain of the adjustments
described above, it is necessary to recognize the effects of
applying the Mexican GAAP inflation accounting principles (see
Note&nbsp;4b.) to such adjustments.
</FONT>

<P align="center"><FONT size="2">F-37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minority
interest</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, the minority interest in
consolidated subsidiaries is presented as a separate component
within the stockholders&#146; equity section of the consolidated
balance sheet. For U.S. GAAP purposes, minority interest is not
included in stockholders&#146; equity and accordingly, is
excluded to arrive at U.S. GAAP stockholders&#146; equity.
</FONT>

<P align="left">
<B><FONT size="2">j.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for
consolidation of facilities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the year ended December&nbsp;31, 1996, the
Company recorded a provision for consolidation of facilities
related to the sale of its then corporate headquarters. Since
the Company has not had the ability to remove such headquarters
from operations, under U.S. GAAP, pursuant to the provisions of
SFAS&nbsp;121, &#147;Accounting for the Impairment of Long-Lived
assets and for Long-Lived Assets to Be Disposed Of,&#148; an
impairment charge would not have been recorded at
December&nbsp;31, 1996, therefore, for U.S. GAAP, the provision
is reversed.
</FONT>

<P align="left">
<B><FONT size="2">k.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income
(loss)&nbsp;and stockholders&#146; equity under U.S.
GAAP</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of net
(loss)&nbsp;profit and stockholders&#146; equity adjusted to
take into account certain material differences between Mexican
GAAP and U.S. GAAP:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss) profit under Mexican GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes (Note&nbsp;23a.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs (Note&nbsp;23b.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments (Note&nbsp;23c.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from the exchange of non-monetary assets
    (Note&nbsp;23d.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(116,091</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale lease-back transaction
    (Note&nbsp;23e.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(261,124</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capitalized interest (Note&nbsp;23f.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of goodwill (Note&nbsp;23g.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest (Note&nbsp;23i.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of inflation accounting on U.S. GAAP
    adjustments (Note&nbsp;23h.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(253</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(22,290</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss) profit under U.S. GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(574,815</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">326,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">As of December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity under Mexican GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,512,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,817,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs (Note&nbsp;23b.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments (Note&nbsp;23c.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(183,876</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from the exchange of non-monetary assets
    (Note&nbsp;23d.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(329,154</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(213,063</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale lease-back transaction
    (Note&nbsp;23e.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(261,124</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capitalized interest (Note&nbsp;23f.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of goodwill (Note&nbsp;23g.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest (Note&nbsp;23i.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(119,165</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,442</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for consolidation of facilities
    (Note&nbsp;23j.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity under U.S. GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,654,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,520,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provided below is an analysis of changes in
stockholders&#146; equity under U.S. GAAP:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">As of December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Opening balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.7,520,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,884,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in capital stock and contributions for
    future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">893,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(574,815</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(184,325</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Closing balance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.7,654,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.7,520,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">l)&nbsp;Discontinued operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As described in Note&nbsp;19, in December 1998,
Old Iusacell decided to discontinue the operations of its
subsidiary, Cellular Solutions, which was in the business of
selling accessories for cellular handsets, and consequently,
recognized a gain (loss)&nbsp;from discontinued operations
amounting to Ps.8,865 and (Ps.1,747), for the years ended
December&nbsp;31, 2000 and 1999, respectively. Under U.S. GAAP,
the closing of this subsidiary does not constitute a
discontinued operation under APB No.&nbsp;30. Accordingly, the
gain (loss)&nbsp;from discontinued operations is recorded as
operating income (expense).
</FONT>

<P align="left">
<B><FONT size="2">m)&nbsp;Extraordinary item</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, the utilization of the
Company&#146;s tax loss carryforwards in 1999 is classified as
an extraordinary item and presented as a separate line item in
the consolidated income statement. Under U.S. GAAP, the
utilization of the Company&#146;s tax loss carryforward is
recorded as a component of the taxation expense.
</FONT>

<P align="left">
<B><FONT size="2">n)&nbsp;Depreciation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Mexican GAAP, depreciation is not included
in the measure of gross profit. Under U.S. GAAP, Ps.1,204,824,
Ps.1,292,146 and Ps.788,430 for the years ended
December&nbsp;31, 2001, 2000 and 1999, respectively, are
reclassified to cost of sales.
</FONT>

<P align="center"><FONT size="2">F-39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">o)&nbsp;Supplementary U.S. GAAP
disclosures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1)&nbsp;Cash flow information
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under U.S. GAAP, SFAS 95, &#147;Statement of Cash
Flows&#148;, a statement of cash flows is required, which
presents only movements in cash and excludes non-cash items.
SFAS&nbsp;95 does not provide any specific guidance with respect
to inflation-adjusted financial statements. However, it is
accepted practice to adjust cash flows from operating activities
for the monetary gains and losses and unrealized foreign
exchange gains and losses.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000(*)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999(*)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss)&nbsp;profit under U.S. GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. (574,815</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. (666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 326,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net loss to cash (used
    in) provided by operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,204,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,292,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">788,430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,340,569</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,088,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">831,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale of towers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,762</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity in (profit)&nbsp;loss of associated
    companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,542</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,462</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of equity investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,976</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase (decrease)&nbsp;in allowance for
    obsolete and slow-moving inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,443</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,615</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,461</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes and employee profit sharing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165,993</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on net monetary position and foreign
    exchange losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(261,108</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(354,564</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(940,036</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Increase) decrease in:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(91,178</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,484</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(645,561</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(42,692</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(82,115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase (decrease)&nbsp;in:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable and related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(167,571</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,633,265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(213,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72,119</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,169</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(38,492</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,334</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(570</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,540,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,536,838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,215,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-40
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000(*)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999(*)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financing activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,197,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments of notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,024</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(743,812</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(789,183</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contributions for future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">893,386</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">869,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">678,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">408,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Investing activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,602,862</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,055,998</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,708,907</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sales of investments in associated
    companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,976</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from the sale of the towers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">358,499</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition of Portatel, net of cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(495,320</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(819,204</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(113,641</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,012,479</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash used in investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,554,911</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,101,378</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,707,900</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Translation and inflation effects in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(28,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,393</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39,428</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (decrease)&nbsp;increase in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(172,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123,542</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">326,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at the end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 202,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 384,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 401,683</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 390,386</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 114,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 140,784</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 102,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Supplemental disclosures of non-cash activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Conversion of debt to equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. &#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 1,839,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(*)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Certain reclassifications were made in prior
    years to conform to classifications used in the most recent year.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2)&nbsp;The assets tax charged to the provision
for assets tax for the years ended December&nbsp;31, 2001, 2000
and 1999 was as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Asset tax not offset by current taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.146,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.156,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.150,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.146,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.156,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.165,991</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-41
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3)&nbsp;Deferred income taxes
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Significant components of deferred income taxes
under U.S. GAAP are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December 31, 2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">SFAS 109</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">SFAS 109</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">applied to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">applied to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Mexican GAAP</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S. GAAP</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balances</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net operating loss carryforwards and tax credits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,223,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,223,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Reorganization reserve
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from the exchange of non-monetary assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">115,204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">115,204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale lease-back transaction
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valuation allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(238,465</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(266,280</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(504,745</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,083,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,115,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">653,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">653,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular telephones to be amortized
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Concessions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,894</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,894</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capitalized interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">911,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">943,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December 31, 2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">SFAS 109</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">SFAS 109</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">applied to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">applied to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Mexican GAAP</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">U.S. GAAP</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balances</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net operating loss carryforwards and tax credits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,160,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,160,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Reorganization reserve
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from the exchange of non-monetary assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,572</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,572</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valuation allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(310,167</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(101,999</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(412,166</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">954,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">954,204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">423,894</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">423,894</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cellular telephones to be amortized
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Concessions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">774,548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">774,604</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4)&nbsp;New Accounting Pronouncements
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FASB recently issued SFAS 143,
&#147;Accounting for Obligations Associated with the Retirement
of Long-Lived Assets&#148;, which is effective for fiscal years
beginning after June&nbsp;15, 2002. The objectives of
SFAS&nbsp;143 are to establish accounting standards for the
recognition and measurement of an asset retirement obligation
and its associated asset retirement cost.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, the FASB issued SFAS&nbsp;No.&nbsp;144
&#147;Accounting for the Impairment of Long-Lived Assets&#148;
(SFAS&nbsp;144) which supersedes SFAS&nbsp;No.&nbsp;121
&#147;Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of&#148; (SFAS&nbsp;121), and
APB&nbsp;No.&nbsp;30, &#147;Reporting the Results of
Operations&nbsp;&#151; Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions&#148;.
SFAS&nbsp;144 provides new guidance on (1)&nbsp;the recognition
of impairment losses on long-lived assets to be held and used or
to be disposed of and (2)&nbsp;how the results of a discontinued
operation are to be measured and presented. It also broadens the
definition of what constitutes a discontinued operation. It is
effective for fiscal years beginning after December&nbsp;15,
2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April of 2002, the FASB issued SFAS&nbsp;145,
&#147;Rescission of FASB Statements No.&nbsp;4, 44, and 64,
Amendment of FASB Statement No.&nbsp;13, and Technical
Corrections.&#148; As a result, companies will no longer be
allowed to classify gains and losses from extinguishments of
debt as extraordinary items unless they meet the criteria of
APB&nbsp;30. Gain and losses from extinguishments of debt that
have been classified as extraordinary in prior years that do not
meet the criteria of APB&nbsp;30 shall be reclassified on a go
forward basis. In addition, SFAS&nbsp;145 requires that capital
leases that are modified so that the resulting lease agreement
is classified as an operating lease be accounted for under the
sale-leaseback provisions of SFAS 28 or 98, as applicable,
instead of SFAS&nbsp;13. The provisions of this statement with
regard to SFAS&nbsp;4 will be effective for fiscal years
beginning after May&nbsp;15, 2002, and those for SFAS&nbsp;13
will be effective for transactions occurring after May&nbsp;15,
2002.
</FONT>

<P align="center"><FONT size="2">F-43
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is presently evaluating the impact,
if any, that these new standards will have on its consolidated
financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5) U.S.&nbsp;GAAP requires the desegregation of
the account balances as disclosed below. There is no similar
requirement under Mexican&nbsp;GAAP. As of December&nbsp;31, the
account balances were as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recoverable taxes and other:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interconnection fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88,463</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">142,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recoverable VAT
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">205,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204,624</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">217,179</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">533,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">514,189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payables:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and rights payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">201,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">178,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,489</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">527,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">709,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">813,002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">988,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6)&nbsp;A significant portion of our trade
receivables is represented by a small number of distributors. In
2001, our three largest distributors accounted for 44% and 24%
of our net trade accounts receivable as of December&nbsp;31,
2001 and 2000. Management has established certain measures to
reduce the risk associated with this concentration such as
certain guarantees and property liens. Management believes that
this distributor concentration will be reduced over time as the
size of our operations grows. However, results of operations
could be negatively affected, at least in the short term, if any
defaults on payment occur with respect to these distributors.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;24&nbsp;&#151; Condensed
Consolidated Financial Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As mentioned in Note 10, in July 1997, the
Company issued U.S.$150,000 of senior notes due 2004 as part of
its refinancing program. The Notes Due 2004 are guaranteed on a
senior subordinated, basis pursuant to guarantees by most of the
Company&#146;s directly and indirectly wholly owned subsidiaries
(Guarantor Subsidiaries). The subsidiary guarantees are full,
unconditional, joint and several.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Presented below is condensed consolidating
financial information as of December&nbsp;31, 2001 and 2000 and
for the three years ended December&nbsp;31, 2001 for i)&nbsp;the
parent company; ii)&nbsp;the combined Guarantor Subsidiaries;
iii)&nbsp;the combined non-Guarantor Subsidiaries;
iv)&nbsp;eliminations; and v)&nbsp;the Company&#146;s
consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Where applicable, the equity method has been used
by the parent company with respect to its investments in certain
subsidiaries for the respective periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has not presented separate financial
statements and other disclosure concerning each of the Guarantor
Subsidiaries because management has determined that such
information is not material to investors.
</FONT>

<P align="center"><FONT size="2">F-44
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">As of December&nbsp;31, 2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and short-term investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,037</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,490</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">660,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,069</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(98,875</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">595,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">349,024</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,476,140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,782,117</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recoverable taxes and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">266,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">326,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(186,990</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">533,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">476,719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,402,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">360,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,067,982</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,172,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">606,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,603,013</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">390,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,067,982</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,531,367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment in associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,002,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">216,356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,184,337</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,063</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,809,332</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">723,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,329,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,756</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,860,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">739,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">444,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">325,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">372,223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,881,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Excess of investment cost over book value, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,885,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,885,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,042,561</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,986,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,045,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,881,852</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,192,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes payable and notes payable to suppliers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">233,535</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">347,909</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43,111</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">549,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,941,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,781,394</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">702,726</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">264,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(295,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">813,002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,966</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,212</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">492,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,058,624</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,383,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,119,911</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,814,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,811,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,811,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes payable to suppliers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,056</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,742</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,354,809</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,061,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,383,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,119,911</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,679,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commitments and contingencies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,137,687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,132,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,374,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,485,965</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,158,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earned capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,449,935</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,207,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,712,864</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,598,938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,771,388</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,687,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,924,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(337,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,761,941</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,512,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities and stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,042,561</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,986,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,045,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,881,852</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,192,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity under Mexican GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,687,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,924,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(337,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,761,941</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,512,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(183,876</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(183,876</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from exchange of non-monetary assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(329,154</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(329,154</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale lease-back transaction
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(143,558</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(113,153</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,413</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(261,124</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capitalized interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(119,165</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(119,165</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for consolidation of facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity under U.S. GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,473,926</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,811,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(750,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,881,106</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,654,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-45
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED INCOME
STATEMENT</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December 31, 2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.1,034,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.8,744,472</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.1,323,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(4,814,318</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.6,288,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,066</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,759,312</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">435,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,415,831</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,854,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">958,668</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,985,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">888,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,398,487</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,434,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(36,484</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,883,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">488,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,422,620</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,912,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,229,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,216,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,073</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,568,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating (loss)&nbsp;profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(234,296</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(114,186</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">269,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Integral financing results:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest (income) expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">195,337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(73,699</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">260,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">385,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign exchange (gain)&nbsp;loss, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(73,900</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(18,018</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,876</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(95,792</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Gain) loss from monetary position
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(120,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(90,918</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,754</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,028</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,434</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(42,070</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity participation in net (gain) loss of
    associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,497</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,264</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for assets tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,482</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effect of the adoption of the new
    accounting principle
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">191</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,885</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,694</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(143,874</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 96,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 47,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year under Mexican GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(143,874</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 96,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 47,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(297,676</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from the exchange of non-monetary assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(116,091</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(116,091</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale lease-back transaction
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(143,558</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(113,153</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,413</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(261,124</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capitalized interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effects of inflation on US GAAP adjustments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss)&nbsp;profit for the year under US GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(347,079</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(257,027</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. (23,949</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 53,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 574,815</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-46
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December&nbsp;31,
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss) profit for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(347,079</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(257,027</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23,949</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(574,815</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net loss to cash
    provided by (used in) operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,227,459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,216,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,073</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,545,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity in net loss (earnings)&nbsp;of associated
    companies and net gain on sale of equity investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on the sale of the towers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,709</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,263</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(790</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,762</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for obsolete and
    slow-moving inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(191</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,424</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,615</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on net monetary position and foreign
    exchange losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(187,713</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94,794</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,230</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(261,108</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(102,290</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(31,075</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(91,178</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,537</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17,053</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(856</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(42,692</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable and related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">608,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(230,298</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(291,453</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,337</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,943</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(241,831</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(68,027</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(213,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income Tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,966</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,354</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(23,900</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(335</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(27</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(62,658</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,334</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) operating
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,287,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">623,984</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(213,241</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(157,558</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,540,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,328,368</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,598</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(441,282</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,190</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,602,862</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from the sale of the towers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">197,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">358,499</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment in associated companies, net of cash
    acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(491,344</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(491,344</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(681,350</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(854,862</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(464,746</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,181,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(819,204</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash (used in) provided by investing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,303,970</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(632,915</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(899,970</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,281,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,554,911</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments of notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,024</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,024</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital stock increases and contributions for
    future capital stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">893,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,108,703</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">893,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">869,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,108,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,108,703</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">869,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Translation and inflation effects in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,017</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(214</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(89</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,683</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(28,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net decrease in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(159,068</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,145</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,597</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(172,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at the end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,037</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,490</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-47
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED BALANCE SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">As of December&nbsp;31, 2000</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and short-term investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">654,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(27,823</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">637,101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">999,939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,606,090</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,591,889</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Recoverable taxes and other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">349,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">391,549</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(252,306</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">514,189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,025,344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,609,677</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">438,641</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,872,018</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,201,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">245,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,561</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,314,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,859,942</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">455,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,886,579</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,743,386</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment in associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,026,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">291,181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,284,823</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,549,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">822,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">888,327</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,305</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,256,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other assets, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">395,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">989,998</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,869</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">328,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,889,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Excess of investment cost over book value, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,888,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,888,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,174,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,963,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,519,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,846,155</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,811,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,464,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,464,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">293,220</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,839</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43,580</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">414,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,313,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,573,177</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">944,557</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(265,769</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">988,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,780,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,652,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,563,905</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,856,935</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,140,024</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,850,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,850,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other liabilities long-term
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,631,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,656,112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,563,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,856,934</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,994,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commitments and contingencies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,938,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,132,736</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,266,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,374,229</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,963,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earned capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,697,459</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,825,283</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,310,536</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,359,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,473,712</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contributions for future capital Stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,543,219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,307,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,044,319</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,989,221</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,817,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities and stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,174,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,963,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,519,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,846,155</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,811,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity under Mexican GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,543,219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,307,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,044,319</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,989,221</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,817,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,442</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,442</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain from exchange of non-monetary assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(213,063</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(213,063</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for consolidation of facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity under U.S. GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,563,121</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,307,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,335,904</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,014,663</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,520,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center"><FONT size="2">F-48</FONT></DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED INCOME
STATEMENT</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December 31, 2000</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,021,567</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,928,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">753,978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,974,467</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,729,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,992</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,394,991</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">393,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,032,826</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,820,116</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">957,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,533,641</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">360,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,941,641</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,909,594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,450,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">333,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,925,708</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,917,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,289,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">992,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,740</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating (loss)&nbsp;profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(391,550</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90,548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(79,721</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,193</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(388,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Integral financing result:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense (income), net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">276,760</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72,425</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305,457</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">509,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign exchange loss (gain), net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,976</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,934</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Gain) loss from monetary position
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(324,248</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(164,169</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,769</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(374,382</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(34,512</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,766</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">154,973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity participation in net (gain) loss of
    associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290,751</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(64,820</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(228,409</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for assets tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">118,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,461</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,461</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit from discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,865</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,865</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss for the year under Mexican GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(672,420</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effects of inflation on US GAAP adjustments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(253</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(253</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss)&nbsp;profit for the year under US GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-49
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December&nbsp;31,
2000</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (loss) profit for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(235,046</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(666,527</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net loss to cash
    provided by (used in) operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,289,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">992,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,740</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,380,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity in net loss (earnings)&nbsp;of associated
    companies and net gain on sale of equity investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290,751</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(293,229</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,478</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for obsolete and
    slow-moving inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,461</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(16,461</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on net monetary position and foreign
    exchange losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(311,019</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(163,513</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,768</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(354,564</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(52,819</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(619</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,484</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,833</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(83,759</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,278</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,755</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(82,115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable and related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">826,801</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(502,655</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">387,938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(879,655</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(167,571</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123,924</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">431,221</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(223,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income Tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,458</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(103</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,169</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(40</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) operating
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,771</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,031,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">143,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(940,743</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,536,838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,673,199</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(107,968</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(327,183</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,055,998</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment in associated companies, net cash
    acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(192,315</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,078</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215,498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,568</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,003,434</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(47,449</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">817,674</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(113,641</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash (used in) provided by investing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,745,946</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(906,004</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(155,417</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">705,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,101,378</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,264</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments of notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(743,812</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(743,812</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contributions for future capital Stock increases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(191,380</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">177,110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,302,158</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">685,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(191,380</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">170,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">678,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Translation and inflation effects in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,931</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,690</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,752</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,393</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net increase (decrease) in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">235,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(75,363</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72,660</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,471</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,660</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at the end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285,139</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-50
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED INCOME
STATEMENT</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December 31, 1999</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 713,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.6,716,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 662,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(3,309,497</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.4,782,971</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,683</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,653,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">445,134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,595,592</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,528,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,062,730</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">217,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,713,905</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,254,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">129,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,058,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">293,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,838,465</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,643,189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">781,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">772,344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,696</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating (loss) profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(223,275</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">232,340</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(148,307</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">130,256</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,986</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Integral financing results:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest (income) expense, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(64,966</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(151,445</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">345,988</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">305,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign exchange gain (loss), net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(198,139</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,920</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(210,259</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain (loss) from monetary position
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(506,610</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(180,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(174,546</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(752,067</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(769,715</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(57,529</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,546</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(656,657</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity participation in net (gain) loss of
    associated companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,657</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,817</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for assets tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,735</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">486,036</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">612,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19,556</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of tax loss carry-forwards
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(461,707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(461,707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from discontinued operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net profit (loss)&nbsp;for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 474,918</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 256,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. (317,329</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps.(435,049</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net profit (loss)&nbsp;for the year under Mexican
    GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 474,918</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 256,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. (317,329</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 435,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pre-operating costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(78,522</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative financial instruments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of inflation on U.S. GAAP adjustments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(22,290</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(22,290</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net profit (loss) for the year under U.S. GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 445,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 256,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. (395,851</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Ps. 326,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-51
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(subsidiary of Grupo Iusacell, S. A. de C.
V.)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="center">
<B><FONT size="2">CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December&nbsp;31,
1999</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-guarantor</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net profit (loss) for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">445,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">256,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(395,851</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">326,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net loss to cash
    provided by (used in) operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">781,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">772,344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,696</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity in net (earnings) loss of associated
    companies and net gain on sale of equity investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,657</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,817</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,345</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in allowance for obsolete and
    slow-moving inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(60</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(269</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,443</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19,556</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,747</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes and employee profit sharing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">229,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(130,256</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,642</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165,993</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on net monetary position and foreign
    exchange losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(658,129</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(176,902</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(130,091</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(940,036</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(466,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(181,600</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(645,561</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,191</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable and related parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">975,331</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94,779</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">641,294</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,633,265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Taxes and other payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(270,358</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">362,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(191,459</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(72,119</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(82,672</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,083</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(38,492</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(573</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(570</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) operating
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,400,674</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">882,838</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(339,896</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">272,004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,215,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,163,881</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(411,304</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94,224</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39,498</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,708,907</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment in associated companies, net cash
    acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">291,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(121,490</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(156,927</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(813,847</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(98,372</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17,096</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(83,164</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,012,479</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash (used in) provided by investing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,685,825</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(631,166</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(111,320</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(279,589</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,707,900</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">869,120</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">391,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(63,292</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,197,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payments of notes payable and long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(789,183</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(142,686</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">142,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(789,183</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(142,686</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">391,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,394</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">408,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Translation and inflation effects in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(34,999</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,235</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(116</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(39,428</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net increase (decrease) in cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(240,213</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">112,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(67,930</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,693</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123,542</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,458</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(32,437</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">326,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at the end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,471</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,660</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Note&nbsp;25&nbsp;&#151;&nbsp;Subsequent
Events</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As mentioned in Note&nbsp;13c., the Montes Urales
property was subject to a lien. On May&nbsp;29, 2002, the
Company&#146;s complaint was resolved in its favor.
Consequently, the lien will be lifted in the Public Registry of
Property.
</FONT>

<P align="center"><FONT size="2">F-52
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">GRUPO IUSACELL</FONT></B>

<P align="center">
<B><FONT size="2">SCHEDULE&nbsp;II&nbsp;&#151; VALUATION AND
QUALIFYING ACCOUNTS</FONT></B>

<DIV align="center">
<B><FONT size="2">Years Ended 1999, 2000 and 2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Amounts expressed in Thousands of Mexican
Pesos (Ps.)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">with Purchasing Power as of December&nbsp;31,
2001)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Charged to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Charged to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">beginning</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">costs and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">end of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">expenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">accounts</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">period</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for obsolete and slow-moving inventories
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,443</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,756</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for doubtful accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85,771</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">Ps.</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">221,684</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">221,684</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">S-I
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "ITEM 19. EXHIBITS" -->
<DIV align="left"><A NAME="025"></A></DIV>

<P align="left">
<B><FONT size="2">ITEM
19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBITS</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws (estatutos) of Grupo Iusacell Celular,
    S.A. de C.V effective April&nbsp;4, 2001; incorporated by
    reference in the Company&#146;s 2000 Annual Report on
    Form&nbsp;20-F submitted to the SEC in June 2001
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2.</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Shareholders Agreement dated as of March&nbsp;30,
    2001 by and among Iusacell, Bell Atlantic Latin America
    Holdings, Inc., Bell Atlantic International, Inc., Bell Atlantic
    New Zealand Holdings, Inc. and Vodafone Americas B.V.;
    incorporated by reference in the Company&#146;s 2000 Annual
    Report on Form&nbsp;20-F submitted to the SEC in June
    2001&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2.</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(b)(ii)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of July&nbsp;25, 1997 among
    Grupo Iusacell Celular, S.A. de C.V., certain subsidiaries of
    Iusacell Celular, S.A. de C.V. and First Union National Bank, as
    trustee. (incorporated herein by reference to Exhibit&nbsp;4.1
    of the Registration Statement F-4&nbsp;&#151; Registration
    Number 333-37431)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2.</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Not applicable.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Not applicable.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement for Equipment, Furnish and Installation
    for Iusacell&#146;s Cellular Network, dated as of
    December&nbsp;10, 1997 among Grupo Iusacell Celular, S.A. de
    C.V., Lucent Technologies World Services, Inc. and Lucent
    Technologies de M&#233;xico, S.A. de C.V. pursuant to which
    Grupo Iusacell Celular, S.A. de C.V. agreed to replace its
    analog wireless cellular network with a new Lucent Technologies
    analog and digital network
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">***</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Credit Agreement, dated as
    of July&nbsp;25, 1997, as amended and restated as of
    March&nbsp;29, 2001 among Grupo Iusacell Celular, S.A. de C.V.
    and JP Morgan, as sole Bookrunner and Lead Arranger, and The
    Chase Manhattan Bank, as Administrative Agent and Collateral
    Agent, BNP Paribas, Citibank N.A., The Toronto-Dominion Bank and
    BBVA Bancomer S.A., as Arrangers by which Grupo Iusacell Celular
    S.A. de C.V. refinanced certain credit facilities in an amount
    of U.S.$265.6&nbsp;million; incorporated by reference in the
    Company&#146;s 2000 Annual Report on Form&nbsp;20-F submitted to
    the SEC in June 2001
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Not applicable.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">6.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">See Item&nbsp;3&nbsp;&#151; Consolidated
    Financial Statements.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">7.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Computation of ratio of earnings to fixed charges
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">E-134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">List of subsidiaries
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">E-135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">9.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Not applicable.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">None.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Previously filed with Registration Statement on
    Form&nbsp;F-4 No.&nbsp;333-95547 submitted to the SEC on
    January&nbsp;27, 2000.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Previously filed with Registration Statement on
    Form&nbsp;F-4 No.&nbsp;333-37431 submitted to the SEC on
    October&nbsp;8, 1997.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">***</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Previously filed with the Annual Report on
    Form&nbsp;20-F of Iusacell Celular for the fiscal year ending
    December&nbsp;31, 1997.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">105
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">GLOSSARY OF TELECOMMUNICATIONS TERMS</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">1XRTT
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A member of CDMA 2000 which is a family of
    standards that defines the radio interface allowing a smooth
    transition from CDMA (1S-95) systems. This family of standards
    involve some variants and the services, offerings, such as voice
    and packet data on a single carrier (1XRTT), data only (1X-DO).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Analog
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A transmission method employing a continuous
    electrical signal that varies in amplitude or frequency in
    response to changes in sound, light, position, etc., impressed
    on a transducer in the sending device.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A range of frequencies between two defined limits.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">CDMA
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Code Division Multiple Access, the
    highest-capacity commercial digital standard available. CDMA
    increases capacity by transmitting a large number of
    simultaneous conversations over a single channel, assigning
    unique codes that can be re-assembled at the receiving end.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Cellular A-band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The range of frequencies used to provide cellular
    wireless service between 825-835&nbsp;MHz and between
    870-880&nbsp;MHz of the radio spectrum.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Cellular B-band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The range of frequencies used to provide cellular
    wireless service between 835-845&nbsp;MHz and between
    880-890&nbsp;MHz of the radio spectrum.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Channel
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A pathway for the transmission of information
    between a sending point and a receiving point.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Covered POPS
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The number of POPs in a defined area for whom a
    cellular signal is accessible.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">CPP
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Calling Party Pays is a cellular telephony
    payment structure in which the party that places a call to a
    cellular telephone is billed for interconnection access, and the
    recipient is not billed for the airtime charges corresponding to
    the call.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Digital
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A method of storing, processing and transmitting
    information through the use of distinct electronic or optical
    pulses that represent the binary digits&nbsp;0 and 1. Digital
    transmission and switching technologies employ a sequence of
    discrete, distinct pulses to represent information, as opposed
    to the continuous analog signal.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Hertz
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The unit measuring the frequency with which an
    alternating electromagnetic signal cycles through the zero-value
    state between lowest and highest states. One hertz (abbreviated
    Hz) equals one cycle per second; KHz (kilohertz)&nbsp;stands for
    thousands of hertz; MHz (megahertz)&nbsp;stands for millions of
    hertz; and GHz (gigahertz)&nbsp;stands for billions of hertz.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">IMTS
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Improved mobile telephone service; IMTS systems
    are analog mobile telephone systems that employ a single
    powerful radio base station to communicate with IMTS mobile
    telephones that are within approximately a 25-mile radius.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">106
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">LATA
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Local access and transport area; an area in which
    a local exchange carrier is permitted to provide service as
    designated by the 1982 United States federal court decree
    resulting from antitrust litigation brought by the United States
    Department of Justice against AT&#38;T corporation.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">PCS
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Personal communications services. PCS represents
    a digital wireless communications service with the ability to
    provide features such as voice, video and data applications,
    short messaging, voicemail, caller identification, call
    conferencing and call forwarding.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">PCS A-Band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The range of frequencies used to provide PCS
    wireless services between 1.850-1.865 GHz and between
    1.930-1.945&nbsp;GHz of the radio spectrum.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">PCS B-Band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The range of frequencies used to provide PCS
    wireless services between 1.870-1.885 GHz and between
    1.950-1.965&nbsp;GHz of the radio spectrum.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">PCS D-Band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The range of frequencies used to provide PCS
    wireless services between 1.865-1.870 GHz and between
    1.945-1.950 GHz of the radio spectrum.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">PCS E-Band
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The range of frequencies used to provide PCS
    wireless services between 1.885-1.890&nbsp;GHz and between
    1.965-1.970&nbsp;GHz of the radio spectrum.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Penetration Rate
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A cellular operator&#146;s subscribers within a
    defined area derived by total POPs within that area.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">POPs
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The population for a particular area based on the
    2000 Mexican census. Population figures for 1996, 1997, 1998 and
    1999 have been calculated by applying the forecast annual
    population growth rate for 1995, as published by the Instituto
    Nacional de Estad&#237;stica, Geograf&#237;a e Inform&#225;tica
    (the National Institute of Statistics, Geography and Information
    Processing, &#147;INEGI&#148;) to the official 1990 census
    figures. Population figures for 2001 have been calculated by
    applying the forecast annual population growth rate for 2001 to
    the data derived from the 2000 Mexico census. Where the
    population information is set forth without reference to a year,
    the information given is as of December&nbsp;31, 2001. The SCT
    divides Mexico into nine geographic Regions for the provision of
    cellular service (individually a &#147;Region&#148; and
    collectively the &#147;Regions&#148;). Information regarding the
    numbers of POPs within a given Region has been calculated using
    the national population growth rate, as published by INEGI.
    Information regarding the number of POPs within a given city has
    been calculated using the growth rate for that city, as
    published by INEGI, which may not be the same as the national
    growth rate published by INEGI. The number of POPs in any Region
    or other geographic area should not be confused with the current
    number of users of wireless services in that Region or other
    geographic area and is not indicative of the number of users of
    wireless services in the future.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">107
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Roaming
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A service offered by mobile communications
    providers which allows a subscriber to use his or her telephone
    while in the service area of another carrier.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Switch
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">A device that opens or closes circuits or selects
    the paths or circuits to be used for transmission of
    information. Switching is the process of interconnecting
    circuits to form a transmission path between users.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">TDMA
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Time division multiple access, a standard of
    digital cellular technology, which provides more call carrying
    capacity than analog, but less than CDMA, by interlacing
    conversations on a single channel through time-sharing methods.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">108
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of Section&nbsp;12
of the Securities Exchange Act of 1934, the registrant certifies
that it meets all requirements for filing on Form&nbsp;20-F and
has duly caused this Annual Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">GRUPO IUSACELL CELULAR, <BR>
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;S.A.
    DE C.V.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="2%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">/s/ PETER H. BURROWES
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Peter H. Burrowes
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Attorney-in-fact
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="2%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">/s/ RUSSELL A. OLSON
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Russell A. Olson
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Attorney-in-fact
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Date: June&nbsp;28, 2002
</FONT>

<P align="center"><FONT size="2">109
</FONT>
</BODY>
</HTML>
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{"company-data": {"conformed-name": "GRUPO IUSACELL CELULAR SA DE CV", "cik": "0000923713", "assigned-sic": "4812"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "033-79254", "film-number": "02694389"}, "business-address": {"street1": "PROLONGACION PASEO DELA REFORTIA 1236", "street2": "COLONIA SANTA FE", "city": "MEXICO MEXICO DF", "state": "NY", "zip": "05348", "phone": "0445254085"}, "mail-address": {"street1": "PROLONGACION PASEO DELA REFORTIA 1236", "street2": "COLONIA SANTA FE", "city": "MEXICO MEXICO DF", "zip": "05348"}}
GRUPO IUSACELL CELULAR, S.A. DE C.V.
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 20-F
o
REGISTRATION STATEMENT PURSUANT TO SECTION
    12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF
    1934
or
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31,
    2001
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 or
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period
    from           to
Commission file number 1-13120
Grupo Iusacell Celular, S.A. de C.V.
(Exact name of Registrant as specified in its
charter)
Iusacell Celular Group, Inc.
(Translation of Registrant's name into
English)
United Mexican States
(Jurisdiction of incorporation or
organization)
Prolongación Paseo de la Reforma 1236
Colonia Santa Fe
Delegación Cuajimalpa
05348 Mexico, D.F.
(Address of principal executive
offices)
Securities registered or to be registered
pursuant to Section 12(b) of the Act.
Title of each class
Name of each exchange on which registered
None
Securities registered or to be registered
pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act:
10% Senior Notes due 2004
Indicate the number of outstanding shares of each
of the issuer's classes of capital or common stock as of
the close of the period covered by the Annual Report:
Series A Capital Stock
27,967 shares
Series B Capital Stock
26,865 shares
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
þ
No
o
Indicate by check mark which financial statement
item the registrant has elected to
follow:     Item 17
o
Item 18
þ
TABLE OF CONTENTS
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3. KEY INFORMATION
ITEM 4. INFORMATION ON THE COMPANY
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
ITEM 8. FINANCIAL INFORMATION
ITEM 9. THE OFFER AND LISTING
ITEM 10. ADDITIONAL INFORMATION
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risks
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15. RESERVED
ITEM 16. RESERVED
PART III
ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ITEM 19. EXHIBITS
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
LIST OF SUBSIDIARIES
Table of Contents
TABLE OF CONTENTS
Page
Part I.
1
Item  1.
Identity of Directors, Senior Management and
    Advisers
1
Item  2.
Offer Statistics and Expected Timetable
1
Item  3.
Key Information
2
Item  4.
Information on the Company
16
Item  5.
Operating and Financial Review and Prospects
52
Item  6.
Directors, Senior Management and Employees
79
Item  7.
Major Shareholders and Related Party Transactions
81
Item  8.
Financial Information
85
Item  9.
The Offer and Listing
87
Item 10.
Additional Information
89
Item 11.
Quantitative and Qualitative Disclosures About
    Market Risk
99
Item 12.
Description of Securities Other Than Equity
    Securities
101
Part II.
102
Item 13.
Defaults, Dividend Arrearages and Delinquencies
102
Item 14.
Material Modifications to the Rights of Security
    Holders and Use of Proceeds
102
Item 15.
Reserved
102
Item 16.
Reserved
102
Part III.
103
Item 17.
Financial Statements
103
Item 18.
Financial Statements
104
Item 19.
Exhibits
105
i
Table of Contents
FORWARD-LOOKING INFORMATION
This Annual Report contains various
forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 as amended (the
"Act"), and Section 21E of the Securities
Exchange Act of 1934 as amended (the "Exchange Act"),
including statements regarding, among other things, the
financial performance and operating plans for Grupo Iusacell
Celular, S.A. de C.V. These statements are based upon the
current beliefs of our management, as well as on assumptions
made by management based upon information currently available to
it. The words "believe," "expect,"
"likely" and "anticipate" and similar
expressions identify some of these forward-looking statements.
These statements are subject to various risks and uncertainties
and other factors which may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied
by such forward-looking statements. Should management's
assumptions prove incorrect, actual results may vary materially
and adversely from those anticipated or projected. Readers are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of their respective dates. We
undertake no obligation to update publicly or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise.
The following factors, as well as other factors
described in this Annual Report, could cause actual results to
differ materially from such forward-looking statements:
•
Material adverse changes in the business
    environment in Mexico, such as a change in value of the peso,
    the imposition of exchange controls, an increase in inflation
    levels and economic downturns;
•
Material adverse changes in the regulatory
    environment in Mexico;
•
Our ability to adapt to rapid technological
    change, develop new technologies and hire and retain qualified
    personnel;
•
Our ability to obtain debt or equity financing
    necessary to pursue business opportunities; and
•
Our ability to compete against other
    telecommunications service providers.
"Iusacell" means Grupo Iusacell,
S.A. de C.V. This company was formerly known as Nuevo Grupo
Iusacell, S.A. de C.V.
"Iusacell Celular" means Grupo
Iusacell Celular, S.A. de C.V. This company was formerly known
as Grupo Iusacell, S.A. de C.V. Iusacell owns 100% of the
capital stock of Iusacell Celular.
On June 30, 2000, Bell Atlantic Corporation,
our principal shareholder, which holds its interest in Iusacell
through various subsidiaries, acquired GTE Corporation in a
merger of equals, renaming itself as "Verizon
Communications Inc." The subsidiaries which directly hold
Iusacell capital stock remained unchanged. As a result of the
foregoing, the term "Verizon" in this Annual Report
refers to Verizon Communications Inc. or its subsidiaries, as
the context requires. We continue to use the term "Bell
Atlantic" in this Annual Report to refer to Bell Atlantic
Corporation and its subsidiaries in connection with events prior
to June 30, 2000.
Iusacell Celular does not have any publicly
traded equity securities. Iusacell Celular has publicly traded
debt securities.
Unless otherwise specified, all references to
"U.S. dollars," "dollars," "U.S.$"
or "$" are to United States dollars, and references to
"Ps." and "pesos" are to Mexican pesos. We
publish our financial statements in pesos that are adjusted to
reflect changes in purchasing power due to inflation. Thus,
unless otherwise specified, our financial data is presented in
constant pesos with purchasing power as of December 31,
2001. Amounts presented in this Annual Report may not add up or
may be slightly inconsistent due to rounding.
Unless otherwise specified, this Annual Report
contains translations of peso amounts into U.S. dollars solely
for the convenience of the reader based on the exchange rate
reported by the Federal Reserve Bank of New York as its noon
buying rate for pesos, which we refer to as the Noon Buying
Rate, at December 31, 2001, which was Ps.9.156 per
U.S.$1.00. These currency conversions should not be construed as
representa-
ii
Table of Contents
tions that the peso amounts actually represent
such dollar amounts. Additionally, these conversions should not
be construed as representations that these peso amounts have
been, could have been or could be converted into U.S. dollars at
those or any other rates of exchange.
We will provide without charge to each person to
whom this Annual Report is delivered, upon written or oral
request, a copy of any or all of the documents incorporated by
reference into this Annual Report (other than exhibits, unless
such exhibits are specifically incorporated by reference in such
documents). Written requests for such copies should be directed
to Grupo Iusacell Celular, S.A. de C.V., Prolongación Paseo
de la Reforma 1236, Colonia Santa Fe, Delegación
Cuajimalpa, 05348 Mexico, D.F., Attention: Investor Relations
Department. E-mail requests may be directed to
investor.relations@iusacell.com.mx. Telephone requests may be
directed to 011-52-55-5109-5759.
iii
Table of Contents
PART I
ITEM 1.     IDENTITY
OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A.     Directors and
Senior Management
Not applicable.
B.     Advisers
Not applicable.
C.     Auditors
Not applicable.
ITEM 2.     OFFER
STATISTICS AND EXPECTED TIMETABLE
Not applicable.
1
Table of Contents
ITEM 3.     KEY
INFORMATION
A.     Selected
Financial Data
The following tables present selected
consolidated financial data of Iusacell Celular and its
consolidated subsidiaries. We have derived this data from the
audited consolidated financial statements of Iusacell Celular as
of December 31, 2001, 2000, 1999, 1998 and 1997 and for
each of the five years in the period then ended, including the
audited consolidated financial statements of Iusacell Celular as
of December 31, 2001 and 2000 and for each of the three
years in the period ended December 31, 2001, which we refer
to as the Consolidated Financial Statements, appearing elsewhere
in this Annual Report, and you should read this information in
conjunction with the Consolidated Financial Statements.
The Consolidated Financial Statements have been
prepared in accordance with Mexican generally accepted
accounting principles, which we refer to as Mexican GAAP, which
differs in certain significant respects from United States
generally accepted accounting principles, which we refer to as
U.S. GAAP. Pursuant to Mexican GAAP, we have prepared the
Consolidated Financial Statements and the selected financial
data presented below in accordance with Bulletin B-10 of the
Mexican Institute of Public Accountants ("MIPA"),
which provides for the recognition of certain effects of
inflation.
Until December 31, 1996, Bulletin B-10
required Iusacell Celular to restate non-monetary assets at
current replacement cost, and to restate non-monetary
liabilities using the National Consumer Price Index (
Indice
Nacional de Precios al Consumidor
), also referred to as the
INPC. Beginning on January 1, 1997 and throughout the
periods presented in this Annual Report, Bulletin B-10 has
required Iusacell Celular to restate non-monetary assets (other
than inventory) using the INPC. Throughout the periods presented
in this Annual Report, Bulletin B-10 has also required
Iusacell Celular to restate the components of shareholders'
equity using the INPC and to record gains or losses in
purchasing power from holding monetary liabilities or assets.
In addition, Bulletin B-10 requires restatement
of all financial statements to constant pesos as of the date of
the most recent balance sheet presented. Accordingly, we have
restated all data in the Consolidated Financial Statements and
in the selected financial data set forth below in constant pesos
with purchasing power as of December 31, 2001. We have not
reversed the effect of these inflation accounting principles in
the reconciliation of Iusacell Celular's net profit
(loss) and stockholders' equity to U.S. GAAP.
Note 23 to the Consolidated Financial Statements
presents the principal differences, other than inflation
accounting, between Mexican GAAP and U.S. GAAP applicable to us
and contains a reconciliation of Iusacell Celular's net
profit (loss) and stockholders' equity to U.S. GAAP.
The U.S. dollar amounts provided in the selected
consolidated financial data below are translations from the
corresponding peso amounts, solely for the convenience of the
reader, at the Noon Buying Rate at December 31, 2001, which
was Ps.9.156 per U.S.$1.00. You should not construe these
translations as representations that the peso amounts actually
represent such U.S. dollar amounts or could be converted into
U.S. dollars at the rate indicated as of any dates mentioned in
this Annual Report or at all.
2
Table of Contents
As of and for the Year Ended December 31,
1997
1998
1999
2000
2001
2001
(Thousands of
U.S. dollars, except
(Thousands of constant pesos as of December 31, 2001,
per share and
except per share and operating data)(1)
operating data)(2)
Income Statement Data:
Mexican GAAP:
Revenues:
Services
Ps.
2,338,563
Ps.
3,129,223
Ps.
4,285,910
Ps.
5,200,997
Ps.
5,681,689
U.S.$
620,543
Telephone equipment sales and other
480,939
479,512
497,061
528,713
607,131
66,310
Total revenues
2,819,502
3,608,735
4,782,971
5,729,710
6,288,820
686,853
Cost of sales:
Cost of services
779,275
979,220
1,221,938
1,464,120
1,476,595
161,271
Cost of telephone equipment sales and other
305,285
256,570
306,557
355,996
378,093
41,295
Total cost of sales
1,084,560
1,235,790
1,528,495
1,820,116
1,854,688
202,566
Gross profit
1,734,942
2,372,945
3,254,476
3,909,594
4,434,132
484,287
Operating expenses
1,127,168
1,377,041
1,643,189
1,917,550
2,220,260
242,492
Depreciation and amortization
881,889
1,015,655
1,620,273
2,380,960
2,568,688
280,547
450 Project write-down
0
1,254,028
0
0
0
0
Other Operating Income
0
0
0
0
307,886
33,627
Operating (loss)
(274,115
)
(1,273,779
)
(8,986
)
(388,916
)
(46,930
)
(5,125
)
Other income (expense), net
0
169,547
(26,225
)
0
0
0
Integral financing cost (gain):
Interest expense, net
376,139
285,378
305,669
509,789
385,896
42,147
Foreign exchange loss (gain), net
73,445
1,068,692
(210,259
)
19,566
(95,792
)
(10,462
)
(Gain) on net monetary position
(443,613
)
(867,468
)
(752,067
)
(374,382
)
(165,028
)
(18,024
)
Total
5,971
486,602
(656,657
)
154,973
125,076
13,661
Equity participation in net income (loss) of
    associated companies
238,971
31,763
(54,160
)
2,478
6,518
712
Provision for equipment impairment(3)
1,406,352
0
0
0
0
0
(Loss) income before asset tax, income tax,
    minority interest, extraordinary item and discontinued operations
(1,447,467
)
(1,559,071
)
567,286
(541,411
)
(165,488
)
(18,074
)
Provision for:
Asset tax
68,705
82,048
150,889
156,335
146,404
15,990
Income tax
0
0
461,707
0
0
0
Total
68,705
82,048
612,596
156,335
146,404
15,990
(Loss) from continuing operations before minority
    interest, extraordinary item and discontinued operations
(1,516,172
)
(1,641,119
)
(45,310
)
(697,746
)
(311,892
)
(34,064
)
Minority interest
314
7,214
20,400
16,461
20,694
2,260
(Loss) from continuing operations before
    extraordinary item and discontinued operations
(1,515,858
)
(1,633,905
)
(24,910
)
(681,285
)
(291,198
)
(31,804
)
Extraordinary item(4)
0
0
461,707
0
0
0
Cumulative effect of the adoption of the new
    accounting pronouncement
0
0
0
0
6,478
708
Loss (gain) from discontinued operations(5)
0
(23,565
)
(1,748
)
8,865
0
0
Net (loss) profit
(1,515,858
)
(1,657,470
)
435,049
(672,420
)
(297,676
)
(32,512
)
U.S. GAAP:
Total revenues
Ps.
2,950,592
Ps.
3,631,765
Ps.
4,782,971
Ps.
5,729,710
Ps.
6,151,423
U.S.$
671,846
Operating (loss) profit
(1,879,991
)
(1,077,832
)
(95,350
)
(380,050
)
(422,156
)
(46,107
)
Net (loss) income
(1,029,047
)
(1,646,622
)
326,867
(666,527
)
(574,815
)
(62,780
)
3
Table of Contents
As of and for the Year Ended December 31,
1997
1998
1999
2000
2001
2001
(Thousands of
U.S. dollars, except
(Thousands of constant pesos as of December 31, 2001,
per share and
except per share and operating data)(1)
operating data)(2)
Balance Sheet Data:
Mexican GAAP:
Working capital
Ps.
(394,759
)
Ps.
1,535,452
Ps.
(598,344
)
Ps.
(1,396,638
)
Ps.
(282,797
)
U.S.$
(30,887
)
Property and equipment, net
4,568,613
6,781,945
7,702,422
8,256,859
8,860,266
967,701
Total assets
10,116,025
12,685,133
14,034,515
13,811,375
14,192,623
1,550,090
Total debt
3,366,606
5,690,125
5,223,440
4,315,250
3,921,076
428,252
Capital stock
9,673,373
11,031,253
12,870,413
12,870,413
12,870,602
1,405,701
Total stockholders' equity
5,043,988
4,684,707
6,938,135
7,817,132
8,512,675
929,737
U.S. GAAP:
Working capital
Ps.
(636,312
)
Ps.
(1,725,717
)
Ps.
(830,193
)
Ps.
(1,668,772
)
Ps.
(482,557
)
U.S.$
(52,704
)
Property and equipment, net
4,568,613
6,568,881
7,489,360
8,043,797
8,622,990
941,786
Total assets
11,121,148
13,194,081
14,531,351
14,294,339
14,790,358
1,615,373
Total debt
3,366,606
5,703,843
5,223,440
4,315,250
3,921,076
428,252
Minority interest
17,540
1,037
(28,125
)
25,442
119,165
13,015
Total stockholders' equity
4,989,688
4,687,426
6,884,123
7,520,007
7,654,442
836,003
Other Financial Data:
Mexican GAAP:
EBITDA(6)
Ps.
607,774
Ps.
995,904
Ps.
1,611,287
Ps.
1,992,044
Ps.
2,521,758
U.S.$
275,421
EBITDA margin(7)
22%
28%
34%
35%
40%
40%
Capital expenditures(8)
Ps.
1,071,452
Ps.
4,135,522
Ps.
1,946,799
Ps.
2,023,095
Ps.
1,648,511
U.S.$
180,047
Interest expense, net
376,139
285,378
305,669
509,789
385,896
42,147
Ratio of earnings to fixed charges(9)
—
—
2.
59
—
—
—
U.S. GAAP:(6)
EBITDA(6)
Ps.
(998,103
)
Ps.
1,198,824
Ps.
1,532,764
Ps.
2,000,910
Ps.
2,123,237
U.S.$
231,896
Cash Flow Data:(10)
Mexican GAAP:
Net resources (used) provided by operating
    activities
Ps.
(341,860
)
Ps.
870,685
Ps.
1,290,403
Ps.
1,797,213
Ps.
2,236,104
U.S.$
244,223
Net resources used in investing activities
(1,750,251
)
(4,404,047
)
(2,786,422
)
(2,297,071
)
(2,908,315
)
(317,640
)
Net resources provided by financing activities
2,110,769
3,681,395
1,372,474
589,661
499,401
54,544
U.S. GAAP:
Net cash provided by operating activities
Ps.
119,199
Ps.
2,178,802
Ps.
2,215,620
Ps.
1,536,838
Ps.
1,540,663
U.S.$
168,268
Net (used in) provided by investing activities
(1,550,729
)
(4,190,986
)
(2,707,900
)
(2,101,378
)
(2,554,911
)
(279,042
)
Net cash provided by (used in) financing
    activities
1,450,190
2,160,216
408,166
678,737
869,441
94,959
Operating Data:
Covered POPs(11)
65,847,614
66,712,645
67,591,791
68,376,034
78,585,938
N/A
Subscribers(12)
Postpaid
199,964
277,014
352,289
442,594
403,988
—
Prepay
200,159
478,361
970,509
1,238,625
1,450,709
—
Total subscribers
400,123
755,375
1,322,798
1,681,219
1,854,697
—
Gross subscriber additions
406,353
747,720
788,438
1,092,895
1,050,620
—
Average subscribers(13)
387,765
742,601
1,290,558
1,637,481
1,721,053
—
Average monthly postpaid churn(14)
2.94%
2.
58%
2.
96%
3.
51%
3.
77%
—
Penetration(15)
0.61%
1.
13%
1.
96%
2.
46%
2.
36%
—
Average monthly MOUs per subscriber(16)
105
87
91
94
117
—
Nominal average monthly mobile wireless revenue
    per subscriber(179)
Ps.
464
Ps.
361
Ps.
335
Ps.
322
Ps.
370
U.S.$
40.4
Nominal cost to acquire a new subscriber(18)
Ps.
5,326
Ps.
3,477
Ps.
3,277
Ps.
3,270
Ps.
2,677
U.S.$
292
4
Table of Contents
(1)
In accordance with Mexican GAAP, financial data
    for all periods covered by the Consolidated Financial Statements
    as well as the other financial data presented in this Annual
    Report, unless otherwise indicated, has been restated in
    constant pesos with purchasing power as of December 31,
    2001. Restatement of peso amounts is made by multiplying the
    relevant nominal peso amount for the relevant period by the
    inflation index for the period from the end of the period to
    which such nominal peso amount relates through December 31,
    2001. The inflation indices used in this Annual Report are
    1.5155 for 1997, 1.2777 for 1998, 1.1376 for 1999 and 1.0440 for
    2000.
(2)
Peso amounts were converted to U.S. dollars at
    the Noon Buying Rate for December 31, 2001, which was
    Ps.9.156 per U.S.$1.00. Such conversions should not be construed
    as representations that the peso amounts actually represent such
    U.S. dollar amounts or could be converted into U.S. dollars at
    the rate indicated, or at all.
In determining the peso amounts of our U.S.
    dollar-denominated obligations at December 31, 2001 in the
    Consolidated Financial Statements, under Mexican GAAP, however,
    we applied the exchange rate published by
Banco de
    México
(the Mexican Central Bank) on December 31,
    2001 which was Ps.9.1695 per U.S.$1.00. The difference between
    the Noon Buying Rate and the
Banco de México
exchange rate causes certain inconsistencies between references
    to U.S. dollar amounts in this Annual Report and the actual
    outstanding U.S. dollar amounts of our U.S. dollar-denominated
    obligations. For example, our actual total debt outstanding,
    excluding trade notes payable, at December 31, 2001 was
    U.S.$436.7 million. In preparing the Consolidated Financial
    Statements, we multiplied this dollar amount by Ps.9.1695; (the
Banco de México
exchange rate at December 31,
    2001) to arrive at Ps.4,004.6 million of total debt,
    excluding trade notes payable. For purposes of this Annual
    Report, we have converted this peso amount to U.S. dollars for
    the convenience of the reader by dividing it by Ps.9.156 (the
    Noon Buying Rate at December 31, 2001) to arrive at
    U.S.$437.4 million of total debt, excluding trade notes
    payable.
As a result of the combined effect of the
    restatement of the financial data in constant pesos with
    purchasing power as of December 31, 2001 and the
    convenience translation of peso amounts into U.S. dollars,
    the amounts shown for certain balance sheet items are not equal
    to the actual amounts outstanding.
(3)
For U.S. GAAP purposes, the impairment charge
    relating to the analog communications equipment is recorded as
    an operating expense.
(4)
For 1999, the extraordinary item represents the
    utilization of tax loss carryforwards available to us which,
    under Mexican GAAP, is required to be classified as an
    extraordinary item. Under U.S. GAAP, the utilization of tax loss
    carryforwards is recorded as a component of tax expense.
(5)
In December 1998, we discontinued the operations
    of our subsidiary Cellular Solutions de México, S.A. de
    C.V., which sold cellular handset accessories. This company
    transferred all its existing inventories as of December 31,
    1998 to another of our subsidiaries and terminated all its
    employees during January and February 1999. See Note 19 to the
    Consolidated Financial Statements. Under U.S. GAAP, the closing
    of this subsidiary does not constitute a discontinued operation
    under APB No. 30. Accordingly, the gain (loss) from
    discontinued operations is recorded as operating income
    (expense).(6) See Note 23 to the Consolidated Financial
    Statements.
(6)
EBITDA as used in this Annual Report is operating
    (loss) plus the sum of depreciation and amortization and, in
    1997 under U.S. GAAP the 450 project non-cash write down and is
    presented because we believe that EBITDA provides useful
    information regarding our debt service ability. EBITDA should
    not be considered in isolation or as a substitute for our
    consolidated income statements or the consolidated statements of
    changes in financial position prepared in accordance with
    Mexican GAAP or as a measure of profitability or liquidity.
    EBITDA as presented in this Annual Report (under both Mexican
    GAAP and U.S. GAAP) differs from EBITDA as defined in the
    instruments governing Iusacell and Iusacell Celular's
    senior notes and Iusacell Celular's senior refinancing
    secured loan (as described herein). In particular, EBITDA in
    this Annual Report has not been reduced to reflect the
    additional expenses that Iusacell Celular would have incurred
    had it expensed the cost of cellular
5
Table of Contents
telephones it gives to its postpaid customers
    rather than amortized such cost over 12 months, in
    accordance with its current practice under Mexican GAAP, as
    permitted under U.S. GAAP. EBITDA is not (i) a measure
    determined under U.S. GAAP, (ii) an alternative to U.S.
    GAAP operating income (loss) or net income (loss), or
    (iii) a measure of liquidity or cash flows as determined
    under U.S. GAAP. EBITDA does not represent discretionary
    funds. EBITDA, as calculated by us, may not be comparable to
    similarly titled measures reported by other companies.
(7)
EBITDA margin is calculated by dividing EBITDA by
    the total revenues for the respective period.
(8)
Capital expenditures include fixed asset
    purchases, capitalized labor costs, the capitalization of
    interest costs related to long-term debt incurred in connection
    with the acquisition of property, plant and equipment, trade-in
    credits received from Lucent Technologies for exchanging our
    previous analog network for a digital and analog network
    supplied by Lucent Technologies and, in some cases, the net
    value of long distance fiber acquired in swaps for Iusacell
    Celular long distance fiber. In 1999 and 2000, pursuant to a
    waiver from its bank lenders, and beginning in 2001, pursuant to
    the terms of its senior refinancing secured loan, Iusacell
    Celular excluded capitalized interest cost from capital
    expenditures in determining its compliance with capital
    expenditure limitations set forth in its debt covenants. For
    1998 and 1999, pursuant to waivers from its lenders, Iusacell
    Celular excluded Lucent trade-in credits from capital
    expenditures in determining its compliance with the capital
    expenditures limitations set forth in its debt covenants.
    Beginning in 2001, pursuant to the terms of Iusacell
    Celular's senior refinancing secured loan, all Lucent
    trade-in credits have been excluded from capital expenditures in
    determining compliance with such debt covenants. See
    Item 5, "Operating and Financial Review and
    Prospects — Liquidity and Capital
    Resources — Capital Expenditures."
(9)
The ratio of earnings to fixed charges covers
    continuing operations. For this purpose, earnings are calculated
    as income or loss before taxes plus (i) integral financing
    cost, including amortization of capitalized interest,
    (ii) the interest portion of annual rent expense and
    (iii) losses from less than 50%-owned affiliates. Fixed
    charges include the expensed and capitalized portions of
    integral financing cost. Earnings were inadequate to cover fixed
    charges in 1997, 1998, 2000 and 2001. The fixed charge coverage
    deficiency for the years ended December 31, 1997, 1998,
    2000 and 2001 amounted to Ps.1,517.8 million
    (U.S.$165.8 million), Ps.2,588.5 million
    (U.S.$288.7 million), Ps.463.9 million
    (U.S.$50.7 million) and Ps.77.3 million (U.S.$8.4),
    respectively.
(10)
Under Mexican GAAP, the cash flow data represents
    changes in financial position and has been adjusted for
    inflation and includes certain non-cash items, such as monetary
    gains and losses and foreign exchange gains and losses and, as a
    result, is not comparable with the respective U.S. GAAP cash
    flow data. Under U.S. GAAP, the effect of inflation adjustments
    has been included in the separate line item "Gain on net
    monetary position and foreign exchange losses" in Note 23
    to the Consolidated Financial Statements.
(11)
Covered POPs is the aggregate number of POPs in
    the geographic regions in which we provide mobile wireless
    services for whom our mobile wireless signal is accessible and
    whom we therefore have the potential to serve. POPs means points
    of presence, or population, for a given area based on census
    data published by Mexico's National Institute of
    Statistics, Geography and Information Processing (
Instituto
    Nacional de Estadística, Geografía e
    Informática
).
(12)
Unless otherwise indicated, subscribers refer to
    the total number of mobile wireless customers included in our
    subscriber base in the geographic regions we cover at the end of
    the respective periods. A prepay customer is included as a
    subscriber if, at the end of the period, such customer's
    telephone number has not yet been deactivated. See Item 4,
    "Information on the Company — Business
    Overview — Cellular Services — Prepay
    Customers."
(13)
Average subscribers represents the rolling
    monthly average number of subscribers for the respective periods.
(14)
Effective January 1, 1998, we changed the
    methodology by which we determine average monthly postpaid
    churn. Average monthly postpaid churn for a given period is now
    calculated by dividing the sum of all postpaid subscribers
    disconnected during such period by the sum of the
    beginning-of-month postpaid subscribers for each of the months
    in such period, expressed as a percentage. Average monthly
6
Table of Contents
postpaid churn for 1997, which was 2.88% under
    the old methodology, has been restated under the new
    methodology. See Item 4, "Information on the
    Company — Business Overview — Cellular
    Services — Postpaid Churn" and Item 5,
    "Operating and Financial Review and Prospects —
    Results of Operations."
(15)
Penetration represents the end-of-period
    subscribers divided by the end-of-period population in the
    geographic regions we cover, expressed as a percentage.
(16)
Effective January 1, 1998, we changed the
    methodology by which we determine average monthly minutes of use
    (MOUs) per subscriber. Average monthly MOUs per subscriber for a
    given period are now calculated by dividing total MOUs for the
    period by the sum of the monthly average number of subscribers
    for each of the months in such period. Average monthly MOUs per
    subscriber for 1997, which was 98 under the old methodology, has
    been restated under this methodology. Effective January 1,
    2000, we again changed the methodology by which we determine
    average monthly MOUs in order to conform to standards applied by
    other Verizon international affiliates. Under the current
    methodology, average monthly MOUs now include minutes of use
    from incoming calls to postpaid customers, which had previously
    been excluded. Both the previous and the current methodologies
    include minutes of use from incoming calls to prepay customers.
    Average monthly MOUs for 1999, which were 77 under the
    methodology effective in 1998 and 1999, have been restated under
    the current methodology. See Item 5, "Operating and
    Financial Review and Current Prospects — Results of
    Operations." When reporting average monthly MOUs per
    subscriber, we exclude "incoming calls only" prepay
    subscribers and the MOUs they generate.
(17)
Effective January 1, 1998, we changed the
    methodology by which we determine nominal average monthly mobile
    wireless revenue per subscriber (ARPU). ARPU for a given period
    is now calculated by dividing the sum of the monthly revenue and
    other cellular revenues for each of the months in the period by
    the sum of the monthly average mobile wireless subscribers for
    each of the months in such period. ARPU for 1997, which was
    Ps.451 under the old methodology, has been restated under this
    new methodology. Effective January 1, 2000, we again
    changed the methodology by which we determine ARPU in order to
    conform to standards applied by other Verizon international
    affiliates. Under the current methodology, ARPU now excludes
    revenues generated from the sale of handsets and accessories to
    postpaid customers. Both the previous and the current
    methodologies exclude revenues generated from the sale of
    handsets and accessories to prepay customers. ARPU for 1999,
    which was Ps.346 under the methodology effective in 1998 and
    1999, has been restated under the current methodology. See
    Item 5, "Operating and Financial Review and
    Prospects — Results of Operations." When
    reporting ARPU, we exclude "incoming calls only"
    prepay subscribers and the revenue they generate.
(18)
Through December 31, 1999, nominal cost to
    acquire a new subscriber represented sales, marketing and
    advertising costs associated with postpaid plans, plus the costs
    of cellular phones we gave to postpaid customers, for the
    respective period (in nominal pesos) divided by the gross
    postpaid customer additions for such period. Effective
    January 1, 2000, we changed the methodology by which we
    determine nominal cost to acquire a new subscriber in order to
    conform to standards used by other Verizon international
    affiliates and more accurately reflect postpaid customer
    acquisition costs. The new methodology includes only handset
    subsidies and sales commissions and excludes allocations of
    advertising and overhead costs. Nominal cost to acquire a new
    subscriber for 1999, which was Ps.3,527 under the old
    methodology, has been restated under the new methodology.
    Nominal cost to acquire a new subscriber for 1997 and 1998 have
    not been restated under the new methodology.
7
Table of Contents
Exchange Rates
The following table sets forth, for the periods
indicated, the period-end, average, high and low Noon Buying
Rates expressed in nominal pesos per U.S. dollar. The Noon
Buying Rate on June 20, 2002 was Ps.9.785 per U.S.$1.00.
Noon Buying Rate(1)
Period End
Average(2)
High
Low
Year ended December 31, 1997
8.070
7.917
8.410
7.717
Year ended December 31, 1998
9.901
9.152
10.630
8.040
Year ended December 31, 1999
9.480
9.563
10.600
9.243
Year ended December 31, 2000
9.618
9.459
10.087
9.183
Year ended December 31, 2001
9.156
9.337
9.972
8.946
Month ended December 31, 2001
9.156
9.158
9.245
9.090
Month ended January 31, 2002
9.152
9.164
9.250
9.095
Month ended February 28, 2002
9.130
9.105
9.170
9.048
Month ended March 31, 2002
9.001
9.064
9.114
9.001
Month ended April 30, 2002
9.375
9.165
9.3750
9.002
Month ended May 31, 2002
9.653
9.510
9.713
9.408
(1)
Source:
Federal
    Reserve Bank of New York
(2)
Average of month-end rates for annual data.
B.     Capitalization
and Indebtedness
Not applicable.
C.     Reasons for
the Offer and Use of Proceeds
Not applicable.
8
Table of Contents
D.     Risk
Factors
Risk Factors Relating to Iusacell
Celular
We
are a holding company and depend on our subsidiaries to pay our
liabilities.
We are a holding company with no significant
assets other than the stock of our subsidiaries.
In order to pay our obligations, we rely on
income from dividends and other cash flow from our subsidiaries.
Because we are a holding company, the claims of all holders of
our subsidiaries' debt rank senior to our obligations. At
December 31, 2001, our consolidated indebtedness was
U.S.$441.7 million, including trade notes payable, of which
U.S.$416.2 million was secured indebtedness. For a
description of some of our obligations and liabilities, see
Item 5, "Operating and Financial Review and
Prospects — Liquidity and Capital
Resources — Liquidity."
Our ability to pay our obligations will depend on
our ability to generate sufficient cash flow and/or to access
equity or debt financing. We cannot assure you that we will be
able to raise equity or debt or that our subsidiaries will
generate sufficient cash flow to pay dividends to enable us to
pay our obligations.
Furthermore, the ability of our subsidiaries to
pay dividends is subject to Mexican legal requirements, which in
general terms provide that a Mexican corporation may declare and
pay dividends only out of the profits reflected in its year-end
financial statements, if such payment is approved by its
stockholders and after the creation of required legal reserves
and the absorption or satisfaction of losses suffered in
previous fiscal years.
Additionally, in the event we engage in business
activities at the holding company level and incur associated
liabilities, or otherwise incur liabilities at the holding
company level, we may not have the resources available to
satisfy those liabilities for the reasons discussed above. In
the event that we incur such liabilities, we could be required
to turn to the capital markets or to our principal shareholders
to help us satisfy those liabilities. At that time, we may not
have access to equity or debt financing. In addition, our
principal shareholders are under no obligation to provide
financial resources to us, and there can be no assurance that
they would do so. A material unsatisfied liability at the
holding company level could lead us to bankruptcy or
reorganization or otherwise make it difficult or impossible for
us to comply with our obligations.
We may be
unable to service our debt, access credit or pursue business
opportunities because we and our subsidiaries are highly
leveraged and have insufficient cash flow.
Historically, our cash generated from operating
activities has not been sufficient to meet our debt service,
working capital and capital expenditure requirements. We have
relied on the capital markets for new equity and debt financing,
vendor financing, borrowings and equity contributions from our
principal shareholders to meet such funding needs.
As of December 31, 2001, our total
consolidated indebtedness, including trade notes payable, was
Ps.4,044.6 million (U.S.$441.7 million), or
approximately 32.2% of our total capitalization.
For the years ended December 31, 2000 and
December 31, 2001, our earnings were insufficient to cover
our fixed charges by Ps.463.9 million (U.S.$50.7 million)
and Ps.77.3 million (U.S.$8.4), respectively.
The degree to which we are leveraged and the
covenants with which we must comply under our various financing
agreements may adversely affect our ability to finance future
operations, to finance necessary capital expenditures, to
service our indebtedness, to compete effectively against better
capitalized competitors and to withstand downturns in our
business or the Mexican economy generally. Our high level of
indebtedness could limit our ability to pursue business
opportunities that may be in our interest and that of holders of
our securities.
9
Table of Contents
We are
subject to restrictive covenants.
The terms of our debt impose significant
operating and financial restrictions. These restrictions will
affect, and in many respects significantly limit or prohibit,
our ability and the ability of our subsidiaries to, among other
things:
•
borrow money;
•
pay dividends on stock;
•
make capital expenditures and other investments;
•
use assets as security in other transactions; and
•
sell certain assets or merge with or into other
    companies.
If we do not comply with these restrictions, we
could be in default even if we can currently pay our debt. In
addition, under our senior refinancing secured loan, we are
required to remain in compliance with certain financial ratios,
and the failure to do so could result in a default under the
facility. In the event of a default under any of our debt which
remains uncured after any applicable grace period, holders of
the relevant debt could demand immediate payment of the
aggregate amount of that debt. Furthermore, this could trigger a
default under certain of our other debt agreements which may
entitle the holders of such debt to accelerate that debt as
well. We may not be able to make such payments. This could lead
to a
concurso mercantil
, a two-stage procedure under
Mexican law commencing with negotiations with our creditors and,
if such negotiations fail to reach an agreement, we would be
declared bankrupt.
We may lose money because of devaluation or
    fluctuation of the peso relative to the
    U.S. dollar.
While our sales are almost entirely denominated
in pesos, the vast majority of our obligations, and all of our
long-term debt, are denominated in U.S. dollars. As a
result, except for those obligations for which we have hedging
arrangements in place, we are exposed to the risk of devaluation
of the peso relative to the U.S. dollar. The peso
appreciated by 4.8% relative to the U.S. dollar during
2001, remained almost flat during 2000 and appreciated 4.3%
against the U.S. dollar in 1999. However, in the past, the
peso has depreciated substantially against the U.S. dollar
and may depreciate significantly in the future. For example, in
1998, the value of the peso depreciated 22.7% relative to the
U.S. dollar.
Declines in the value of the peso relative to the
U.S. dollar could adversely affect our ability to meet
U.S. dollar-denominated obligations, including those under
our debt securities. In addition, any devaluation of the peso
may negatively affect the value of the securities of a Mexican
company with sales in pesos and debt denominated in
U.S. dollars, such as our company.
We face
increasing competition which may reduce our operating
margins.
We face significant competition in our core
cellular services business from Radiomóvil Dipsa, S.A. de
C.V., commonly known as Telcel, in each region in which we
operate. As a subsidiary of América Móvil S.A. de
C.V., a company spun off from Teléfonos de México,
S.A. de C.V., the former state telephone monopoly known as
Telmex, Telcel has significantly greater internal financial and
other resources than those available to us, nationwide cellular
and personal communications services (PCS) concessions, a
nationwide cellular network and the ability to use Telmex's
installed telecommunications systems. Competition in the Mexican
wireless industry is substantial and we, like Telcel, bear
significant promotional expenses, including the cost of
providing cellular telephones to postpaid subscribers free of
charge or at a substantial discount. In addition, competition
from Telcel has not always allowed us to implement price
increases to keep pace with inflation and has occasionally
caused us to implement price rollbacks and reductions. We also
face competition from Pegaso Comunicaciones y Sistemas, S.A. de
C.V., which we refer to as Pegaso, a consortium which includes
Leap Communications International, Inc. ("Leap"),
Sprint PCS and a group of Mexican investors, and from Servicios
Profesionales de Comunicación, S.A. de C.V., which we refer
to as Unefón, an affiliate of TV Azteca, S.A. de C.V. and
Elektra, S.A. de C.V. Telefónica Móviles, S.A.
("Telefónica"), a Spanish telecommunications
service provider, recently announced that it entered into an
agreement to acquire a 65%
10
Table of Contents
stake in Pegaso, including the interests held by
Leap and Sprint PCS. Both these service providers own
concessions in all nine wireless service regions in Mexico and
have begun to provide service in Mexico's principal cities.
We also face increasing competition from Nextel
de México, S.A. de C.V., a provider of enhanced specialized
mobile radio services and satellite telephony.
In addition, we face increasing competition in
providing long distance, paging, wireless local telephony and
data transmission services. The Mexican government may grant
additional concessions to other companies to provide services
similar to or the same as those that we provide.
Besides Telcel and Telefónica, some other
competitors may also have greater financial and other resources,
which may limit our ability to compete effectively.
If we do not obtain significant capital
    from outside sources, we will have to defer the building of our
    wireless infrastructure and our pursuit of long distance and
    data opportunities and may lose the opportunity to generate
    revenues.
In order to implement our operating strategy
through 2004, we will have to incur significant capital
expenditures. We expect our aggregate capital expenditures for
2002, 2003 and 2004, not including capitalized interest, to
total approximately U.S.$505.0 million. We anticipate that
approximately U.S.$20.0 million of such capital
expenditures will be invested during 2002, to increase the
quality and coverage of our cellular network in Region 8 in
southern Mexico. We expect capital expenditures to increase the
quality and coverage of our cellular network in southern Mexico
not to exceed U.S.$30.0 million in the aggregate in 2002
and 2003.
As we make additional investments in our cellular
network and pursue long distance and data opportunities, we will
also need additional external funding in 2003 and beyond. The
terms of our concessions may, in the future, require us to make
other significant network investments for which additional funds
would be required. Furthermore, the investments required to keep
pace with technological change, such as third-generation
wireless telecommunication equipment, will require additional
capital resources. We cannot assure you that we will be able to
obtain such additional funds, including funds from either of our
principal shareholders, the capital markets or bank or vendor
financing, on acceptable terms or at all.
Factors over which we have limited or no
    control could impair our ability to implement new services and
    maintain our existing services and, as a result, we may lose
    business to our competitors.
Our ability to extend the implementation of our
wireless cellular services and to expand our long distance and
data services in accordance with our strategic plan will depend
on a number of factors over which we have limited or no control.
These factors include, among others, our ability to acquire or
renew concessions for spectrum at commercially acceptable
prices, raise sufficient capital, obtain required governmental
approvals, negotiate reasonable interconnection agreements,
obtain rights of way for fiber optic cables, successfully deploy
technologies, secure leases and permits for cell sites, hire and
retain additional qualified personnel and develop an adequate
customer base. Any of these factors could delay, impede or
reduce the scope of the implementation of new services and have
a material adverse effect on our existing business, financial
condition and results of operations.
The technology we use may be made obsolete
    by the technology used by our competitors.
All companies in the global telecommunications
industry must adapt to rapid and significant changes in
technology. The technology that we have selected in our wireless
business may be challenged by competition from new or improved
digital technologies supporting wireless service or other
services in the near future. Technological changes may adversely
affect our competitive position, require substantial new capital
expenditures and/or require write-downs of obsolete technology.
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We may not have enough management resources
    to be able to expand our business in accordance with our
    plans.
We plan to continue to access additional
opportunities in the wireless business in Mexico. In February
2002, we completed the acquisition of a 100% ownership interest
in Grupo Portatel, S.A. de C.V. and its subsidiaries, which we
refer to collectively as Portatel. Portatel holds the Cellular
A-Band concession and provides cellular services in
Region 8 in southern Mexico. We will have to devote
substantial management resources to take advantage of these new
opportunities and business ventures. In so doing, we will have
to attract and retain qualified management personnel to keep
pace with our rate of growth. If we are unable to attract and
retain qualified management personnel, our existing business,
financial condition and results of operations could be harmed.
Our strategy to expand our wireless
    footprint in Mexico leads us to consider significant
    acquisitions from time to time that may adversely affect our
    business, financial condition and results of
    operations.
One of our business strategies is to provide our
customers with access to reliable and high-quality wireless
service throughout Mexico. Providing access in regions where we
do not own concessions through roaming agreements with other
operators does not afford us optimal control over the coverage,
quality and pricing of our service. As a result, from time to
time we explore possibilities of expanding our wireless
footprint in Mexico. For example, we recently acquired Portatel.
Although we believe that transactions such as
acquisitions or joint ventures would significantly strengthen
our competitive position, at the same time they pose a number of
risks and uncertainties for us and for the holders of our
securities. These risks include the possibility that such
acquisitions or joint ventures could involve (i) additional
debt or other liabilities, or the acquisition of operational,
financial, legal, labor or other liabilities, risks or financial
needs, which we may not discover until after the acquisition or
joint venture has been consummated and (ii) an increase in
our capital expenditure requirements. Any of these risks could
result in a material adverse change in our financial condition
and/or ability to service debt. In addition, any acquisition
made with our shares could be dilutive to our shareholders.
Because we cannot foresee all of the risks that
one or more of these acquisitions might involve, should they
occur, it is not possible for us to describe all these risks. As
a result, holders of our securities must be prepared to accept
any deterioration in our prospects, business, financial
condition, results of operations or cash flow stemming from one
or more of these acquisitions.
Cellular fraud increases our
    expenses.
The fraudulent use of cellular telecommunications
networks imposes a significant cost upon cellular service
providers who must bear the cost of services provided to
fraudulent users. We suffer losses of revenue as a result of
fraudulent use and also incur cash costs due to our obligation
to reimburse carriers for the cost of services provided to some
fraudulent users. These cash costs approximated
Ps.39.5 million (U.S.$4.3 million) and
Ps.42.8 million (U.S.$4.7 million) in 2000 and 2001,
respectively.
Although technology has been developed to combat
the fraudulent use of telecommunications networks, this
technology does not eliminate fraudulent use entirely. We must
make expenditures periodically to acquire and use anti-fraud
technology. In 1998, we spent Ps.39.9 million
(U.S.$4.4 million) to acquire anti-fraud technology and to
cover other costs related to fraud detection and prevention. In
1999, 2000 and 2001, we incurred minimal expenses for these
purposes. However, we cannot assure you that the anti-fraud
technology that we have purchased will continue to be effective
in detecting and preventing fraud. If our anti-fraud technology
becomes obsolete, we will need again to make expenditures to
acquire and use new anti-fraud technology.
A significant portion of our accounts
    receivable is represented by a small number of
    distributors.
In 2001, our three largest distributors accounted
for 44% and 24% of our net trade accounts receivable as of
December 31, 2001 and 2000, respectively. We have
established certain measures to reduce the risk
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associated with this concentration such as
certain guarantees and liens. Although we believe that this
distributor concentration will be reduced over time as the size
of our operations grow, our results of operations could be
negatively affected, at least in the short-term, if any payment
defaults occur with respect to these distributors.
Risk Factors Relating to Our
Shareholders
If Verizon sold all or a substantial part
    of its interest in us, that sale could result in Verizon no
    longer managing our operations, in which case we would have to
    make an offer to repurchase a substantial majority of our debt
    securities.
Verizon currently has the right and power to
elect a majority of the members of our Board of Directors and,
with certain exceptions, unilaterally determine our policies and
strategy.
If Verizon were to sell all or a substantial part
of its indirect interest in Iusacell Celular, the sale would
cause Verizon to lose its ability to manage us. Verizon would
then no longer be in a position to determine our policies and
strategies, manage our operations or provide the technical and
financial support that we have historically relied on. It is not
possible for us to describe the strategy that Iusacell Celular
would implement following any such management change.
In addition, any substantial sale by Verizon
would constitute a change of control under Iusacell Celular debt
instruments relating to up to approximately
U.S.$441.7 million of indebtedness. In the event of any
such change of control, Iusacell Celular would have to make an
offer to repurchase that indebtedness. We cannot assure you that
Iusacell Celular would have sufficient funds or have the ability
to obtain sufficient funds on a timely basis to pay for any or
all of the indebtedness that we may have to repurchase if that
happened.
We rely on Verizon and Vodafone personnel;
    if either Verizon or Vodafone recalled them, we would have fewer
    qualified employees.
Our President and Director General, Chief
Financial Officer, Vice President, Technical Operations, Vice
President, Sales, and Vice President, Long Distance and Data,
are employees of Verizon, and our Senior Vice President,
Marketing, is an employee of Vodafone Group Plc, which we refer
to as Vodafone. The services of each such employee are provided
to us on a secondment basis. We also use the services of a
number of Verizon and Vodafone employees on a consulting basis,
primarily in the areas of network operations, information
systems, strategic planning, marketing and customer care
operations. So long as Verizon controls Iusacell (and indirectly
Iusacell Celular) and Vodafone holds a significant equity
interest in Iusacell (and indirectly Iusacell Celular), we
expect these or other seconded employees and consultants to
continue to provide services to us. If Verizon and Vodafone did
not make these employees available to us, our results of
operations and financial condition could be materially adversely
affected.
Risk Factors Relating to Doing Business in
Mexico
The
Mexican government may impose additional conditions on our
concessions or may take them away.
We provide our services pursuant to concessions
granted by the Mexican government. Our activities are subject to
significant government regulation and supervision. The
concessions may be subject to additional conditions or may not
be renewed when they expire. The Mexican government also
reserves the right to revoke, temporarily seize or expropriate
concessions or assets related to a concession for reasons, among
others, of public interest or order such as war, national
disaster or significant public disturbances. Moreover, the
Mexican government may grant additional concessions to potential
competitors to provide services similar to those that we
provide. Any of these developments or other government action
could harm the value of Iusacell Celular's concessions and
our financial condition and results of operations.
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Our
financial statements may not give you the same information as
financial statements prepared under U.S. generally accepted
accounting principles.
Iusacell Celular prepares its financial
statements in accordance with Mexican GAAP. Mexican GAAP differs
in certain significant respects from U.S. GAAP, including,
but not limited to, the treatment of minority interest, purchase
accounting, deferred income taxes, capitalization of
pre-operating costs, derivative financial instruments, gains
from the exchange of non-monetary assets, the provisioning for
the consolidation of facilities and sale-leaseback transactions.
In particular, under Mexican GAAP companies must incorporate the
effects of inflation directly in their accounting records and in
published financial statements. The effects of inflation
accounting under Mexican GAAP are not eliminated in the
reconciliation to U.S. GAAP, as these inflation-adjusted
figures are considered a more meaningful presentation than
historical cost-based financial reporting for both Mexican and
U.S. accounting purposes. For this and other reasons, the
presentation of Mexican financial statements and reported
earnings may differ from that of companies in other countries.
See Note 23 to our Consolidated Financial Statements.
If
Mexico experiences political and economic crises, we may lose
money.
We are a Mexican company, and all of our
operations are in Mexico. Accordingly, the political and
economic environment in Mexico has a significant impact on our
financial condition and results of operations.
The Mexican government has exercised, and
continues to exercise, significant influence over the Mexican
economy. Mexican governmental actions concerning the economy and
state-owned enterprises could have a significant impact on
Mexican private sector entities in general and on us in
particular, and on market conditions, prices and returns on
Mexican securities, including our securities.
In July 2000, Mexico held national elections,
which were won by Vicente Fox Quezada, the candidate of the
National Action Party (
Partido Acción Nacional
).
This represents the first time that a party other than the
Institutional Revolutionary Party (
Partido Revolucionario
Institucional
) has won the Presidency in more than
70 years. In addition, no single party currently has a
majority in the National Congress. We cannot predict the impact
that this change in administration will have on the Mexican
economy in the years to come.
In the past, Mexico has experienced economic
crises, caused by internal and external factors, characterized
by exchange rate instability, high inflation, high domestic
interest rates, economic contraction, a reduction of
international capital flows, a reduction of liquidity in the
banking sector and high unemployment. These economic conditions
substantially reduced the purchasing power of the Mexican
population and, as a result, the demand for telephony services.
Crises such as these could harm our financial
condition and results of operations and the market value of our
securities.
If
the Mexican government imposes exchange controls, we may not be
able to purchase imported goods or make dividend, principal and
interest payments in U.S. dollars.
In the past, the Mexican economy has experienced
balance of payment deficits and shortages in foreign exchange
reserves. While the Mexican government does not currently
restrict the ability of Mexican or foreign persons or entities
to convert pesos to foreign currencies generally, and
U.S. dollars in particular, it has done so in the past and
could do so again in the future. We cannot assure you that the
Mexican government will not institute a restrictive exchange
control policy in the future. Any such restrictive exchange
control policy could prevent or restrict access to
U.S. dollars or other foreign currencies to purchase
imported goods and to meet our U.S. dollar obligations,
such as the payment of dividends or principal and interest under
any debt securities.
Payment
of judgments entered against us will be in pesos, which may
expose holders of our debt securities to exchange rate
risks.
If a proceeding to enforce our obligations under
any debt securities is brought in Mexico, Mexican law permits us
to pay a resulting judgment in pesos. Under the Mexican Monetary
Law, an obligation payable in
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Mexico in a currency other than pesos may be
satisfied in pesos at the exchange rate in effect on the date
when payment is made.
If a Mexican court declares us to be in
concurso mercantil
, our obligations under any debt
securities:
•
would be converted into pesos at the exchange
    rate prevailing at the time of the court's declaration of
concurso mercantil
and then to Unidades de Inversión
    (UDI's) which are denominated in pesos and adjusted
    periodically for inflation by Banco de Mexico, and payment would
    occur at the time claims of the court-recognized creditors are
    satisfied subject to the priority established by law; and
•
would not be otherwise adjusted to take into
    account devaluation of the peso against the U.S. dollar
    occurring after the court's declaration.
The
10% tax on telecommunications services approved by the Mexican
Congress may adversely affect the ability of wireless companies,
including us, to add new postpaid customers.
On January 1, 2002, the Mexican Congress
approved a surcharge that assesses an additional 10% federal
excise tax on certain wireless telecommunications services. In
February 2002, we filed an injunctive action
(amparo)
challenging the Mexican government's implementation of the
tax. According to local media reports and government statements,
several other members of the industry have initiated similar
proceedings. The tax has resulted in a 10% increase in the
monthly bills of postpaid mobile wireless customers and in the
cost of prepay cards in denominations of Ps.200 or more.
High
inflation rates in Mexico may decrease demand for our services
while increasing our costs.
In recent years, Mexico has experienced high
levels of inflation. The annual rate of inflation, as measured
by the Mexican National Consumer Price Index, was 12.3%, 9.0%,
4.4% and 1.4% in 1999, 2000, 2001 and the three-month period
ended March 31, 2002, respectively. High inflation rates
can adversely affect our business and results of operations in
the following ways:
•
Inflation can adversely affect consumer
    purchasing power, thereby adversely affecting consumer demand
    for our services and products; and
•
To the extent inflation exceeds our price
    increases, our prices and revenues will be adversely affected in
    "real" terms.
High interest rates in Mexico could
    increase our financing costs
Mexico has, and is expected to continue to have,
high real and nominal interest rates. The interest rates on
28-day Mexican government treasury securities averaged 21.4%,
15.2%, 11.3% and 7.4% for 1999, 2000, 2001 and the three-month
period ended March 31, 2002, respectively. Accordingly, if
we need to incur peso-denominated debt in the future, it will
likely be at high interest rates.
Other Risk Factors
Recent
terrorist activities in the United States and their consequences
could adversely affect our operations
As a result of the terrorist attacks in the
United States on September 11, 2001, there was increased
short-term market volatility, and there may be long-term effects
on the U.S. and world economies and markets. Any future
terrorist attacks or the anticipation of any such actions may
have a further adverse impact on the U.S. and world economies
and thus on demand for our services
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ITEM 4.
INFORMATION ON THE COMPANY
A.     History and
Development of the Company
Grupo Iusacell Celular, S.A. de C.V., which was
known as Grupo Iusacell, S.A. de C.V. until February 29,
2000, is a
sociedad anónima de capital variable
with
indefinite life organized under the laws of Mexico on
October 6, 1992.
Iusacell Celular's commercial name is
"Grupo Iusacell," but our operating subsidiaries
market their products under the single
Iusacell
Digital
™ brand name. Iusacell Celular currently
operates entirely in Mexico under Mexican legislation, although
our participation in the U.S. capital markets makes us also
subject to certain securities laws of the United States.
Iusacell Celular was formed in 1992 to hold the
principal telecommunications interests of the Peralta Group,
which primarily comprises securities and entities controlled by
Mr. Carlos Peralta. Iusacell Celular's subsidiaries
are primarily engaged in the wireless telecommunications
business and hold concessions to operate cellular telephone
systems in five contiguous market regions in central and
southern Mexico. Mexico is divided into nine geographic regions
for the provision of mobile wireless service. Iusacell Celular
was granted an authorization to provide cellular service in
Region 9 (which includes Mexico City) in 1989 and, in a
series of transactions from 1990 to 2002, purchased the
companies holding concessions to provide cellular service in
Region 5 (which includes the city of Guadalajara),
Region 6 (which includes the city of León),
Region 7 (which includes the city of Puebla) and
Region 8 (which includes the cities of Cancún and
Mérida). In October 1995, a Iusacell Celular subsidiary
received a concession to provide long distance service and began
providing such service in August 1996. Also in August 1996, we
began to provide paging services through a joint venture between
Iusacell Celular and a third party concessionaire.
In November 1993 and August 1994, Bell Atlantic
acquired a 42.0% equity interest in Iusacell Celular for
U.S.$1.04 billion. In June 1994, Iusacell Celular completed
an initial public offering of two of its four series of ordinary
shares and of American depositary shares representing two series
of its shares.
In February 1997, Bell Atlantic assumed
management control of Iusacell Celular. This change of control
was implemented when Bell Atlantic and the Peralta Group
effected certain conversions of shares from one series into
another that gave Bell Atlantic a majority of the Iusacell
Celular series A shares and control over the Iusacell Celular
Board of Directors. All these conversions were effected on a
one-for-one basis. In August 1997, Bell Atlantic acquired NYNEX
Corporation in a merger of equals to form the new Bell Atlantic.
In September 1997, in order to focus exclusively
on its core Mexican market, Iusacell Celular sold its direct and
indirect interests in Ecuadorian cellular and paging companies
for approximately U.S.$31.4 million, net of taxes.
In December 1997, Iusacell Celular entered into
an agreement with subsidiaries of Lucent Technologies, Inc.
pursuant to which Iusacell Celular agreed (i) to replace
its existing analog wireless cellular network with a new Lucent
Technologies digital and analog network for a minimum
consideration of U.S.$188.0 million which was completed in
August 1999 and (ii) to continue acquiring network
equipment and services under the agreement in order to improve
its digital network. Through December 31, 2001, Iusacell
Celular has purchased approximately U.S.$409.9 million of
network equipment and services under this agreement.
Iusacell was formed on August 6, 1998 for
the purpose of acquiring and holding the shares of Iusacell
Celular. On July 6, 1999, Iusacell launched an offer to
exchange two classes of Iusacell voting ordinary shares for the
four classes of Iusacell Celular ordinary shares then
outstanding on a one-for-one basis. This offer was completed on
August 10, 1999 and, as a result, Iusacell acquired 99.5%
of the outstanding Iusacell Celular shares. On January 31,
2000, Iusacell launched a second exchange offer for the purpose
of exchanging American depositary shares representing
Iusacell's series V shares for the balance of American
depositary shares representing Iusacell Celular's
series D and series L shares on a one-for-one basis.
This offer was completed on February 29, 2000 and, as a
result, Iusacell held 99.9% of the outstanding Iusacell Celular
shares. In May 2001, Iusacell Celular effected a reverse stock
split of 1 new Iusacell Celular share for every
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30,000 old Iusacell Celular shares. As a result
of this reverse split, Iusacell now holds 100% of the capital
stock of Iusacell Celular.
In December 1999, as a first step toward
minimizing its involvement in real estate management and tower
maintenance, Iusacell Celular entered into an agreement with
MATC Celular S. de R.L. de C.V., the Mexican subsidiary of
American Tower Corporation, which we refer to as MATC Celular,
pursuant to which MATC Celular could acquire the majority of
towers owned and/or operated by Iusacell Celular. In return,
Iusacell Arrendadora S.A. de C.V., a subsidiary of Iusacell,
would lease space on those towers and sublease it to the
operating subsidiaries of Iusacell Celular. Iusacell Celular
sold approximately 244 towers to MATC Celular in 2001, and
an additional 25 towers in May 2002. We expect to sell up
to 61 additional towers to MATC Celular in 2002.
On June 30, 2000, Bell Atlantic acquired GTE
Corporation, one of the world's largest telecommunications
companies, in a merger of equals, renaming itself as Verizon
Communications Inc. The subsidiaries which directly hold
Iusacell capital stock remained unchanged. In April 2001,
Vodafone acquired the Peralta Group's 34.5% equity interest
in Iusacell for U.S.$973.4 million.
Over our last three full fiscal years, excluding
the effects of inflation accounting, capitalized interest and
certain non-cash trade-in credits, we have invested
approximately U.S.$500.0 million in capital expenditures,
primarily for our cellular communications network, long distance
network and billing, customer care and administrative systems.
See Item 5, "Operating and Financial Review and
Prospects — Liquidity and Capital
Resources — Capital Expenditures."
On October 19, 2001, we completed the
acquisition of a 78.3% ownership interest in Portatel, for
Ps.522.5 million (U.S.$57.1 million). We reached an
agreement to acquire the remaining 21.7% ownership in Portatel
for Ps.148.1 million (U.S.$16.2 million) and closed
the acquisition of this remaining ownership interest on
February 8, 2002. Portatel is engaged in the wireless
communications business and holds the concession to provide
cellular services in Region 8, which covers the states of
Yucatán, Campeche, Quintana Roo, Chiapas and Tabasco in
southern Mexico.
In 2002, we plan to invest at least
U.S.$150.0 million in capital expenditures, not including
capitalized interest, to increase the coverage and improve the
quality of and enhance the features available through our
cellular and long distance networks, and to improve our billing
and customer care systems. We plan to spend approximately
U.S.$21.0 million in 2002 to expand the coverage and
increase the quality of our cellular network in Region 8 in
southern Mexico. All of this capital equipment will be deployed
in Mexico. We expect to finance our 2002 capital expenditure
plan through funds from our operations, vendor and project
financing, the capital markets and the net proceeds from the
sale of our cellular towers to MATC Celular. See Item 5,
"Operating and Financial Review and Prospects —
Liquidity and Capital Resources — Capital
Expenditures."
Our principal executive offices are located at
Prolongación Paseo de la Reforma 1236, Colonia Santa Fe,
Delegación Cuajimalpa, 05348, Mexico, D.F. Our telephone
number is (5255) 5109-4400. Our agent in the United States
is Puglisi & Associates, 850 Library Avenue,
Suite 204, P.O. Box 885, Newark, Delaware 19715. Our
internet website address is http://www.iusacell.com.mx. The
information on our website is not incorporated into this
document.
B.     Business
Overview
We are a leading wireless telecommunications
services provider in Mexico with nearly 1.9 million mobile
wireless customers at December 31, 2001. We hold and
operate concessions in the 800 megahertz (MHz) band to
provide cellular wireless services in five contiguous geographic
regions comprising all of central and southern Mexico. Our
service regions include Mexico City, one of the world's
most populous cities, and the cities of Guadalajara, León,
Puebla, Cancún and Mérida and combined represent
approximately 79 million points of presence (POPs)
comprising 78% of Mexico's total population.
Since February 1997, Iusacell Celular has been
under the management control of subsidiaries of Bell Atlantic
(now Verizon). From late 1993 through February 1997, Bell
Atlantic participated substantially in the
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financial and technological operations of
Iusacell Celular. Since Bell Atlantic assumed control of our
Board of Directors and management, Bell Atlantic personnel
seconded to Iusacell and Bell Atlantic consultants have been
integrally involved in managing our day-to-day operations and
defining and implementing our long-term strategy. Through
December 31, 2001, Verizon has invested approximately
U.S.$1.3 billion for its current 39.4% economic and voting
interest in Iusacell and its indirect 100% interest in Iusacell
Celular.
Since Bell Atlantic took control of Iusacell
Celular's management, our subscriber base has grown from
approximately 245,000 subscribers in February 1997 to
1,855,166 subscribers as of December 31, 2001. Of
these subscribers, as of December 31, 2001, 404,075 were
postpaid customers who purchase cellular services pursuant to
fixed-term contracts, and the remaining 1,451,091 were customers
who pay for their cellular services in advance primarily through
the purchase of prepay calling cards. As of December 31,
2001, approximately 768,000 of these prepay customers were
"incoming calls only" customers who are only able to
receive incoming calls and not to make outgoing calls. These
customers generate little or no revenue. Iusacell Celular's
postpaid and prepay subscribers who can both make outgoing calls
and receive incoming calls had an average monthly cellular
revenue per subscriber (ARPU) during 2001 of Ps.370.0
(approximately U.S.$40.4), with prepay subscribers in this group
having an ARPU of Ps.146.0 (approximately U.S.$15.9) during 2001.
In May 1998, we launched digital service using
Code Division Multiple Access (CDMA) technology, the
highest-capacity commercial digital technology available, in the
800 MHz frequency band in the Mexico City area. Since
August 1999, we have offered digital coverage and services in
almost all areas where we provide mobile wireless services. In
addition to our core mobile wireless services, we also provide a
wide range of other telecommunications services, including long
distance, paging, wireless local telephony and data transmission
services.
The management team at Iusacell is able to draw
extensively upon Verizon's expertise in the development and
implementation of our operating strategy. Fares F. Salloum,
Iusacell's Chairman of the Board, has 29 years of
global telecommunications experience. In addition,
Mr. Salloum is currently responsible for Verizon's
international wireline and wireless operations in the western
hemisphere, including Telus Corporation (Telus) in Canada,
Codetel, C. por A. (Codetel) in the Dominican
Republic, Compañía Anónima Nacional
Teléfonos de Venezuela (CANTV) in Venezuela,
Telecomunicaciones de Puerto Rico Inc. (TELPRI) in Puerto
Rico and CTI Holdings, S.A. (CTI) in Argentina.
Iusacell's President and Director General, Peter H.
Burrowes, has nine years of telecommunications experience,
having served as President and Chief Executive Officer of
Comunicación Celular, S.A. (Comcel), a cellular
service provider in Colombia, for nearly eight years prior to
joining Iusacell Celular in April 2001.
The management team is supported by an
experienced group of Mexican executives and other personnel from
Verizon and Vodafone.
Verizon
Verizon is one of the largest telecommunications
companies in the world, with extensive participation in and
knowledge of the wireless telecommunications business. In August
1997, Bell Atlantic and NYNEX Corporation, two of the original
seven regional Bell operating companies formed as a result of
the break-up of AT&T in 1984, and completed their merger of
equals to form the new Bell Atlantic. On June 30, 2000, the
new Bell Atlantic and GTE Corporation consummated a merger of
equals, in which GTE shareholders received 1.22 shares of
Bell Atlantic common stock for each GTE share they owned, and
Bell Atlantic renamed itself Verizon. Verizon had operating
revenues and net income of approximately U.S.$67.2 billion
and U.S.$38 million, respectively, for the fiscal year
ended December 31, 2001, and total assets of approximately
U.S.$170.8 billion at such date.
In the United States, Verizon provides local
exchange telephone service in 31 states and the District of
Columbia, reaching 33 million households, utilizing nearly
132 million access lines and employing more than 261,000
people. Verizon Wireless, a partnership between Verizon (which
owns 55%) and Vodafone (which owns 45%) established in April
2000, is the largest wireless operator in the United States,
with more than
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29 million subscribers. Verizon Wireless has
a presence in 49 states and the District of Columbia, and it
covers 232 million POPs, nearly 90% of the United States
population, including 49 of the top 50 U.S. markets.
Outside the United States, Verizon has wireline
and/or wireless operations in 23 countries and territories
in the Americas, Europe, Asia and the Pacific, with
3.2 million attributable access lines and 9.6 million
attributable wireless customers as of December 31, 2001.
Through its interest in FLAG, the world's longest undersea
fiber optic cable, Verizon's global presence extends to
45 countries. Verizon is also the world's largest
provider of print and on-line directory information.
Verizon is a reporting company under the Exchange
Act. Bell Atlantic and GTE were reporting companies under the
Exchange Act. Reports and information filed by Verizon, Bell
Atlantic and GTE with the Commission may be inspected and copied
at the public reference facility maintained by the Commission at
Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such material may be
obtained by mail at prescribed rates by calling the SEC at
1-800-SEC-0330.
Vodafone
On April 4, 2001, Vodafone acquired a 34.5%
equity interest in Iusacell from the Peralta Group for
U.S.$973.4 million.
Vodafone is the largest wireless operator in the
world, with more than 101 million proportionate subscribers
(subscribers proportionate to Vodafone's stake in the
relevant wireless companies) and a presence in
28 countries. Vodafone also owns stakes in wireless
carriers in Europe, the United States, the Asia/ Pacific region,
the Middle East and Africa. Vodafone companies are the leading
mobile phone operators in the United States (with a 45%
ownership interest in Verizon Wireless), Germany
(Vodafone D2) and the United Kingdom (Vodafone), among
others. Vodafone has grown substantially with its recent
acquisition of Mannesmann AG and is expanding its wireless data
services.
Competitive Strengths
Leading
Digital Technology Platform in All Our Markets
We believe that we are the Mexican market leader
in technology. In August 1999, upon completion of our deployment
of a CDMA digital network in nearly all areas where we provide
cellular service, we became the first company in Mexico to make
digital voice service broadly available to all of our customers.
Our digital network currently provides service to areas with
approximately 60 million inhabitants, representing
approximately 59% of Mexico's total population.
Compared with analog cellular technology, our
digital technology increases system capacity by approximately
six to 10 times, offers better call quality and clarity,
enables significantly longer telephone battery life, ensures
greater call confidentiality and fraud protection and provides a
wider variety of advanced features and applications, such as
short messaging service. Our network technology provides
superior switching and transmission capabilities. These features
allow for lower capital expenditures per subscriber and reduced
network operating costs.
From January 1, 1997 through
December 31, 2001, we made approximately
U.S.$864.4 million in capital expenditures, most of which
was spent on our cellular and fiber optic telecommunications
network. For additional information regarding capital
expenditures, see Item 5, "Operating and Financial
Review and Prospects — Liquidity and Capital
Resources — Capital Expenditures."
In order to take advantage of the benefits of our
new digital network, we have stopped purchasing and providing
analog-only handsets to customers and have accelerated our
efforts to migrate existing higher-usage customers to digital
service. At December 31, 2000 and December 31, 2001,
Iusacell had 519,639 and 848,577 digital customers,
respectively. In December 2001, our digital customers in the
aggregate generated approximately 65% of our total mobile
wireless traffic.
We believe that our analog service will continue
to operate in the near future because a significant number of
our prepay subscribers have analog-only telephones.
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In 2001, the Mexican telecommunications
regulator, the
Comisión Federal de Telecomunicaciones
(Mexican Federal Telecommunications Commission or COFETEL),
performed technical audits in the country's largest cities
in order to determine whether wireless carriers are offering
acceptable network quality. In these audits, we significantly
bettered COFETEL minimum standards for lost calls and
ineffective attempts of 6% and 5%, respectively, in all audited
cities in our core cellular regions, including Mexico City.
Verizon and
Vodafone Wireless Expertise and Support
Our management team draws extensively upon
Verizon's and Vodafone's expertise to develop and
implement our operating strategy. Verizon and Vodafone are the
managing partners in Verizon Wireless, the largest wireless
carrier in the United States. Verizon also has substantial
investments in other wireless telecommunications companies in
the Americas, Europe, Asia and the Pacific. Vodafone is the
largest wireless operator in the world. We believe that
Verizon's and Vodafone's extensive experience in the
development and implementation of marketing programs designed to
promote substantial subscriber growth provide us with a
competitive advantage in the Mexican mobile wireless market.
Experienced
Management Team
The senior management team of Iusacell has an
aggregate of almost 100 years of experience in the
telecommunications industry. Individually, Iusacell
Celular's operating managers have established track records
of producing subscriber growth, penetrating new markets and
developing new telecommunications product offerings.
Iusacell's management team is complemented by experienced
Verizon and Vodafone telecommunications executives and
consultants.
Well-Recognized
Brand Name
All of the services that we offer use the well
recognized
Iusacell Digital
brand name to increase
consumer awareness and customer loyalty. We believe that the
high "top of mind" and "share of voice" held
by the
Iusacell Digital
brand name has allowed us to make
more cost-efficient marketing investments compared with those of
our competitors.
The
IUSACELL Digital
brand name is well
recognized not only in the regions where we currently provide
service, but also in the regions where we do not yet provide
service. We believe that this recognition has facilitated our
entry into Region 8 in southern Mexico, and will facilitate our
entry into other markets if and when we are able to do so.
Large
Cellular Subscriber Base
At December 31, 2001, we had 1,854,697
mobile wireless subscribers, including both postpaid and prepay
subscribers. Of our mobile wireless subscriber base, 21.8%
consisted of customers that purchase cellular services pursuant
to fixed-term contracts and the remaining 78.2% of our cellular
customers purchase their services in advance, primarily through
prepay calling cards. Prepay customers include both those who
can receive and make calls and those who are only able to
receive incoming calls. We believe that our postpaid customers
seek the convenience of uninterrupted mobile wireless service
and access to high quality customer service and are willing to
pay a monthly fee for the choice of value-added services such as
wireless Internet, call waiting, emergency service (*911), short
messaging, voice-mail, three-way calling and caller
identification. On the other hand, prepay subscribers are also
attractive to us because of their higher average per-minute
airtime charges, lower acquisition costs and the absence of
billing costs, credit concerns and collection risk related to
their business.
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Business Strategy
Iusacell Celular's strategic and operating
plan is based on the wireless operating model that Verizon has
successfully deployed in the Americas, Europe, Asia and the
Pacific. This model focuses on:
•
state-of-the-art network technology and
    performance;
•
delivery of products and services which customers
    consider valuable;
•
strong distribution; and
•
superior customer service.
We believe that our strategic and operating plan
will enable us to increase our subscriber base, subscriber
usage, revenues and profitability in our core mobile wireless
businesses. This strategic plan incorporates the following key
elements:
Nationwide
Wireless Coverage
We believe that it is important to provide
reliable and high quality wireless service to our customers
throughout Mexico. We intend to continue doing so by holding
concessions in each region of Mexico or, in those areas where we
are unable to secure concessions, by enabling seamless roaming
services and offering our customers telephones that can access
nationwide services on different frequencies. As part of this
strategy, we acquired Portatel, which provides cellular services
in southern Mexico, in a two-part transaction on
October 19, 2001 and February 8, 2002 for
Ps.670.6 million (U.S.$73.3 million). Iusacell now
holds concessions covering approximately 79 million
inhabitants, or 78% of Mexico's total population.
We also believe that it is important for our
customers to be able to access wireless services throughout
North, Central and South America. Currently, Iusacell's
customers are able to roam in over 2,000 municipalities in the
United States, Canada and Europe, as well as in 85 other
countries in the Americas, Europe, Asia, Africa and the Pacific.
Significantly
Strengthen our Distribution Channels
We continue to strengthen our product
distribution system to emphasize consistent, standardized
merchandising through a well-balanced mix of company-owned
stores and independent distributors conveniently located
throughout all of our operating regions. We continue to develop
additional long-term relationships with our distributors to
encourage them to sell our products and services, and seek to
make these relationships exclusive. We intend to continue to
increase our distribution system primarily by expanding the
number of locations where customers can purchase prepay cards.
To further this strategy, we or our distributors have entered
into agreements to allow our prepay cards to be marketed by or
at distributors of Mexico's national lottery tickets, PEMEX
franchise gas stations, NADRO pharmacies, one of the largest
drugstore chains in Mexico, OXXO and Seven Eleven franchise
convenience stores, BBVA Bancomer, Bital and Bancrecer automatic
teller machines, nationwide newsstands, CIFRA (Walmart) and
Comercial Mexicana stores, two of the largest retail chains in
Mexico, and Mexico City subway stations. In the past year, we
also launched a distribution program called "Los
Rojos," implemented in Mexico City, Guadalajara, Toluca,
Cuernavaca, Puebla and Veracruz. The program, implemented
through a distributor, recruits existing street vendors and
provides them with an opportunity to directly sell our
VIVA™ cards and pre-activated prepaid handsets to drivers
and pedestrians. In its initial stage the program employed
approximately 1,200 people. Since Verizon took control of our
management, we have increased our points of distribution from
approximately 230 in February 1997 to more approximately 46,000
at December 31, 2001.
We also opened or remodeled 22 customer sales and
service centers in 1998, 17 in 1999, 8 in 2000 and 259 in 2001,
bringing the total number of customer sales and service centers
owned and operated by us at December 31, 2001 to 127. All
of these centers present Iusacell Celular's new store
image, an environment which emphasizes retail merchandising
rather than transaction processing. In the second half of 2002,
we intend to open 10 new customer sales and service centers.
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Superior
Network and Customer Service
We believe that superior network technology and
proactive and timely customer service help us to attract and
retain customers. To build a superior network, we swapped out
our previous analog network for an analog and CDMA digital
network supplied by Lucent Technologies and, upon completion of
the swap-out in August 1999, became the first company in Mexico
to make digital voice services broadly available to all of our
customers. For our customers, our digital technology offers
better call quality and clarity, ensures greater call
confidentiality and fraud protection, enables significantly
longer telephone battery life, and provides a wider variety of
advanced features and applications as compared with analog
cellular technology. Over the last three years, Iusacell Celular
has experienced rapid growth in digital subscribers. As a
result, and in anticipation of further growth in digital
subscribers and digital usage, we decided to accelerate our
capital expenditure program in 1999 and 2000 to expand digital
capacity and improve digital service quality.
To provide proactive and timely customer service,
we operate two call centers that provide automated and efficient
service to our customers. Our call center service quality and
response speed has further improved with the implementation of
state-of-the-art customer service software in Region 9 in 2000
and in our other service regions in 2001. We also use welcome
packages, customer satisfaction calls, special programs for
corporate customers and customized billing to communicate our
commitment to our customers. Our customer service centers offer
"one-stop shopping" for cellular, long distance,
paging and data transmission services as a convenience to our
customers. Our customer service representatives undergo ongoing
rigorous training and are continually monitored and evaluated.
In March 1999, Iusacell Celular completed the
installation of a new prepay operating system in its then four
cellular regions. The prepay operating system improved customer
satisfaction through automated card activation and account
information and by providing voice mail and other value-added
services. It has also lowered both the cost of support for
prepay services and prepay turnover and facilitated increased
per subscriber usage.
Committed to offering world class customer
service, in 2001 we began the implementation of a special
program called Customer Relationship Management, which we refer
as CRM. The program aimed to gather information from our various
systems to allow us to better tailor our services and strategies
to each of our customers. Following implementation of the CRM
strategy, we deployed the following applications to fulfill
customer needs: customer autoservice channels such as invoice
presentment, payments and airtime sales through the Internet, MQ
Series from IBM, a software tool that integrates new postpaid
customer information between our point of sale system and
billing system and some other administrative systems to enhance
the functionality of our call centers.
In 2001, we also implemented a preferred customer
retention program targeting high-value postpaid customers in
order to improve customer loyalty and thereby reduce churn by
offering dedicated phone lines and customer care
representatives. We also implemented a high-value customer
campaign which consists of proactively contacting customers, to
assure that the provided service meet their needs and find out
how it can be improved. To strengthen the antichurn program for
all postpaid customers, we introduced a proactive contract
renewal program. A permanent outbound program was introduced to
contact those customers who have reported their phone stolen or
lost in order to arrange for a replacement. We are designing
similar programs for our higher-usage prepay customers and
expect to implement these programs during 2002.
Customer
Segmentation
We design our products and services for each
customer segment. For postpaid customers, we offer six pricing
packages tailored to meet the needs of high and mid-usage
customers and two additional pricing packages with a prepay
component tailored to lower-usage customers. We believe that our
postpaid customers seek the convenience of uninterrupted mobile
service and access to high quality customer service and wish to
purchase their long distance, paging, and other
telecommunications services bundled together as a single product.
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We also sell prepay cards to penetrate the
segment of lower-usage customers. We believe our prepay
customers seek service without a fixed financial commitment and
monthly billing.
In September 1999, we introduced "one-single
rate" plans for postpaid customers who seek the convenience
of paying a single per-minute rate for local, national long
distance and long distance service to the United States. In
October 1999, we introduced a "one-single rate" plan
for prepay customers and extended coverage of all
"one-single rate" plans to include international long
distance service to Canada. In November 2000, we extended our
"one-single rate" plans to include most of western
Europe and Israel. At December 31, 2001, we had 858,800
"one-single rate customers," 72,323 of whom were
postpaid customers, representing 17.9% of our total postpaid
customer base, and 786,477 of whom were VIVA™ prepay
customers, representing 54.2% of the total prepay customer base.
Value-Added
Services
Our network permits us to provide our digital and
analog customers with a wide range of value-added services,
including caller identification, voice mail, and three-way
calling. To encourage our customers to migrate to digital
service, we offer short messaging service, Internet access,
mobile banking, and mobile e-mail accounts only to our digital
postpaid customers through wireless application
protocol WAP) enabled handsets, Lap Top computers and
Pocket PCs (PDAs).
In December 2001, Iusacell Celular and Banco
Santander launched the first joint brand credit card in the
wireless service industry. This credit card will help Iusacell
Celular's customers finance the acquisition of a handset,
facilitate the credit and collection process and build customer
loyalty.
Sales Force
Incentives
With the objective of increasing the size and
quality of our subscriber base, we have a sales force
compensation plan which is largely performance-based. Our
compensation plan is based on sales volume and product mix and
rewards our sales force for upgrading analog postpaid customers
to digital service and qualified prepay customers to postpaid
plans. The compensation plan is also designed to encourage
salespersons to sell bundled products and value-added services.
During 2001, we implemented an incentive program for our
customer care representatives to promote customer retention. In
2002, the sales force compensation plan was restructured to
better reward individual performance.
The Telecommunications Industry in
Mexico
Market
Liberalization
Cellular
Services
The Mexican government initiated its efforts to
liberalize the telecommunications industry in 1989, dividing
Mexico into nine geographic regions for the provision of
cellular service. In order to provide an alternative for
cellular customers, two concessions were granted in each region,
one to Telcel, the cellular subsidiary of Telmex, and the other
to an independent operator. In addition, Telmex was required to
interconnect all cellular operators to its network in an effort
to facilitate competition. The nine geographic Regions are
described in the table below.
Region
Number
Geographical Coverage
Major Cities in the Region
1
The states of Baja California and Baja California
    Sur and the municipality of San Luis Río Colorado in
    northwestern Sonora state.
Tijuana, Mexicali, Ensenada, Tecate and La Paz.
2
The states of Sonora and Sinaloa (except for the
    municipality of San Luis Río Colorado in northwestern
    Sonora).
Hermosillo, Ciudad Obregón, Culiacán
    and Mazatlán.
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Region
Number
Geographical Coverage
Major Cities in the Region
3
The states of Chihuahua and Durango and the
    municipalities of Torreón, Francisco I. Madero, Matamoros,
    San Pedro and Viesca in the state of Coahuila.
Ciudad Juárez, Chihuahua, Durango,
    Gómez Palacio and Torreón.
4
The states of Tamaulipas, Nuevo León and
    Coahuila. (except for the municipalities of Torreón,
    Francisco I. Madero, Matamoros, San Pedro and Viesca).
Monterrey, Saltillo, Tampico, Ciudad Victoria,
    Nuevo Laredo, Reynosa and Matamoros.
5
The states of Colima, Jalisco (except for 12
    municipalities in northeastern Jalisco), Michoacan and Nayarit.
Guadalajara (Mexico's second largest city),
    Morelia, Tepic, Colima and Manzanillo.
6
The states of Aguascalientes, Guanajuato,
    Querétaro, San Luis Potosí and Zacatecas and 12
    municipalities in northeastern Jalisco.
León, Querétaro, Aguascalientes, San
    Luis Potosí and Zacatecas.
7
The states of Guerrero, Oaxaca, Puebla, Tlaxcala
    and Veracruz.
Puebla, Acapulco, Veracruz and Oaxaca.
8
The states of Yucatán, Quintana Roo,
    Campeche, Chiapas and Tabasco.
Mérida, Cancún, Villahermosa, Campeche,
    Tuxtla Gutiérrez and San Cristobal de las Casas.
9
The states of Mexico, Hidalgo and Morelos and the
    Federal District.
Mexico City, Toluca, Cuernavaca and Pachuca.
In December 1990, the Mexican government
initiated the privatization of Telmex, then the sole provider of
landline local, long distance and Cellular B-Band cellular
services, when it sold 20.4% of the equity and 50.1% of the
voting power in Telmex to a private consortium for
U.S.$1.76 billion. The winning consortium consisted of
Grupo Carso, S.A. de C.V., a Mexican conglomerate
which owns or otherwise controls a majority of the
consortium's voting interest, SBC Communications Inc. and
France Telecom S.A. Subsequent to the original privatization,
the Mexican government further reduced its holdings in Telmex
through additional transactions and completed the privatization
process in June 1994. In 2001, Telcel and other wireless
international subsidiaries of Telmex were spun-off from Telmex
to form a new company named América Móvil, S.A. de
C.V., known as América Móvil.
Telcel holds the Cellular B-Band concession in
each of the nine cellular regions and is Mexico's largest
cellular operator. Our subsidiaries hold the Cellular A-Band
concession in each of Regions 5, 6, 7, 8 and 9, and
entities in which Telefónica is a controlling shareholder
hold the Cellular A-Band concession in Regions 1, 2, 3
and 4.
Wireless
Local Loop and PCS Services
In May 1998, COFETEL completed auctions for
concessions for a range of spectrum frequencies in the
1.9 gigahertz (GHz) band to provide PCS wireless
services and the 3.4-3.7 GHz Wireless Local Loop band to
provide local wireless services in substantially the same nine
geographic Regions established for the provision of cellular
service. Four companies won nationwide concessions in the
Wireless Local Loop frequencies:
•
Telmex;
•
Axtel;
•
Midicel, S.A. de C.V. (Midicel); and
•
Unefón.
Three companies won nationwide concessions to
provide PCS services in the 1.9 GHz frequencies.
Unefón won the 30 MHz PCS A-Band auction on a
nationwide level. Pegaso won a mix of 30 MHz PCS
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B-Band and 10 MHz PCS E-Band concessions
across all nine regions. Telcel won the 10 MHz PCS D-Band
auction on a nationwide level. Grupo Hermes,
S.A. de C.V. and Midicel won auctions for seven of the
remaining nine PCS B-Band and PCS E-Band properties. Each of
these concessions has a 20-year term and authorizes the
provision of mobile and fixed wireless service and other
value-added services.
Formal concessions for Wireless Local Loop and
PCS frequencies were issued in late 1998 to all auction winners,
except Unefón and Midicel, which received extensions to
May 15, 1999 to pay accrued interest and to June 15,
1999 to pay the balance of their concession fees. Midicel did
not meet its interest payment requirements in May 1999 and
forfeited its Wireless Local Loop and PCS concessions and
approximately U.S.$50 million in deposits, letters of
credit and surety bonds. Midicel later offered full payment and
petitioned for a review (
recurso de revisión
) of the
forfeiture order. After additional legal proceedings, the
Secretaría de Comunicaciones y Transportes
(Mexican
Telecommunications and Transport Ministry or SCT), affirmed the
forfeiture order and is also assessing whether Midicel has
complied with its commitments under its long distance and public
telephony concessions in order to determine whether these
concessions should also be revoked. Unefón did meet its May
1999 and June 1999 payment requirements and received its
Wireless Local Loop and PCS concessions. Pegaso initiated
wireless PCS services in Tijuana, Monterrey, Guadalajara and
Mexico City in 1999, and now has coverage in 12 cities.
Unefón commercially launched mobile prepay wireless
services in Acapulco, Toluca, Mexico City and Aguascalientes in
early 2000, and now has coverage in 15 cities throughout
Mexico.
We also face wireless competition from companies
providing mobile wireless telecommunications services utilizing
alternative existing technologies. Nextel de México,
S.A. de C.V., known as Nextel, began marketing its
enhanced specialized mobile radio services in 1998. We believe
that Nextel provides three types of services: trunking, access
to the telephone network and short messaging. It currently
covers 17 cities principally in central Mexico.
Long
Distance Services
In connection with the privatization of Telmex in
1990, the Mexican government granted Telmex a concession to
provide public domestic and international long distance
telephone service with an exclusivity period of six years. In
August 1996, the exclusivity period expired, and competition
with proprietary infrastructure commenced in January 1997. A
presubscription balloting process was conducted in Mexico's
150 largest cities, covering 85% of Mexico's total POPs, to
enable customers to choose a long distance provider.
The SCT has granted a total of 22 long distance
concessions, including the one held by us. Long distance
concessionaires include, among others:
•
Telmex;
•
Alestra S. de R.L., in which AT&T Corporation
    is a shareholder;
•
Avantel, S.A. de C.V., in which MCI WorldCom Inc.
    and Citigroup Inc. are shareholders;
•
Telinor, S.A. de C.V. (Axtel), in which The Bell
    Telephone Company of Canada, commonly known as Bell Canada, is a
    shareholder; and
•
Iusatel, S.A. de C.V., a subsidiary of Iusacell
    Celular which we refer to as Iusatel.
Each concession has a nationwide scope and a
30-year term. Concession holders are authorized to offer
domestic, international and value-added services, including
voice and data transmission services.
Local
Telephone Services
The Mexican government has also initiated the
liberalization process for competition in local telephony
service. Accordingly, the SCT has already granted 13 concessions
for wireline local telephone service. Maxcom Telecomunicaciones,
S.A. de C.V., MetroRed, S.A. de C.V. and Megacable
MCM, S.A. de C.V. have initiated service in the Mexico City
area.
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Underserved
Telephony Market
Despite the significant increase in wireline and
wireless penetration in Mexico over the last three years, we
believe that there still is a substantial unmet demand for
telephone services in Mexico. According to the International
Telecommunication Union, an agency of the United Nations, as of
December 31, 2001, there were approximately 13.5 wireline
telephone lines per 100 inhabitants in Mexico, which is lower
than the teledensity rates of some other Latin American
countries and substantially lower than those of developed
countries such as the United States. Due to the relatively low
wireline penetration in developing countries such as Mexico,
increases in the level of wireless penetration in these
countries may be partly attributable to users who purchase
wireless services as a principal means of telecommunications.
The following table presents, for selected Latin
American countries and the United States, wireline telephone
lines in service per 100 inhabitants as of December 31,
2000 and December 31, 2001:
Selected Wireline Telephony
Penetration
Lines in service
per 100
inhabitants(1)
Country
2000
2001
United States
67.3
66.5
Uruguay
27.8
28.3
Chile
22.1
23.9
Brazil
14.8
21.7
Argentina
21.3
21.6
Colombia
16.9
17.1
Mexico
12.4
13.5
Venezuela
10.9
11.2
Peru
6.3
7.8
(1)
Source:
International Telecommunication Union 2002 Website
The following table presents, for selected Latin
American countries and the United States, the number of
subscribers of wireless telephone services per 100 inhabitants
as of December 31, 2000 and December 31, 2001:
Selected Wireless Telephony
Penetration
Wireless
subscribers
per 100
inhabitants(1)
Country
2000
2001
United States
40.0
44.4
Chile
22.3
34.0
Venezuela
21.7
26.4
Mexico
14.2
20.1
Argentina
16.3
18.6
Brazil
13.6
16.7
Uruguay
13.1
15.5
Colombia
5.3
7.4
Peru
4.0
5.9
(1)
Source:
International Telecommunication Union 2002 Website
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Calling Party
Pays
On May 1, 1999, Mexico implemented the
"calling party pays" modality, or CPP, which had
already been implemented in some other Latin American and
European countries. Calling party pays is a wireless telephony
payment structure in which the party that places a call to a
wireless telephone is billed for interconnection access, and the
recipient is not billed for the airtime charges corresponding to
that call. The introduction of CPP triggered growth in wireless
penetration, particularly in the prepay segment and wireless
traffic.
Cellular Services
History and
Overview
We became the first Mexican provider of cellular
telecommunications services in 1989, when we commenced operation
of our Cellular A-Band network in Region 9. Through a
series of transactions from 1990 to 2002, we acquired 100%
beneficial ownership interests in the entities which hold the
Cellular A-Band concessions in Regions 5, 6, 7, and 8.
The regions we serve cover a contiguous geographic area
comprising all of the regions in central and southern Mexico,
which allows us to achieve economies of scale.
Iusacell Celular's service regions are home
to a variety of industries. Region 9 includes Mexico City,
which has the greatest concentration of service and
manufacturing industries in Mexico and is also the center of
Mexico's public and financial services sectors.
Region 5 includes Guadalajara, Mexico's second largest
city and the commercial and service center of western Mexico,
which has recently begun to develop as a center for the
maquiladora industry. Region 6 includes León,
Querétaro, Aguascalientes and San Luis Potosí and has
historically been dominated by the agricultural sector, although
it has recently begun to develop as an automobile manufacturing
and high technology center. Region 7 includes Puebla,
Acapulco, Veracruz and Oaxaca and contains major operations of
the Mexican petrochemical and automotive industries and
significant tourist resorts and attractions. Region 8
includes Mérida, Villahermosa, Cancún, Campeche and
Tuxtla Gutiérrez and contains major operations of the
Mexican petroleum industry and significant tourist resorts and
attractions.
Subscribers
and System Usage
According to customer profiles, professionals
comprise a large portion of our Region 9 postpaid cellular
subscriber base. Iusacell Celular offers a number of value-added
services designed specifically to fulfill the demands of this
important group of postpaid subscribers. For example, we offer
secretarial services and provide English-speaking operators to
serve the large English-speaking market in Region 9.
Iusacell Celular also provides financial news reporting,
emergency services, entertainment information, reservations
services and sports reports. Moreover, CDMA digital postpaid
customers in Region 9 have available caller identification,
short messaging service and data transmission services. We
believe that these value-added services help increase postpaid
subscriber usage and also enhance our market image as a full
service cellular provider.
Postpaid
Customers
We believe that our postpaid subscriber base in
the remaining regions consists of subscribers engaged in a
variety of occupations. Due to the lower wireline penetration
outside of Region 9, the subscriber base in Regions 5,
6, 7 and 8 includes a number of users who purchase cellular
services as a principal means of telecommunications.
We believe that a strong distribution network is
necessary in order to develop and sustain a significant presence
in these markets.
Prepay
Customers
In contrast to postpaid subscribers, prepay
customers typically generate low levels of cellular usage, have
access to a limited number of value-added services, generally
already own a handset and often are unwilling to make a fixed
financial commitment or do not have the credit profile to
purchase postpaid plan cellular services.
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Other prepay customers include vacationers and
traveling business people who require cellular service for short
periods of time. In addition to helping customers control costs,
our prepay programs have no monthly bill and allow customers to
prepay for cellular services in cash.
The prepay program markets prepay cards which
credit a specific peso amount worth of air-time usage to an
account to be utilized for outgoing and incoming calls over a
specified period of time.
A prepay customer ceases to be considered a
customer of Iusacell Celular when a specified period of time has
elapsed since the customer purchased and activated, or last
added credit to, his or her last prepay card. The
customer's telephone number is then deactivated, and the
customer is considered to have turned over.
Iusacell Celular's current prepay customers
who want to continue to have wireless service after this time
must choose to:
•
continue to be prepay customers of Iusacell
    Celular by purchasing another card or otherwise recharge the
    airtime in their accounts;
•
become postpaid customers of Iusacell Celular; or
•
become either postpaid or prepay customers of
    another wireless service provider.
VIVA prepay customers normally have 60 days
to use up an activated prepay card and activate a new card or
otherwise recharge the airtime in their account. If the customer
has not activated a new card or recharged the airtime in its
account at the end of 60 days, the balance of the VIVA
customer's account becomes zero, and the customer loses the
ability to make outgoing calls for an additional period of
305 days. During this 305-day period, a VIVA customer will
be able to receive local incoming calls, but not to make
outgoing calls, thereby becoming an "incoming calls
only" customer. If the customer activates a new card or
recharges the airtime in its account within the 305-day period,
the customer's account automatically returns to normal
status, and a new 60-day period begins. Otherwise, once the
305-day period elapses, the customer's telephone number is
deactivated. See Item 5, "Operating and Financial
Review and Prospects — Operating Results —
Increase in Subscriber Base."
We evaluate alternative methods of determining
prepay customer turnover on an ongoing basis, as the current
method is dependent upon, among other things, the number of days
of use Iusacell permits before deactivating a telephone number.
In October 1999, in order to evaluate whether we
could generate additional revenues from "incoming calls
only" customers for previously purchased cards, we extended
the period of time to use up an activated card and activate a
new card from 185 days to April 30, 2000 for
"incoming calls only" customers who otherwise would
have lost service before that date. Beginning May 1, 2000,
we decided to return to our prior policy of maintaining
"incoming calls only" customers for only 185 days
and began to turn over "incoming calls only" prepay
customers who had reached the 185-day limit without activating a
new prepay card. In July 2001 we reduced the initial period for
using up an activated prepay card and activating a new card from
185 days to the current 60 days. As a result, at the
time, approximately 345,000 incremental subscribers were
transferred to the "incoming calls only" prepaid
customer status.
At December 31, 2001, Iusacell Celular had
approximately 768,000 "incoming calls only" customers.
The substantial majority of "incoming calls only"
customers generate little or no traffic. Iusacell Celular's
prepay subscribers who can both make outgoing calls and receive
incoming calls had an average monthly revenue per subscriber
during 2001 of Ps.146 (approximately U.S.$15.9).
In March 1999, we substantially completed the
installation of the VIVA prepay operating system. The VIVA
platform better tracks customer turnover than its predecessor
system. This operating system, together with initiatives to
increase the number of distribution points for prepay cards,
adjust commissions to encourage distributors to sell prepay
cards of higher denominations, improve customer care and
otherwise improve the convenience of the prepay program, has
enhanced our ability to add and retain prepay customers and has
increased usage. In 2000, we implemented two important tools for
the sale of prepay airtime: sales through
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automated teller machines at banks and sales over
the phone by dialing *AIRE. In early 2002, we introduced a tool
to sell prepay airtime through our website.
In 2000, we invested approximately
U.S.$8.0 million in our VIVA platform in order to expand
its capacity to meet demand. In 2002, we will be evaluating
different payment platforms with intelligent network capability
that will enable us to launch new services and support third
generation wireless technology.
Given the higher turnover among our prepay
customers, we pursue plans to migrate our qualified prepay
customers to postpaid plans, where customer loyalty and
retention have been historically higher.
In order to better focus on active prepay
customers and reduce the potential turnover from prepay sales
through retail distribution channels, in 2001 we implemented a
new policy under which a pre-activated prepay sale will be
reported only when the end-user places the first outgoing call.
Accordingly, commissions related to this type of prepay sale are
now paid only after the end-user places the first outgoing call.
Postpaid
Churn
Postpaid churn measures both voluntarily and
involuntarily disconnected subscribers. Through
December 31, 1997, we calculated postpaid churn for a given
period by dividing, for each month in that period, the total
number of postpaid subscribers disconnected in such month by the
number of postpaid subscribers at the beginning of such month
and dividing the sum of the resulting quotients for all months
in such period by the number of months in such period. Effective
January 1, 1998, we changed the methodology by which we
determine average monthly postpaid churn for a given period.
Average monthly postpaid churn for a given period is now
calculated by dividing the sum of all postpaid subscribers
disconnected during such period by the sum of the
beginning-of-month postpaid subscribers for each of the months
in such period, expressed as a percentage.
Voluntarily disconnected subscribers encompass
subscribers who choose to:
•
no longer subscribe to wireless service;
•
become a prepay customer of Iusacell Celular; or
•
obtain wireless service on a postpaid or a prepay
    basis from another wireless service provider.
Involuntarily disconnected subscribers encompass
customers whose service is terminated after failing to meet
Iusacell's payment requirements.
Roaming
Through our roaming agreements with other
operators, we offer nationwide roaming service to our prepay and
postpaid cellular subscribers, and international service only to
our postpaid subscribers. Through these agreements, subscribers
can place calls from any location in Mexico served by a Cellular
A-Band operator, and can receive a call made to the
subscriber's number (automatic call delivery) regardless of
the region in Mexico in which the subscriber is located. We also
provide cellular services to all subscribers of other
non-wireline cellular operators in Mexico while such subscribers
are temporarily located in a region served by Iusacell.
An operator (a host operator) providing service
to a subscriber of another operator (the home operator)
temporarily located in the host operator's service region
(an in-roamer) earns usage revenue. We bill the home operator of
an in-roamer for the in-roamer's usage in our service
region. In the case of roaming by a Iusacell Celular subscriber
in the region of a host operator (an out-roamer), Iusacell
Celular is billed by the host operator for the subscriber's
usage. We remit the billed amount to the host operator and bill
our own customer, the out-roamer, without any mark-up. As a
result, we retain the collection risk for roaming charges
incurred by our own subscribers. Conversely, roaming charges
billed by Iusacell for in-roaming usage by subscribers of other
non-wireline operators are the responsibility of those
operators. Roaming charges between wireless operators are
settled monthly.
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Interconnection charges owed to Telmex and
long-distance charges owed to long distance carriers as a result
of roaming are the responsibility of the host operator. In
addition to higher per minute charges for airtime (as compared
to home region rates), the host operator is entitled to receive
a fee for each day roaming service is initiated. In-roaming fees
and usage revenue represented 1.6%, 1.3% and 1.7% of our total
revenues during 1999, 2000 and 2001, respectively. Out-roaming
charges represented 4.2%, 6.2% and 4.9% of Iusacell
Celular's total revenues during 1999, 2000 and 2001,
respectively.
We have more than 60 agreements with U.S.,
Canadian and other foreign operators to provide our subscribers
with international roaming capabilities. These operators include
Verizon International affiliates such as Verizon Wireless,
Movilnet in Venezuela, CTI in Argentina, Codetel in the
Dominican Republic, Telus in Canada, Puerto Rico Telephone
Company, AT&T Wireless and Cingular Wireless. In addition,
we provide, through the National Automatic Cellular Network,
automatic call delivery throughout most of the United States,
including Puerto Rico, whereby our subscribers may receive
telephone calls from Mexico without the caller having to dial
access codes. Currently, our customers are able to roam in over
2,000 municipalities in the United States and Canada as well as
in 85 other countries in the Americas, Europe, Asia, Africa and
the Pacific.
Long Distance Services
In August 1996, we became one of Telmex's
first competitors in long distance service when we began to
provide long distance services to our cellular subscribers in
Mexico pursuant to the 30-year concession which was awarded to
Iusatel in October 1995 and was modified in December 1997. Our
competitors in long distance include 14 other companies
operating under concessions, including Telmex, the former long
distance monopoly. We believe that competition in the Mexican
long distance market has stimulated growth in demand for long
distance service. During 1998, there were no significant price
changes in our long distance rates, and our long distance
traffic increased approximately 11% compared with 1997. During
1999, our prices increased approximately 14%, and our long
distance traffic increased approximately 25% compared with 1998.
During 2000, our prices decreased approximately 13%, and our
long distance traffic increased approximately 22% compared with
1999. During 2001, we implemented an average 8% price increase
for our long distance customers, including cellular long
distance, while the rate of inflation in Mexico that year was
4.4%, and long distance traffic increased approximately 5%
compared with 2000.
We currently provide long distance service using
our own switches and transmission equipment and a combination of
fiber optic lines, microwave links and lines leased from Telmex
and Alestra. At December 31, 2001, we provided long
distance service in 52 cities to 1,872,967 customers, 1,864,045
of which were existing customers for our other services. We
chose not to commit significant marketing resources to the
presubscription balloting process in which telephone customers
were asked to elect their long distance carrier, which was
conducted in cities across Mexico in 1997, 1998 and 1999, and as
a result we fared poorly in the initial balloting results. Under
the Cofetel rules we were exempted from the presubscription
obligation for our cellular customers. This authorization
expired on April 7, 2002. We requested an extension and
Cofetel granted us a temporary six-month extension, while it
decides on the final term of the extension, that will expire on
October 7, 2002. Revenues related to long distance services
represented 9.3% and 10.4% of our total revenues for 2000 and
2001, respectively, not including dark fiber optic cable sales.
Our long distance concession provides for
coverage and technological investment requirements. If we do not
satisfy such requirements, we may have to pay fines and
penalties and potentially lose our long distance concession.
After evaluating the commercial feasibility of complying with
our initial concession, we requested that the SCT and COFETEL
modify the terms of the concession to reflect a more rational
business plan. In December 1997, the government granted the
modification request, authorizing a change in the coverage
requirements and increasing flexibility in the choice of
transmission technology, significantly reducing our investment
requirements.
We further reduced the capital investment for our
long distance business by entering into fiber optic cable swap
agreements with two other long distance companies, Marcatel and
Bestel, in March 1998 and December 1998, respectively. These
agreements will allow us to acquire fibers in the long distance
fiber optic networks
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built by Marcatel and Bestel in central and
northern Mexico in exchange for fibers in the long distance
fiber optic network we recently completed in central Mexico. As
a result, we will be able to obtain redundancy in central Mexico
and access to the United States border at minimal cost. We
expect to complete the implementation of these fiber exchanges
in 2003.
In December 1999, Iusatel agreed to swap dark
fiber optic cable in the amount of U.S.$17.3 million and
sell approximately U.S.$7.4 million of additional dark
fiber optic cable to Telereunion, S.A. de C.V., an affiliate of
Telscape International, Inc. Upon the signing of this swap
agreement, Telereunion issued promissory notes to Iusatel for
the purchase price but defaulted on the payment of each of these
notes. In April 2001, Telereunion's U.S. parent, Telscape
International, Inc, filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. As part of a
settlement arrangement, on September 17, 2001, Telereunion
and Iusatel executed an agreement by means of which the former
transferred dark fiber optic assets in the amount of U.S.$7.4
million to the latter in exchange for full settlement of the
past notes receivable in the same amount. In addition, in 2001,
we entered into a fiber optic cable swap agreement worth
Ps.142.7 million (U.S.$15.6 million) to exchange
certain long-distance fiber optic cables.
In 1996, Iusatel executed an agreement with
Teleglobe USA, Inc. for the exchange of international long
distance traffic. On May 28, 2002, Teleglobe USA, Inc.,
filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. In 2000, Iusatel entered into a second
agreement for the exchange of international long distance
traffic with AT&T, giving Iusatel two alternative routes to
deliver international long distance traffic, thereby reducing
costs and enhancing its proportional return traffic.
Other Services
Paging
On December 14, 1995, Iusacell Celular and
Infomin formed Infotelecom as a joint venture to market national
and international paging services. Iusacell Celular owns 49% of
Infotelecom, Infomin owns 49%, and the remaining 2% is owned by
Mr. José Ramón Elizondo, a former director of
Iusacell Celular. Infomin has a concession, which expires on
July 20, 2009, to provide nationwide paging services in
Mexico. Under the Infotelecom joint venture agreement, Infomin
is obligated to contribute this concession to Infotelecom.
Infomin obtained the Infotelecom's Board of Directors
authorization to transfer its shares in Infotelecom to Banco
Mercantil del Norte, S.A. Institución de Banca Multiple, a
Mexican bank, in settlement of certain indebtedness. The
completion of such transaction has not been notified to Iusacell
Celular.
Pursuant to a marketing agreement between
Iusacell Celular and Infomin, Infotelecom has the right to
market national paging services on behalf of Infomin, and
Infotelecom is required to make monthly payments to Infomin
equal to 5% of all gross revenues for the preceding month. This
payment represents the amount which Infomin, as the concession
holder, must pay the SCT for the right to provide paging
services.
Infotelecom began marketing paging services in
August 1996 and, at December 31, 2001, provided service in
34 cities including Mexico City, Guadalajara, Monterrey, Puebla,
Cuernavaca, Toluca, Querétaro, León, Guanajuato, and
Ciudad Juárez, Chihuahua.
As of December 31, 2001, Infotelecom had
17,054 paging customers. Our revenues related to paging services
represented 0.8% and 0.5% of total revenues for 2000 and 2001,
respectively.
Under their joint venture agreement, Iusacell
Celular and Infomin valued the Infomin paging concession at
U.S.$10.5 million, and we agreed to fund the first
U.S.$10.5 million of Infotelecom's cash requirements
before Infomin would be required to make pro rata cash
contributions. In December 1998, Iusacell Celular and Infomin
determined the appropriate manner in which to capitalize
Infotelecom. Up to that time, we had been funding the joint
venture by means of loans. On December 31, 1998, Iusacell
Celular capitalized Ps.141.9 million
(U.S.$15.5 million) in advances to Infotelecom, including
Ps.52.6 million (U.S.$5.7 million) in interest which
was not credited against the U.S.$10.5 million required to be
funded by us. However, U.S.$9.0 million of such
capitalization was applied against the U.S.$10.5 million to
be funded by us. In 1999, Iusacell Celular capitalized
approximately an additional U.S.$1.0 million against the
U.S.$10.5 million
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funding requirement. In 2000 and 2001, no amounts
were capitalized and applied against the funding requirement.
Public and
Rural Telephony and Local Fixed Wireless
Iusacell Celular operates public and rural
telephony programs, utilizing available cellular capacity. These
programs provide telecommunications services through cellular
telephones in phone booths, intercity buses and rural areas. The
provision of services in this way fulfills the terms of our
concessions for the provision of cellular telephone service and
utilizes our cellular network to provide telecommunications
coverage in areas with little or no basic service. As of
December 31, 2001, we had 37,972 cellular telephones in
service under our public and rural telephony programs,
representing a 91% increase compared to 19,917 cellular phones
in service as of December 31, 2000.
As of December 31, 2001, we were providing,
on a trial basis pending approval from SCT, local wireless
service in the 450 MHz frequency band to 9,869 customers in
selected markets in Region 9. We do not charge our local
wireless customers fees for incoming calls. We believe that
there is substantial unmet demand for telephone service in
Mexico as demonstrated by the relatively low level of
residential wireline, business wireline and cellular penetration.
We experienced substantial delays in obtaining
the SCT's approval of our technical and economic plans for
local wireless service in the 450 MHz frequency band.
However, on June 10, 1997, the SCT and Iusacell Celular
agreed on a process by which Iusacell Celular could obtain a
concession issued and recognized by the SCT to provide local
wireless service in the 450 MHz frequency band. This
agreement allows us to convert and consolidate our existing
concessioned radiotelephony frequencies into 450 MHz
spectrum in Regions 4, 5, 6, 7 and 9 and grants us a right
of first refusal to acquire concessions to provide local
wireless service in these regions over such frequencies at
prices derived from the prices of the winning bids in the
auctions for 450 MHz and 1.9 GHz (PCS) frequency bands
concluded in May 1998. These auctions yielded a right of first
refusal exercise price estimated at U.S.$2.25 million for
each of the five regions. However, neither the SCT nor COFETEL
has formally notified us of the exact right of first refusal
exercise price, the payment terms or the coverage and build-out
requirements relating to the concessions, all of which are
necessary for us to decide whether to exercise our right of
first refusal.
As a result of these delays and the uncertainty
relating to our ability, at a commercially acceptable cost, to
implement full scale local wireless service in the 450 MHz
frequency band, we are exploring alternatives for providing
local telephony services, such as limited zone wireless services
in the 800 MHz (cellular) or 1.9 GHz (PCS) frequency
bands deploying digital technology that permits mobility or
fixed wireless services over such bands. If we were to determine
that it would be preferable to pursue such an alternative rather
than to continue to pursue local wireless service in the
450 MHz frequency band, that alternative could require the
acquisition of concessions, other regulatory approvals and the
payment of substantial fees. Our management is currently
evaluating our overall strategy with respect to local telephony
services.
In September 1998, we determined that because of
many factors, including the impact of changing technology since
the initiation of the 450 MHz fixed local wireless project
in 1994, an impairment of our investment in 450 MHz TDMA
technology had occurred. As a result, we recorded a substantial
non-cash write-down of our investment in the 450 MHz fixed
local wireless project. Given the obsolescence of our existing
450 MHz network infrastructure, we may record a non-cash
write-down of substantially all of the remaining book value of
the 450 MHz project fixed assets by the end of 2002.
In expanding our local telephone services, we
plan to capitalize on synergies between our mobile wireless and
local wireless services, utilizing our existing cellular network
for connections with the local subscribers' premises.
Furthermore, we believe that local wireless service requires a
lower investment cost per line than landline service.
In January 1996, our long distance subsidiary
applied to modify its concession to allow it to provide local
wireline service, including dedicated circuits, local switching
and data service. This request was reasserted in Iusacell
Celular's October 1997 application to modify our long
distance concession. This request was rejected
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for procedural reasons in July 1998. In January
1997, Iusatelecomunicaciones, S.A. de C.V., Iusacell's
450 MHz local wireless subsidiary, also filed for a local
wireline concession. The SCT has not yet issued this concession.
While we currently do not anticipate that the provision of local
wireline service will become a significant part of our services,
we may provide, on a case-by-case basis, local wireline
telephone service as part of our overall provision of
telecommunications services.
Data
Transmission
We began providing data transmission services in
1993. We provide both public and private data transmission
primarily using excess capacity in our microwave and fiber optic
backbone in our existing cellular network in Region 9 and, until
March 2001, we provided satellite transmission through
Satelitrón, S.A. de C.V., which we refer as
"Satelitrón," a joint venture among Iusacell
Celular, Hughes Network Systems and another partner which
provided a shared hub for private networks. On March 22,
2001 we sold our 65.9% equity interest in Satelitrón and
our ownership of the Satelitrón transmission hub, receiving
approximately U.S.$1.3 million in proceeds.
Since the latter part of 2001 we started
providing data transmission services, our primarily targeted
customers are Mexican based carriers. As of the end of May 2002,
we had eight customers, all Mexico based carriers.
In June 2002, we installed and activated a
Genuity Internet POP in Mexico which allows Iusatel to deliver
Internet Access Services in conjunction to our leased line
service. The addition of this infrastructure will better
position Iusatel to deliver future Internet Protocol (IP)
services.
Microwave
Transmission
In December 1998, the SCT issued three 20-year
concessions to Punto-a-Punto Iusacell, S.A. de C.V., a joint
venture between Iusacell Celular and Mr. José
Ramón Elizondo, a former director of Iusacell Celular, for
short-haul microwave frequencies in the 15 GHz and 23 GHz
frequency bands won at auction. Punto-a-Punto Iusacell paid
approximately Ps.42.6 million (U.S.$4.7 million) for
these concessions. These frequencies are being used to
interconnect our cell sites, business customers and other
networks. Additionally, we have an obligation to provide the
right to use excess capacity in these frequencies to other users
to enable them to install their own microwave links.
Accordingly, during 2000, Punto-a-Punto Iusacell, S.A. de C.V.
started to provide services to other carriers allowing them to
use our excess capacity for installation of links. In 2001, we
continued providing these services, including services to other
carriers.
Punto-a-Punto Iusacell participated in the
auctions for long-haul microwave frequencies in the 7 GHz
frequency band that began in March 1999 and concluded in July
1999. However, Punto-a-Punto Iusacell did not win any
concessions in these auctions.
In September 1999, Punto-a-Punto Iusacell entered
into an agreement with an affiliate of the service provider in
the four Cellular A-Band regions in northern Mexico to swap the
right to use long-haul microwave frequency links held by the
affiliate for short-haul microwave frequency links held by
Punto-a-Punto Iusacell plus U.S.$2.45 million in cash.
Punto-a-Punto Iusacell closed this transaction in January 2000
and is currently operating and installing additional links in
those frequencies.
Sales and Marketing
With the assumption of control of our management
by Verizon in 1997, we redefined our marketing strategy for
achieving profitable growth, particularly in our mobile wireless
business. More recently, we have focused our sales and marketing
strategy on the CDMA digital cellular business, where there is
greater per-subscriber usage and revenues than there is with
analog subscribers. We seek to increase our average monthly
revenue per subscriber, aggressively grow our cellular
subscriber base, decrease the cost of acquiring additional
subscribers and reduce postpaid churn and prepay turnover.
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Our cellular wireless subscribers consist of
postpaid and prepay customers who can be classified as high,
moderate or low-usage customers. We are implementing
distribution, advertising, customer service support and pricing
plans targeted to each specific customer segment and to increase
airtime usage.
Distribution
We currently target the various segments of our
subscriber base through five sales and distribution channels:
Iusacell Celular owned and operated customer sales and service
centers, independent distributors, a direct sales force,
commission sales agents and telemarketing. We are aggressively
increasing the number of our points of distribution in order to
acquire additional subscribers. At December 31, 2001,
Iusacell Celular had 45,985 points of distribution, as compared
to 20,762, 6,522 and 2,280 at December 31, 2000, 1999 and
1998, respectively. As of December 31, 2001 these points of
sale comprised 127 customer sales and service centers owned and
operated by Iusacell, 1,598 points of sale operated by
independent distributors who offer all of our products and
44,260 points of sale for distribution only of VIVA prepay
cards, also operated by independent distributors.
Our redesigned sales force compensation plan is
structured to motivate the sales force within each distribution
channel through monetary incentives. This plan provides training
and monetary incentives so that the sales force is encouraged to
activate profitable and loyal accounts, cross-sell the full line
of our service offerings and maintain our standards in
advertising, promotions and customer service.
Customer
Sales and Service Centers
We have reconfigured each of our customer sales
and service centers to offer one-stop-shopping for a variety of
cellular, long distance and paging services, as well as
accessories. Walk-in customers can subscribe to cellular service
postpaid plans, purchase prepay cards, sign up for long distance
service and purchase equipment such as handsets, pagers and
accessories. In an effort to maximize customer loyalty, reduce
postpaid churn and prepay turnover and increase average monthly
revenue per subscriber through cross-selling, we continue to
emphasize the customer sales and service centers that we own and
operate ourselves as a key distribution channel.
During 1998, we opened 22 new customer sales and
service centers. In 1999, although we did not open any new
customer sales and service centers, we replaced one existing
customer sales and service center and remodeled 16 other
existing customer sales and service centers. In 2000, we opened
14 new customer sales and service centers and remodeled 6 other
existing customer sales and service centers. In 2001, we opened
25 new customer sales and service centers. As of
December 31, 2001, Iusacell Celular owned and operated 127
customer sales and service centers throughout our cellular
regions.
Direct
Sales Force
To service the needs of our customers, we have
created a dedicated direct sales force, which, at
December 31, 2001, included 631 full-time sales
representatives, an increase from 117 full-time sales
representatives at December 31, 2000. The increase in the
number of our direct sales representatives was the result of our
recent acquisition of Portatel which provides cellular service
in Region 8. This group of trained representatives seeks to
increase sales by:
•
aggressively pursuing the sales opportunities in
    the different niches of the market;
•
"bundling" combinations of services
    into customized packages designed to meet customers'
    requirements;
•
developing and marketing new services to satisfy
    the demands of such customers; and
•
educating corporate purchasing managers about
    alternative pricing plans and services.
These direct sales representatives are
distributed along our service regions to deliver personalized
service.
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In 2001, face-to-face customer service personnel
were integrated to 31 stores which we own and operate in an
effort to further personalize the service. In 2002, we expect to
include a customer service representative in all of the stores
we own.
Independent
Distributors
In order to broaden our market, we maintain
relationships with a broad network of over 80 exclusive
distributors that, at December 31, 2001, sold all of our
products at 1,598 points of sale in our core cellular regions in
central Mexico. In addition, VIVA prepay cards were distributed
at an additional 44,260 points of sale. In order to ensure that
our standards are maintained at all distribution points, we
provide assistance to our distributors in training, promotions
and advertising. We also provide them with information on our
customer base to allow the distributors to service our customers
effectively.
In 2001, we launched a program called "los
Rojos" which was implemented in Mexico City, Guadalajara,
Toluca, Cuernavaca, Puebla and Veracruz. The program,
implemented through a distributor, recruits existing street
vendors and provides them with an opportunity to increase their
income by directly selling our prepay VIVA cards and
preactivated prepaid handsets to car drivers and pedestrians.
Commission
Sales Agents
We retain commission agents as a flexible sales
force in all of our mobile wireless regions. The agents function
as cellular service brokers for Iusacell Celular, working out of
their own premises to better target their customers. These
agents provide additional distribution outlets with minimal
support from Iusacell. We used to retain commission agents as a
flexible sales force throughout our regions. As of
December 31, 2001, we had no agreements with commission
sale agents since we decided to incorporate these into our
direct sales force.
Telemarketing
From time to time, Iusacell Celular engages
telemarketing service providers as a direct marketing mechanism
or to follow up on targeted mailings.
Electronic
Means
In 2000, we implemented two important electronic
tools for the sale of prepay airtime: sales through automated
teller machines at banks and sales over the phone by dialing
*AIRE. Sales at ATM machines are charged against our
customer's bank account. Sales using *AIRE are charged to
our customer's credit card. We have implemented ATM sales
at BBVA Bancomer, Bital and Bancrecer. We intend to negotiate
additional ATM distribution agreements in 2002. The charges are
credited to our customer's account by using a personal
identification number.
Advertising
Iusacell Celular has launched an integrated media
plan emphasizing the benefits of our products and supported by
the Iusacell brand image, the logo for which was redesigned in
1997 and modernized in 2001. Since 1997, all product offerings
have been marketed under the single, well-recognized IUSACELL
brand name which was reinaugurated as
IUSACELL Digital
in
February 1998, in anticipation of the digitalization of our
network and product offerings.
The purpose of the media plan is to inform and
convince potential users and subscribers about the benefits of
the products and services offered by Iusacell Celular and to
target potential subscribers through a coordinated print, radio,
television and fixed and moving outdoor advertising campaign. A
key element of this integrated media plan is a periodic agency
review, where the sales results of a given campaign are
evaluated. The integrated media plan enables us to negotiate
more favorable advertising rates. Television and print
advertisements prominently feature an ad-response telephone
number to solicit new customer inquiries.
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Customer
Service
We view superior customer service as essential in
order to distinguish ourselves in the competitive Mexican
cellular telecommunications market. We have trained customer
service representatives who are equipped to answer
customers' questions regarding services and products and
are available from 8:00 a.m. to 10:00 p.m. daily. We
train our customer service representatives to ensure that each
customer receives prompt attention, informed answers to any
inquiries and satisfactory resolution of any concerns. We
believe that enhanced customer service, especially after-sales
support, is essential to developing brand loyalty and supports
the efforts of our sales force to cross-sell our services and
products. For prepay customers, the VIVA prepay operating system
better tracks the usage patterns and identities of these
subscribers. The system has improved customer satisfaction
through automated activation, automated self service menus
through the Integrated Voice Response (IVR) system, voice
messaging and other services and has lowered the cost of support
services.
To further enhance customer service, we have
installed dedicated personal computer terminals linked to our
billing system so that each customer service representative,
either at a Iusacell Celular customer sales and service center
or at a Iusacell Celular call center, can handle customer
inquiries, billing questions and account payments with real-time
data and a full customer profile in hand. These dedicated
personal computer terminals have been provided with a new
application, Computer Telephony Integration (CTI) which allows
us to give a proactive solution to our customers' requests,
minimizing the time of response. Customer data gathered from
such sources as the activation process, the billing system and
exit interviews with customers who terminate service allows us
to better tailor our marketing strategy to each customer. Along
with providing information as to how we can improve our customer
service, this data is expected to enable representatives from
each of the distribution channels to better target their sales
approach to each customer when cross-selling Iusacell's
services and products. We are currently in the process of
upgrading our Automatic Call Distribution (ACD), monitoring and
workforce management systems and we believe we will have these
upgraded systems in place by the second half of 2002.
In early 1998, we opened two call centers that
provide more automated and efficient service to customers.
Iusacell Celular's call center service quality and response
speed in Region 9 further improved in 2000 with the
implementation of state-of-the-art customer service software. We
implemented this software in Regions 5, 6 and 7 in 2001. In
1998, we also began implementing the Customer Attention Support
Team (CAST) program in our busiest customer service centers in
order to accelerate the problem resolution process. This program
has also been expanded to include the majority of our customer
service centers in all five of our cellular operating regions.
Currently we have extended this program to all our corporate,
medium and small business accounts as well as government
accounts. Each of these customers has an assigned CAST, sales
and collections executive.
In December 2000, the certifying company
Societé Generale de Surveillance de México
(SGS) granted ISO 9002 Certification under the
Entidad
Mexicana de Acreditación (EMA)
to Iusacell's
customer care process in the following areas:
•
*611;
•
explanations and complaints, including certain
    CAST sale centers;
•
activations;
•
retention; and
•
service assurance.
Since we received the ISO 9002 Certification, we
have had four quality audits by the certifying company and we
have maintained the certification.
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Pricing
General.
Iusacell
Celular offers a variety of flexible pricing options for our
mobile cellular service. The primary components of the postpaid
pricing plans include monthly fees, per-minute usage charges and
a number of free minutes per month. The prepay program markets
cards which credit a specified number of pesos to a
customer's account. The cards can be utilized for outgoing
and incoming calls over a period of up to 60 days and for
incoming local calls only for an additional period of
305 days. See Item 4, "Information on the
Company — Business Overview — Cellular
Services — Prepay Customers." Most of the
postpaid plans include a selection of free cellular handsets.
The prepay plans do not provide free cellular handsets.
Postpaid Plans.
The
digital and analog postpaid pricing plans are designed to target
primarily high and moderate usage postpaid subscribers.
High-usage customers are typically willing to pay higher monthly
fees in exchange for larger blocks of free minutes, value-added
services, a free high-end handset and lower per minute airtime
charges under a single contract. Moderate and lower-usage
subscribers typically prefer pricing options which have a lower
monthly charge, fewer free minutes, a less expensive handset and
higher per minute airtime charges than those options chosen by
high-usage customers.
In April 1999, in an effort to differentiate our
digital product, we drastically simplified our digital postpaid
plan offerings. We reduced the number of our postpaid plans from
11 to 6 and substantially increased the number of minutes
included with the monthly fee when compared with previous
comparable digital and analog postpaid plans. However, to
satisfy the more limited needs of low-usage postpaid
subscribers, we maintained one additional postpaid plan which
provides a moderately priced, fixed monthly charge coupled with
a high per-minute airtime charge and relatively few free minutes.
Prepay Plans.
In
contrast to postpaid subscribers, prepay customers typically
generate low levels of cellular usage, have access to a limited
number of value-added services, generally already own a handset
and often are unwilling to make a fixed financial commitment or
do not have the credit profile to purchase postpaid plan
cellular services. Other prepay customers include vacationers
and traveling business people who require cellular service for
short periods of time. In addition to helping customers control
costs, our prepay programs have no monthly bill and allow
customers to prepay for cellular services in cash.
In September 1997, we introduced our
next-generation VIVA prepay service. VIVA provides for automated
reactivation and value-added services such as voice-messaging.
As of December 31, 2001, VIVA prepay cards were available
in denominations of Ps.100, Ps.150, Ps.200 and Ps.500. Since
January 1, 2002, after the implementation of a new tax to
certain telecommunication services in Mexico, our VIVA prepay
cards are only available in denominations of Ps.100 and Ps.150.
See Item 3, "Key Information — Risk
Factors — Risk Factors Relating to Doing Business in
Mexico."
Hybrid Plans.
In
2000, we launched the ID Pack, a hybrid plan with elements of
postpaid and prepay plans targeted at high school and
university-aged youths who want the status of a cellular phone
but want to control their usage. The plan had a low monthly fee
of Ps.99 and provided certain value-added services, with airtime
purchased through the activation of a VIVA prepay card. In 2001,
we launched the Lady Pack, a hybrid plan targeted at women in
their 20s. Both of these plans were discontinued in January
2002. In February 2002, we launched the IDEAL plan, a new hybrid
plan targeted at individuals who want the status of a cellular
phone but want to control their usage. This plan also has a low
monthly fee of Ps.165 and provides certain value-added services
and 30 minutes worth of airtime per month. Additional airtime is
purchased through the activation of a VIVA prepay card.
Discounts on Incoming
Calls.
In response to competitive and
market conditions, we offer discounts on the airtime charges of
up to 50% for incoming calls for our customers who are in their
home region and who have opted out of the CPP system. Beginning
in May 1999, with the advent of the CPP modality, cellular
customers who do not opt out of CPP do not pay airtime charges
for incoming local calls (other than incoming local calls while
roaming outside their home region).
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Off-peak Pricing.
Evidencing our commitment to innovation and our focus on
differentiation, we launched an off-peak pricing rate plan for
postpaid and prepaid subscribers in November 2001. For the first
time in Mexico, this plan offered wireless customers a
discounted per-minute tariff during nights and weekends. Our
competitors soon followed our initiative.
Strategy.
We intend
to continually review market pricing and will attempt to
increase prices, if economic and competitive conditions permit,
to keep pace with inflation. Constant adjustments to meet market
and competitive conditions may require that we increase or
decrease prices over short periods of time. See Item 5,
"Operating and Financial Review and Prospects —
Trend Information — Price Increases and
Rollbacks."
Activation, Billing and Collection
Procedures
We can activate a phone within 15 minutes or less
for any prepay and postpaid customers. For postpaid customers
who intend to pay their monthly charges with a credit card,
there is a credit approval process prior to the delivery and
activation of a cellular telephone. For postpaid customers who
intend to pay their monthly charges in cash, there is a credit
review process and a requirement of a security deposit,
depending on the postpaid plan, in a minimum amount equal to 1.5
times the corresponding monthly rental fee. In 2000, we started
to offer direct online activation to reduce the time of response
to our customers.
We have also implemented a system to monitor MOU
levels and the number of calls to certain geographic areas in
order to identify abnormal usage by postpaid subscribers. When
abnormal usage is detected, we contact the subscriber to
determine whether such usage has been authorized. We believe
that these procedures are effective in reducing the number of
billing disputes with subscribers and losses due to cellular
fraud.
Billing is currently administered using five
different billing systems, including a cellular customer care
and billing system provided by LHS Communications Systems, Inc.
(LHS) in Regions 5, 6, 7, 8 and 9 which we also use for our
450 MHz fixed local wireless business, one point of sale
system that provides billing, administration and control
features, a proprietary residential long distance system, a
proprietary system for high-volume business long distance
customers and a purchased system for paging customers. We
compile billing information from our switches by electronic
transfer on an hourly basis for processing by our billing
systems. We take protective and disaster recovery measures in
connection with all billing information.
From 1998 through 2001, we invested a total of
U.S.$32.6 million in the cellular portion of our LHS
cellular customer care and billing system.
We mitigate our credit exposure in five ways:
•
for all customers by obtaining a credit report
    from the
Buró Nacional de Crédito
(National
    Credit Bureau), a Mexican affiliate of TransUnion Corporation;
•
by requiring payment to be made by credit card
    or, for those customers who do not pay by credit card, by
    requiring security deposits;
•
by requiring that postpaid customers purchase a
    bond, which provides for payment in the event of customer
    defaults;
•
by establishing credit limits, and portfolio
    segmentation, according to customers' credit quality; and
•
by utilizing prepay services, which eliminate all
    credit risk.
For 1999 and 2000, we reserved approximately 2.7%
and 1.6% of our cellular revenues in each year for doubtful
receivables. For 2001, we reserved approximately 1.7%% of our
cellular revenues for doubtful receivables.
In addition, we also record a revenue provision
for those postpaid customers who had fallen behind in their
payments and whose service had been suspended. Toward the end of
the third quarter of 1999, we changed our billing practice for
these postpaid customers. Rather than continue our policy of not
charging
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monthly fees upon suspension, in the hope of
receiving additional revenues from CPP tariffs for incoming
local calls and from suspended customers who ultimately pay
overdue amounts and reinitiate service, we began to permit
incoming call service and continue to charge monthly fees to
suspended customers for an additional two months, but reserved a
substantial portion of the monthly fees as a revenue provision.
This period was reduced to two months in the second quarter of
2000. This change in policy resulted in additional marginal
revenue and in the increase in 1999 and 2000 reserves discussed
above.
Network and Equipment
Cellular
Services
As of December 31, 2001, our integrated
mobile wireless network comprised 6 cellular switches, 537 cell
sites, 135 repeaters and 24 microwave repeaters, and covered
approximately 65% of all mobile wireless regional POPs,
representing 51 million inhabitants or 65% of Mexico's
total population. In 2000, we added 63 cellular cell sites and
38 repeaters throughout our cellular regions. During 2001, we
added 83 new cellular cell sites, 43 repeaters and 1 switch. As
a result of the integration of Region 8 into our business,
in 2001 we added 26 cell sites in Region 8 to our cellular
network.
In December 1997, we signed an agreement with
subsidiaries of Lucent Technologies for the replacement of
Iusacell's existing analog network equipment with Lucent
Technologies analog and CDMA digital network equipment. This
replacement began in February 1998. All regions that we owned at
the time were completely swapped out as of August 1999.
We elected to deploy CDMA digital technology
instead of TDMA technology based on our and Verizon's
evaluation of the two technologies. Verizon is successfully
using CDMA technology in most of its U.S. markets with favorable
customer response. CDMA offers significantly greater
call-carrying capacity, superior voice quality, longer telephone
battery life and greater fraud protection and is easier to
upgrade than TDMA. We will maintain transmitting equipment to
serve both analog and digital formats, and we are marketing
tri-mode cellular and PCS telephones capable of sending and
receiving both analog and digital transmissions in order to
support roaming service between our cellular and PCS regions.
Digital microwave links between cell sites and
the landline system are supplied by various equipment
manufacturers. Taking advantage of the ability of our various
switching systems to run customized software, in 2000 we
developed a proprietary software package which is able to track
and report, in real-time, all aspects of network performance,
including traffic analysis, call quality and alarms. In 2001 we
began introducing the new Dense Wavelength Division Multiplexing
(DWDM) technology in some high-traffic areas of our fiber optic
network to increase capacity.
We have a network operations and control center
(NOCC) in Mexico City which oversees, administers and provides
technical support to all our cellular regions. In 1999, we
upgraded our NOCC by installing a new network management system
that provides more complete and automated surveillance
capabilities and fault and performance management for all
network equipment. During 2000, we implemented a new network
administration system that provides better surveillance and
administration of network performance. We are installing another
center for network operations in Toluca that will provide an
alternative monitoring capability for the network in case of a
contingency in the center for network operations located in
Mexico City. We expect to start operations at the center to be
located in Toluca during the second half of 2002.
In March 2002 we started providing two-way Short
Message Service (SMS) and we are evaluating the feasibility of
installing a Packet Switched Data (PSD) platform to provide data
services over the new 3G-1XRTT technology. Nevertheless, the
network is being currently enhanced to support 3G-1XRTT handsets
only for voice service in order to increase the network capacity.
Other
Services
We provide paging services primarily using our
own cellular network facilities as well as 69 owned and one
leased paging antennas. For long distance, we use fiber optics
and state-of-the-art digital systems. In
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particular, we use our three long distance
switches and our own fiber optic network and transmission
equipment, as well as other redundant facilities leased from
Telmex and other competitors.
We provide private data transmission services,
primarily using excess capacity in our microwave backbone in our
existing cellular network in Region 9.
We expect that our local wireless network, if
implemented in the 450 MHz frequency band, will be based on
the most advanced digital switching, transmission and subscriber
connection equipment that is readily available and commercially
feasible. We would utilize our existing infrastructure,
including one switch and fourteen 450 MHz cell sites, to
the extent possible. If we opt to provide local wireless service
through our 800 MHz cellular band, the digital technology
that would be employed would offer additional features such as
out-of-zone mobility.
Competition
The offering of cellular services in Mexico is
currently a regulated duopoly in each region. Iusacell
Celular's cellular competitor in all regions in which it
provides service is Telcel, the holder of the Cellular B-Band
concession for service throughout Mexico and the country's
largest cellular provider. Cellular systems compete principally
on the basis of quality of telecommunications services, customer
service, price, breadth of coverage area, roaming capabilities
and value-added services. Operators are largely free to set
their own rates, provided they are set on the basis of cost.
We are facing increasing competition from
companies providing mobile wireless telecommunications services
utilizing alternative existing technologies. Nextel de
México, S.A. de C.V. began marketing its enhanced
specialized mobile radio services in 1998. In 1999, we began to
face competition from the winners of 1.9 GHz (PCS) spectrum
in the auctions concluded in May 1998. Pegaso commercially
launched its mobile wireless PCS services in Tijuana in February
1999, initiated PCS services in Monterrey, Guadalajara and
Mexico City later in 1999 and at the end of 2001 provided PCS
service in 12 cities in Mexico. In May 2002, Telefónica
Móviles announced that it signed an agreement to buy 65% of
the share capital of Pegaso from Leap Wireless and Sprint PCS
and intends to merge this entity into its existing operating
company in Mexico. Unefón launched mobile wireless services
in Acapulco and Toluca in February 2000, and now provides fixed
and mobile wireless services in those two cities as well as in
Mexico City, Guadalajara, Monterrey and 12 more cities in Mexico.
In paging services, we compete with established
companies such as Comunicaciones Mtel, S.A. de C.V. (Skytel),
Operadora Biper, S.A. de C.V., Enlaces Radiofónicos, S.A.
de C.V. (Digitel), Comunicación Dinámica
Metropolitana, S.A. de C.V. (Coditel), Grupo Radio Beep, S.A. de
C.V. and Buscatel, S.A. de C.V., a Telmex subsidiary. Some of
our paging competitors have already established nationwide
paging networks, giving them a significant operational and
marketing advantage over us. In 1999, COFETEL concluded auctions
for a series of nationwide and regional concessions for
frequencies to be used to provide two-way paging services in
which we did not participate. Moreover, we and other digital
wireless providers, including Telcel and Pegaso, have begun to
provide one-way and two-way short message services, which are
paging services, over wireless frequencies.
In providing long distance telephone service, we
face or will face competition from 14 other concession holders,
including Telmex and joint venture companies in which AT&T
and MCI WorldCom have beneficial ownership interests.
Presubscription balloting in which telephone customers were
asked to elect their long distance carrier was conducted in 150
cities across Mexico in 1997, 1998 and 1999. We chose not to
commit significant marketing resources to the balloting process
and fared poorly in the initial balloting results.
In the local telephony market, we expect to face
significant competition from Telmex, the existing monopoly, and
new competitors providing service over the 1.9 GHz (PCS)
frequency bands, and 3.4-3.7 GHz (Wireless Local Loop)
frequency bands, such as Axtel and Unefón.
In providing data transmission services, we
compete for customers with Telmex, state-owned
Telecomunicaciones de México, which we refer to as Telecom,
and the operational long distance companies.
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In addition, we believe that the current Mexican
data transmission industry includes over 1,000 private networks
that provide data transmission services.
Government Regulation
Telecommunications systems in Mexico are
regulated by the SCT and by COFETEL, a decentralized regulatory
body within the SCT, pursuant to the 1995 Telecommunications Law
(
Ley Federal de Telecomunicaciones
), which became
effective on June 8, 1995. Regulations governing
international long distance, domestic long distance and local
telephony have been promulgated under the 1995
Telecommunications Law. However, some rules from the prior Law
of General Means of Communication (
Ley de Vías Generales
de Comunicación
) and the rules promulgated under such
law, including, without limitation, the Telecommunications Rules
(
Reglamento de Telecomunicaciones
) which we collectively
refer to as the Original Communications Laws, generally remain
effective if they are not inconsistent with the 1995
Telecommunications Law and the rules promulgated under that law.
These laws and regulations define the regulatory
structure applicable to the nationwide telecommunications
infrastructure and the provision of telecommunications services.
They govern, among other things:
•
applications to obtain concessions to install,
    maintain and operate telecommunications systems;
•
the establishment of technical standards for the
    provision of telecommunications services;
•
the grant, revocation and modification of
    concessions and permits; and
•
the auction of spectrum.
During the first half of 2001, the SCT announced
that the 1995 Telecommunications Law would be amended to include
new provisions related to competition, customer protection,
spectrum auctions, permits for commercialization of
telecommunication services and universal service. Reportedly,
the amendments will focus more on networks than on services. The
SCT and the telecommunications industry have been recently
involved in discussions to define the content of the new law. We
believe that the initiative could be presented to Congress for
approval in 2002.
In particular, the terms and conditions of
concessions and permits granted under the Original
Communications Laws, which is the case for the cellular
concessions and permits granted to Iusacell and our
subsidiaries, should be governed by the Original Communications
Laws and respected under the new regulatory regime until their
expiration. The 1995 Telecommunications Law may grant rights
enhancing those set forth in the Original Communications Laws.
For instance, rates charged by holders of concessions and
permits granted under the Original Communications Laws no longer
require prior approval from the SCT, but only require
registration with COFETEL.
Concessions
and Permits
To provide public telecommunications services in
Mexico through a public network, the service provider must first
obtain a concession from the SCT. Pursuant to the 1995
Telecommunications Law, concessions for public networks may not
exceed a term of 30 years, and concessions for
radioelectric spectrum may not exceed a term of 20 years.
Concessions may be extended for a term equivalent to the term
for which the concession was originally granted, but not to
exceed such 20- or 30-year limit, as the case may be.
Concessions specify, among other things:
•
the type of network, system or service;
•
the allocated spectrum, if applicable;
•
the geographical region in which the holder of
    the concession may provide the service;
•
the required capital expenditure program;
•
the term during which such service may be
    provided;
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•
the payment, where applicable, required to be
    made to acquire the concession, including, where applicable, the
    participation of the Mexican government in the revenues of the
    holder of the concession; and
•
any other rights and obligations affecting the
    concession holder.
In addition to concessions, the SCT may also
grant permits for (i) establishing, operating or exploiting
telecommunications services not constituting a public network
(i.e., reselling) and (ii) installing, operating or
exploiting transmission-ground stations. There is no specified
maximum term for permits. Under the 1995 Telecommunications Law,
only registration with the SCT is required to provide
value-added telecommunications services.
Under the 1995 Telecommunications Law and the
Foreign Investment Law (
Ley de Inversión
Extranjera
), concessions may only be granted to Mexican
individuals and to Mexican corporations in which non-Mexicans
hold no more than 49% of their voting shares or which are not
otherwise controlled by non-Mexicans, except that, in the case
of concessions for cellular communications services, foreign
investment participation may exceed 49% with the prior approval
of the Mexican Foreign Investment Commission of the Mexican
Ministry of Economy (formerly the Ministry of Commerce and
Industrial Development). The Mexican Foreign Investment
Commission has recently ruled, upon application of Unefón,
that concessions for PCS services should be treated identically
to concessions for cellular services for foreign investment
purposes. There are no foreign investment participation
restrictions in respect of operations conducted under permits.
A concession or a permit may be terminated
pursuant to the 1995 Telecommunications Law upon:
•
expiration of its term;
•
resignation by the concession holder or the
    permit holder;
•
revocation;
•
expropriation; or
•
dissolution or bankruptcy of the concession
    holder or the permit holder.
A concession or a permit may be revoked prior to
the end of its term under certain circumstances, such as:
•
unauthorized or unjustified interruption of
    service;
•
the taking of any action that impairs the rights
    of other concessionaires or permit holders;
•
failure to comply with the obligations or
    conditions specified in the concession or permit;
•
failure to provide interconnection services with
    other holders of telecommunications concessions and permits;
•
loss of the concession or permit holder's
    Mexican nationality in instances in which Mexican nationality is
    legally required;
•
unauthorized assignment, transfer or encumbrance
    of the concession or permit, of any rights under the concession
    or permit or of assets used for the exploitation of the
    concession or permit;
•
failure to pay to the Mexican government its fee
    for the concession or permit or, where applicable, its
    participation in the revenues of the holder of the concession or
    permit; or
•
participation of any foreign government in the
    capital stock of the holder of the concession or permit.
•
In addition, the SCT may establish for any
    concession further events which could result in revocation of
    that concession.
The Mexican government, through the SCT, may also
temporarily seize all assets related to a concession or permit
in the event of a natural disaster, war, significant public
disturbance or threats to internal peace and for other reasons
related to preserving public order or for economic reasons. In
addition, the government has
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the statutory right to expropriate a concession
and assets related to its exploitation for public interest
reasons. Under Mexican law, the Mexican government is obligated
to compensate the owner of the assets in the case of a statutory
expropriation or temporary seizure, except in the event of war.
If the Mexican government temporarily seizes such assets, it
must indemnify the concession or permit holder for all losses
and damages, including lost revenues.
In the case of an expropriation, the amount of
the compensation is to be determined by appraisers. If the party
affected by the expropriation disagrees with the amount
appraised, it may initiate judicial action against the
government. Should no agreement be reached on the amount of the
indemnity in the case of a seizure or expropriation, the
determination will be made by an independent appraiser. Iusacell
is not aware of any instance in which the SCT has exercised any
of these powers in connection with a cellular company.
The
Original Concession
Our right to provide radiotelephony, local
wireless and data transmission services nationwide, as well as
cellular service in Region 9, is based upon the concession
granted on April 1, 1957, as amended, which we refer to as
the Original Concession, to Servicio Organizado Secretarial,
S.A., merged into SOS Telecomunicaciones, S.A. de C.V., which we
refer to as SOS. The term of the Original Concession is
50 years, and it expires on April 1, 2007. The
Original Concession may, however, be revoked prior to such date
in the event that SOS fails to comply with its terms or
applicable law. The Original Concession is renewable upon timely
application to the SCT, provided that SOS has complied with all
of the requirements of the Original Concession and agrees to any
new terms and conditions established by the SCT at the time of
renewal.
In consideration for the Original Concession, SOS
must make payments to the Mexican government equal to 5% of all
gross revenues derived from services provided through its
Region 9 cellular network and payments in an amount which
is the greater of (i) 4% of all gross revenues and
(ii) 10% of net income, in either case, derived from
services provided through its nationwide radiocommunications
network.
Under the terms of the Original Concession, SOS
must continually modernize its services. In updating its
services, SOS must submit technical and economic plans for
approval by the SCT. In determining whether to approve these
plans, the SCT is authorized to consider whether the plans
sufficiently address factors such as the public interest
(including, without limitation, teledensity) and efficiency and
uniformity in telecommunications throughout Mexico.
Initially, the Original Concession authorized
only the installation and commercial operation of nationwide
mobile (vehicle-installed) radiotelephone public service in the
132-144 MHz frequency range. Since then, however, the
Original Concession has been amended numerous times, allowing us
to expand the types of telecommunications services which we may
offer. In 1978, the Original Concession was amended to grant SOS
an additional allocation in the 440-450 MHz and 485-495 MHz
frequency ranges in return for yielding a portion of its
132-144 MHz frequency range allocation. SOS retained the
frequencies between 138 and 144 MHz.
Between 1986 and 1989, the Original Concession
was further amended to enable SOS to provide fixed rural
radiotelephony service, to offer telex and data transmission
with the obligation to link its subscribers to the network owned
by Telecom, and to interconnect its radiocommunications ground
stations through satellite.
In 1989, SOS was authorized to install, operate
and maintain a mobile public radiocommunications network with
cellular technology in the 825-835 MHz and 870-880 MHz
frequency bands in Region 9. In 1990, SOS was authorized to
carry intra-regional cellular-to-cellular communications
throughout Region 9 without being required to interconnect
with the long distance carrier. In 1992, SOS was authorized to
provide public data transmission service nationwide through its
radio communications networks without the obligation to link its
subscribers to the Telecom network.
In 1993, SOS was granted an additional 5 MHz
band in the 800 MHz frequency range for the provision of
cellular service, due to the high volume of cellular traffic
experienced in Region 9. In the same year, SOS was
authorized to improve its radiocommunications public service in
the 440-450 MHz and 485-495 MHz frequency ranges by
utilizing digital technology and to interconnect its
telecommunications systems through
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fiber optic, satellite and microwave
technologies. The SCT also clarified the ability, and indeed the
obligation, of SOS to interconnect customers of its nationwide
radio communications network regardless of whether such
customers use fixed, mobile or portable telephones.
In accordance with the 1995 Telecommunications
Law, SOS applied to renew the Original Concession in March 1997.
Moreover, in December 1996, we applied to divide the Original
Concession into two concessions, one relating to the provision
of cellular services over the 800 MHz frequency band in
Region 9, which would not be subject to restrictions on
foreign investment, and a second relating to the 450 MHz
frequencies, which would be subject to restrictions on foreign
investment. We are currently negotiating the terms and
conditions for such extension and division with COFETEL.
Cellular
Concessions
Mexico is divided into nine cellular regions. The
SCT has allocated cellular telephone system frequencies in each
region in the Cellular A-Band and the Cellular B-Band. In each
region, Telcel holds the Cellular B-Band concession and its
cellular competitor in each region holds the Cellular A-Band
concession.
In Region 9, we hold the right to provide
cellular service pursuant to an authorization granted to SOS by
the SCT in 1989 under the Original Concession. In
Regions 5, 6, 7 and 8, we hold the right to provide
cellular service through our subsidiaries Comunicaciones
Celulares de Occidente, S.A. de C.V., known as Comcel, Sistemas
Telefónicos Portátiles Celulares, S.A. de C.V., known
as Portacel, Telecomunicaciones del Golfo, S.A. de C.V., known
as Telgolfo, and Portatel del Sureste, S.A. de C.V. known as
Portatel, respectively. Comcel, Portacel, Telgolfo and Portatel
each holds a 20-year concession expiring in 2010 which
authorizes these subsidiaries to install, operate, maintain and
exploit mobile public radiotelephone networks with cellular
technology for commercial use in the Cellular A-Band. In
consideration for these authorizations and concessions, the
subsidiaries made initial payments to the Mexican government
and, in addition, must make payments as follows:
Percent of Gross
Revenues Payable To
Subsidiary
Mexican Government
Comcel
8%
Portacel
7%
Telgolfo
8%
Portatel
6%
By the terms of their concessions, Comcel,
Portacel, Telgolfo and Portatel must continually modernize their
services after receiving approval of their technical and
economic plans from the SCT. In determining whether to approve
these plans, the SCT is authorized to consider whether the plans
sufficiently address factors such as the public interest
(including, without limitation, teledensity) and efficiency and
uniformity in telecommunications throughout Mexico. These
concessions may be revoked or terminated prior to their
expiration dates in the event the concession holder fails to
comply with the conditions established in the concessions or
applicable law. The concessions may, however, be renewed for a
term equal to the original term upon timely application to the
SCT, provided that the concession holder had complied with all
of the requirements of its concession and agrees to any new
terms and conditions established by the SCT at the time of such
renewal.
Paging
On December 14, 1995, Iusacell Celular and
Infomin formed Infotelecom as a joint venture to market national
and international paging services. Infomin has a concession,
which expires on July 20, 2009, to provide nationwide
paging services in Mexico. Although the joint venture agreement
between Iusacell Celular and Infomin contemplates that Infomin
will ultimately transfer its paging concession to Infotelecom,
Infomin's paging concession prohibits foreign ownership of
more than 49% of the voting shares of the entity holding the
concession. Infomin, therefore, would be unable to contribute
its paging license to the joint
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venture so long as Verizon continued to control
the management of Iusacell Celular and Iusacell Celular
continued to hold more than 49% of the voting shares of
Infotelecom.
In order to eliminate this obstacle to the
transfer of the paging concession to Infotelecom, in December
1998 we sold a 2% interest in Infotelecom to Mr. José
Ramón Elizondo, a former director of Iusacell Celular. As a
result, we currently hold a 49% interest in Infotelecom.
Infotelecom is required to make monthly payments to Infomin
equal to 5% of all gross revenues for the preceding month. This
payment represents the amount which Infomin as concession holder
must pay to the SCT for the right to provide paging service. In
2000, Infomin received governmental approval to transfer its
paging concession to Infotelecom. We nevertheless expect the
transfer of the concession to be implemented in 2002. The
financial statements of Infotelecom are consolidated with the
financial statements of Iusacell. See Note 2 to the
Consolidated Financial Statements.
Long
Distance
Our right to provide international long distance
services is based upon a long distance concession granted by the
SCT to Iusatel, on October 16, 1995. The term of the long
distance concession is 30 years and may be renewed upon
timely application to the SCT, for an equal period of time,
provided that Iusatel complies with certain requirements. Upon
our application, the SCT and COFETEL modified this concession on
December 17, 1997, authorizing a change in the coverage
requirements and increasing flexibility in the choice of
transmission technology.
Pursuant to the modified concession, Iusatel is
required to comply with technical specifications and had to
serve with its own infrastructure a minimum of 11 specified
cities by July 31, 1998, 26 additional specified cities by
December 31, 1999 and another 13 additional specified
cities by December 31, 2000. Iusatel complied with its
coverage commitments in all cities except for Saltillo in
Region 4. Therefore, in 2001 the SCT substituted Tlaxcala
for Saltillo in our coverage commitment, and we are currently in
compliance with all our coverage commitments.
In February 1997, the Mexican Foreign Investment
Commission conditioned its approval of Bell Atlantic assuming
management control over Iusacell Celular upon the requirement,
among others, that we transfer at least 51% of the voting shares
of Iusatel to Mexican investors on terms acceptable to the
Mexican Foreign Investment Commission. In November 1998, we
complied with this requirement by having Mr. Elizondo agree
to subscribe to 5.1% of the capital stock of Iusatel, comprising
51% of the voting shares thereof. We retained a 94.9% equity
interest in Iusatel, including a 90% equity interest through the
ownership of neutral limited voting stock (
inversión
neutra
) and a 49% voting interest representing a 4.9% equity
interest. The financial statements of Iusatel are consolidated
with the financial statements of Iusacell Celular. See
Note 2 to the Consolidated Financial Statements.
Local
Telephony
We believe our right to provide local telephony
service is derived from the Original Concession. The Original
Concession, as originally granted, permitted SOS to provide
radiocommunications service to vehicle-mounted terminal
equipment nationwide.
In 1986, the SCT amended the Original Concession
to authorize SOS to provide fixed public radiotelephony service
in rural areas nationwide in accordance with plans to be
approved by the SCT. In 1990, the Telecommunications Rules were
promulgated by the Mexican government which further modified the
Original Concession.
These regulations classified radiocommunications
services on the basis of the networks used to provide such
services rather than upon the basis of subscriber terminal
equipment. Radiocommunications networks are generally classified
as either "fixed" or "mobile." Our
radiocommunications network is a mobile network. In 1993, the
SCT clarified the ability, and indeed the obligation, of SOS to
interconnect customers of its nationwide radiocommunications
network regardless of whether such customers use fixed, mobile
or portable telephones.
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Pursuant to the Original Concession, the
commencement of construction and marketing of local wireless
service in the 450 MHz frequency band on a commercial basis
requires the prior approval of the SCT. We have never received
the SCT's approval of our technical and economic plans for
local wireless service in the 450 MHz frequency band.
However, Iusacell Celular has reached an
agreement with the SCT on a technical process by which Iusacell
Celular can provide local wireless service in the 450 MHz
frequency band in some of its existing service regions and has
received a right of first refusal to acquire the concessions to
provide local wireless service in such regions.
Our management is currently evaluating whether to
exercise our right of first refusal. See Item 4,
"Information on the Company — Business
Overview — Other Services — Public and Rural
Telephony and Local Fixed Wireless."
In September 1998, we determined that, because of
many factors, including the impact of changing technology since
the initiation of the 450 MHz fixed local wireless project
in 1994, an impairment of our investment in 450 MHz TDMA
technology had occurred. As a result, we recorded a substantial
non-cash write-down of our investment in the 450 MHz fixed
local wireless project. Given the obsolescence of our existing
450 MHz network infrastructure, we may record a non-cash
write-down of substantially all of the remaining book value of
the 450 MHz project fixed assets by the end of 2002.
In November 1998, Mr. Elizondo agreed to
subscribe 5.1% of the capital stock of Iusatelecomunicaciones,
S.A. de C.V., the Iusacell Celular subsidiary which provides
local wireless service in the 450 MHz frequency band on a
trial basis, comprising 51% of our total voting shares. We
retained a 94.9% equity interest in Iusatelecomunicaciones,
including a 90% equity interest through the ownership of neutral
limited voting stock
(inversión neutra)
and a 49%
voting interest representing a 4.9% equity interest. The
financial statements of Iusatelecomunicaciones are consolidated
with the financial statements of Iusacell Celular. See
Note 2 to the Consolidated Financial Statements.
Data
Transmission
Our right to offer telex and provide public data
transmission service throughout Mexico is derived from the
Original Concession. We use our allocations in the
138-144 MHz, 440-450 MHz and 485-495 MHz
frequency bands and excess capacity in our cellular microwave
backbone in Region 9 to provide data transmission services.
Satellite
Transmission Permit
On December 15, 1991, Satelitrón, a
joint venture among Hughes Network Systems, Iusacell Celular and
one other investor, was granted a 15-year permit to provide
dedicated circuit services and private networks through Mexican
satellites or any other satellites designated by the Mexican
government. The Satelitrón permit is renewable for 15
additional years upon timely application to the SCT, provided
Satelitrón has complied with all of the requirements of the
permit and agrees to any new terms and conditions established by
the SCT at the time of such renewal. Under this permit,
Satelitrón is required to make monthly payments to the SCT
equal to 2.5% of all gross revenues derived from its provision
of access to its satellite bandwidth, and 2.5% of all such gross
revenues to Telecom for supervision and supporting services. On
March 22, 2001, we sold our 65.9% equity interest in
Satelitrón and our ownership in the transmission hub to
Telepuertos Satelitales, S.A. de C.V. for U.S.$1.3 million.
Dedicated
Microwave Circuit Services Permit
On December 8, 1993, the SCT authorized SOS
to use its microwave network's excess capacity to provide
dedicated circuit services. In accordance with the terms of this
permit, these dedicated microwave circuits cannot be
interconnected to public exchange networks, and the service must
only be provided through the links of the microwave network
authorized by the SCT. On February 1, 1994, the SCT
authorized SOS to carry voice, data and video conferencing
through these dedicated circuit services.
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Value-Added
Services Permit
On June 17, 1993, SOS was granted a permit
to provide through its public network the following value-added
telecommunications services to its cellular subscribers:
•
secretarial service;
•
voice mail; and
•
data transmission.
The term of this permit is the same as that of
the authorization for using the Region 9 cellular network
through which the value-added services are to be provided. Under
this permit SOS is required to make annual payments to the
Mexican government equal to 5% of all gross revenues derived
directly from the provision of these services. In October 1994,
Comcel, Telgolfo and Portacel were each granted a permit to
provide secretarial services under the same terms granted to
SOS, including the making of the annual payments to the Mexican
government.
Foreign
Ownership Restrictions
Pursuant to the 1995 Telecommunications Law and
the 1993 Foreign Investment Law, holders of concessions to
provide telecommunications services in Mexico, excluding
providers of cellular service, cannot have a majority of their
voting shares owned by, and cannot be otherwise controlled by,
foreign persons. In February 1997, the Mexican Foreign
Investment Commission conditioned its approval of Verizon
assuming management control over Iusacell upon the requirement
that, within a renewable period of 180 days, Iusacell
Celular would transfer at least 51% of the voting shares of
Iusatelecomunicaciones and Iusatel to Mexican investors on terms
acceptable to the Mexican Foreign Investment Commission. The
Mexican Foreign Investment Bureau twice extended the transfer
deadline.
In November 1998, we complied with this
requirement by transferring 51% of the voting shares of these
two subsidiaries to Mr. Elizondo by means of a subscription
to capital. We retained 49% of the voting shares of these
subsidiaries, representing 4.9% of their capital. We also hold
an additional 90% of the capital of these subsidiaries through
the ownership of neutral limited voting stock
(inversión
neutra)
that does not constitute voting shares for purposes
of the Mexican foreign investment laws. Consequently, we hold a
94.9% equity interest in these two subsidiaries, whose financial
results we consolidate.
To participate in the auctions for concessions
for microwave frequencies concluded in September 1997, we formed
Punto-a-Punto Iusacell, S.A. de C.V., a joint venture with
Mr. Elizondo. The Mexican Foreign Investment Bureau
approved a capital structure substantially similar to that
authorized for Iusatel and Iusatelecomunicaciones for the
microwave joint venture. The financial statements of
Punto-a-Punto Iusacell are consolidated with the financial
statements of Iusacell Celular. See Note 2 to the Consolidated
Financial Statements.
Moreover, in December 1998 Mr. Elizondo
acquired a 2% interest in Infotelecom, from Iusacell Celular. As
a result, we currently hold only 49% of this entity, complying
with the condition precedent necessary to allow our other
partner, Infomin, a Mexican controlled company, to transfer its
paging concession to Infotelecom, as previously agreed with us.
Rates for
Telecommunications Services
Under the Original Communications Laws, SCT
approval was required for rates charged for all basic and
certain value-added cellular services and for data transmission
services. Historically, the SCT permitted rate increases based
on the cost of service, the level of competition, the financial
situation of the carrier and macroeconomic factors. Carriers
were not allowed to discount the rates authorized by the SCT,
although operators occasionally waived activation fees on a
promotional basis. Interconnection rates were also authorized by
the SCT. All terms of interconnection (such as point of
interconnection) other than interconnection rates were
negotiated between the regional non-wireline cellular carriers
and Telmex under
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the SCT's supervision. Rates for dedicated
circuit services through microwave networks, and dedicated
circuits and private networks through satellites, were not
regulated under the Original Communications Laws.
Under the 1995 Telecommunications Law, rates for
telecommunications services, including cellular and long
distance services, are now freely determined by the providers of
such services. Providers are prohibited from adopting
discriminatory practices in the application of rates. In
addition, the SCT is authorized to impose specific rate
requirements on those companies determined by the Federal
Competition Commission to have substantial market power. All
tariffs for telecommunications services, other than value-added
services, must be registered with COFETEL prior to becoming
effective.
In January 2001, we negotiated a rate reduction
with Telmex that decreases both long distance and local cellular
interconnection charges from U.S.$0.0330 to U.S.$0.0125 per
minute. Additionally, we negotiated with Telmex the terms
regarding payment for the projects Telmex undertook to prepare
its long distance network for competition. We paid Telmex a
fixed payment of approximately U.S.$13.0 million and agreed
to pay a U.S.$0.0053 per minute, usage based, surcharge to the
local wireline interconnection rate for the next four years for
long distance calls terminated in Telmex's local networks.
In December, 2001, Telmex, Alestra and Avantel
reached an agreement to further reduce the long distance
interconnection rate from U.S.$0.0125 per minute to U.S.$0.00975
per minute. We are currently in negotiations with Telmex to
obtain similar terms for both our long distance business and
local cellular interconnection rate.
United States
Regulation
In 1982 Bell Atlantic, like all other regional
Bell operating companies, was subject to a consent decree (the
"Decree") resulting from anti-trust litigation between
the United States Department of Justice against AT&T. The
Decree required AT&T to divest itself of its local telephone
companies. Under the Decree, Bell Atlantic was prohibited, with
certain limited exceptions, from providing interLATA (long
distance) telecommunications, engaging in the manufacture of
customer premises equipment (CPE), or engaging in the
manufacture or sale of telecommunications equipment.
The Telecommunications Act of 1996 (the
"1996 Act"), which became effective on
February 8, 1996, includes provisions that open local
telephony markets to competition and would permit regional Bell
operating companies, such as the local operating telephone
companies of the former Bell Atlantic, to provide interLATA
services (long distance) and video programming and to engage in
manufacturing. Under the 1996 Act, the former Bell Atlantic was
allowed to provide certain interLATA (long distance) services
immediately upon enactment, including interLATA (long distance)
services permitted under the Decree, interLATA (long distance)
services originating outside the states where its subsidiaries
provide local exchange telephone services and interLATA (long
distance) services that are "incidental" to other
permitted business such as wireless services.
However, the ability of Verizon and its
affiliates to engage in businesses previously prohibited by the
Decree, including providing interLATA (long distance) services
originating in the states where the former Bell Atlantic
subsidiaries provide local exchange telephone service, and
manufacturing CPE or telecommunications equipment, is largely
dependent on satisfying certain conditions contained in the 1996
Act and related regulations.
Since Iusacell Celular is a Verizon affiliate,
its operations must comply with the terms of the Decree. In 1986
and 1993, Bell Atlantic obtained waivers under the Decree that
allowed it to conduct business outside the United States,
subject to certain exceptions and restrictions. Under such
exceptions and restrictions, a foreign telecommunications entity
(FTE) affiliated with Verizon, such as Iusacell, could not
provide interexchange (long distance) telecommunications
services between points in the United States or own any
international telecommunications facilities in the United States.
As to telecommunications traffic between the
United States and a foreign country, an FTE could provide only
the foreign "half" of such traffic. An FTE was
prohibited from discriminating in handling traffic to and from
the United States and was limited as to interests it could own
in international cables and satellite
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facilities to and from the United States.
Finally, an FTE was prohibited from exporting to the United
States any telecommunications equipment or CPE manufactured
outside the United States.
The 1996 Act eliminated certain restrictions
under the Decree including:
•
restrictions that precluded an FTE from providing
    the U.S. "half" of traffic originating in a foreign
    country;
•
restrictions on exporting to the United States
    telecommunications equipment or CPE manufactured outside the
    United States; and
•
restrictions on providing interLATA (long
    distance) telecommunications services between points in the
    United States or international long distance service originating
    in the United States, and from owning international
    telecommunications facilities in the United States subject to
    the same conditions that Verizon must satisfy under the 1996 Act
    and any regulations promulgated thereunder with respect to
    interLATA (long distance) telecommunications services
    originating in the states in which the former Bell Atlantic
    local exchange subsidiaries provide service.
Under the 1996 Act, we may now provide both the
foreign "half" and the United States "half"
of telecommunications traffic originating in Mexico (or any
other foreign country) and may now carry international
telecommunications traffic which, although routed through the
United States, neither originates nor terminates in the United
States. In addition, we may carry United States originated
traffic bound for Mexico (or other foreign countries) so long as
the traffic originates outside the states where the former Bell
Atlantic subsidiaries provide local exchange telephone service,
except from those states where Verizon has obtained
Section 271 approval and subject to having appropriate
authority under Section 214 of the United States
Communications Act of 1934.
In 1996, Iusatel applied for and received
authorization under Section 214 of the Communications Act
to become a facilities-based provider of international long
distance services from the United States. This Section 214
authorization was transferred to a Peralta Group entity in
January 1997 in order not to delay the proposed change of
control from the Peralta Group to Bell Atlantic. In 2002,
Iusatel USA, Inc., a subsidiary of Iusatel, applied for and
received authorization under Section 214 of the
Communications Act to become a facilities-based provider of
international long distance services from the United States. We
have not yet determined whether we will engage in activities
permitted by the 1996 Act or any Section 214 authorization
we may receive. If we choose to engage in such activities, we
cannot predict the specific impact of such activities on our
business, financial condition or results of operations.
Other laws of the United States may restrict
activities of Iusacell Celular by virtue of Verizon's
ownership interest, including laws and regulations that restrict
trade with, and investments in, specific countries, as well as
the United States Foreign Corrupt Practices Act. The Foreign
Corrupt Practices Act is also applicable to Iusacell because its
securities are listed on the New York Stock Exchange.
The Iusacell Shareholders' Agreement
contains provisions designed to require us to refrain from
taking any actions that would cause Verizon to be in violation
of applicable law.
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C.     Organizational
Structure
The following table shows our principal direct
(unless otherwise noted) subsidiaries, the majority of which are
organized under the laws of Mexico, their principal line of
business and the percentage of our ownership interest and voting
power as of December 31, 2001.
%
% Voting
Name
Line of Business
Ownership
Power
SOS Telecomunicaciones, S.A. de C.V.
Region 9 cellular
100
100
Comunicaciones Celulares de Occidente, S.A.
    de C.V.
Region 5 cellular
100
100
Sistemas Telefónicos Portátiles
    Celulares, S.A. de C.V.
Region 6 cellular
100
100
Telecomunicaciones del Golfo, S.A. de
    C.V.
Region 7 cellular
100
100
Grupo Portatel, S.A. de C.V. and subsidiaries
Region 8 cellular
78.3
78.3
Iusacell, S.A. de C.V.
Sales and marketing
100
100
Sistecel, S.A. de C.V.
Administrative services
100
100
Iusatel, S.A. de C.V.
Long distance
94.9
49
Iusatelecomunicaciones, S.A. de C.V.
Local wireless
94.9
49
Punto-a-Punto Iusacell, S.A. de C.V.
Microwave transmission
94.9
49
Infotelecom, S.A. de C.V.
Paging
49
49
Iusatel USA, Inc.
(2)
Not currently operating
100
100
(2)
Held through Iusatel, S.A. de C.V.; Iusatel USA,
    Inc. is a company established in the United States.
All of the above companies, including those in
which we own directly or indirectly a minority voting interest,
are consolidated with the financial statements of Iusacell
Celular. See Note 2 to the Consolidated Financial
Statements.
D.     Property,
Plant and Equipment
As of December 31, 2001, we operated in our
service regions a total of 127 customer sales and service
centers, 537 cellular cell sites, 135 repeaters, 24 cellular
microwave transmission repeaters, microwave transmission
repeaters, 14 fixed local wireless 450 MHz cell sites, 69
paging antennas, 6 switches for cellular service, 1 switch for
local wireless service and 3 switches for long distance service.
We generally lease the land and cellular tower
space where our customer sales and service centers, cell sites,
antennas, microwave transmission equipment and switching centers
are located. We own and lease administrative offices in Mexico
City as well as in Guadalajara, León, Puebla, Monterrey,
Mérida, Tijuana and Ciudad Juárez. We generally own
our cellular network equipment, subject to liens.
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As of December 31, 2001, the book value of
our property and equipment, before accumulated depreciation of
Ps.5,604.7 million (U.S.$612.1 million) for 2001,
consisted of the following:
Value
(In thousands of constant pesos
Property and Equipment
as of December 31, 2001 and
millions of U.S. dollars)
Buildings and facilities
Ps.1,623.4
U.S.$
177.3
Communications equipment
9,820.2
1,072.5
Furniture and fixtures
195.0
21.3
Transportation equipment
79.5
8.7
Computer equipment
1,446.4
158.0
Cellular rental telephones
9.1
1.0
Land
65.9
7.2
Construction in progress
1,225.5
133.8
See Item 5, "Operating and Financial
Review and Prospects — Liquidity and Capital
Resources — Capital Expenditures" for a
discussion of planned capital expenditures and existing
encumbrances on our property and equipment. See also notes 4 and
8 to the Consolidated Financial Statements.
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ITEM 5.     OPERATING
AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and
analysis in conjunction with the Consolidated Financial
Statements included elsewhere in this Annual Report. Unless
otherwise indicated, all financial information in this Annual
Report is presented in constant pesos with purchasing power as
of December 31, 2001. The U.S. dollar translations provided
in this Annual Report are, unless otherwise indicated,
calculated at the Noon Buying Rate at December 31, 2001,
which was Ps.9.156 per U.S.$1.00. Sums may not add due to
rounding.
A.     Operating
Results
General
The following discussion and analysis is intended
to help you understand and cellular assess the significant
changes and trends in the historical results of operations and
financial condition of Iusacell Celular and subsidiaries and
factors affecting our financial resources.
The Consolidated Financial Statements have been
prepared in accordance with Mexican GAAP, which differs in
certain significant respects from U.S. GAAP. Note 23
to the Consolidated Financial Statements provides a description
of the principal differences between Mexican GAAP and
U.S. GAAP as they relate to Iusacell Celular's.
Note 23 to the Consolidated Financial Statements also
provides a reconciliation to U.S. GAAP of Iusacell's
net income (loss) for the years ended December 31, 1999,
2000 and 2001 and of stockholders' equity as of
December 31, 2000 and 2001.
As a Mexican company, we maintain our financial
records in pesos. Pursuant to Bulletin B-10,
"Recognition of the Effects of Inflation on Financial
Information," and Bulletin B-12, "Statement of
Changes in Financial Position," issued by MIPA,
Iusacell's financial statements are reported in period-end
pesos to adjust for the inter-period effects of inflation. The
presentation of financial information in period-end, or
constant, currency units is intended to eliminate the distorting
effect of inflation on the financial statements and to permit
comparisons across comparable periods in comparable monetary
units. Bulletin B-10 requires us to restate non-monetary assets,
non-monetary liabilities and the components of
stockholders' equity using the
Indice Nacional de
Precios al Consumidor
("INPC"). We have not
eliminated the effects of these inflation accounting principles
in the reconciliation to U.S. GAAP. See Note 23 to the
Consolidated Financial Statements.
Except where otherwise indicated, financial data
for all periods in the Consolidated Financial Statements and
throughout this Annual Report have been restated in constant
pesos as of December 31, 2001, in accordance with the fifth
amendment to Bulletin B-10. References in this Annual Report to
"real" amounts are to inflation-adjusted pesos and
references to "nominal" amounts are to unadjusted
historical pesos. In calendar years 1999, 2000 and 2001, the
rates of inflation in Mexico, as measured by changes in the
INPC, were 12.3%, 9.0% and 4.4%, respectively. The inflation
indices used are 1.1376 for 1999 figures and 1.0440 for December
2000 figures.
In reporting under Mexican GAAP and in accordance
with Bulletin B-10, we are required to quantify all
financial effects of operating and financing the business under
inflationary conditions. For presentation purposes,
"integral financing cost (gain)" refers to the
combined financial effects of:
•
net interest expense or interest income;
•
net foreign exchange gains or losses; and
•
net gains or losses on monetary position.
Net foreign exchange gains or losses reflect the
impact of changes in foreign exchange rates on monetary assets
and liabilities denominated in currencies other than pesos. A
foreign exchange loss arises if a liability is denominated in a
foreign currency which appreciates relative to the peso between
the time the liability is incurred and the date it is repaid, as
the appreciation of the foreign currency results in an increase
in the amount of pesos which must be exchanged to repay the
specified amount of the foreign currency liability. We incurred
a foreign exchange loss in 2000 on our U.S. dollar denominated
debt as the peso depreciated against
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the U.S. dollar. A foreign exchange gain arises
if a liability is denominated in a foreign currency which
depreciates relative to the peso between the time the liability
is incurred and the date it is repaid, as the depreciation of
the foreign currency results in a decrease in the amount of
pesos which must be exchanged to repay the specified amount of
the foreign currency liability. In 1999 and 2001, we incurred a
foreign exchange gain on our U.S. dollar denominated debt as the
peso appreciated against the U.S. dollar.
The gain or loss on monetary position refers to
the gains and losses realized from holding net monetary
liabilities or assets and reflects the impact of inflation on
monetary liabilities and assets. For example, a gain on monetary
position results from holding net monetary liabilities during
periods of inflation, such as in 1998, 1999, 2000 and 2001, as
the purchasing power of the peso declines over time.
Devaluation and Inflation
Mexico experienced a severe economic crisis
following the devaluation of the peso in December 1994, when the
Mexican government first allowed the peso to fluctuate freely
against the U.S. dollar. The value of the peso generally
continued to decline during subsequent years, depreciating by
54.8% relative to the U.S. dollar in 1995 and by 22.7% in 1998.
The peso has generally recovered and strengthened in recent
years, depreciating by only 1.5% against the U.S. dollar in 2000
and appreciating by 4.8% in 2001.
Depreciation of the value of the peso has
contributed to sharp increases in inflation. Inflation, which
had been 7.1% in 1994 as measured by changes in the INPC,
increased to 52.0% and 27.7% in 1995 and 1996, respectively.
After a reduction to 15.7% in 1997, inflation was 18.6% for the
year 1998. Since then inflation has declined to 12.3% in 1999,
9.0% in 2000 and reached its lowest level in more than
30 years in 2001 to 4.4%.
In the past, devaluation and depreciation of the
peso as well as inflation have negatively affected our results
of operations and financial condition and may do so in the
future.
Impact of
Devaluation and Inflation on our Results of
Operations
The general economic conditions in Mexico
resulting from the devaluation of the peso and the resulting
inflation have had, and may have, an overall negative impact on
our results of operations primarily as a result of the following
factors:
•
Peso devaluations result in a decrease in the
    purchasing power of Mexican consumers, resulting in a decrease
    in the demand for all goods and services, including cellular
    telephony;
•
Due to competitive market conditions and the
    overall state of the Mexican economy, we have not been able to
    increase our prices in line with the inflation rate;
•
Significant inflation leads to an upward
    restatement of our assets, resulting in a substantial increase
    in depreciation and amortization expense.
•
Given our net U.S. dollar liability position,
    devaluation of the peso as compared to the U.S. dollar results
    in the recording of net foreign exchange losses, and
    appreciation of the peso as compared to the U.S. dollar results
    in the recording of net foreign exchange gains.
Impact of
Devaluation and Inflation on our Financial
Condition
The general economic conditions in Mexico
resulting from the devaluation of the peso and the resulting
inflation have had, and may have, an overall negative impact on
our financial condition as result of the following factors:
•
Substantially all of our indebtedness is
    denominated in U.S. dollars. As a result, in a period of peso
    devaluation, the peso-carrying amount of such debt increases to
    reflect the additional pesos required to meet such foreign
    currency liabilities; and
•
Whenever the inflation rate exceeds the
    devaluation rate, as was the case in 1996, 1999, 2000 and 2001,
    the peso-carrying value of our assets purchased in foreign
    currencies is reduced. This is because, assuming that the
    foreign currency value of a given asset remains unchanged
    between periods, the
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value of such asset for the prior period is
    restated upwards using the inflation rate, while the valuation
    of such asset for the current period is restated using a foreign
    exchange rate which increased at a lower rate.
See Item 5, "Operating and Financial
Review and Prospects — Liquidity and Capital
Resources — Hedging" for a description of
contracts we use to hedge.
Increase in Subscriber Base
We use our automated VIVA prepay program in all
of our cellular markets. In October 1999, we introduced a
"one-single rate" plan for prepay customers.
One-single rate prepay customers pay a single per minute rate
for local, national long distance and international long
distance service to the United States and Canada.
The VIVA program has been extremely popular, with
prepay customers increasing from an insignificant percentage of
our subscriber base at its introduction to 73.4% at
December 31, 1999 (970,509 subscribers), 73.7% at
December 31, 2000 (1,238,625 subscribers) and 78.2% at
December 31, 2001 (1,450,709 subscribers). Prepay customers
comprised 86.7%, 74.8% and more than 100% of our net subscriber
additions in 1999, 2000 and 2001, respectively. We expect that
prepay customers will continue to comprise the substantial
majority of new subscriber additions.
The percentage of total service revenues derived
from prepay customers was 11.9% in 1999, 13.0% in 2000 and 23.4%
in 2001.
In 1999 and 2000, we experienced a 27.2% and
25.6% increase in the aggregate number of postpaid customers,
respectively, compared to the beginning period number, with
limited migration by postpaid customers to prepay programs. In
2001 we experienced an 8.7% reduction in the number of postpaid
customers. Many of these postpaid customers migrated to our
prepay program or disconnected as a result of a higher postpaid
churn rate derived from the stricter activation policies and
retention programs implemented to increase the quality of
additions. Moreover, as part of a review of postpaid customers
implemented in the second quarter of 2001, including a targeted
retention program, we decided to delete 11,600 postpaid
customers from our subscriber base in that period.
Prepay customers, on average, have substantially
lower minutes of use than postpaid customers and do not pay
monthly fees and, as a result, generate substantially lower
average monthly revenues per subscriber, even though prepay
plans involve higher outgoing call per minute airtime charges
than the average postpaid plan. Consequently, as the proportion
of prepay customers to our total subscribers continues to
increase, we expect that average minutes of use per customer and
average monthly revenues per customer will continue to decrease.
The implementation of the CPP modality and the digitalization of
the postpaid subscriber base have moderated this decline.
In November 1998, we extended the life of our
VIVA prepay cards from a maximum of 135 days to a maximum
of 180 days to allow greater flexibility in their use. In
April 1999, in anticipation of the advent of the CPP modality
and for competitive reasons, we extended the life of our VIVA
prepay cards to a maximum of 365 days. After the balance of
a prepay card becomes zero (which occurs automatically after
180 days), the VIVA customer had 185 days to activate
a new card before losing his phone number. During this 185-day
period, the VIVA customer was considered an "incoming calls
only" customer, able to receive incoming local calls, but
not able to make outgoing calls.
In October 1999, in order to evaluate whether we
could generate additional revenues from "incoming calls
only" customers, we extended the period of time to activate
a new card from 185 days until April 30, 2000 for
those "incoming calls only" customers who otherwise
would have lost service before that date. Beginning May 1,
2000, we determined to return to our prior policy of maintaining
"incoming calls only" customers for only 185 days
and began to turn over "incoming calls only" prepay
customers who had reached the 185-day limit without activating a
new prepay card.
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Extending the life of VIVA prepay cards defers
the deactivation of prepay customers who may in fact not be
using the service. The November 1998 extension, by deferring
prepay turnover for 45 additional days, contributed to the
strong growth in subscriber net additions, particularly prepay
net additions, during the fourth quarter of 1998. Likewise, the
April 1999 and October 1999 extensions, by deferring prepay
turnover, increased overall subscriber net additions in the
second, third and fourth quarters of 1999 and the first quarter
of 2000. The May 2000 decision to no longer defer the
deactivation of prepay customers led to a decrease in overall
subscriber net additions in the second, third and fourth
quarters of 2000. Overall subscriber net additions in the second
quarter of 2000 were also negatively affected by our decision to
turn over approximately 25,000 prepay customers who had
purchased but never activated a prepay card. Overall subscribers
declined by approximately 14,000 in the third quarter of 2000 as
a result of our decision to examine our entire prepay subscriber
base and eliminate approximately 59,000 additional prepaid
customers who had not made or received any calls for an extended
period of time. In the second quarter of 2001 net prepay
additions were affected by our decision to change the policy for
reporting preactivated prepay sales in order to better focus on
active customers and reduce the potential future churn. Under
the new policy a preactivated prepay sale is now reported when
the end-user places the first outgoing call. Accordingly,
commissions related to this type of prepay sale are now paid
only after the end-user places the first outgoing call. This
policy change resulted in 88,300 disconnects of previously
pre-activated but never used prepay phones from our customer
base. As part of a restructuring of distribution processes, we
conducted a comprehensive review of the prepay base in the
second quarter of 2001. This review identified an additional
88,100 inactive prepay customers who were churned in that period.
Additionally, we reduced the initial period for
using up an activated prepay card and activating a new card from
185 days to 60 days effective July 1, 2001. This
measure is intended as an incentive for customers to recharge
their airtime on a more regular basis. As a result,
approximately 345,000 incremental customers were transferred to
the "incoming calls only" status in that quarter. The
reduction in the initial period is in line with Mexican market
practices. Any decision to further reduce or extend the VIVA
card life for "incoming calls only" customers will
also reduce or increase overall subscriber net additions for the
period of the reduction or extension.
At December 31, 2001, we had approximately
768,000 "incoming calls only" customers. The
substantial majority of "incoming calls only"
customers generate very low traffic.
In late March 1999, we implemented marketing
initiatives focused on increasing usage by and revenues derived
from prepay customers. These initiatives included an approximate
6% price increase, the implementation of a Ps.59 or Ps.79
activation fee for a customer activating a telephone number with
a Ps.250 or Ps.150 prepay card, an increase in the minimum
denomination of the prepay card with which a customer can
activate prepay service from Ps.100 to Ps.150, an adjustment of
commissions to encourage distributors to activate customers with
prepay cards of higher denominations and the sending of
electronic reminders to customers to replenish their cards.
During the second half of 2000, we began to migrate high-usage
prepay customers to digital service and to sell digital handsets
to new prepay customers. At the end of 2000 and 2001, 11% and
35% of the prepay subscriber base, respectively, were able to
access digital service. These initiatives, together with the
continuing efforts to increase the number of distribution points
for prepay cards in order to facilitate and encourage their
replenishment, appear to have had their intended results. Our
new and existing prepay customers are generating higher revenues.
Digitalization
Digital and dual-mode (i.e., digital-analog)
handsets are substantially more expensive than analog handsets,
although the prices for all types of handsets have declined over
time. As a result, the subsidies we provide for handsets are
higher than they would have been had we remained an exclusively
analog service provider. The sale of digital handsets to new
subscribers and the migration of analog postpaid subscribers to
digital service began in 1998, with our introduction of digital
service. During the second half of 2000, we began to migrate
high-usage prepay customers to digital service and to sell
dual-mode handsets to new prepay customers. In May 2001, we
decided to no longer purchase any analog-only handsets. Upon the
exhaustion of
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our existing inventory of analog-only handsets,
we will only sell digital, dual mode and tri-mode handsets to
our customers.
We believe that digitalization will increase
subscriber usage. Our experience has been that the average new
digital customer uses his or her cellular telephone more than
the average analog customer and that analog customers that
migrate to digital service tend to increase their usage upon
migration.
Digital postpaid subscribers increased from
27,410 at December 31, 1998 to 337,341 at December 31,
2001. At December 31, 2001, only 66,647 postpaid
subscribers were analog customers, the vast majority of which
were rural postpaid terminals. At December 31, 2001, we had
511,236 digital prepay subscribers, representing approximately
35% of the total prepay customer base. We expect that the
percentage of our prepay customers who use digital service will
increase with our existing handset purchase and sale policy and
our continued migration of prepay customers to digital service.
In connection with Iusacell's commercial
launch of PCS services in Monterrey and Tijuana in December
2001, we expect to begin providing tri-mode handsets (which
combine digital PCS, digital cellular and analog cellular modes)
to targeted new postpaid customers in our five Regions. Tri-mode
handsets are substantially more expensive than dual-mode
handsets, although the prices for all types of handsets have
declined over time. As a result, we expect that the subsidies we
provide for handsets will be higher than they otherwise would be
if we were only to provide dual-mode handsets in our cellular
regions.
Tower Monetization
In December 1999, we entered into a series of
agreements with a Mexican affiliate of American Tower
Corporation, which we refer to as MATC Celular. These
agreements, among other things, give MATC Celular the right to
acquire approximately 330 of our existing non-strategic towers.
In 2001, we closed the sale of approximately 244 of these
non-strategic towers to MATC Celular, receiving in excess of
U.S.$34 million in net gains. On May 2002, we closed the
sale of 25 additional non-strategic towers receiving
approximately U.S.$4.2 million in net gains. We expect to
sell up to an additional 61 non-strategic towers to MATC Celular
during the remaining of 2002. Iusacell is leasing back these
towers from MATC Celular and subleasing them to its operating
subsidiaries.
The difference between the sale price and book
value of the towers sold is being recorded as a reduction in
operating expense. In 2001, we recorded an expense reduction
under Mexican GAAP of Ps.215.9 million in connection with
our sale of 244 towers to MATC Celular. However, the leasing of
the towers from MATC Celular results in an increase in our
operating expenses, which we experienced in 2001. However, this
effect was partially offset by the reduction in interconnection
rate expenses registered in January 2001. Under U.S. GAAP,
the majority of the gain was differed. See Note 23 to the
Consolidated Financial Statements for a further discussion.
Under U.S. GAAP, this sale was deferred. See
Note 23 to the Consolidated Financial Statements for a
further discussion.
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Results of Operations
The following table presents results of
operations data for the years ended December 31, 1999, 2000
and 2001.
Year Ended December 31,
1999
2000
2001
Ps.
Ps.
% Change
Ps.
% Change
(In millions of constant December 31, 2001 pesos,
except percentages)
Total revenues
4,783.0
5,729.7
19.8
6,288.8
9.8
Cost of sales
1,528.5
1,820.1
19.1
1,854.7
1.9
Operating expenses
1,643.2
1,917.6
16.7
2,220.3
15.8
Depreciation and amortization
1,620.3
2,381.0
46.9
2,568.7
7.9
Operating loss
(9.0
)
(388.9
)
(4,221.1
)
(46.9
)
87.9
Integral financing gain (loss)
(656.7
)
155.0
—
125.1
(19.3
)
Net (loss) profit
435.0
(672.4
)
(254.6
)
(297.7
)
(55.7
)
Year Ended December 31, 2001 Compared
    to Year Ended December 31, 2000
Revenues
Total revenues consist of service revenues and
telephone equipment and other revenues. Our cellular service
revenues are principally derived from the provision of mobile
wireless telephone service in Mexico and also include revenues
attributable to in-roaming and long distance service revenue
generated by our mobile wireless subscribers as well as revenues
from the provision of telecommunication services in Mexico other
than wireless, including long distance service revenue from
non-mobile subscribers and revenues from the provision of data
transmission, fixed local wireless and paging services. Our
service revenues also include all Bulletin B-10 inflation
adjustments on all service revenue line items, whether mobile
wireless service revenues or other service revenues. Telephone
equipment and other revenues consist primarily of revenues from
sales of mobile telephone equipment and accessories, as well as
revenues attributable to out-roaming and revenues from the sale
of dark fiber optic cable. Revenues attributable to out-roaming
are passed through to the applicable host operator.
The following table presents the source of our
revenues for the years ended December 31, 2000 and 2001:
Year Ended December 31,
2000
2001
Change
Ps.
%
Ps.
%
%
(In millions of constant pesos as of
December 31, 2001 except percentages)
Service revenues
5,201.0
90.8
5,681.7
90.3
9.2
Telephone equipment and other revenues
528.7
9.2
607.1
9.7
14.8
Total revenues
5,729.7
100.0
6,288.8
100.0
9.8
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The table below presents service revenues by
source for the years ended December 31, 2001 and 2000:
Year Ended December 31,
2000(1)
2001(1)
Ps.
%
Ps.
%
(In millions of constant pesos as of
December 31, 2001, except percentages)
Airtime(2)
2,533.4
48.7
2,840.8
50.0
Monthly fees
1,710.7
32.9
1,743.0
30.7
Long distance
532.5
10.2
649.4
11.4
Value-added services and in-roaming(4)
424.7
8.2
448.5
7.9
Total service revenues
5,201.0
100.0
5,681.7
100.0
(1)
Figures include intercompany eliminations.
(2)
Airtime includes amounts billed to other carriers
    for incoming minutes under CPP, additional outgoing postpaid
    minutes to those included in the package contracted and prepaid
    outgoing minutes net of unsuitable minutes. Incoming and
    outgoing airtime is charged on a per-minute basis for both peak
    (Monday to Friday, 8:00 a.m. to 10:00 p.m.) and non-peak
    airtime.
(3)
Includes fees for value-added services, such as
    call waiting, call transfer, emergency service, secretarial
    service and three-way calling, and revenues from premiums for
    surety bonds, insurance-related charges payable by subscribers,
    rural and public telephony, Iusacell's cellular magazines
    and other revenues. Does not include charges for related
    airtime. Customers using value-added services such as news,
    weather, sports and entertainment reports are charged only for
    airtime. These revenues are therefore included in airtime.
We had 1,854,697 and 1,681,219 mobile wireless
subscribers at December 31, 2001 and 2000, respectively.
Prepay subscribers increased 17.1% from 1,238,625
subscribers or 73.7% of total subscribers, at December 31,
2000 to 1,450,709 or 78.2% of total subscribers, at
December 31, 2001. This figure includes 98,470 prepay
subscribers in Region 8 in southern Mexico as a result of our
acquisition of Portatel which represent 6.8% of the total prepay
subscriber base at December 2001. "Incoming calls
only" prepay customers, the substantially majority of whom
generate little traffic, grew by 179.3% from 275,001 at
December 31, 2000 to 768,076 at December 31, 2001.
Revenues from these customers do not have certain costs
associated with them which we incur in connection with postpaid
customers, such as commissions on sales, advertising or bad debt
expenses. Digital prepay customers grew by 270.6% from 137,943
at December 31, 2000 to 511,236 at December 31, 2001.
Long distance included (LDI) prepay customers grew by 88.9% from
416,442 at December 31, 2000 to 786,477 at
December 31, 2001. A prepay customer is included as a
customer if the customer's telephone number remains
activated at the end of the reporting period. In the third
quarter 2001, we reduced the initial period for using up an
activated prepay card from 185 days to 60 days
effective July 1, 2001 and began to turn over
"incoming calls only" prepay customers who had reached
the 305-day limit without activating a new card or otherwise
recharging the airtime in their accounts.
Postpaid subscribers decreased 8.7% from 442,594
subscribers or 26.3% of total subscribers at December 31,
2000 to 403,988 or 21.8% of total subscribers at
December 31, 2001. This figure includes 15,112 postpaid
subscribers in Region 8 in southern Mexico. Without including
the Region 8 postpaid subscribers as of December 2001, the
decline would have been 12.1% from period to period. Digital
postpaid subscribers decreased by 11.6% from 381,696 at
December 31, 2000 to 337,341 at December 31, 2001. LDI
postpaid customers decreased by 19.1% from 89,363 at
December 31, 2000 to 72,323 at December 31, 2001. The
December 31, 2001 postpaid subscriber data includes
approximately 37,972 public telephony numbers who are considered
as postpaid customers since January 1, 2000.
Total service revenues increased by 9.2% to
Ps.5,681.7 million (U.S.$620.5 million) in 2001 from
Ps.5,201.0 million (U.S.$568.0 million) in 2000 and
represented 90.3% and 90.8% of total revenues in 2001
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and 2000 respectively. Revenues increased
primarily as a result of total subscriber growth, greater usage
as a result of the digitalization of the postpaid subscriber
base and traffic growth.
Monthly fees from postpaid subscribers grew by
1.9% from Ps.1,710.7 million (U.S.$186.8 million) in
2000 to Ps.1,743.0 million (U.S.$190.4 million) in
2001. Monthly fees increased notwithstanding an increase in the
number of lower-end subscribers in 2001. Airtime revenues
increased 12.1% from Ps.2,533.4 million
(U.S.$276.7 million) in 2000 to Ps.2,840.8 million
(U.S.$310.3 million) in 2001, primarily as a result of
traffic growth related to calling party pays and greater usage
by postpaid subscribers. Long distance cellular revenue
increased by 22.0% to Ps.649.4 million
(U.S.$70.9 million) in 2001 from Ps.532.2 million
(U.S.$58.1 million) in 2000. This growth is the result of
higher usage by the subscriber base.
Average monthly MOU's for all subscribers
for 2001 (excluding "incoming calls only" prepay
customers) were 117, an increase of 24.5% as compared to the
average monthly MOU's of 94 in 2000. MOU's among
postpaid customers increased by 1.6% from 246 in 2000 to 250 in
2001. MOU's among prepay customers also increased by 40.6%
from 32 in 2000 to 45 in 2001. This increase in MOU's was
driven by traffic growth and greater usage by the total prepay
subscriber base and the reduction of the period to utilize the
prepay card from 180 days to 60 days.
Nominal average monthly cellular revenue per
subscriber for all subscribers (excluding "incoming calls
only" prepay customers) increased 14.9% to Ps.370
(U.S.$40.4) in 2001 from Ps.322 (U.S.$35.2) in 2000. The
increase was driven mainly by higher usage by the subscriber
base, traffic growth and the reduction of the period to utilize
the prepay card from 180 days to 60 days.
Postpaid subscriber churn increased to an average
monthly level of 3.8% in 2001 from 3.5% in 2000. We have taken
strict collection procedures to reduce the bad debt expense and
have implemented new activation policies and retention programs.
Telephone Equipment and
Other.
Telephone equipment and other
revenues increased 14.8% to Ps.607.1 million
(U.S.$66.3 million) in 2001 from Ps.528.7 million
(U.S.$57.7 million) in 2000. The 14.8% increase in revenues
comes mainly from out-roaming fees.
Cost of
sales
Our cost of sales includes cost of services, cost
of telephone equipment and other costs. Total cost of sales
increased 1.9% to Ps.1,854.7 million
(U.S.$202.6 million) in 2001 from Ps.1,820.1 million
(U.S.$198.8 million) in 2000. As a percentage of total
revenues, cost of sales decreased to 29.5% in 2001 from 31.8% in
2000.
Cost of Services.
Cost of services includes taxes and
fees on revenues payable to the Mexican government,
interconnection costs, technical costs such as maintenance,
repair costs, lease expenses, salaries of technical personnel
and utilities on a pro-rata basis. As a percentage of total
revenues, cost of services decreased to 23.5% in 2001 from 25.6%
in 2000. Cost of services slightly increased 0.9% to
Ps.1,476.6 million (U.S.$161.3 million) in 2001 from
Ps.1,464.1 million (U.S.$159.9 million) in 2000. The
increase was primarily driven by the higher access costs paid to
other carriers due to increased mobile-to-mobile CPP traffic as
well as lease costs following the sale of certain transmission
towers in 2001. See Item 5 "Operating and Financial
Review and Prospects — Operating Results —
Tower Sales". Partially offsetting those items were the
reduction of interconnection rates in January 2001, the more
efficient use of our fiber network and the one-time adjustment
in provisions of gross cellular airtime revenues payable to the
Mexican government.
Cost of Telephone Equipment and Other.
Cost of telephone equipment and other
includes that portion of handset and accessory costs that are
not capitalized, handset and accessory inventory obsolescence
charges and the cost of dark fiber optic cable sold. Cost and
telephone equipment and other increased 6.2% to
Ps.378.1 million (U.S.$41.3 million) in 2001 from
Ps.356.0 million (U.S.$38.9 million) in 2000 primarily
due to the three-month consolidation of Portatel, partial
subsidization of telephones sold to prepay customers and an
increase in accessory obsolescence charges. As a percentage of
the telephone equipment and other revenues, the cost of
telephone equipment and other decreased to 62.3% in 2001 from
67.3% in 2000. The cost of a cellular handset given to a
postpaid customer is amortized over 12 months, the average
length of our
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cellular contract, instead of being immediately
expensed in the period in which the customer received the
telephone.
Operating
expenses
Operating expenses increased 15.8% to
Ps.2,220.3 million (U.S.$242.5 million) in 2001 from
Ps.1,917.6 million (U.S.$209.4 million) in 2000. As a
percentage of total revenues, operating expenses increased from
33.5% in 2000 to 35.3% in 2001. As a percentage of total
revenues, sales and advertising expenses decreased to 22.3% in
2001 from 24.6% in 2000. In peso terms, sales and advertising
expenses increased 14.9%, to Ps.1,612.2 million
(U.S.$176.1 million) from Ps.1,403.3 million
(U.S.$153.3 million) in 2000, primarily because of higher
television advertising rates as well as expenses incurred in
association with the consolidation of Region 8 cellular service
into our business. General and administrative expenses increased
18.2% to Ps.608.0 million (U.S.$66.4 million) in 2001,
from Ps.514.3 million (U.S.$56.2 million) in 2000, due
to lower capitalization of engineering expenses, higher
consulting and vendor fees as well as charges associated with
the consolidation of Portatel, the provider of cellular service
in Region 8 which we acquired. As a percentage of total
revenues, general and administrative expenses increased slightly
to 9.7% in 2001 from 9.0%.
Other
income
We had other income of Ps.307.9 million
(U.S.$33.6 million) in 2001 mainly as a result of the sale
of 244 towers to MATC Celular. The same towers were immediately
leased back from MATC Celular by our parent's subsidiary
Iusacell Arrendadora, S.A de C.V. See Item 5,
"Operating and Financial Review and Prospects —
Operating Results — Tower Monetization".
Depreciation and
amortization
In 2001, management completed a review of its
depreciation and amortization policies related to certain analog
and digital network equipment and postpaid handsets. The aim of
the study was to align the estimated remaining useful lives of
those assets with current international benchmarks. As a result
of the review, a change in the weighted estimated useful life of
the network assets was made. The weighted average useful life
for the network equipment was extended to 10 years,
compared to the 8.7 years previously used. With regard to
the amortization of postpaid handset costs, we shortened the
average amortization period from 18 months to
12 months. Depreciation and amortization expenses increased
7.9% to Ps.2,568.7 million (U.S.$280.5 million) in
2001, from Ps.2,381.0 million (U.S.$260.0 million) in
2000 due primarily to the higher postpaid handset amortization
expense in 2001.
Operating
loss
We reported an operating loss of
Ps.46.9 million (U.S.$5.1 million) in our Consolidated
Financial Statements in 2001, compared to an operating loss of
Ps.388.9 million (U.S.$42.5 million) in 2000. The
lower operating loss was attributable to the benefit resulting
from the sale of our towers. Without considering this benefit,
our operating loss for 2001 would be Ps.354.8 million
(U.S.$38.8 million).
Integral
financing (results)
We recorded an integral financing cost of
Ps.125.1 million (U.S.$13.7 million) in 2001 compared
to an integral financing cost of Ps.155.0 million
(U.S.$16.9 million) in 2000. The lower cost was
attributable to several factors. Net interest expense decreased
by 24.3% from Ps.509.8 million (U.S.$55.7 million) in
2000 to Ps.385.9 million (U.S.$42.1 million) in 2001
as a result of lower interest rates and a stronger peso which
appreciated by 4.8% against the U.S. dollar from December
2000 to December 2001. Also due to this appreciation of the
peso, we recorded a foreign exchange gain of
Ps.95.8 million (U.S.$10.5 million) in 2001 compared
to a foreign exchange loss of Ps.19.6 million
(U.S.$2.1 million) in 2000. We also posted a lower gain in
monetary position of Ps.165.0 million
(U.S.$18.0 million) in 2001 compared to a gain of
Ps.374.4 million (U.S.$40.9 million) in 2000 due to
the effect of our net peso liability position of the lower
period-over-period inflation rate of 4.4% in 2001 compared to
8.9% in 2000.
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Net
loss
As a result of the factors described above, our
net loss was Ps.297.7 million (U.S.$32.5 million) in
2001 compared to a net loss of Ps.672.4 million
(U.S.$73.4 million) in 2000.
Year Ended December 31, 2000 Compared
    to Year Ended December 31, 1999
Revenues
The following table presents the source of our
revenues for the years ended December 31, 1999 and 2000.
Year Ended December 31,
1999
2000
Change
Ps.
%
Ps.
%
%
(In millions of constant pesos as of
December 31, 2001, except percentages)
Service revenues
4,285.9
89.6
5,201.0
90.8
21.4
Telephone equipment and other revenues
497.1
10.4
528.7
9.2
6.4
Total revenues
4,783.0
100.0
5,729.7
100.0
19.8
Services
The table below presents service revenues by
source for the years ended December 31, 1999 and 2000.
1999
(1)
2000
(1)
Ps.
%
Ps.
%
(In millions of constant pesos as of
December 31, 2001, except percentages)
Airtime
(2)
1,720.9
40.2
2,533.4
48.7
Monthly fees
1,606.8
37.5
1,710.7
32.9
Long distance
554.3
12.9
532.2
10.2
Value-added services and in-roaming
(3)
403.9
9.4
424.7
8.2
Total service revenues
4,285.9
100.0
5,201.0
100.0
(1)
Figures reflect intercompany eliminations.
(2)
Airtime includes amounts billed to other carriers
    for incoming minutes under CPP starting May 1, 1999.
    Incoming and outgoing airtime is charged on a per-minute basis
    for both peak (Monday to Friday, 8:00 a.m. to
    10:00 p.m.) and non-peak airtime.
(3)
Includes fees for value-added services, such as
    call waiting, call transfer, emergency service, secretarial
    service and three-way calling, and revenues from premiums for
    surety bonds, insurance-related charges payable by subscribers,
    rural and public telephony and Iusacell's cellular
    magazine. Does not include charges for related airtime.
    Customers using value-added services such as news, weather,
    sports and entertainment reports are charged only for airtime.
    These revenues are therefore included in airtime.
Postpaid subscribers increased by 25.6% from
352,289 subscribers, or 26.6% of total subscribers, at
December 31, 1999, to 442,594 subscribers, or 26.3% of
total subscribers, at December 31, 2000. Digital postpaid
customers grew by 73.6% from 219,829 at December 31, 1999
to 381,696 at December 31, 2000. LDI postpaid customers
grew by 402.7% from 17,776 at December 31, 1999 to 89,364
at December 31, 2000. The December 31, 2000 postpaid
subscriber data includes approximately 12,000 public telephony
customers who in the second quarter of 2001 were reclassified,
retroactively to January 1, 2000, as postpaid customers
rather than prepay customers.
Service revenues increased by 21.4% to
Ps.5,201.0 million (U.S.$568.0 million) in 2000 from
Ps.4,285.9 million (U.S.$468.1 million) in 1999 and
represented 90.8% and 89.6% of total revenues in 2000 and 1999,
respectively. Revenues increased primarily as a result of
subscriber growth, greater usage as a result
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of the digitalization of the postpaid subscriber
base and traffic growth related to calling party pays (which
resulted in a significant increase in incoming calls and
contributed to the growth in prepay subscribers). This increase
was offset in part by the decline in nominal average monthly
cellular revenue per subscriber and long distance cellular
revenues described below.
Monthly fees from postpaid customers increased
6.5% during 2000, Ps.1,710.7 million
(U.S.$186.8 million) as compared to Ps.1,606.8 million
(U.S.$175.5 million) in 1999. This was primarily a result
of a migration of postpaid customers from higher to lower
monthly fixed charge products, offset by the increase in the
postpaid subscriber base. Airtime revenues increased 47.2% from
Ps.1,720.9 million (U.S.$188.0 million) in 1999 to
Ps.2,533.4 million (U.S.$276.7 million) in 2000,
primarily as a result of subscriber growth, traffic growth
related to calling party pays and greater usage generated by the
digitalization of the postpaid subscriber base. Long distance
service revenues decreased 4.0% from Ps.554.3 million
(U.S.$60.5 million) in 1999 to Ps.532.2 million
(U.S.$58.1 million) in 2000. We believe this decline was
due to the increase in the postpaid and prepay LDI customer
base, which replaces per-minute long distance charges that are
allocated to long distance service revenues with higher
per-minute airtime charges that are not allocated to long
distance service revenues.
In the second quarter of 2000, in order to
conform to standards applied by other Verizon International
affiliates, we changed our methodology in calculating average
monthly MOUs and nominal ARPU to (i) include minutes of use
from incoming calls to postpaid customers, and (ii) exclude
revenues generated from the sale of handsets and accessories to
postpaid customers. The MOU and ARPU data presented below for
2000 and 1999 have been calculated using this new methodology.
Average monthly MOUs for all subscribers for 2000
(excluding "incoming calls only" prepay customers)
were 94, an increase of 3.3% as compared to the average monthly
MOUs of 91 in 1999. MOUs among postpaid customers increased
17.7% from 209 MOUs in 1999 to 246 MOUs in 2000. MOUs among
prepay customers increased 18.5% to 32 in 2000 from 27 in 1999.
This increase in MOUs was driven by the traffic growth related
to CPP and by the continuing digitalization of the customer base.
Nominal average monthly revenue per subscriber
for all subscribers (excluding "incoming calls only"
prepay customers) decreased 3.9% from Ps.335 (U.S.$36.6) in
1999 to Ps.322 (U.S.$35.2) in 2000. This blended decline,
primarily due to the increase in the percentage of prepay
customers (excluding "incoming calls only" customers),
masks a 5.0% increase in postpaid customer nominal ARPU and a
7.5% increase in prepay customer nominal ARPU.
Postpaid subscriber churn increased to an average
monthly level of 3.51% in 2000 from 2.96% in 1999. We believe
that this increase in churn was related to inadequate credit and
collection procedures at the time of activation. We have taken
steps to correct this situation.
Telephone Equipment and
Other.
Telephone equipment and other
revenues increased by 6.4% from Ps.497.1 million
(U.S$54.3 million) in 1999 to Ps.528.7 million
(U.S.$57.7 million) in 2000. The 71.1% increase in revenues
attributable to out-roaming fees, from Ps.199.7 million
(U.S.$21.8 million) in 1999 to Ps.341.7 million
(U.S.$37.3 million) in 2000, more than offset (i) the
12.6% decline in handset revenues, from Ps.125.6 million
(U.S.$13.7 million) in 1999 to Ps.109.8 million
(U.S.$12.0 million) in 2000 and (ii) the absence of
revenues from the sale of dark fiber optic cable in 2000, which
in 1999 represented Ps.68.7 million (U.S.$7.5 million)
in revenues.
Cost of
Sales
Total cost of sales increased 19.1% to
Ps.1,820.1 million (U.S.$198.8 million) in 2000 from
Ps.1,528.5 million (U.S.$166.9 million) in 1999. As a
percentage of total revenues, cost of sales decreased to 31.8%
in 2000 from 32.0% in 1999.
Cost of services.
Cost of services increased 19.8% to
Ps.1,464.1 million (U.S.$159.9 million) in 2000 from
Ps.1,221.9 million (U.S.$133.5 million) in 1999. This
increase was mainly due to the 21.4% increase in service
revenues, which resulted in higher overall (i) taxes and
fees payable to the Mexican government and
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(ii) Telmex interconnection fees. As a
percentage of service revenues, cost of services decreased
slightly from 28.5% in 1999 to 28.2% in 2000.
Cost of telephone equipment.
Cost of telephone equipment and other
increased by 16.1% to Ps.356.0 million
(U.S.$38.9 million) in 2000 from Ps.306.6 million
(U.S.$33.5 million) in 1999 primarily due to the expensed
partial subsidization of telephones sold to prepay customers and
an increase in handset inventory obsolescence charges. As a
percentage of telephone equipment and other revenues, the cost
of telephone equipment and other increased to 67.3% in 2000 from
61.7% in 1999. The cost of a cellular handset given to a
postpaid customer was amortized over 18 months, the average
maturity of our cellular contract in these periods.
Operating
Expenses
Operating expenses increased 16.7% to
Ps.1,917.6 million (U.S.$209.4 million) in 2000 from
Ps.1,643.2 million (U.S.$179.5 million) in 1999. As a
percentage of total revenues, operating expenses decreased to
33.5% in 2000 from 34.4% in 1999. Sales and advertising expenses
increased 33.8% from Ps.1,048.7 million
(U.S.$114.5 million) in 1999 to Ps.1,403.3 million
(U.S.$153.3 million) in 2000, primarily because of
increased commissions to distributors resulting from higher
sales and revenue-related increases in advertising. General and
administrative expenses decreased by 13.5% from
Ps.594.5 million (U.S.$64.9 million) in 1999 to
Ps.514.3 million (U.S.$56.2 million) in 2000 mainly
due to cost containment programs and higher productivity.
Depreciation and
Amortization
Depreciation and amortization expenses increased
by 46.9% to Ps.2,381.0 million (U.S.$260.0 million) in
2000 from Ps.1,620.3 million (U.S.$177.0 million) in
1999. This increase was primarily due to the completion in late
1999 of the deployment of the new Lucent Technologies analog and
digital network and the additional investments made in 1999 and
2000 to satisfy the capacity and coverage requirements for
continued growth and quality standards. In addition, in the
fourth quarter of 1999, we completed the implementation of our
new LHS cellular billing system and we capitalized all
associated costs. The continued digitalization of the postpaid
subscriber base resulted in greater amortization expenses driven
mainly by increased purchases of more expensive digital handsets.
Operating
Loss
We recorded an operating loss of
Ps.388.9 million (U.S.$42.5 million) in 2000 as
compared to an operating loss of Ps.9.0 million
(U.S.$1.0 million) in 1999.
Integral
Financing Results
We recorded an integral financing cost of
Ps.155.0 million (U.S.$16.9 million) in 2000 compared
to an integral financing gain of Ps.656.7 million
(U.S.$71.7 million) in 1999. Net interest expense increased
to Ps.509.8 million (U.S.$55.7 million) in 2000 from
Ps.305.7 million (U.S.$33.4 million) in 1999. In
addition, as a result of the slight peso devaluation in 2000 as
compared to the peso appreciation against the U.S. dollar in
1999, we recorded a foreign exchange loss of
Ps.19.6 million (U.S.$2.1 million) in 2000 as compared
to a foreign exchange gain of Ps.210.3 million
(U.S.$23.0 million) in 1999. We also experienced a decrease
in gain in monetary position from Ps.752.1 million
(U.S.$82.1 million) in 1999 to Ps.374.4 million
(U.S.$40.9 million) in 2000 due to the effect on our net
peso liability position of a lower period-over-period inflation
as measured by changes in the INPC, 12.3% in 1999 as compared to
8.9% in 2000.
Net Income
(loss)
As a result of the factors described above, our
net loss was Ps.672.4 million (U.S.$73.4 million) in
2000 compared to a net income of Ps.435.0 million
(U.S.$47.5 million) in 1999.
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Income Tax, Asset Tax and Employees'
Profit Sharing
Beginning January 1, 1999, as a result of
Mexican income tax law amendments, we must limit our tax
consolidation to 60% of all our subsidiaries, except for four
entities (Iusatel, S.A. de C.V., Iusatelecomunicaciones, S.A. de
C.V., Infotelecom, S.A. de C.V., and Punto-a-Punto Iusacell,
S.A. de C.V.) which are not included in our consolidated tax
return (although they are consolidated for financial reporting
purposes), because we do not hold at least 51% of the voting
shares of such subsidiaries. We filed an injunctive action
(amparo) against the new income tax law amendments on the
basis that the law is unconstitutional. This injunctive action
was rejected on technical grounds and we are not allowed to file
another motion on the same grounds.
In December 2000, the Mexican Treasury Department
(
Secretaría de Hacienda y Crédito Público
)
ruled that we could prepare consolidated tax returns for
ourselves and the subsidiaries in which we hold a majority of
voting shares and thereby apply our net operating loss
carryforwards against our and such subsidiaries' profits.
In April 2001, the Mexican Treasury Department ruled that
Iusacell Celular's net operating loss carryforwards would
be transferred to Iusacell, so that Iusacell could apply such
net operating loss carryforwards against its and its
majority-owned subsidiaries' tax result.
Iusacell and its subsidiaries pay an alternative
net asset tax, which is levied on the average value of
substantially all assets less certain liabilities. This tax,
which is 1.8% of the taxable base, is required to be paid if the
amount of the asset tax exceeds the computed income tax
liability. We provided for Ps.150.9 million
(U.S.$16.5 million), Ps.156.3 million
(U.S.$17.1 million) and Ps.146.4 million
(U.S.$16.0 million) as asset tax for 1999, 2000 and 2001,
respectively. These taxes may be applied in subsequent years
against income tax payments, to the extent income tax
liabilities for such years exceed the net asset tax calculation.
Due to net losses, we paid no income taxes in 2001 and paid the
asset taxes specified above. In 2000, as a result of the new tax
consolidation rules, we paid Ps.82.4 million
(U.S.$9.0 million) in income taxes as well as the asset tax
specified above, even though Iusacell recorded a net loss on a
fully consolidated basis. See Note 12 to the Consolidated
Financial Statements for a discussion of our carryforward tax
losses.
While we have no employees at the holding company
level, our subsidiaries are required under Mexican law to pay
their employees, in addition to their required compensation and
benefits, profit sharing in an aggregate amount equal to 10% of
the taxable income of the relevant subsidiary (calculated
without reference to inflation adjustments or amortization of
tax loss carryforwards). There was no statutory profit sharing
in any periods presented.
New Mexican Accounting
Pronouncements
In November 2001, the MIPA issued the revised
Bulletin C-9, "Liabilities, Provisions, Contingent
Assets and Liabilities and Commitments"
(Bulletin C-9), which establishes a methodology for
valuation, presentation and disclosure of liabilities and
provisions, as well as for valuation and disclosure of
contingent assets and liabilities, and for disclosure for
commitments. The revised Bulletin C-9 states that
(i) all contingent assets that have a practical true
realization must be accounted and disclosed in the financial
statements; (ii) contingent assets that have a probable
realization cannot be accounted for in the financial statements,
but must be disclosed; and (iii) contingent assets that do
not have a probable realization and cannot be accounted for in
the financial statements are not required to be disclosed.
Bulletin C-9 requires disclosure of committed amounts when
it represents significant fixed assets additions. The provisions
of Bulletin C-9 are required to be applied beginning on
January 1, 2003, although early adoption is recommended.
In addition, in December 2001, the MIPA issued
revised Bulletin C-8, "Intangible Assets"
(Bulletin C-8), which defines intangible assets as costs
incurred and rights or privileges acquired that will generate a
future economic benefit. Revised Bulletin C-8 states that
pre-operating costs should be expensed as a period cost, unless
they could be classified as development costs. Bulletin C-8
requires that intangible assets with finite useful lives should
be amortized over its useful life. The provisions of
Bulletin C-8 are required to be applied beginning on
January 1, 2003, although early adoption is recommended.
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U.S. GAAP Reconciliation
The principal differences between Mexican GAAP
and U.S. GAAP as they relate to Iusacell are the adjustment
for the effects of inflation, minority interest, purchase
accounting, deferred income taxes, capitalization of
pre-operating costs, derivative financial instruments,
provisions for consolidation of facilities and accounting for
non-monetary exchanges, and sale-leaseback transactions. See
Note 23 to the Consolidated Financial Statements for a
reconciliation to U.S. GAAP of stockholders' equity
and net profit (loss) for the respective periods presented.
New U.S. Accounting Pronouncements
In July 2001, the FASB issued FAS No. 141,
"Business Combinations," which supercedes APB
No. 16, "Business Combinations" and amends or
supercedes a number of related interpretations of APB
No. 16. The Statement is effective for all business
combinations initiated after June 30, 2001 and for all
business combinations accounted for by the purchase method that
are completed after June 30, 2001. FAS No. 141
addresses financial accounting and reporting for business
combinations, eliminates the pooling-of-interests method of
accounting for business combinations, and prescribes the initial
recognition and measurement of goodwill and other intangible
assets, accounting for negative goodwill and the required
disclosures in respect of business combinations. The Company
applied SFAS 141 to the Portatel acquisition and SFAS 142
to the intangible assets acquired therein.
In July 2001, the FASB also issued FAS
No. 142, "Goodwill and Other Intangible Assets",
which supercedes APB No. 17, "Intangible Assets."
The Statement is effective for fiscal years beginning after
December 15, 2001 and may not be retroactively applied to
financial statements of prior periods. FAS No. 142 requires
that goodwill, including previously existing goodwill and
intangible assets with indefinite useful lives not be amortized
but should be tested for impairment annually, or more frequently
if impairment indicators arise. Goodwill and intangible assets
with indefinite useful lives will no longer be tested for
impairment under FAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of." The Company expects that due to the adoption
of SFAS 141 and 142, amortization of approximately
Ps.169,833, corresponding to all of the Company's goodwill
at December 31, 2001, will not be recorded during 2002,
which previously would have been.
The Financial Accounting Standards Board
("FASB") recently issued SFAS 143,
"Accounting for Obligations Associated with the Retirement
of Long-Lived Assets", which is effective for fiscal years
beginning after June 15, 2002. The objectives of
SFAS 143 are to establish accounting standards for the
recognition and measurement of an asset retirement obligation
and its associated asset retirement cost.
In 2001, the FASB issued SFAS 144,
"Accounting for the Impairment of Long-Lived Assets",
which supersedes SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of", and APB 30, "Reporting the Results
of Operations-Reporting the Effects of Disposal of a Segment of
a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions". SFAS 144 provides
new guidance on (1) the recognition of impairment losses on
long-lived assets to be held and used or to be disposed of and
(2) how the results of a discontinued operation are to be
measured and presented. It also broadens the definition of what
constitutes a discontinued operation. It is effective for fiscal
years beginning after December 15, 2001.
In April of 2002, the FASB issued SFAS 145,
"Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical
Corrections." As a result, companies will no longer be
allowed to classify gains and losses from extinguishments of
debt as extraordinary items unless they meet the criteria of
APB 30. Gain and losses from extinguishments of debt that
have been classified as extraordinary in prior years that do not
meet the criteria of APB 30 shall be reclassified on a go
forward basis. In addition, SFAS 145 requires that capital
leases that are modified so that the resulting lease agreement
is classified as an operating lease be accounted for under the
sale-leaseback provisions of SFAS 28 or 98, as applicable,
instead of SFAS 13. The provisions of this statement with
regard to SFAS 4 will be effective for fiscal years
beginning after May 15, 2002, and those for SFAS 13
will be effective for transactions occurring after May 15,
2002.
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We are currently evaluating the adoption of
SFAS 143, 144 and 145 will have on our results of
operations and financial position.
Critical Accounting Policies
We have identified certain key accounting
policies on which our consolidated financial condition and
results of operations are dependent. These key accounting
policies most often involve complex matters or are based on
subjective judgments or decisions. In the opinion of our
management, our most critical accounting policies under both
Mexican GAAP and U.S. GAAP are those related to the
accounting for revenue recognition, allowance for doubtful
accounts, the evaluation of long-lived assets, depreciation and
amortization and deferred taxes. For a full description of all
of our accounting policies, see Notes 4 and 23 to the
Consolidated Financial Statements included in this Annual Report.
Revenue
recognition
The recognition of revenue from the sale of
prepay cards to mobile wireless customers requires a certain
degree of management estimates. For periods presented we
recognized revenue at the date of the sale, rather than on a
deferred basis, because the length of the average consumption
period for such prepay cards is approximately one to one and
one-half months, which we believe is not a significant period
and is not material to our results of operations. We estimate
the average consumption period taking into consideration the
date cards are shipped to distributors and vendors to when the
minutes are registered in our systems. In 2002, based on more
precise methods of monitoring card usage, we modified our
revenue recognition methodology.
Allowance for
doubtful accounts
The allowance for doubtful accounts represents
our estimate of the probable loss inherent in all accounts
receivable. We consider a number of factors in determining the
proper level of the allowance including historical collection
experience, current economic trends, the aging of the accounts
receivable portfolio and changes in the credit-worthiness of our
customers. Systems to detect fraudulent call activity are in
place within our network, but if these systems fail to identify
such activity, we may realize a higher degree of uncollectible
accounts. While we believe that our estimates are reasonable,
changes in our customers trends or any of the above mentioned
factors could materially affect our bad debt expense.
Evaluation of
long-lived assets
We have recognized on our balance sheets certain
long-lived assets and capitalized costs including goodwill,
property, plant and equipment, pre-operating expenses and Telmex
special projects. These assets are assigned useful lives which
impact annual depreciation and amortization expense, the
assignment of which involves significant judgments and
estimates. These long-lived assets are evaluated for impairment
on a periodic basis and we recognize an impairment to the extent
we believe that the carrying value is no longer recoverable from
future cash flows. Factors we take into consideration include
the future cash flows to be generated by the assets and the
possible impact that inflation may have in our ability to
generate cash flow since, with inflation accounting, the
carrying value is restated by inflation prior to an impairment
analysis. Key assumptions we evaluate include inflation,
currency fluctuations and future revenue growth. If our
assumptions are not correct, we would have to recognize a
write-off or accelerated amortization of the carrying value of
these assets.
Depreciation and
amortization
We depreciate property, plant and equipment and
amortize goodwill and other intangible assets using
straight-line methods over the period of time we estimate we
will benefit from each asset. For US GAAP purposes we do
not amortize goodwill related to Portatel and beginning January
2002 we no longer amortize goodwill of indefinite-lived
intangible assets.
The cost of mobile wireless telephones given to
customers under exclusive service contracts is amortized on a
straight-line. During 2001, we reduced the amortization period
of mobile wireless telephones from an
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average of 18 months to 12 months. The
term of service contracts varies on a customer by customer
basis. Due to the cost-ineffectiveness of tracking phones on an
individual contract basis for amortization purposes, we estimate
the average term of our contracts based on current trends.
Deferred taxes
We have recorded a net deferred tax asset mainly
reflecting the benefit of tax loss carryforwards, which expire
in varying amounts in the future. Realization is dependent on
generating sufficient taxable income prior to expiration of the
loss carryforwards. Although realization is not assured,
management believes it is more likely than not that a portion of
the net deferred tax asset will be realized based on our
business plan estimate of future taxable income over the next
five years in an amount sufficient to utilize the net deferred
tax losses recorded. Although we feel we will use our loss
carryforwards, given the fact that we've experienced
significant losses, a valuation allowance for a majority of the
asset has been recognized.
Our estimate of future taxable income is based
primarily on and supported by (i) the significant
improvement in operating performance through 2001, as evidenced
by the success of the implementation of the Verizon wireless
business model which has produced strong subscriber annual
compound growth of 50% through 2001, improved revenues mainly
driven by subscriber growth and lower network and operating
costs, (ii) Vodafone's strong experience and success
in the prepaid market, (iii) additional increases in
revenues generated by the CPP feature with an important taxable
operating margin, (iv) the change in Mexican income tax law
to increase the useful lives for network equipment from 3.3
years to 12.5 years, representing an important decrease in
depreciation expense for income tax purposes and (v) an
increase in 2002 of the potential effects of additional cost
cutting. We will continue to evaluate our deferred tax asset
every year.
B.     Liquidity and
Capital Resources
As part of the equity recapitalization and
restructuring of Iusacell completed in August 1999, Iusacell
acquired 99.5% of the capital stock of Iusacell Celular. Prior
to that time, Iusacell had nominal assets and no operations,
indebtedness or liabilities. As a result of a second exchange
offer launched in the United States by Iusacell for the
remaining Iusacell Celular ADSs and completed on
February 29, 2000, Iusacell held 99.9% of the capital stock
of Iusacell Celular. On March 30, 2001, Iusacell
Celular's shareholders approved a 30,000 to 1 reverse stock
split, which became effective in May 2001. As a result of such
transactions, Iusacell now holds 100% of the capital stock of
Iusacell Celular.
General
Our liquidity requirements arise from cash used
in operating activities, purchases of network equipment,
interest and principal payments on outstanding indebtedness and
acquisitions of and strategic investments in businesses. We have
financed our growth to date through equity contributions from
our principal shareholders, public offerings and private
placements of debt and equity securities, bank debt and vendor
financing.
We believe that funds from operating activities,
vendor financing and proceeds from tower monetization
transactions will be sufficient to meet our debt service and
principal amortization requirements, working capital
requirements and capital expenditure needs for our existing
businesses through 2003, although we cannot provide any
assurance in this regard.
With respect to our new businesses, our strategic
plan is to significantly increase the quality and coverage of
our newly acquired cellular network in Region 8 in southern
Mexico. Our capital expenditure needs and working capital
requirements to develop these business will require certain
amount of additional funding in the second half of 2002 and
beyond. We are seeking to obtain this financing from equipment
vendors and other sources. There can be no assurance that we
will be able to obtain any such financing.
Our future operating performance and ability to
service and repay our indebtedness will be subject to future
economic and competitive conditions and to financial, business
and other factors, many of which are beyond our control.
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Changes in Financial Position
Historically, our cash generated from operating
activities has not been sufficient to meet our debt service,
working capital and capital expenditure requirements. We have
relied on the capital markets for new equity and debt financing,
vendor financing and borrowings and equity contributions for our
principal shareholders to meet such funding needs. For the year
ended December 31, 1999, our ratio of earnings to fixed
charges was 0.81:1.00. For the years ended December 31,
2000 and 2001, our earnings were insufficient to cover our fixed
charges by Ps.914.0 million (U.S.$99.8 million) and
Ps.279.6 million (U.S.$30.5 million), respectively.
Cash Flows From Operating Activities
We generated positive cash flows from operating
activities in the years ended December 31, 2001 and
December 31, 2000. Net cash provided by operating
activities was Ps.2,236.1 million (U.S.$244.2 million)
for 2001 compared to Ps.1,797.2 million
(U.S.$196.3 million), for 2000. The increase in 2001
resulted mainly from a smaller loss from continuing operations
than in 2000, and an increase in depreciation and amortization
of Ps.187.7 million (U.S.$20.5 million), partially
offset by resources used in working capital of
Ps.115.3 million (U.S.$12.6 million). We also
generated positive cash flows from operating activities in the
year ended December 31, 1999, of Ps.1,290.4 million
(U.S.$140.9 million).
Cash Flows from Financing Activities
For the year ended December 31, 2001, net
cash provided by financing activities amounted to
Ps.499.4 million (U.S.$54.5 million) compared to
Ps.589.7 million (U.S.$64.4 million) for the year
ended December 31, 2000. The decrease was mainly
attributable to an increase in the principal payments on
long-term debt of Ps.1,898.9 million
(U.S.$207.4 million), a decrease in the amount of proceeds
received from effect of rights and primary offerings of Iusacell
of Ps.408.8 million (U.S.$44.6 million), partially
offset by an increase in the proceeds received from long-term
debt of Ps.2,435.6 million (U.S.$266.0 million). Net
cash provided by financing activities in 1999 was
Ps.1,372.5 million (U.S.$149.9 million). The decrease
in 2000 from 1999 was mainly due to a decrease in the proceeds
received from long-term debt of Ps.373.7 million
(U.S.$40.8 million) and capital stock from the
capitalization of stockholders debt of Ps.1,839.2 million
(U.S.$200.9 million) and an increase in the principal
payments on long-term debt of Ps.920.5 million
(U.S.$100.5 million), partially offset by an increase in
the issuance of notes payable of Ps.852.8 million
(U.S.$93.1 million).
Cash Flows Used for Investing
    Activities
Net cash used in investing activities was
Ps.2,908.3 million (U.S.$317.6 million) in 2001. We
purchased Ps.2,912.3 million (U.S.$318.1 million) of
property, equipment and other assets including the acquisition
of Portatel. Net cash used in investing activities was
Ps.2,297.1 million (U.S.$250.9 million) in 2000 and
was primarily attributable to purchases of
Ps.3,144.1 million (U.S.$343.4 million) consisting of
property, equipment and other assets, partially offset by the
sale of other assets of Ps.778.8 million
(U.S.$85.1 million) compared to purchases of
Ps.297.4 million (U.S.$32.5 million), and a lower
amount of sales of common stock of associated companies of
Ps.64.3 million (U.S.$7.0 million).
Net cash used in investing activities in 1999 was
Ps.2,786.4 million (U.S.$304.3 million). In 1999, we
made investments in an aggregate amount of
Ps.2,799.9 million (U.S.$305.8 million). Substantially
all of these expenditures were for the purchase of property,
equipment and other assets.
Tax Loss Carryforwards
We have recorded a net deferred tax asset of
Ps.172.0 million (U.S.$18.8 million) mainly reflecting
the benefit of tax loss carryforwards, which expire in varying
amounts between 2005 and 2010. Realization is dependent on
generating sufficient taxable income prior to expiration of the
loss carryforwards. Although realization is not assured,
management believes it is more likely than not that a portion of
the net deferred tax asset at December 31, 2001 will be
realized based on our business plan estimate of future taxable
income over
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the next five years in an amount sufficient to
utilize the net deferred tax losses recorded as of
December 31, 2001.
Our estimate of future taxable income is based
primarily on and supported by (i) the significant
improvement in operating performance through 2001, as evidenced
by the success of the implementation of the Verizon wireless
business model which has produced strong subscriber annual
compound growth of 50% through 2001, improved revenues mainly
driven by subscriber growth and lower network and operating
costs, (ii) Vodafone's strong experience and success
in the prepaid market, (iii) additional increase in
revenues generated by the CPP feature with an important taxable
operating margin, (iv) the change in the income tax law to
increase the useful lives for network equipment from 3.3 years
to 12.5 years, representing an important decrease in
depreciation expense for income tax purposes and (v) an
increase in 2002 of the potential effects of additional cost
cutting.
The amount of the deferred tax asset considered
realizable could be reduced in the near term if estimates of
future taxable income during the carry forward periods are
reduced.
As of December 31, 2001, we had a valuation
allowance of Ps.238.5 million (U.S.$26.0 million), to
reduce our deferred tax assets to estimated realizable value.
The valuation allowance primarily relates to the deferred tax
assets arising from tax loss carryforwards and tax credits. To
the extent that the Mexican tax loss carryforwards cannot be
used by our subsidiaries, 60% of such tax loss carryforwards can
be used to offset our future consolidated income.
At December 31, 2001, we had net operating
losses for income tax purposes that may be carried forward and
applied against future taxable earnings of
Ps.2,512.6 million (U.S.$274.4 million) expiring in
various amounts from 2005 through 2011. See Note 12 to the
Consolidated Financial Statements.
Capital Expenditures
In 2002 and 2003, we expect to make capital
expenditures to extend our network infrastructure, build out our
cellular and long distance networks, enhance our new billing
systems, and support existing operations and new business
opportunities. The degree and timing of capital expenditures
will remain strongly dependent on the competitive environment
and economic developments in Mexico, including inflation and
exchange rates, as well as on the timing of regulatory actions
and on the availability of suitable debt and/or equity financing.
If we acquire additional mobile wireless
concessions in Mexico, we may be required to increase our
capital expenditure budget. We would expect to finance these
capital expenditures through a combination of debt and vendor
financing, equity capital and operating cash flow.
We expect capital expenditures for 2002 and 2003
to total approximately U.S.$340.0 million, not including
amounts in respect of capitalized interest. We expect to invest
up to U.S.$170.0 million of this amount during 2002,
including approximately U.S.$21.0 million to increase the
quality and coverage of our cellular network in Region 8 in
southern Mexico.
We expect to make capital expenditures of
approximately U.S.$170.0 million in 2003, including
U.S.$10.0 million to develop our cellular network in
Region 8 in southern Mexico.
Total capital expenditures in 2001 were
U.S.$180.0 million. Approximately U.S.$2.6 million of
this amount was used to develop and increase the quality of the
wireless network in the recently acquired Region 8 in
southern Mexico.
We believe that funds from operating activities,
other vendor financing, existing short-term facilities and the
proceeds from tower monetization transactions will be sufficient
to meet our debt service and principal amortization requirements
and the working capital requirements and capital expenditure
needs of our existing businesses through 2003, although we
cannot provide any assurance in this regard.
Total capital expenditures in 2000 were
approximately U.S.$175.0 million used for the development
of the Iusacell Celular wireless network.
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Total capital expenditures in 1999 were
U.S.$144.5 million, not including Lucent Technologies
trade-in credits in the amount of U.S.$19.2 million and
capitalized interest in the amount of U.S.$17.1 million.
Capital expenditure amounts were derived using
historical pesos translated at the exchange rate in effect at
the end of the corresponding year.
Contractual Obligations
The following table outlines Iusacell
Celular's obligations for payments under its indebtedness,
including notes payable to suppliers and operating leases for
the periods indicated using balances as of December 31,
2001.
Payments Due by Period
2002
2003
2004
2005
2006
Thereafter
Total
(Figures in thousands of U.S. Dollars as of December 31, 2001)
Iusacell Celular Indebtedness(1)
Senior notes due 2004
150,000
150,000
Senior refinancing secured loan
—
—
99,608
132,811
33,203
265,622
Short-term credit lines:
Banco Santander Mexicano
12,000
12,000
Motorola Credit Corporation
9,106
9,106
Vendor Financing (notes payable)
4,362
4,362
Total indebtedness
25,468
—
249,608
132,811
33,203
—
441,090
Operating leases(2)
MATC Celular
168,599
168,599
168,599
168,599
168,599
842,995
1,685,990
Buildings and others
105,291
77,701
64,194
55,987
46,250
—
349,423
Total operating leases
273,890
246,300
232,793
224,586
214,849
842,995
2,035,413
(1)
These amounts include principal payments.
(2)
These amounts include the minimum lease payments.
The degree to which we are leveraged and the
covenants with which we must comply under our various financing
agreements may adversely affect our ability to finance future
operations, to finance necessary capital expenditures, to
service our indebtedness, to compete effectively against better
capitalized competitors and to withstand downturns in our
business or the Mexican economy in general. Our high level of
indebtedness could limit our ability to pursue business
opportunities that may be in our interest and that of holders of
our securities. In addition, in the event that the Iusacell
Celular senior notes have not been refinanced by March 31,
2004, the outstanding amount of the senior refinancing secured
loan will become due on that date.
The terms of our debt impose significant
operating and financial restrictions. These restrictions will
affect, and in many respects significantly limit or prohibit,
our ability and the ability of our subsidiaries to, among other
things:
•
borrow money;
•
pay dividends on stock;
•
make capital expenditures and other investments;
•
use assets as security in other transactions; and
•
sell certain assets or merge with or into other
    companies.
If we do not comply with these restrictions, we
could be in default even if we can currently pay our debt. In
addition, under our senior refinancing secured loan, we are
required to remain in compliance with certain financial ratios,
and the failure to do so would result in a default under the
facility. In the event of a default under any of our debt which
remains unsecured after any applicable grace period, holders of
the relevant debt
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could demand immediate payment of the aggregate
amount of that debt. Furthermore, this could trigger a default
under certain of our other debt as well. We may not be able to
make such payments. This could lead to a
concurso
mercantil,
a two-stage procedure under Mexican law
commencing with negotiations with our creditors and, if such
negotiations fail to reach an agreement, we would be declared
bankrupt.
Long-Term Indebtedness
Iusacell
Celular senior notes
In July 1997, Iusacell Celular issued
U.S.$150.0 million of its 10% Senior Notes due 2004, which
we refer to as the Iusacell Celular senior notes, under an
indenture dated as of July 25, 1997 among Iusacell Celular,
the subsidiaries of Iusacell Celular guaranteeing such senior
notes and First Union National Bank, as trustee, which we refer
to as the Iusacell Celular indenture. Substantially all of the
Iusacell Celular senior notes were exchanged in January 1998 for
identical 10% senior notes due 2004 which are also governed by
the Iusacell Celular indenture, pursuant to an exchange offer
registered with the SEC.
The Iusacell Celular indenture limits the ability
of Iusacell Celular to make dividend payments to Iusacell. In
addition, it restricts the ability of Iusacell Celular and its
principal subsidiaries to incur indebtedness.
In connection with the senior refinancing secured
loan described below, Iusacell Celular was required, under the
terms of the Iusacell Celular indenture, to equally and ratably
secure all amount due under the Iusacell Celular senior notes by
a second priority lien on its cellular concessions, certain
equipment and suppliers.
Senior
Refinancing Secured Loan
On March 29, 2001, Iusacell Celular
completed the refinancing of its senior secured credit facility
by entering into an Amended and Restated Senior Secured Credit
Loan Agreement, which we refer to as the senior refinancing
secured loan, which consists of:
•
a Tranche A Loan in an aggregate principal amount
    of U.S.$189.8 million for the purpose of refinancing
    existing indebtedness under the senior secured credit facility
    and under a certain bridge loan used to make a principal
    amortization payment under the senior secured credit facility in
    January 2001; and
•
a Tranche B Loan in an aggregate principal amount
    of U.S.$75.8 million for the purpose of paying existing
    indebtedness under certain Eximbank facilities and under a
    certain bridge loan used to make a principal amortization
    payment under the Eximbank facilities in January 2001.
The senior refinancing secured loan bears
interest at a rate per annum equal to one-, two-, three- or
six-month LIBOR (at Iusacell Celular's option) plus a
spread ranging from 1.75% to 2.25%, depending on Iusacell
Celular's leverage ratio. Iusacell Celular's
obligations under the senior refinancing secured loan are
unconditionally guaranteed, jointly and severally, by the
principal operating subsidiaries of Iusacell Celular and its
subsidiaries holding cellular concessions and are secured by a
pledge of substantially all the capital stock and equity
interests held by Iusacell Celular and substantially all assets
used in connection with or related to such cellular concessions.
Upon the acquisition of Portatel, the cellular concession
covering Region 8 was mortgaged under this loan, and all
capital stock and equity interests of Portatel are in the
process of being pledged under this loan.
The senior refinancing secured loan begins
amortizing on May 31, 2004 in equal quarterly amounts and
matures on February 28, 2006. However, in the event that
the Iusacell Celular senior notes have not been refinanced by
March 31, 2004, the outstanding amount of the senior
refinancing secured loan will become due on that date.
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Loan
Covenant Waivers and Modifications
On December 7, 2001 the senior refinancing
secured loan was amended, and a waiver and consent were granted
by the lenders allowing Iusacell Celular to (i) create
liens encumbering initial deposits and margin deposits securing
indebtedness under any interest rate protection agreement or
other interest hedging agreement up to the principal amount of
indebtedness of Iusacell Celular and its subsidiaries with
floating rates of interest; (ii) make loans or advances to
Iusacell in lieu of paying dividends at such times and in such
amounts as necessary to permit Iusacell to pay scheduled
interest (including any tax gross-up with respect thereto) and
principal payments as and when due in respect of the Iusacell
senior notes and (iii) make loans or advances to Iusacell
in lieu of paying dividends in an amount not to exceed U.S.$5.0
million, so long as an event of default has not occurred, to
discharge other liabilities of Iusacell incurred in the ordinary
course of business.
Short-term
debt
Banco
Santander Mexicano
In February 2001, Iusacell Celular obtained a
one-year unsecured term credit facility from Banco Santander
Mexicano in the principal amount of U.S.$12 million to be
used solely to acquire cellular handsets. Loans outstanding
under this facility bore interest at an annual rate of 6.99%.
Interest was paid quarterly and the principal was paid in
February 25, 2002.
Motorola
Credit Corporation Loan
Upon the acquisition of Portatel, Iusacell
Celular assumed a U.S.$9.1 million loan that Portatel del
Sureste, S.A. de C.V., a subsidiary of Portatel, had incurred
from Motorola Credit Corporation in March 2000 to purchase
certain cellular infrastructure equipment. Interest under this
loan was calculated at a floating annual rate equal to six-month
LIBOR plus 6%.
In connection with the acquisition of Portatel
and its subsidiaries, Iusacell Celular, Portatel del Sureste,
S.A. de C.V., and Motorola Credit Corporation entered into a
series of agreements pursuant to which a partial payment of
U.S.$3.0 million was paid on this loan on March 27,
2002, and the remaining U.S.$6.1 million was paid on
April 26, 2002.
Vendor
Financing
From time to time, we incur indebtedness with
vendors in order to finance purchases of equipment, hardware,
software and services. As of December 31, 2001, we had
U.S.$4.4 million of such vendor financing outstanding.
Vendor financing is classified as notes payable to suppliers.
Building
and others
Building and others consisted of operating leases
for our administrative offices, sales branches and service
facilities. Building leases are Pesos-denominated and contain
escalation clauses for inflation. Amounts represents the future
annual minimum rental payments on leases current at
December 31, 2001.
Risks
Associated With Our Ability to Service or Refinance Our
Debt
Our ability to satisfy our obligations under our
debt in the future will depend upon our future performance,
including our ability to increase revenues significantly and
control expenses. Our future operating performance depends upon
prevailing economic, financial, business and competitive
conditions and other factors, many of which are beyond our
control.
Iusacell Celular's debt agreements severely
restrict the ability of Iusacell Celular and its subsidiaries to
pay cash dividends or otherwise make cash available to Iusacell,
except, under some circumstances, for scheduled interest
(including any tax gross-up with respect thereto) and principal
payments in respect of the Iusacell senior notes and loans or
advances or dividend payments to Iusacell in an amount up to
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U.S.$5.0 million in order to discharge other
liabilities of Iusacell incurred in the ordinary course of
business. While such restrictions exist, we expect to meet
Iusacell's other liquidity requirements with funds provided
by future equity and debt offerings and capital contributions
from our principal shareholders. Our principal shareholders are
under no obligation to make capital contributions to us.
Total Iusacell debt, including notes payable to
suppliers, was Ps.7,601.8 million (U.S.$830.3 million) at
December 31, 2001. At December 31, 2001,
Iusacell's average cost of outstanding bank debt was
approximately 10.3%, with a remaining average maturity of
approximately 3.8 years. At December 31, 2001,
Iusacell's ratio of debt to total capitalization was 51.5%
compared to 54.8% at December 31, 2000 and 60.1% at
December 31, 1999.
Iusacell Celular's liquidity has been
provided by cash from operations, short and long-term
borrowings, vendor financing and capital contributions. Total
Iusacell Celular debt, including trade notes payable, was
Ps.4,044.6 million (U.S.$441.7 million) outstanding at
December 31, 2001, 6.3% lower than the total debt of
Ps.4,315.2 million (U.S.$471.3 million) outstanding at
December 31, 2000. At December 31, 2001, Iusacell
Celular's average cost of outstanding bank debt was
approximately 6.9%, with a remaining average maturity of
approximately 3.0 years. At December 31, 2001,
Iusacell Celular's ratio of debt to total capitalization
was 32.2% compared to 36.2% at December 31, 2000 and 46.8%
at December 31, 1999.
If we do not have sufficient funds to satisfy our
obligations, we may take specific actions, including delaying or
reducing capital expenditures, attempting to refinance our debt
at or prior to its maturity or, in the absence of such
refinancing, attempting to sell assets quickly in order to make
up for any shortfall in payments under circumstances that might
not be favorable to getting the best price for the assets, or
seeking additional equity capital. Our ability to refinance our
debt and take other actions will depend on, among other things,
our financial condition at the time, the restrictions in the
instruments governing our debt and other factors, including
market conditions, the macroeconomic environment, and the level
of such variables as the Peso-Dollar exchange rate and benchmark
money-market rates in Pesos and Dollars.
All of our and substantially all of Iusacell
Celular's debt outstanding at December 31, 2001 was
U.S. dollar-denominated and only partly hedged against foreign
exchange risk. See Item 5, "Operating and Financial
Review and Prospects — Liquidity and Capital
Resources — Liquidity — Hedging" and
"Item 11 Quantitative and Qualitative Disclosures
About Market Risk."
Certain
Trading Activities
On December 30, 1999, Iusacell Celular
entered into a foreign exchange hedge using forward rate
contracts to hedge its exchange rate exposure for
U.S.$77.0 million, representing approximately 50% of the
principal and interest payments on its indebtedness coming due
over the period from April 2000 to April 2001. This transaction
resulted in a U.S.$9.8 million loss. On November 22,
2000, Iusacell Celular entered into a second foreign exchange
hedge for U.S.$15.0 million. This transaction resulted in a
U.S.$1.7 million loss. On August 9, 2001, Iusacell
Celular entered into a third foreign exchange hedge using
forward rate contracts for U.S.$11.0 million on its
indebtedness coming due over the period from November 2001 to
November 2002. As of December 31, 2001, the fair value of
the hedge resulted in an unrealized loss of
U.S.$1.4 million.
In August and October 2001, Iusacell Celular
entered into a foreign exchange hedge using forward rate
contracts to hedge 100% of the principal amount of
U.S.$150 million and interest of U.S.$34.5 million on
its 10% senior notes due 2004. This hedge was intended to
benefit from the strength of the U.S. dollar relative to the
peso to mitigate foreign exchange exposure. This hedge becomes
due between July 2002 and July 2004. As of December 31,
2001, the fair value of the hedge resulted in an unrealized loss
of U.S.$17.0 million. In accordance with the terms of the
foreign exchange hedge, we posted cash collateral in the amount
of U.S.$2.0 million. We determine the fair value of
derivative financial instruments using an external third-party
expert.
As of December 31, 2001, Iusacell Celular
maintained forward-rate contracts for U.S.$201.0 million
partially hedging its principal and interest payments due in the
period from January 2002 to July 2004.
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Interest
Rate Collars
In July 1998, Iusacell Celular entered into an
interest rate collar agreement for a notional amount of
U.S.$35 million until July 30, 2002. The collar
agreement limits the maximum effective LIBOR cost to 6.12% if
six-month LIBOR is lower than 7.12%, and 7.12% if LIBOR equals
or exceeds 7.12%. Iusacell Celular can participate in a decline
in LIBOR to 5.30%.
On February 26, 1999, Iusacell Celular
entered into an additional interest rate collar agreement to
limit the maximum interest rate which must be paid on
U.S.$15.0 million of its floating rate debt until July
2002. This collar agreement limits the maximum effective LIBOR
cost to 5.82% if six-month LIBOR is lower than 6.82%, and 6.82%
if LIBOR equals or exceeds 6.82%. Iusacell Celular can
participate in a decline in LIBOR to 4.75%.
For the year ended December 31, 2001, due to
the significant decrease in the LIBOR interest rates, Iusacell
Celular recognized additional interest expense of
Ps.5.4 million (U.S.$0.6 million) for the interest
rate collars, which was offset by the lower interest expense on
its floating rate debt. Accordingly, these derivatives were
highly effective.
The U.S.$50.0 million aggregate notional
amount of the above interest rate collar agreements does not
quantify risk or represent assets or liabilities of Iusacell,
but is used in the determination of cash settlements under the
agreements.
We are exposed to credit loss from counterpart
non-performance, but we do not anticipate any such loss from the
interest rate collar agreements, which are with a major
financial institution.
Recent Equity Offerings
In 1999, Iusacell contributed
Ps.6,128.2 million (U.S.$637.1 million) in additional
equity to Iusacell Celular. In 2000, Iusacell contributed
Ps.2,346.6 million (U.S.$244.0 million) in additional
equity to Iusacell Celular. Neither Iusacell or Iusacell
Celular's principal shareholders, Verizon or Vodafone, have
any obligation to contribute equity to Iusacell Celular.
Tower Monetization
In December 1999, Iusacell Celular entered into a
series of agreements with MATC Celular. These agreements, among
other things, gave MATC Celular the right to acquire
approximately 330 existing Iusacell Celular non-strategic
towers. In 2001, we sold 244 towers to MATC Celular, receiving
in excess of U.S.$34 million in net gains. In May 2002, we
sold 25 additional non-strategic towers, receiving
U.S.$3.7 million in net gain. We expect to sell up to 61
additional non-strategic towers to MATC Celular during 2002.
Iusacell is leasing back the sold towers from MATC Celular and
subleasing them to Iusacell Celular's operating
subsidiaries.
Dividend Policy
We have never paid dividends in the past, and we
currently have no plans to initiate dividend payments. In
addition, the Iusacell Celular indenture and the senior
refinancing secured loan limit Iusacell Celular's ability
to pay dividends.
B.     Research and
Development, Patents and Licenses, Etc.
Iusacell Celular does not undertake research and
development activities.
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C.     Trend
Information
In addition to the events and developments
identified elsewhere in this Item 5, "Operating and
Financial Review and Prospects," our financial condition
and results of operations could also be materially affected by
the following events and developments:
New Competition
As a direct result of the spectrum auctions
organized by COFETEL, which concluded in May 1998, we are now
facing additional mobile wireless competition operating in the
1.9 GHz (PCS) spectrum in our cellular territories and
additional local telephony competition operating in the
3.4-3.7 GHz (Wireless Local Loop) spectrum. The experience
of other countries suggests that, although overall demand for
wireless telephony services will increase, prices will
experience downward pressure, especially at the time of market
entry by the new competitors. New competition has not caused us
to decrease prices, we did not increase prices from March 1999
until mid-April 2001, when we apply a 4.5% increase on a
weighted average basis, in the regular monthly fees of our
postpaid plans.
Price Increases and Rollbacks
We have attempted, and continue to attempt, to
exercise price leadership in the Mexican cellular market, with a
strategy of having our prices keep pace with inflation if
economic and competitive conditions permit.
In late March 1999, we raised airtime prices on
our postpaid plans by approximately 12% on a weighted average
basis and approximately 6% for prepay customers. These price
increases remained in place as the competition followed our lead.
In mid-April 2001, after not having raised our
prices for more than two years, we increased the regular monthly
fees of our postpaid plans by approximately 4.5% on a
weighted-average basis and the monthly fees for one-single rate
service of our postpaid plans by approximately 15% on a weighted
average basis. We also increased the airtime charges of one of
our postpaid plans by 4.8%. These price increases have remained
effective despite the fact that the competition has not followed
us. Our revenues will be adversely affected to the extent that
our price increases cannot keep pace with inflation. We believe
that the implementation of the CPP modality accelerated the
prepay subscriber growth and increased the subscriber usage
throughout the Mexican wireless market.
Regulatory Developments
The Mexican authorities resolved several critical
regulatory issues over the last several years and will likely
continue to resolve additional important regulatory issues
during 2002 which may have a material effect on Iusacell's
financial condition and results of operations.
Local
Interconnection
On November 27, 1998, COFETEL issued a
resolution which established the per-minute interconnection rate
for telephone calls made from wireless customers to wireline
customers at Ps.0.2573 per full minute payable on a per-second
basis, which will be indexed on a monthly basis for inflation.
COFETEL declined to provide for any amount of
reciprocity in the interconnection fee payable by Telmex to
wireless operators for interconnection services that Iusacell
and other wireless operators provide Telmex for calls made by
wireline customers to mobile wireless customers.
In March 2001, we negotiated a rate reduction
with Telmex, retroactive to January 1, 2001, that decreases
the interconnection rate per minute for telephone calls made
from wireless customers to wireline customers from Ps.0.31 per
full minute, payable on a per-second basis, to the peso
equivalent of U.S.$0.0125 per full minute, payable on a
per-second basis.
In December, 2001, Telmex, Alestra and Avantel
reached an agreement to further reduce the long distance
interconnection rate from U.S.$0.0125 per minute to U.S.$0.00975
per minute. We are currently in
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negotiations with Telmex to obtain similar terms
for both our long distance business and local cellular
interconnection rate.
Calling Party
Pays
On November 27, 1998, COFETEL ruled that the
calling party pays modality would be implemented by May 1,
1999 as an option for the wireless customer. CPP is a cellular
telephony payment scheme similar to the existing wireline
payment scheme, where the wireline or fixed wireless party that
places a local call to a cellular telephone, and not the
cellular subscriber receiving the call, will be billed for
interconnection access, and the recipient will not be billed for
the airtime charges corresponding to that call. COFETEL
established the CPP interconnection tariff at Ps.1.80 per minute
or fraction of a minute, which was to be indexed on a monthly
basis for inflation as of October 1, 1998, for calls from
Telmex wireline customers to mobile wireless customers. CPP
would only apply to local calls, and the "mobile party
pays" modality would continue to apply to incoming long
distance and incoming calls to a roamer.
In April 1999, after a legal action by Telmex to
attempt to suspend the scheduled implementation of CPP, Telmex
and the Cellular A-Band carriers completed negotiating a new
mobile wireless-Telmex local wireline interconnection agreement
with the approval of COFETEL. The calling party pays modality
was implemented on May 1, 1999. All mobile wireless
customers were automatically converted to CPP, with the right to
revert to the mobile party pays modality. The interconnection
rate was frozen for six months at Ps.1.90 per minute or fraction
of a minute. Had the indexing established by the
November 27, 1998 COFETEL resolution been applied, the rate
for May 1999 would have been Ps.2.06 per minute or fraction of a
minute. The price which Telmex may charge its customers was
frozen at Ps.2.50 per minute or fraction of a minute, plus
Telmex's applicable per-call local charge. Iusacell cannot
predict whether COFETEL intends to extend the same tariff and
surcharge at the same rates and for how long. Telmex greeted the
May 1, 1999 implementation of CPP with an advertising
campaign critical of the high costs to wireline customers, whom
Telmex urged to block CPP calls. But after a moderate decline in
traffic during the first two weeks of May 1999, we began to
experience a gradual increase in traffic over the last two weeks
of May 1999, slightly exceeding pre-CPP traffic levels by the
end of the month. Since then, we experienced traffic growth in
1999 and 2000. In particular, since the initiation of CPP we
experienced an increase in the percentage of total calls that
were incoming calls from 39% to 60% in 2000. In early 2000,
Telmex reversed its opposition to CPP, publicly announcing
support for it. In 2001, the percentage of total calls that were
incoming calls experienced a reduction to 56%, which makes us
believe the CPP effect has been exhausted.
The overwhelming majority of our cellular
customers have chosen not to opt out of the CPP modality. We
believe that the implementation of the CPP modality has
accelerated prepay subscriber growth and increased subscriber
usage throughout the Mexican wireless market.
We are currently discussing with COFETEL and
Telmex the possibility of extending the CPP modality to incoming
national long distance calls. If this proposal is accepted, the
mobile party pays modality would continue to apply only to
incoming international long distance calls.
Long Distance
Interconnection
In a separate resolution issued on
November 27, 1998, COFETEL also established the
interconnection tariff between long distance and local wireline
carriers at Ps.0.2573 per full minute payable on a per-second
basis, which will be indexed on a monthly basis for inflation.
In March 2001, we negotiated a rate reduction
with Telmex, retroactive to January 1, 2001, that decreases
the per-minute interconnection rate for terminating long
distance telephone calls made by our long distance customers in
Telmex's local wireline network to the peso equivalent of
U.S.$0.0125 for a full minute.
In December, 2001, Telmex, Alestra and Avantel
reached an agreement to further reduce the long distance
interconnection rate from U.S.$0.0125 per minute to U.S.$0.00975
per minute. We are currently in negotiations with Telmex to
obtain similar terms for both our long distance business and
local cellular interconnection rate.
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Long Distance
Concession
In December 1997, COFETEL authorized a
modification of our concession to provide long distance
services, modifying coverage requirements and permitting the use
of microwave and other non-fiber technologies for transmission
purposes. Together with fiber-swapping agreements reached by
Iusacell with two of our competitors, the modified concession
permits a more efficient, more technologically flexible long
distance network and eliminated more than U.S.$200 million
in Iusacell capital expenditure requirements from 1999 to 2000.
On January 1, 2001, Telmex, Avantel and
Alestra announced a preliminary agreement with respect to how
much, through what means and over how much time Avantel and
Alestra will pay for the special projects implemented by Telmex
prior to January 1997 in order to permit competition in long
distance telephony, including the numbering and signaling plans
and expenditures to facilitate interconnection. Avantel, Alestra
and Telmex agreed that the total amount reimbursable to Telmex
for such special projects by all long distance carriers was
U.S.$777.0 million, including interest payable from
December 1997 until October 1999. In March 2001, Iusatel
negotiated a similar agreement with Telmex, in which Iusatel
agreed to pay for its portion of such special projects in two
parts: (i) a fixed payment of approximately
U.S.$13.6 million, payable in twelve equal monthly
installments beginning in April 2001, and (ii) a
U.S.$0.0053 per full minute, usage-based surcharge to the
local wireline interconnection rate from January 1, 2001
through December 31, 2004 for long distance calls
terminated in Telmex's local wireline network. Since these
special projects payments relate to capital investments made by
Telmex, we are recording them as a deferred asset and
consequently we are amortizing them.
Quality
Standards
In October 1999, we entered into an agreement
with COFETEL to maintain certain cellular quality standards
measured in terms of connection time, dropped calls and
ineffective attempts. We currently meet these quality standards.
Failure to maintain these quality standards may result in refund
obligations to subscribers and governmental sanctions.
Although we met COFETEL's quality standards
in 2000, we nevertheless determined voluntarily to compensate
our subscribers in Region 9 in light of perceived quality
problems during 1999 due to network digitalization and rapid
traffic growth. Our subscribers as of December 31, 1999
received, if a postpaid subscriber, 20% more included minutes in
their postpaid package in April and May 2000, or if a prepay
customer, five free minutes. The financial impact of this
voluntary compensation program was not material.
We met successfully COFETEL's quality
standards, that in 2001 were set as follows:
•
Drop calls 6%
•
Ineffective attempts 5%
Portatel significantly increased its quality
standards in the fourth quarter of 2001, the rate in ineffective
attempts improved to 0.7% after receiving in initial audits in
the city of Mérida, a 14.9% rate.
The terms and conditions for the 2002 quality
standards agreed by concessionaires and COFETEL are:
•
Drop calls 4%
•
Ineffective attempts 5%
•
Connection time 12 seconds
The 2002 quality tests began June 3, 2002
and will end December 13, 2002, and will held revisions in
the 30 largest cities in terms of number of wireless mobile
users, that represents 70% of the total wireless mobile users in
Mexico.
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Other Developments
Distributor
Defection
In June 2001, SAGO Interamericana, S.A. de C.V.,
a distributor that represented at that time slightly less than
10% of our monthly gross postpaid additions and approximately 2%
of our monthly gross prepay additions, notified us that it was
immediately terminating its distribution agreement with us. We
believe that this action violated the termination provisions of
the distribution agreement and we are seeking compensatory
damages. In addition, we are seeking to recover approximately
Ps.44.0 million in net receivables owed to us by SAGO.
Telereunion
Default
In December 1999, Iusatel agreed to swap dark
fiber optic cable in the amount of U.S.$17.3 million and
sell approximately U.S.$7.4 million of additional dark
fiber optic cable to Telereunion, S.A. de C.V., an affiliate of
Telscape International, Inc. Upon the execution of this
agreement, Telereunion issued promissory notes to Iusatel for
the purchase price but defaulted on the payment of each of these
notes. In April 2001, Telereunion's United States parent
Telscape International, Inc. filed for reorganization under the
Chapter 11 of the United States Bankruptcy Code. As part of
a settlement arrangement, on September 17, 2001,
Telereunion and Iusatel executed an agreement by means of which
the former transferred dark fiber optic assets in the amount of
U.S.$7.4 million to the latter in exchange for full
settlement of the past notes receivable in the same amount.
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ITEM
6.     DIRECTORS, SENIOR MANAGEMENT AND
EMPLOYEES
A five-member Board of Directors manages Iusacell
Celular. Under the Iusacell Shareholders Agreement, Vodafone has
the right to nominate one director. As a result, the other four
directors have the power under our by-laws to approve, without
the affirmative vote of any other directors, all resolutions of
the Board of Directors, except with respect to some transactions
which require approval by a general extraordinary meeting of the
shareholders (and over which the Iusacell Shareholders Agreement
grants Vodafone supermajority rights).
A.     Directors and
Senior Management
Directors
On April 30, 2002, Iusacell Celular elected
new directors. The following table presents information with
respect to our directors at April 30, 2002:
Name
Age
Position(s)
Peter H. Burrowes
50
Chairman of the Board and Series A Director
Russell A. Olson
43
Series A Director
Henry M. Ruiz
39
Series A Director
Alan Bowers
45
Series B Director
Javier Martinez del Campo
42
Series B Director
The term of each director expires upon the
election of his successor at a duly convened general ordinary
shareholders meeting.
Our by-laws authorize alternate directors to
serve on the Board of Directors in place of directors who are
unable to attend meetings or otherwise participate in the
activities of the Board of Directors. The alternate directors as
of April 30, 2002 are: any of Juan Carlos Merodio and Norma
E. Urzua for any of Messrs. Burrowes, Olson or Ruiz,
Ignacio Gomez Morin for Mr. Martinez del Campo, and Richard
Harman for Mr. Bowers.
Biographies
Peter H. Burrowes
has been a member of the Board of
Directors of Iusacell Celular since April 2002.
Mr. Burrowes also has been a member of the Board of
Directors of Iusacell since September 2001. Mr. Burrowes
was appointed President and Director General of Iusacell on
April 23, 2001. Prior to this appointment Mr. Burrowes
was for 8 years President and Chief Executive Officer of
Comunicación Celular, S.A., a leading Colombian
cellular services provider. Before that, Mr. Burrowes
served in different key positions in multinational corporations,
including Director General of Parker Gillete, S.A.
de C.V., Director General of Givaudan Roure, S.A., a
Colombian subsidiary of Hoffman La Roche, Finance and
Administration Director of Compañía Química
Borden and Regional Finance Director of General Foods
International, among others. Mr. Burrowes holds an
Economics degree from the Universidad de los Andes, Colombia, an
administration and marketing degree from the Ealing Technical
College of London, Great Britain and participated in the
Executive Program on Competition and Strategy at the Harvard
School of Business.
Russell A. Olson
has
been a member of the Board of Directors of Iusacell Celular
since April 30, 2002, Mr. Olson has also served as
Executive Vice President of Finance and CFO of Iusacell since
October 2001, after serving as Executive Director of Business
Analysis for Verizon International for the Americas since June
2000. Mr. Olson has served in a variety of financial
positions within Verizon and its predecessor company, GTE, for
over 16 years, including financial reporting, auditing,
treasury, international, strategic planning and business
analysis. Mr. Olson holds a B.A. degree in Business
Administration — Finance from the University of
Arizona and a M.S. degree in Finance from Fairfield University.
Henry M. Ruiz
has
been a member of the Board of Directors of Iusacell Celular
since March 30, 2001. Mr. Ruiz has also served as
Vice-President of Technical Operations of Iusacell since
July 31, 2000 as an alternate director of Iusacell since
August 2000 and as a director of Iusacell Celular since April
2001.
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Mr. Ruiz also served as Director of
Engineering and Operations for Iusacell in Region 5 from
March 1998 to September 1998 and as Director of Executive
Support for Iusacell's Vice-President of Technical
Operations from January 1997 until March 1998. Mr. Ruiz has
been an employee of Verizon and Bell Atlantic for 16 years.
From October 1998 until June 2000, he served as Chief Technology
Officer of Excelcomindo Pratama in Indonesia, where he was
responsible for network, engineering operations and information
technology. From August 1990 until December 1996, Mr. Ruiz
supported business development efforts worldwide for Bell
Atlantic International Inc. Prior to that, Mr. Ruiz worked
for New Jersey Bell for six years in various engineering and
operations capacities. Mr. Ruiz received a B.S. in
Mathematics and Computer Science at Stevens Institute of
Technology and a degree from the Professional Program for
Managers of Telecommunications and Information Technology at
Carnegie Mellon University.
Alan Bowers
has been
a member of the Board of Directors of Iusacell Celular since
April 30, 2002. Mr. Bowers is the Managing Director of
International Operations for Vodafone Americas Region, with
responsibility for oversight of the company's operations in
Mexico. Prior to his appointment as Managing Director on
July 1, 2000, Mr. Bowers was the country manager for
Korean operations. Mr. Bowers has held a variety of other
international positions with the company including the position
of Chief Financial Officer of Belgacom Mobile, Vodafone's
joint-venture with Belgacom in Belgium. Prior to working for
Vodafone, Mr. Bowers was an economist at the World Bank in
Washington, D.C. Mr. Bowers has a M.S. degree in Economics
from Georgetown University, and an M.B.A. from the University of
California at Berkeley.
Javier Martínez del Campo Lanz
has been a member of the Board of
Directors of Iusacell Celular since February 7, 1997. He
has been a partner with the Mexico City based law firm of De
Ovando y Martínez del Campo, S.C. since 1984.
Mr. Martínez del Campo holds a law degree from the
Universidad Anáhuac and a master's degree from the
University of San Diego. Mr. Martínez del Campo is a
member of the Mexican Bar Association and an international
associate of the American Bar Association.
Mr. Martínez del Campo serves as the secretary of the
board of directors of various Mexican corporations, including
Grupo Gigante, S.A. de C.V., one of Mexico's largest
retailers.
B.     Compensation
The aggregate amount of compensation, including,
without limitation, base salary and benefits, paid by Iusacell
in 2001 to all directors and executive officers as a group was
Ps.84.1 million (U.S.$9.2 million), compared to
Ps.85.9 million (U.S.$9.4 million) in 2000. The aggregate
amount excludes any amounts paid by Verizon and Vodafore to
their employees who are directors and executive officers of
Iusacell. See Item 7, "Major Shareholders and Related
Party Transactions — Related Party Transactions."
As part of our general compensation policy, we conduct periodic
reviews of our management and employees to determine bonus
compensation. Iusacell also provides executive officers with use
of an automobile. In addition, we provide our executive officers
and other employees with food stamps (up to Ps.1,226.1 per
month), gas stamps (up to 320 liters per month) and with
contributions to a savings plan (up to Ps.1,665.8 per month).
C.     Board
Practices
Not applicable.
D.     Employees
At December 31, 2000, Iusacell Celular and
our subsidiaries had an aggregate of 1,933 full-time and
part-time employees, 139 temporary employees and 4 full time
Verizon seconded employees or consultants. Approximately 34.7%
of the full time employees were members of a labor union. We
have never experienced a work stoppage and management considers
our relationship with our employees to be good.
E.     Share
Ownership
Iusacell owns, directly or indirectly, 100% of
our shares. As a result, our directors and officers as a group
own, in aggregate, none of our shares.
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ITEM 7.     MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.     Major
Shareholders
Iusacell owns, directly or indirectly, 100% of
our outstanding 27,967 series A shares and 26,865
series B shares. Iusacell has two principal shareholders.
The first, Verizon, is comprised of various subsidiaries of
Verizon. Since February 1997, we have been under management
control of subsidiaries of Bell Atlantic. Our second principal
shareholder is a subsidiary of Vodafone Group Plc. No other
shareholder owns more than 5% of any class of Iusacell's
shares. At April 30, 2002, based on the information made
available to us, the shareholders of Iusacell were as follows:
Number of Shares
Shareholders
A Shares
%
V Shares
%
Total
%
Verizon(1)
657,966,431
68.4
76,152,002
8.5
734,118,433
39.4
Vodafone(2)
303,326,053
31.6
339,617,555
37.7
642,943,608
34.5
Public investors(3)
—
—
484,962,753
53.8
484,962,753
26.1
Total
961,292,484
100.0
900,732,310
100.0
1,862,024,794
100.0
(1)
The address of Verizon Communications Inc. is:
    1095 Avenue of the Americas, New York, New York.
(2)
The address of the Vodafone Group Plc is: Max
    Eunvelaan 61, 3062 MA. Rotterdam, The Netherlands.
(3)
Includes the series V shares held by the trust
    administering our executive employee stock purchase plan.
Our
directors and officers as a group own, in the aggregate, less
than 1% of Iusacell's shares.
In August 1999, a reorganization of Iusacell and
Iusacell Celular was completed. The reorganization included
U.S.$132.5 million in borrowings from our principal
shareholders between August 1998 and March 1999 that were
immediately converted into Iusacell Celular equity, an offer to
exchange the shares of Iusacell Celular for shares of Iusacell,
primary equity offerings that raised U.S.$33.7 million in
net proceeds for Iusacell and a U.S.$106.5 million
secondary offering by our principal shareholders. This
reorganization more than doubled the number of Iusacell's
publicly held shares. Before the August 1999 primary and
secondary offerings, Verizon (then Bell Atlantic) had a 47.2%
interest in Iusacell Celular and the Peralta Group had a 43.8%
interest. After the August 1999 reorganization, Verizon and the
Peralta Group each had a 40.4% interest in Iusacell. On
January 31, 2000, Iusacell launched a second exchange offer
to acquire the remaining 0.5% interest in Iusacell Celular held
by public shareholders. This offer was completed on
February 29, 2000 and, as a result, Iusacell then held
99.9% of the outstanding Iusacell Celular shares. See
Item 4, "Information on the Company —
History and Development of the Company." Since this second
exchange offer placed additional series V shares with public
shareholders, both Verizon and the Peralta Group were slightly
diluted.
On March 30, 2000, Iusacell Celular's
shareholders approved a 30,000 for 1 reverse split of
its shares which became effective in May 2001. Iusacell now
holds 100% of the outstanding Iusacell Celular shares.
During the fourth quarter of 1999 and the first
quarter of 2000, relatives of Mr. Carlos Peralta sold
approximately 34,900,000 series V shares on the open market. In
April and May 2000, Iusacell sold 10,529,700 American Depositary
Shares for U.S.$15.125 per ADS in a public offering, receiving
approximately U.S.$153.0 million in net proceeds. As a
result, as of May 31, 2000, Verizon held a 37.2% interest
in Iusacell and the Peralta Group and associated individuals
held a 34.5% interest in Iusacell.
On April 4, 2001, Vodafone closed the
purchase of the Peralta Group's 34.5% interest in Iusacell.
In connection with this purchase, the shareholders agreement
among Iusacell, Verizon and the Peralta Group terminated and
Iusacell, Verizon and Vodafone entered into a new shareholders
agreement, which we refer to as the Iusacell Shareholders
Agreement.
On September 27, 2001, our shareholders
authorized a rights offering to holders of our outstanding
series V shares and ADSs. The rights offering involved
newly issued series V shares representing ADSs and
series A shares for up to U.S.$100 million. The
subscription period started on October 5, 2001 and ended on
November 1, 2001. Iusacell's principal shareholders,
Verizon and Vodafone, purchased their pro rata portion
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of series A and series V shares. 67% of
the non-Verizon and Vodafone shareholders exercised their rights
on the series V shares. In addition, Verizon's
subscription included all of the series V shares offered
to, but not subscribed by, public shareholders.
As of April 30, 2002, Verizon held a 39.4%
interest in Iusacell and Vodafone held a 34.5% interest in
Iusacell.
Governance
Iusacell Celular's by-laws provide that
resolutions of the Board of Directors will be valid when
approved by a majority vote of the members present, including
the favorable vote of one of the Series A directors and the
favorable vote of one of the Series B directors.
Iusacell Celular's by-laws also provide that
resolutions of our shareholders will be valid when approved by a
majority of our outstanding shares, including a majority of the
outstanding series A shares and Series B shares.
The following transactions should be approved by
the shareholders at a general ordinary or extraordinary meeting
in accordance with the by-laws:
•
acquisitions of non-telecommunications businesses
    for a purchase price in excess of U.S.$30.0 million;
•
certain investments, joint ventures and mergers
    within the telecommunications business involving assets in
    excess of U.S.$100.0 million;
•
certain dispositions of assets for consideration
    in excess of U.S.$30.0 million;
•
incurrence of indebtedness in an amount exceeding
    U.S.$100.0 million in the aggregate within any fiscal year;
•
certain issuances of capital stock in an amount
    exceeding U.S.$50.0 million in the aggregate within any
    fiscal year;
•
entering into, amending or terminating contracts
    with or for the benefit of certain affiliates of Iusacell
    Celular, except for any renewals or extensions on terms
    substantially similar to those of certain consulting and
    seconded employee arrangements of Iusacell Celular with Verizon
    affiliates;
•
termination or disposition of any
    telecommunication transmission business with annual revenues of
    more than U.S.$10.0 million in each of the two most recent
    fiscal years;
•
termination of concessions relating to
    telecommunications operations;
•
the determination of how Iusacell Celular will
    vote its shares and grant proxies to vote its shares on any
    supermajority transaction within entities in which Iusacell
    Celular holds 10% or more of the capital stock; and
•
the granting of powers-of-attorney in connection
    with any such supermajority transactions.
The Iusacell Shareholders Agreement and our
by-laws also effectively provide that Vodafone be entitled to
elect one of the chief operations officer, the chief financial
officer, the chief marketing officer or the chief technical
officer of Iusacell and certain Iusacell subsidiaries.
Iusacell's Board of Directors or Executive Committee
determines the officer to be so designated. The Iusacell
Executive Committee has determined that Vodafone have the right
to designate the chief marketing officer. Koren Borges has been
elected as Senior Vice President, Marketing for Iusacell.
B.     Related Party
Transactions
General Policy
We adopted a policy on transactions with related
parties in November 1993 in connection with the acquisition by
Bell Atlantic of its initial holdings in Iusacell. This policy
provides that we will not, and will not
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permit any of our subsidiaries to, enter into any
contract or transaction with or for the benefit of any of their
affiliates (excluding transactions with, between or among wholly
owned subsidiaries), which is not at a price and on other terms
at least as favorable to us or the subsidiary as those which
could be obtained on an arm's-length basis from an
unaffiliated third party. This policy has been formalized in the
Iusacell Shareholders Agreement.
Consulting and Secondment Agreements
Iusacell Celular and Verizon have entered into a
series of consulting and secondment agreements pursuant to which
Verizon has agreed, for an indefinite term, to provide Iusacell
Celular with management, technical, marketing, legal and other
consulting services and seconded employees. Seconded employees
generally agree to expatriate assignments of two to three years
duration, with such employees' compensation being paid by
Verizon and reimbursed by Iusacell Celular. Verizon charges
Iusacell Celular for the provision of seconded employees at
cost, and for the provision of consulting services at or below
market rates. Vodafone has recently entered into a similar
agreement with Iusacell applicable to Iusacell Celular.
With respect to consulting services and seconded
employees provided in 2001, Iusacell Celular has been credited
by Verizon for a total of U.S.$7.2 million to adjust
previous overcharges. At December 31, 2001, Iusacell
Celular owed Verizon U.S.$6.3 million for consulting
services and seconded employees provided in 1999, 2000 and 2001.
Vodafone charged to Iusacell for consulting fees and secondment
agreements a total of U.S.$219,216 in 2001.
In March 2001, Verizon and Iusacell Celular
agreed that Verizon would accept a transfer of all rights in
connection with a U.S.$15.0 million advance paid by
Iusacell Celular to an affiliate of Nortel Networks Inc. in
exchange, on a dollar-for-dollar basis, for the cancellation of
all existing charges invoiced by Verizon to Iusacell Celular
with respect to consulting services and seconded employees and a
credit against any and all future such charges until the sum of
all canceled and credited against charges equals
U.S.$15.0 million. See Item 8 "Financial
Information — Consolidated Statements and Other
Financial Information — Legal Proceedings —
Non Judicial Disputes."
Roaming Agreements
GTE Telecommunications Services, Inc., which we
refer to as TSI, provides clearinghouse services for roaming
arrangements. In 2001, TSI paid Iusacell Celular U.S.$134,821
for such services. In October 2001, we entered into an
inter-carrier roaming agreement with Verizon Wireless in the
United States.
Interests of Directors
The Peralta Group, which was one of our principal
shareholders until April 4, 2001, owns Fraccionadora y
Constructora Mexicana, S.A. de C.V., known as Fracomex, a
company engaged in real estate investment and management that
has entered into 13 lease agreements with Iusacell Celular
and some of its subsidiaries. In 2001, Iusacell Celular paid
Fracomex rent for U.S.$392,858. Additionally, in 2001 Iusacell
acquired some equipment from Fracomex for a total of U.S.$9,671.
Payments totaled U.S.$402,529.
Two Peralta Group members lease land to Iusacell
Celular at the Peralta Group industrial complex in Pastejé,
Mexico, upon which Iusacell has built and operates warehouses.
These land leases expire in December 2015, but can be terminated
before then if either party gives the other one year's
prior written notice. Currently, Iusacell Celular pays these two
Peralta Group entities U.S.$23,064 per month for these land
leases. In 2001, payments for these leases totaled U.S.$299,835.
In 2001, Manufacturas Electrónicas
Pastejé, S.A. de C.V., a joint venture between the Peralta
Group and Mr. Marco Antonio de la Torre Barranco, an
alternate director of Iusacell until April 2001, provided
telephone and accessory repair services to Iusacell Celular in
the amount of Ps.14.8 million (U.S.$1.6 million).
Mr. Fernando de Ovando, a director of
Iusacell until April 2000, Mr. Javier Martínez del
Campo, a director of Iusacell since April 2001 and a director of
Iusacell Celular since February 1997, and Mr. Ignacio
Gómez Morin, a director of Iusacell since April 2001 and an
alternate director of Iusacell Celular since
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February 1997, are members of the law firm of De
Ovando y Martínez del Campo, S.C., which, in 2001, provided
legal services to Iusacell and Iusacell Celular in the amount of
approximately Ps.2.2 million (U.S.$240,280).
C.     Interests of
Experts and Counsel
Not Applicable.
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ITEM 8.
FINANCIAL INFORMATION
A.     Consolidated
Statements and Other Financial Information
Financial Statements
See Item 19(a) for a list of financial
statements filed under Item 18.
Legal Proceedings
Although we are a party to legal proceedings in
the ordinary course of our business, management believes that
none of these proceedings, individually or in the aggregate, are
likely to have a material adverse effect on Iusacell.
Suit by Mitsubishi
Mitsubishi Electronics America, Inc. filed a
complaint with the Circuit Court of Cook County, Illinois,
United States, on July 28, 1996 against Iusacell Celular,
Bell Atlantic Corporation and Bell Atlantic Latin American
Holdings, Inc. Mitsubishi's complaint alleged, among other
things, that we breached a purported contract for the purchase
of 60,000 local wireless telephone terminals at a cost of
U.S.$510 each. Mitsubishi later filed an amended complaint
against Iusacell Celular adding a fraud allegation against
Iusacell Celular. Mitsubishi sought judgment in an amount in
excess of U.S.$50,000 for each of the three counts against
Iusacell Celular, plus punitive damages for one of those counts.
Mitsubishi filed answers to interrogatories claiming damages in
an amount of U.S.$8,825,343.
Our motions to dismiss the complaint for lack of
personal jurisdiction and on substantive grounds were rejected,
although the court reserved judgment on Iusacell Celular's
motion to dismiss for
forum non conveniens
. Although we
believed the lawsuit had no basis, we nevertheless created a
contingency reserve of U.S.$3.0 million with respect to
such litigation.
After discovery, we filed a motion for summary
judgment. On December 7, 2000, the Circuit Court granted
our motion and all counts of the complaint against Iusacell
Celular were dismissed. As a result, in the fourth quarter of
2000, we reversed Ps.23 million (U.S.$2.4 million) of
the contingency reserve. In January 2001, in order to avoid
further litigation, we reached a settlement with Mitsubishi.
Suit against SAGO
In June 2001, SAGO Interamericana, S.A. de C.V. a
distributor that at that time represented slightly less than 10%
of our monthly gross post paid additions and approximately 2% of
our monthly gross prepay additions, notified us that it was
immediately terminating its distribution agreement. We believe
that this action violated the termination provisions of the
distribution agreement, and have filed a lawsuit seeking
compensatory damages. We cannot predict whether we will prevail
in this lawsuit.
Telemedic lawsuit
In March 2002 Telemedic S.A de C.V. filed a
lawsuit against Iusacell, S.A de C.V. seeking compensatory
damages. We are now in the process of submitting evidence to the
judge. Those compensatory damages, if any, shall be determined
by the judge at the end of the process.
Non-Judicial Disputes
In May 1998, we discovered that our former
corporate headquarters in Mexico City, of which one of Iusacell
Celular subsidiaries is the owner, is encumbered by liens
incurred by the prior owner for an amount in excess of the
estimated fair market value of the property. In March 2001, we
filed suit against the Director of the Public Registry of
Property of the Federal District of Mexico in the
48th Civil Superior Tribunal in the Federal District of
Mexico, seeking cancellation of the liens in the public registry
on the basis that the underlying obligation has been discharged.
We prevailed in the lawsuit and consequently the lien will be
cancelled in the Public Registry of Property of the Federal
District of Mexico.
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Dividend Policy
Since becoming a public company in 1999, we have
not paid any dividends. We do not contemplate paying dividends
in the foreseeable future.
B.     Significant
Changes
Not applicable.
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ITEM 9.     THE OFFER
AND LISTING
A.     Offer and
Listing Details
Iusacell Celular's series D and L
shares were listed on the Mexican Stock Exchange until
February 29, 2000. ADSs representing 10 Iusacell Celular
series D shares were listed on the New York Stock Exchange
from June 21, 1994 until August 10, 1999 and traded
under the symbol CEL.d. ADSs representing 10 Iusacell Celular
series L shares were listed on the New York Stock Exchange
from June 21, 1994 until February 29, 2000 and traded
under the symbol CEL until August 4, 1999 and thereafter,
until February 29, 2000 under the symbol CEL.y.
The following tables present, for the periods
indicated, the high, low and period end sales prices of
(i) the Iusacell Celular series D and series L
shares on the Mexican Stock Exchange, as reported by the Mexican
Stock Exchange until their delisting, and (ii) the Iusacell
Celular series D and series L ADS on the New York
Stock Exchange, as reported by the New York Stock Exchange until
their delisting. We present the average trading volume of the
shares and ADSs for the indicated periods in 1997, 1998, 1999
and 2000. We do not have average trading volume information for
1996.
Mexican Stock Exchange (in Ps.)
Average Daily
Trading Volume
Period
High
Low
Period-end
(Shares)
SERIES D
First Quarter 1999
6.80
6.80
6.80
194
Second Quarter 1999
11.10
7.50
11.10
1,806
Third Quarter 1999
13.90
11.00
13.90
20,250
Fourth Quarter 1999
(1)(2)
—
—
—
—
SERIES L
First Quarter 1999
8.60
8.10
8.50
532
Second Quarter 1999
13.50
8.30
11.50
1,903
Third Quarter 1999
(2)
13.80
12.38
13.38
4,680
New York Stock Exchange (in U.S.$)
Average Daily
Trading Volume
Period
High
Low
Period-end
(ADSs)
SERIES D
First Quarter 1999
8.750
6.063
7.375
5,812
Second Quarter 1999
13.750
7.000
12.750
7,747
Third Quarter 1999
(3)
15.250
10.630
10.630
11,954
SERIES L
First Quarter 1999
9.875
6.375
8.000
51,556
Second Quarter 1999
14.500
7.500
13.000
132,798
Third Quarter 1999
15.560
9.500
13.310
34,328
Fourth Quarter 1999
16.125
7.250
14.688
5,440
First Quarter 2000
(3)
24.500
14.000
20.375
6,938
(1)
There was no trading during this period.
(2)
The series D shares and the series L
    shares were delisted from the Mexican Stock Exchange on
    February 29, 2000.
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(3)
The series D ADSs were delisted from the New
    York Stock Exchange on August 10, 1999. The series L
    ADSs were delisted from the New York Stock Exchange on
    February 29, 2000.
Source:
Bloomberg
L.P.
B.     Plan of
Distribution
Not applicable.
C.     Markets
Trading on the New York Stock
Exchange
ADSs representing ten Iusacell Celular
series D shares were listed on the New York Stock Exchange
from June 21, 1994 until August 10, 1999 and traded
under the symbol CEL.d. ADSs representing ten Iusacell Celular
series L shares were listed on the New York Stock Exchange from
June 21, 1994 until February 29, 2000 and traded under
the symbol CEL until August 4, 1999 and thereafter until
February 29, 2000, under the symbol CEL.y.
Trading on the Mexican Stock
Exchange
Iusacell Celular's series D and L shares
were listed on the Mexican Stock Exchange until
February 29, 2000.
D.     Selling
Shareholders
Not applicable.
E.     Dilution
Not applicable.
F.     Expenses of
the Issue
Not applicable.
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ITEM
10.     ADDITIONAL
INFORMATION
A.     Share
Capital
Not applicable.
B.     Memorandum and
Articles of Association
General
Iusacell Celular was incorporated on
October 6, 1992 as a variable capital corporation
(
sociedad anónima de capital variable
) established
under the laws of Mexico. Iusacell Celular was registered in the
Public Registry of Commerce of the Federal District of Mexico
under Commercial Number 168528 on November 3, 1998. On
March 30, 2001, Iusacell Celular's shareholders
approved new by-laws, which became effective on April 4,
2001, upon the closing of the sale by the Peralta Group to
Vodafone of its series A and series V shares in
Iusacell.
Iusacell Celular's corporate purpose is
found under Article Two of its by-laws. Iusacell's
primary purpose is to act as a holding company. The duration of
our existence under our by-laws is indefinite.
Directors
Under Mexican law, any member of the Board of
Directors who has a conflict of interest with Iusacell Celular
in any transaction must disclose such fact to the other members
of the Board of Directors and abstain from voting on such matter
at the relevant meeting of the Board of Directors. Any member of
the Board of Directors who violates such provision may be liable
for damages caused to us. Additionally, members of the Board of
Directors may not represent any shareholders at any
shareholders' meeting.
Voting Rights and Shareholders'
Meetings
Iusacell holds, directly or indirectly, 100% of
the series A and B shares of Iusacell Celular.
Each series A and series B share
entitles the holder to one vote at any general meeting of the
shareholders of Iusacell Celular.
Under our by-laws, any shareholder or group of
shareholders holding Iusacell Celular shares representing at
least 25% of the total capital stock of Iusacell Celular, shall
be entitled to designate one director corresponding to such
series of shares and the corresponding alternate director.
Under Mexican law, the holders of shares of any
series are also entitled to vote at a special meeting of the
holders of shares of such series on any action that would
prejudice the rights of such holders, and such a holder would be
entitled to judicial relief against any such action taken
without the approval of the required majority of holders of the
relevant series at such a meeting. Any determination that an
action does not require a vote at a special meeting would be
subject to judicial challenge by an affected shareholder, and
the necessity for a vote at a special meeting would ultimately
be determined by a court. Mexican law does not provide extensive
guidance on the criteria to be applied in making such a
determination.
General shareholders' meetings may be
ordinary or extraordinary meetings. Extraordinary general
meetings are meetings called to consider the matters specified
in Article 182 of the Ley General de Sociedades
Mercantiles, which we refer to as the Mexican Companies Law,
including, principally, changes in the fixed share capital, any
amendments to the by-laws, liquidation, issuance of preferred
stock, merger, transformation from one type of company to
another, change in nationality and change of corporate purpose.
General meetings called to consider all other
matters are ordinary meetings. An ordinary general meeting of
the shareholders of Iusacell Celular must be held at least
annually during the four months following the end of each fiscal
year to consider matters specified in Article 181 of the
Mexican Companies Law, including, principally, the approval of
the report of the Board of Directors regarding the performance
of Iusacell Celular, the approval of the financial statements of
Iusacell Celular for the preceding fiscal year, appointment of
directors and statutory auditors and determination of their
compensation, and the declaration of dividends.
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Under our by-laws, the quorum on a first call for
an ordinary general shareholders meeting is at least 51% of the
outstanding shares. If a quorum is not available on the first
call, a second meeting may be called and validly held regardless
of the number of shares represented. In order for a resolution
of the ordinary general meeting to be validly adopted as a
result of a first or subsequent call, attendance by and the
favorable vote of the holders of each of a majority of the
outstanding series A and series B shares is required.
The quorum on a first call for an extraordinary
general meeting is 75% of the outstanding shares. If a quorum is
not available on the first call, a second meeting may be called
and convened, provided that at least 51% of the outstanding
shares are present. Whether on a first or second call, in order
for a resolution of an extraordinary general meeting to be
validly adopted, the favorable vote of the holders of a majority
of each of the outstanding series A and series B
shares.
Under Mexican law, holders of 20% of our
outstanding capital stock may have any shareholder action set
aside by filing a complaint with a Mexican court of competent
jurisdiction within 15 days after the close of the general
shareholders' meeting at which such action was taken, by
showing that the challenged action violates Mexican law or our
by-laws. Relief under these provisions is only available to
holders:
•
whose shares were not represented when the action
    was taken or, if represented, were voted against it; and
•
whose complaint makes reference to the clause of
    the by-laws or the legal provision that was infringed.
Shareholders' meetings may be called by the
Board of Directors, the Chairman of the Board of Directors, the
Secretary and alternate Secretary, any two directors, any of the
statutory auditors or any Mexican court of competent
jurisdiction. In addition, the Board of Directors or any of the
statutory auditors may be required to call a meeting of
shareholders upon the written request of holders of 10% of the
outstanding capital stock. In addition, the Board of Directors
or the statutory auditors must call a shareholders' meeting
at the written request of any shareholder if no ordinary general
shareholders' meeting has been held for two consecutive
years or if the shareholders' meetings held during such
period have not considered the items mentioned in
Article 181 of the Mexican Companies Law discussed above.
Notice of a meeting must be published in the Official Gazette of
the Federation (
Diario Oficial de la Federación
) and
in a newspaper of general circulation in Mexico City at least
15 days prior to the meeting. In order to attend a
shareholders' meeting, a shareholder must request and
obtain an admission card by furnishing, at least 48 hours
before the time set for holding the shareholders' meeting,
appropriate evidence of its ownership of shares or depositing
such shares with our corporate secretary of the Board or with an
institution authorized to accept such deposit. If so entitled to
attend the meeting, a shareholder may be represented by proxy
signed before two witnesses.
Under Mexican law, an action for civil
liabilities against members of the Board of Directors may be
initiated by a shareholders' resolution taken at a general
shareholders' meeting. In the event shareholders decide to
bring such an action, the persons against whom such action is
brought will immediately cease to be members of the Board of
Directors. Additionally, shareholders representing not less that
15% of the outstanding shares of Iusacell may directly take such
action against members of the Board of Directors, provided that
(i) such shareholders have not voted in favor of a
resolution approved at the relevant general shareholders'
meeting pursuant to which it was resolved not to take any action
against the directors who are to be sued, and (ii) the
claim in question covers damages alleged to have been caused to
Iusacell and not only to the individual plaintiffs'
interests.
Shareholder Conflicts of Interest
Under Mexican law, any shareholder that has a
conflict of interest in connection with any transaction must
abstain from voting at the relevant shareholders' meeting.
A shareholder that votes on a business transaction in which his
interest conflicts with that of Iusacell may be liable for
damages if the transaction would not have been approved without
such shareholder's vote.
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Dividend Rights
The series A and series B shares have the same
dividend rights. The declaration and payment of such dividends
will depend upon Iusacell's results of operations,
financial conditions, cash requirements, future prospects and
other factors deemed relevant by the shareholders. In addition,
Mexican law provides that Mexican companies may only pay
dividends from retained earnings included in the year-end
financial statements that have been approved by their
shareholders. Dividends may be paid only after all losses for
previous years have been paid for, a legal reserve equal to 20%
of paid-in capital has been achieved and shareholders have
approved the dividend payment.
At the annual ordinary general meeting of
shareholders of Iusacell Celular, the Board of Directors will
generally submit the financial statements of Iusacell Celular
for the previous fiscal year, together with a report by the
Board of Directors, to the series A and series B shareholders
for their approval. The series A and series B shareholders,
having approved the financial statements, will determine the
allocation of Iusacell Celular's net profits for such
fiscal year. At least 5% of such net profits must be allocated
to a legal reserve until the amount of the legal reserve equals
20% of Iusacell Celular's capital stock. Such reserve is
not available for distribution except as a stock dividend.
Additional amounts may be allocated to other reserve funds as
the shareholders determine including a reserve to repurchase
shares. The remaining balance of net profits, if any, is
available for distribution as dividends but only after losses,
if any, of previous years have been paid for.
All shares of each series outstanding at the time
a dividend or other distribution is declared are entitled to
share pro rata in such dividend or other distribution.
Partially-paid shares participate in any distribution to the
extent that such shares have been paid at the time of the
distribution.
The covenants contained in the Iusacell Celular
Indenture and in the terms of the Senior Refinancing Secured
Loan limit Iusacell Celular's ability to declare and
distribute dividends to Iusacell. Iusacell Celular and its
subsidiaries may agree to similar restrictions in the future as
they incur additional debt.
Liquidation
In the event that we are liquidated, one or more
liquidators must be appointed at an extraordinary general
shareholders' meeting to wind up our affairs. All
outstanding shares would be entitled to participate equally in
any distribution upon liquidation. Partially-paid shares
participate in any distribution to the extent that such shares
have been paid at the time of the distribution.
Changes in Share Capital and Rights of
Shareholders
An increase of capital stock may be effected
through the issuance of new shares for payment in cash or in
kind, by capitalization of indebtedness or by capitalization of
certain items of shareholders' equity. No increase of
capital stock may be effected until all previously issued shares
of capital stock have been fully paid. A reduction of capital
stock may be effected to absorb losses, to make reimbursements
to shareholders , or to release shareholders from payments not
made. A reduction of capital stock to absorb losses may be
effected by reducing the value of all outstanding shares. A
reduction of capital stock shall also be effected on a pro rata
basis.
Shareholders may also approve the redemption of
fully-paid shares with retained earnings. Such a redemption
would be effected by a repurchase by lot.
The by-laws require that, unless a
shareholders' meeting resolves otherwise, any capital
increase effected pursuant to a capital contribution be
represented by new series A and series B shares in
proportion to the number of shares of each such series
outstanding. Our by-laws provide that the series B shares
may not exceed 49% of our capital stock.
The fixed portion of our capital stock may only
be increased or decreased by resolution of an extraordinary
general meeting and an amendment to the by-laws, whereas the
variable portion of our capital stock may be increased or
decreased by resolution of an ordinary general meeting of
shareholders.
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Preemptive Rights
In the event of a capital increase through the
issuance of new shares for payment in cash or in kind, a holder
of existing shares has a preferential right to subscribe for a
sufficient number of new shares to maintain the holder's
existing proportionate holdings of shares. Preemptive rights
must be exercised within the period and under the conditions
established for such purpose by the shareholders, and under
Mexican law and our by-laws in no case may such period be less
than 15 days and no greater than 30 days following the
publication of notice of the capital increase in the Official
Gazette of the Federation or following the date of the
shareholders' meeting at which the capital increase was
approved if all shareholders were represented. Otherwise, such
rights will lapse.
Under Mexican law, preemptive rights may not be
waived in advance by a shareholder, and cannot be represented by
an instrument that is negotiable separately from the
corresponding share.
Other Provisions
Fixed
and Variable Capital
As a
sociedad anónima de capital
variable
, we may issue shares constituting fixed capital and
shares constituting variable capital. The issuance of variable
capital shares, unlike the issuance of fixed capital shares,
does not require an amendment of our by-laws, although it does
require approval at an ordinary general meeting of shareholders.
The covenants contained in the Iusacell Celular
Indenture and the Senior Refinancing Secured Loan limit Iusacell
Celular's ability to issue variable capital shares.
Forfeiture
of Shares
As required by Mexican law, Iusacell
Celular's by-laws provide that "current or future
foreign shareholders of the Company agree with the Ministry of
Foreign Relations to consider themselves as Mexican nationals
with respect to the shares that they may acquire or of which
they may be owners, as well as with respect to the assets,
rights, concessions, participations or interests of which the
Company is the owner and of the rights and obligations that
derive from the contracts to which the Company is a party, and
therefore not to invoke the protection of their governments with
respect to such shares under penalty, should they violate this
agreement, of forfeiting for the benefit of the Nation the
shares that they may have acquired."
In the opinion of de Ovando y Martínez del
Campo, S.C., special Mexican counsel to Iusacell Celular, under
this provision a non-Mexican shareholder is deemed to have
agreed not to invoke the protection of his own government by
requesting such government to interpose a diplomatic claim
against the Mexican government with respect to its rights as a
shareholder, but is not deemed to have waived any other rights
it may have with respect to its investment in Iusacell Celular,
including any rights under U.S. securities laws (the
enforceability of which may be challenged in Mexico).
If the shareholder should invoke such
governmental protection in violation of this agreement, its
shares could be forfeited to the Mexican government. Mexican law
requires that such a provision be included in the by-laws of all
Mexican corporations unless such by-laws prohibit ownership of
capital stock by foreign investors.
Appraisal
Rights
Whenever the shareholders approve a change of
corporate purpose, change of nationality, spin-off or
transformation from one type of corporate form to another, any
shareholder entitled to vote on such change or transformation
who has voted against it has the right to withdraw from Iusacell
and receive an amount generally equivalent to the book value of
our shares (in accordance with our last balance sheet approved
by a shareholders' meeting), provided such shareholder
exercises its right to withdraw within 15 days following
the adjournment of the meeting at which the change or
transformation was approved.
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Foreign Investment Regulation
Foreign investment in capital stock of Mexican
corporations in certain economic sectors, including telephone
and cellular services, is regulated by the 1993 Foreign
Investment Law, as amended, and the regulations issued under
that law in 1998, which we refer to as the 1998 Regulations.
Under the 1993 Foreign Investment Law, foreign investment is
defined in general as the participation of foreign investors in
the voting capital stock of Mexican corporations and in
activities which are regulated by the 1993 Foreign Investment
Law. Foreign investors are defined as non-Mexican individuals,
non-Mexican legal entities and foreign entities without legal
personality.
The Mexican Foreign Investment Commission, the
Mexican Foreign Investment Bureau and the Mexican National
Registry of Foreign Investment are responsible for the
administration of the 1993 Foreign Investment Law and the 1998
Regulations. In order to comply with foreign investment
restrictions, Mexican companies that are engaged in specified
restricted industries typically limit particular classes of
their stock to ownership by Mexican individuals and by Mexican
corporations in which foreign investment has a minority
participation.
As a general rule, the 1993 Foreign Investment
Law allows foreign investment in up to 100% in the capital stock
of Mexican companies, except for those engaged in specified
restricted industries, such as basic telephone service, where
foreign investment is limited to 49% of the voting capital
stock. Foreign investment may, however, participate in a
proportion in excess of 49% of the voting capital stock of a
Mexican corporation engaged in the cellular telephone business
previous approval of the Mexican Foreign Investment Commission.
Iusacell has received such approval and, as a result, neither
our series A nor our series V shares are restricted to Mexican
ownership. See Item 4, "Information on the
Company — Business Overview — Government
Regulation — Foreign Ownership Restrictions."
Foreign states and foreign governments are
prohibited under the 1995 Telecommunications Law from holding a
concession or permit to provide telecommunications services,
from receiving any such concession or permit as a guarantee, or
from being the beneficiary of any such guarantee or from
directly or indirectly owning shares of Iusacell.
C.     Material
Contracts
In December 1997, Iusacell Celular entered into
an agreement with subsidiaries of Lucent Technologies, Inc.
pursuant to which Iusacell Celular agreed (i) to replace
its existing analog wireless cellular network with a new Lucent
Technologies digital and analog network for a minimum
consideration of U.S.$188.0 million. which network swap-out
was completed in August 1999, and (ii) to continue
acquiring network equipment and services under the agreement in
order to improve its digital and analog network. Through
December 31, 2001, Iusacell Celular has purchased
approximately U.S.$409.9 million of network equipment and
services under this agreement.
In December 1999, Iusacell Celular, as a first
step toward minimizing its involvement in real estate management
and tower maintenance business, entered into an agreement with
MATC Celular, a Mexican subsidiary of American Tower Corporation
pursuant to which MATC Celular could acquire the majority of
towers currently owned and/or operated by Iusacell Celular. In
return, Iusacell would lease space on those towers and sublease
them to its operating subsidiaries, including operating
subsidiaries of Iusacell Celular. In 2001, we sold 244 towers to
MATC Celular, receiving in excess of U.S.$34 million in net
book gains. In May 2002, we sold 25 additional non-strategic
towers receiving in excess of U.S.$4.2 million in net
gains. We expect to sell up to an additional 61 towers to MATC
Celular during the remainder of 2002.
See also, Item 5, "Operating and
Financial Review and Prospects — Liquidity and Capital
Resources — Liquidity," for a summary of Iusacell
Celular's material credit agreements and indentures.
D.     Exchange
Controls
There are currently no exchange controls in
Mexico; however, Mexico has imposed foreign exchange controls in
the past. Pursuant to the provisions of the North American Free
Trade Agreement and in the event
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Mexico experiences serious balance of payment
difficulties or the threat thereof in the future, Mexico remains
free to impose foreign exchange controls on investments made in
Mexico, including those made by U.S. and Canadian investors.
E.     Taxation
General
The following is a general summary of material
U.S. and Mexican federal income tax consequences of the
acquisition, ownership and disposition of Iusacell
Celular's senior notes (the "Note" or the
"Notes") by U.S. holders.
For purposes of this summary, a "U.S.
holder" is any holder of any of such securities that is,
for United States federal income tax purposes:
•
a citizen or resident of the United States;
•
a corporation, partnership, or other entity
    created or organized in or under the laws of the United States,
    or any political subdivision thereof;
•
an estate the income of which is includible in
    gross income for United States federal income tax purposes
    regardless of source; or
•
a trust if a court within the United States is
    able to exercise primary supervision over the administration of
    the trust and one or more United States persons have the
    authority to control all substantial decisions of the trust.
This summary does not constitute, and should not
be construed as, legal or tax advice to holders of the Notes.
This summary does not purport to consider all the possible U.S.
or Mexican federal income tax consequences of the purchase,
ownership and disposition of the Notes and is not intended to
reflect the individual tax position of any beneficial owner
thereof. The summary is based upon Mexican federal tax laws,
their regulations and administrative rules issued by the Mexican
Ministry of Finance and Public Credit, the Tax Treaty mentioned
below and the Internal Revenue Code of 1986, as amended (the
"Code"), U.S. Treasury regulations promulgated
thereunder, published rulings by the U.S. Internal Revenue
Service ("IRS") and court decisions, all as in effect
as of the date hereof, all of which authorities are subject to
change or differing interpretations, which changes or differing
interpretations could apply retroactively. Readers are cautioned
that this is not a complete analysis or listing of all potential
tax effects that may be relevant to a decision to purchase, hold
or dispose of the Notes.
This summary of U.S. federal income tax
consequences is limited to investors who hold the Notes as
"capital assets" within the meaning of
section 1221 of the Code (i.e., generally, property held
for investment) and does not purport to deal with investors in
special tax situations, such as financial institutions, tax
exempt organizations, insurance companies, regulated investment
companies, dealers in securities or currencies, persons holding
notes as a hedge against currency risks or as a position in a
"straddle," "conversion transaction," or
"constructive sale" transaction for tax purposes,
persons owning (actually or constructively) 10% or more of the
voting shares of the Company, or persons whose functional
currency (as defined in section 985 of the Code) is not the
U.S. dollar.
Holders and prospective purchasers of the Notes
should consult their own tax advisors concerning the application
of Mexican and U.S. federal income tax laws to their particular
situations as well as any consequences of the purchase,
ownership and disposition of the Notes arising under the laws of
any state, locality or foreign government or other taxing
jurisdiction.
Mexico and the United States have signed and
ratified a Convention for the Avoidance of Double Taxation and
the Prevention of Tax Evasion with Respect to Taxes on Income
and related Protocols (collectively, the "Tax
Treaty"). The Tax Treaty is currently in effect and
provisions of the Tax Treaty that may affect holders of Iusacell
ADSs or Notes are summarized below. Holders should consult with
their tax advisors as to their entitlement to the benefits
afforded by the Tax Treaty. Mexico has also executed treaties to
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avoid double taxation with other countries as
well as agreements providing for the exchange of information
with respect to tax matters, some of which presently are in
force. The following summary does not take into account the
effect of any such treaties. Readers should consult their tax
advisors as to their entitlement to the benefits afforded by
such other treaties.
United States Tax Consequences to Holders of
Notes
Payments
of Interest and Additional Amounts
Generally, payments of interest and any
additional amounts (
i.e
., "gross-up payment")
paid by Iusacell Celular (the "Additional Amounts")
will be taxable to a U.S. holder as ordinary income at the time
such payments are accrued or are received, in accordance with
the U.S. holder's regular method of accounting for Federal
income tax purposes.
Market
Discount
If a U.S. holder purchases a Note for less than
its principal amount, the difference will be treated as a
"market discount" for U.S. federal income tax purposes
subject to a
de minimis
exception.
Under the market discount rules, a U.S. holder
will be required to treat any payment on a Note, or any gain on
its sale, exchange, retirement or other disposition, as ordinary
income to the extent of the accrued market discount which was
not previously included in income. If the Note is disposed of in
a non-taxable transaction (other than a non-recognition
transaction described in section 1276(c) of the Code),
accrued market discount will be includible as ordinary income to
the U.S. holder as if it had sold the Note at its fair market
value. In addition, a U.S. holder may be required to defer,
until the maturity of a Note or its earlier disposition
(including a non-taxable transaction other than a transaction
described in section 1276(c) of the Internal Revenue Code),
the deduction of all or a portion of the interest expense in
respect of any indebtedness incurred or continued to purchase or
carry the Note. Market discount will be considered to accrue on
a straight-line basis during the period from the date of
acquisition to the maturity date of the Note, unless the U.S.
holder elects to accrue on a constant-yield basis.
A U.S. holder of a Note may elect to include
market discount in income as it accrues on either a ratable or a
constant yield basis. If a U.S. holder makes this election, the
rules regarding the treatment of gain upon the disposition of
the Note and upon the receipt of certain cash payments as
ordinary income and regarding the deferral of interest
deductions will not apply. Currently, if a U.S. holder elects to
include market discount in income as it accrues, the election
will apply to all market discount obligations acquired during or
after the first taxable year to which the election applies.
Currently this election may not be revoked without the consent
of the Internal Revenue Service.
Amortizable
Bond Premium
If a U.S. holder purchases a Note for more than
the amount payable at maturity (or on an earlier call date),
that excess will be considered an "amortizable bond
premium." This holder may elect to amortize the premium to
offset the interest and Additional Amounts from the Note such
holder would otherwise be required to include in income (subject
to special rules for early redemption provisions). In any tax
year, the holder can only use as much of the premium as the
constant yield method would allocate to that year. The U.S.
holder's basis in the Note will be reduced by the amount of
bond premium offset against interest and Additional Amounts.
Currently, if a U.S. holder elects to amortize the premium to
offset the interest from a Note, the election will apply to all
debt instruments acquired during or after the first taxable year
to which the election applies. Currently, this election may not
be revoked without the consent of the Internal Revenue Service.
Sale,
Exchange or Retirement of a Note
Except as discussed above, upon the sale,
exchange or retirement of a Note, a U.S. holder generally will
recognize taxable gain or loss equal to the difference between
the amount realized on the sale, exchange or
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retirement and such U.S. holder's adjusted
tax basis in the Note. For this purpose, the amount realized
does not include any amount attributable to accrued interest on
the Note (which will be taxable as such). A
U.S. holder's adjusted tax basis in a new note will
generally be the cost of the Note plus the market discount, if
any, the U.S. holder previously included in income
minus
any amortizable bond premium and any payments other than
payments of stated interest made on the Note. Such gain or loss
generally will be long-term capital gain or loss if the Note has
been held for more than one year at the time of such sale,
exchange or retirement. The deductibility of capital losses is
subject to limitations. Gain or loss recognized by a U.S. holder
on a sale or other disposition of a Note generally will be
treated as from sources within the United States for U.S.
federal income tax purposes.
Foreign
Tax Credit and Effect of Withholding Taxes
Interest and Additional Amounts paid on Notes
will constitute income from sources outside the United States
for United States federal income tax purposes, and, with certain
exceptions, will be grouped together with other items of
"passive" income (or, in the case of some holders,
"financial services income"), for purposes of
computing the foreign tax credit allowable to a U.S. holder.
A U.S. holder will be required to include foreign
withholding taxes, if any, imposed on payments on a Note
(including any Additional Amounts payable by Iusacell Celular)
in gross income as interest income. Such treatment will be
required regardless of whether, as will generally be true,
Iusacell Celular is required to pay additional amounts so that
the amount of Mexican withholding taxes does not reduce the net
amount actually received by the holder of the Note.
Subject to certain limitations, a U.S. holder may
be entitled to a credit against its United States Federal income
tax liability, or a deduction in computing its United States
Federal taxable income, for foreign income taxes withheld by
Iusacell Celular (which, as described above, would include
amounts withheld on Additional Amounts paid by Iusacell Celular
with respect to Mexican taxes). The foreign tax credit
provisions are complex, and U.S. holders are urged to consult
their own tax adviser as to the availability, if any, of a tax
credit or deduction to them.
Information
Reporting and Backup Withholding
For each calendar year in which the Notes are
outstanding, each DTC participant or indirect participant
holding an interest in a Note on behalf of a beneficial owner of
a Note and each paying agent making payments in respect of a
Note will generally be required to provide the IRS with certain
information, including such beneficial owner's name,
address and taxpayer identification number (either such
beneficial owner's Social Security number or its employer
identification number, as the case may be), and the aggregate
amount of interest, principal and Additional Amounts paid to
such beneficial owner during the calendar year. These reporting
requirements, however, do not apply with respect to certain
beneficial owners, including corporations, securities
broker-dealers, other financial institutions, tax-exempt
organizations, qualified pension and profit sharing trusts and
individual retirement accounts.
In the event that a beneficial owner of a Note
fails to establish its exemption from such information reporting
requirement or is subject to the reporting requirements
described above and fails to supply its correct taxpayer
identification number in the manner required by applicable law,
or underreports its tax liability, as the case may be, a holder
may be subject to backup withholding at the rate of 30% in 2002
and 2003 (and at a lower rate in subsequent years) of each
payment of interest, principal and Additional Amounts with
respect to Notes. This backup withholding tax is not an
additional tax and will be allowed as a refund or credit against
the beneficial owner's United States Federal income tax
liability if the required information is furnished to the IRS.
Prospective purchasers of Notes are advised to
consult their own tax advisers as to the consequences of
acquiring and disposing of the Notes, including, without
limitation, (i) the applicability and effect of any state,
local or non-U.S. tax laws to which they may be subject, and of
any legislative or administrative changes in law, (ii) the
United States Federal income tax consequences of foreign
withholding taxes by Iusacell Celular
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(and of the payment by Iusacell Celular of
Additional Amounts with respect thereto) and (iii) the
availability of a credit or deduction for foreign withholding
taxes.
Mexican Tax Consequences to Holders of
Notes
The following is a summary of the principal
consequences under current Mexican federal tax law, their
regulations and administrative rules issued by the Mexican
Ministry of Finance and Public Credit and the Tax Treaty, in
force as of the date of this report, of the purchase, ownership
and disposition of Notes by a Foreign Holder. A "Foreign
Holder" is a holder who (i) is not a resident of
Mexico for tax purposes and (ii) will not hold Notes or a
beneficial interest in Notes in connection with the conduct of a
trade or business through a permanent establishment or a fixed
base in Mexico.
Taxation
of Payments of Interest and Principal
Under the Mexican Income Tax Law, payments of
interest made by Iusacell Celular to a Foreign Holder in respect
of their respective Notes will be subject to Mexican withholding
taxes assessed at a rate of 4.9% if, (i) the Notes have
been placed through banks or brokers in a country with which
Mexico has executed a treaty to avoid double taxation and such
treaty is in force, (ii) the Notes have been registered in
the Special Section of the National Registry of Securities (the
"Special Section"), and (iii) as has been the
case in the past, the issuer provides the information required
under general rules issued by the Ministry of Finance and Public
Credit (the "Reduced Rate Regulation"), which is
described below. Otherwise, payments of interest made by
Iusacell Celular to a Foreign Holder in respect of their
respective Notes will be subject to Mexican withholding taxes
assessed at a rate of 10%.
The information requirements under the
"Reduced Rate Regulation" are generally described
below:
•
that Iusacell Celular, as is the case, have
    timely filed with the Mexican Ministry of Finance and Public
    Credit information relating to the registration of their
    respective Notes in the Special Section and to the issuance of
    their respective Notes; and
•
that Iusacell Celular timely file each quarter of
    the calendar year with the Mexican Ministry of Finance and
    Public Credit information representing that no "party
    related" to Iusacell Celular, as the case may be, directly
    or indirectly, is the effective beneficiary of 5% or more of the
    aggregate amount of the interest payment, and Iusacell Celular
    maintain records evidencing compliance with this requirement.
Under the Mexican Income Tax Law and the Reduced
Rate Regulation any of the following would be a "party
related" to Iusacell Celular, as the case may be:
(1) shareholders of Iusacell Celular, as the case may be,
that own, directly or indirectly, individually or collectively
with related persons (within the meaning of the Mexican Income
Tax Law and the Reduced Rate Regulation) more than 10% of the
voting stock of Iusacell Celular, as the case may be, or
(2) corporations if more than 20% of their stock is owned
directly or indirectly, individually or collectively by related
persons of Iusacell Celular, as the case may be.
Apart from the Reduced Rate Regulation, other
special rates of Mexican withholding income tax may apply. In
particular, under the Tax Treaty, the Mexican withholding tax is
reduced to 4.9% (the "Treaty Rate") for some holders
that are residents of the United States within the meaning of
the Tax Treaty provided they satisfy the circumstances
contemplated in the Tax Treaty and provided that the Notes are
considered to be regularly and substantially traded on a
recognized securities market, which is not expected to be the
case. During 2002, the Tax Treaty is not expected, generally, to
have any material effect on the Mexican tax consequences to
holders of Notes because, as described above, with respect to a
Foreign Holder and Iusacell Celular will be entitled to withhold
taxes in connection with interest payments under their
respective Notes at the Reduced Rate so long as the Reduced Rate
Regulation requirements described above are met. From March 2003
and beyond, holders of the Notes should consult their tax
advisors as to the possible application of the Treaty Rate.
Interest paid on Notes held by a non-Mexican
pension or retirement fund will be exempt from Mexican
withholding tax if the fund (i) has been duly incorporated
as a fund pursuant to the laws of its country of
97
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origin, (ii) is the effective beneficiary of
the interest paid, (iii) is registered with the Mexican
Ministry of Finance and Public Credit for that purpose, and
(iv) the relevant interest income is exempt from taxes in
that country.
Iusacell Celular has agreed, subject to the
exceptions and limitations contained in the indenture under
which the Notes were issued, to pay additional amounts in
respect of the Mexican withholding taxes mentioned above to the
holders of the Notes. Payment of these additional amounts with
respect to the Notes will be subject to Mexican withholding tax
at the same rate generally applicable to interest paid in the
Notes.
Under the Mexican Income Tax Law, a Foreign
Holder will not be subject to any Mexican income taxes in
respect of payments of principal made by Iusacell Celular in
connection with the Notes.
Taxation
of the Sale and other Disposition of the Notes
Under the Income Tax Law it is not clear if a tax
will apply to gains resulting from a Foreign Holder's sale
or other disposition of Notes. Iusacell Celular believes, but
has not verified, that the tax in question applies only to the
gains resulting from a Foreign Holder's sale or other
disposition of debt securities placed among the investment
public at large in Mexico.
Transfer
and other Taxes
There are no Mexican stamp, registration, or
similar taxes payable by a Foreign Holder in connection with the
purchase ownership or disposition of the Notes. A Foreign Holder
of Notes will not be liable for Mexican estate, gift,
inheritance or similar tax with respect to the Notes, although
gratuitous transfers of the Notes may in some circumstances
cause a Mexican income tax to be imposed on the recipient.
F.     Dividends and
Paying Agents
Not applicable, but see Item 5,
"Operating and Financial Review and Prospects —
Liquidity and Capital Resources — Dividend
Policy" and Item 8, "Financial
Information — Consolidated Statements and Other
Financial Information — Dividend Policy."
G.     Statement by
Experts
Not applicable.
H.     Documents on
Display
We file Annual Reports with and furnish other
information to the SEC as may be applicable from time to time.
You may read and copy any documents filed or furnished by
Iusacell Celular at the SEC's public reference rooms in
Washington, D.C., New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public
reference rooms.
I.     Subsidiary
Information
Not applicable.
98
Table of Contents
ITEM
11.     QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Interest Rate Risks
Iusacell Celular's earnings are affected by
changes in interest rates as a result of long-term borrowings.
Iusacell Celular has fixed rate debt under its
Iusacell Celular senior notes. Iusacell Celular also had, as of
December 31, 2000, variable debt which was refinanced in
March 2001 with other variable debt.
Iusacell Celular's Senior Refinancing
Secured Loan bears interest at a variable rate per annum equal
to one, two, three or six-month LIBOR (at Iusacell
Celular's option) plus a spread ranging from, depending on
Iusacell Celular's leverage ratio, of 1.75% to 2.25%.
We do not enter into derivative financial
contracts for trading or speculative purposes. However, we have
managed the exposure to interest rate risk through the use of
interest rate collars and the exposure to foreign exchange risk
through forward rate contracts.
In July 1998, Iusacell Celular entered into an
interest rate collar agreement on a notional amount of
U.S.$35.0 million until July 30, 2002. The collar
agreement limits the maximum effective LIBOR cost to 6.12% if
six-month LIBOR is lower than 7.12% and 7.12% if LIBOR equals or
exceeds that level. On February 26, 1999, Iusacell Celular
entered into a second interest rate collar agreement to limit
the maximum interest rate Iusacell Celular must pay on
U.S.$15.0 million of its floating rate debt until July
2002. Under the terms of this second collar agreement, Iusacell
Celular's maximum effective LIBOR cost is limited to 5.82%
if six-month LIBOR is lower than 6.82% and, if six-month LIBOR
equals or goes above 6.82%, then Iusacell Celular's maximum
effective LIBOR cost is limited to 6.82%. These interest rate
collar agreements remain applicable through July 2002.
The following table summarizes the debt
obligations and derivative instruments that are sensitive to
changes in interest rates held by Iusacell as of
December 31, 2001. For the debt, the tables present
principal payment obligations that exist by maturity date and
the related average interest rate. For the collars, the table
present the notional amounts and average cap and floor rates
that exist by contractual date. Average interest rates for
liabilities are calculated based on weighted averages. Dollar
denominated amounts have been converted to Mexican Pesos based
on the exchange rate of December 31, 2001, which was 1
U.S.$1 = Ps9.1695
As of December 31, 2001 Expected Maturity Date
2002
2003
2004
2005
2006
Thereafter
Total
Fair Value
In thousands of Mexican Pesos (U.S. Dollars)
Fixed Rate Debt
U.S. Dollar denominated
110,034
—
1,375,425
—
—
1,485,459
1,526,722
Weighted-average interest rate
9.5
%
10.0
%
5.4
%
—
—
Mexican Peso denominated
Weighted-average interest rate
Variable Rate Debt
U.S. Dollar denominated
83,501
—
913,356
1,217,806
304,452
—
2,519,114
2,519,114
Weighted-average interest rate
4.8
%
6.6
%
7.7
%
7.7
%
7.7
%
—
Mexican Peso denominated
40,000
40,000
40,000
Weighted-average interest rate
12.4
%
Interest Rate Derivatives
Interest Rate Collars
Average Cap Rate
6.03
Average Floor Rate
5.13
Note: To determine the weighted-average interest
rate for variable rate debt, Libor interest rate was forecasted
by CIEMEX-WEFA assuming 2.40% for 2002, 4.30%. for 2003, 5.30%
for 2004 and beyond. Foreign Currency Risk
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Table of Contents
Iusacell's primary foreign currency exposure
relates to our foreign currency denominated debt.
Iusacell's debt obligations are denominated in U.S. dollars
while it generates revenues in Mexican pesos. Therefore,
Iusacell is exposed to currency exchange rate risks that could
significantly affect our ability to meet our obligations. The
exchange rate of pesos to the U.S. dollar is a freely floating
rate and the peso has experienced significant devaluations in
recent years. Any significant decrease in the value of the peso
relative to the U.S. dollar in the near term may have a material
adverse effect on Iusacell and on our ability to meet our
long-term debt obligations.
In December 1999, Iusacell Celular used
forward-rate contracts to hedge its exchange rate exposure for
U.S.$77.0 million, approximately 50% of the principal and
interest payments coming due over the period April 2000 to April
2001. In November 2000, Iusacell Celular entered into another
forward-rate contract to hedge its exchange rate exposure for
U.S.$15.0 million of interest payments coming due between
then and January 2002. In August 2001, Iusacell entered into
another forward-rate contract for U.S.$11.0 million to
hedge its exchange rate exposure of interest payments coming due
between then and November 2002. In August and October 2001
Iusacell Celular hedged using forward rate contracts 100% of the
principal U.S.$150 million and U.S.$34.5 million of
associated interest of its 10% senior notes due 2004.
The following table summarizes Iusacell's
debt and derivative instruments that are sensitive to changes in
foreign currency exchange rates as of December 31, 2001.
For the debt, the tables present principal payment obligations
that exist by maturity date and the related average interest
rate. For the forward exchange contracts, the table presents the
amount of foreign currency that Iusacell has contracted to
purchase and the average exchange rates by contractual dates.
Average interest rates for liabilities are calculated based on
weighted average. Dollar denominated amounts have been converted
to Mexican Pesos based on the exchange rate of December 31,
2001, which was 1 U.S.$1 = Ps9.1695.
As of December 31, 2001 Expected Maturity Date
2002
2003
2004
2005
2006
Thereafter
Total
Fair Value
In thousands of Mexican Pesos (U.S. Dollars)
Fixed Rate Debt
U.S. Dollar denominated
110,034
—
1,375,425
—
—
1,485,459
1,526,722
Weighted-average interest rate
9.5
%
10.0
%
5.4
%
—
—
Variable Rate Debt
U.S. Dollar denominated
83,501
—
913,356
1,217,806
304,452
—
2,519,114
2,519,114
Weighted-average interest rate
4.8
%
6.6
%
7.7
%
7.7
%
7.7
%
—
Forward Exchange Derivatives
Receive Mexican Pesos/ Pay
    U.S. Dollars
—
—
—
—
—
—
Average exchange rate
—
—
—
—
—
—
—
Receive U.S. Dollars/ Pay
    Mexican Pesos
209,065
140,752
1,984,279
—
—
—
—
Average exchange rate
9.955
9.384
12.026
—
—
—
—
Note: To determine the weighted-average
interest rate for variable rate debt, Libor interest rate was
forecasted by CIEMEX-WEFA assuming 2.40% for 2002, 4.30%. for
2003, 5.30% for 2004 and beyond.
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ITEM
12.     DESCRIPTION OF SECURITIES OTHER
THAN EQUITY SECURITIES
Not applicable.
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Table of Contents
PART II
ITEM
13.     DEFAULTS, DIVIDEND ARREARAGES
AND DELINQUENCIES
See Item 5, "Operating and Financial
Review and Prospects — Liquidity and Capital
Resources — Loan Covenants Waivers and
Modifications" for a description of any default and the
correspondent waiver.
ITEM 14.     MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
Not applicable
ITEM
15.     RESERVED
Not applicable.
ITEM
16.     RESERVED
Not applicable.
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Table of Contents
PART III
ITEM
17.     FINANCIAL STATEMENTS
We have responded to Item 18 in lieu of
responding to this Item.
103
Table of Contents
ITEM
18.     FINANCIAL STATEMENTS
Grupo Iusacell Celular, S.A. de C.V.
Report of Independent Accountants
F-67
Consolidated Balance Sheets —
    December 31, 2001 and 2000
F-69
Consolidated Income Statements — Fiscal
    Years Ended December 31, 2001, 2000 and 1999
F-71
Consolidated Statements of Changes in
    Stockholders' Equity — Fiscal Years Ended
    December 31, 2001, 2000 and 1999
F-73
Consolidated Statements of Changes in Financial
    Position — Fiscal Years Ended December 31, 2001,
    2000 and 1999
F-75
Notes to the Consolidated Financial Statements
F-77
Financial Statement Schedules
Schedule II — Valuation and
    Qualifying Accounts
S-1
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Table of Contents
REPORT OF INDEPENDENT ACCOUNTANTS
Mexico City, March 1, 2002, except for
Note 25 for which the date is May 29, 2002.
The Board of Directors and Stockholders of
Grupo Iusacell Celular, S. A. de C. V.:
We have audited the accompanying consolidated
balance sheets of Grupo Iusacell Celular, S. A. de
C. V. and subsidiaries (the Company) as of
December 31, 2001 and 2000, and the related consolidated
statements of income, of changes in stockholders' equity
and of changes in financial position for each of the three years
in the period ended December 31, 2001 and the financial
statement schedule included in this Form 20-F. These
financial statements and financial statement schedule are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards in Mexico and 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 and are prepared in
accordance with generally accepted accounting principles. 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 and financial statement schedule referred to above
present fairly, in all material respects, the consolidated
financial position of Grupo Iusacell Celular, S. A. de
C. V. and subsidiaries as of December 31, 2001 and
2000, and the consolidated results of its operations, changes in
stockholders' equity and changes in its consolidated
financial position for each of the three years in the period
ended December 31, 2001, in conformity with accounting
principles generally accepted in Mexico.
Accounting principles generally accepted in
Mexico vary in certain significant respects from accounting
principles generally accepted in the United States. The
application of the latter would have affected the determination
of consolidated net income for each of the three years in the
period ended December 31, 2001 expressed in Mexican Pesos
and the determination of consolidated stockholders' equity
at December 31, 2001 and 2000 also expressed in Mexican
Pesos to the extent summarized in Note 23 to the consolidated
financial statements.
PRICEWATERHOUSECOOPERS
Juan Manuel Ferrón Solís
Audit Partner
F-1
Table of Contents
GRUPO IUSACELL CELULAR, S.A. DE C.V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S.A. de
C.V.)
CONSOLIDATED BALANCE SHEETS
(Notes 1, 2, 3 and 4)
Expressed in thousands of
constant Mexican pesos as of December 31,
2001
December 31,
2001
2000
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 4c.)
Ps.
119,544
Ps.
292,354
Accounts receivable:
Trade, net of Ps.210,891 and Ps221,684 of
    allowance for doubtful accounts in 2001 and 2000, respectively
    (Note 4e.)
595,286
637,101
Due from related parties (Note 5)
43,047
50,354
Recoverable taxes and other
533,720
514,189
1,172,053
1,201,644
Inventories — Net (Note 6)
239,770
249,388
Total current assets
1,531,367
1,743,386
Investments (Note 7)
34,063
32,952
Property and equipment — Net
    (Note 8)
8,860,266
8,256,859
Other assets — Net (Note 9)
1,881,304
1,889,619
Excess of cost of investments in subsidiaries
    over book value — Net of accumulated amortization of
    Ps.793,552 in 2001 and Ps.662,976 in 2000 (Note 4j.)
1,885,623
1,888,559
Total assets
Ps.
14,192,623
Ps.
13,811,375
LIABILITIES AND STOCKHOLDERS'
    EQUITY
CURRENT LIABILITIES:
Notes payable (Note 10d.)
Ps.
110,034
Ps.
120,391
Current portion of long-term debt (Note 10)
—
1,344,059
Trade accounts payable
549,944
493,735
Notes payable to suppliers, short-term
    (Note 11)
123,501
—
Due to related parties (Note 5)
160,516
155,134
Taxes and other payables
813,002
988,542
Income tax (Note 12)
54,498
38,158
Employee profit sharing (Note 12)
2,669
5
Total current liabilities
1,814,164
3,140,024
Long-term debt (Note 10)
3,811,042
2,850,800
Other accounts payable, long-term (Notes 4d.
    and 4m.)
54,742
3,419
Total liabilities
5,679,948
5,994,243
Commitments and contingencies (Note 13)
—
—
F-2
Table of Contents
December 31,
2001
2000
STOCKHOLDERS' EQUITY:
Contributed capital (Notes 14, 15 and 16):
Capital stock
12,870,602
12,870,413
Capital contributed
92,831
92,831
12,963,433
12,963,244
Contributions for future capital stock increases
2,195,544
1,302,158
Earned capital (Note 16):
Accumulated (losses) profits:
Legal reserve
26,828
26,828
For prior years
(5,835,793
)
(5,163,373
)
For the year
(297,676
)
(672,420
)
(6,106,641
)
(5,808,965
)
Accumulated other comprehensive income
(664,747
)
(664,747
)
Total majority stockholders' equity
8,387,589
7,791,690
Minority interest
125,086
25,442
Total stockholders' equity
8,512,675
7,817,132
Total liabilities and stockholders' equity
Ps.
14,192,623
Ps.
13,811,375
The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
F-3
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Notes 1, 2, 3 and 4)
Expressed in thousands of
constant Mexican pesos as of December 31,
2001
Years Ended December 31,
2001
2000
1999
Revenues:
Services
Ps.
5,681,689
Ps.
5,200,997
Ps.
4,285,910
Telephone equipment sales and other
607,131
528,713
497,061
6,288,820
5,729,710
4,782,971
Cost of sales:
Cost of services
1,476,595
1,464,120
1,221,938
Cost of telephone equipment sales and other
378,093
355,996
306,557
1,854,688
1,820,116
1,528,495
Gross profit
4,434,132
3,909,594
3,254,476
Operating expenses
2,220,260
1,917,550
1,643,189
Depreciation and amortization
2,568,688
2,380,960
1,620,273
Other operating income (Note 8)
307,886
—
—
Operating loss
(46,930
)
(388,916
)
(8,986
)
Other expenses (income) — Net
—
—
26,225
Integral financing cost (gain):
Interest expense — Net
385,896
509,789
305,669
Foreign exchange (gain) loss — Net
(95,792
)
19,566
(210,259
)
Gain from monetary position
(165,028
)
(374,382
)
(752,067
)
125,076
154,973
(656,657
)
Equity participation in net (profit) loss of
    associated companies and net (gain) loss on sale of equity
    investments (Notes 2 and 7)
(6,518
)
(2,478
)
54,160
(Loss) profit from continuing operations before
    assets tax, income tax and minority interest
(165,488
)
(541,411
)
567,286
Provisions for:
Assets tax
146,404
156,335
150,889
Income tax
—
—
461,707
146,404
156,335
612,596
Loss from continuing operations before minority
    interest
(311,892
)
(697,746
)
(45,310
)
Minority interest
20,694
16,461
20,400
Loss from continuing operations
(291,198
)
(681,285
)
(24,910
)
(Profit) loss from discontinued operations (net
    of income tax) (Note 19)
—
(8,865
)
1,748
Loss after discontinued operations and before
    extraordinary item
(291,198
)
(672,420
)
(26,658
)
Extraordinary item:
Amortization of tax loss carry forwards
—
—
461,707
(Loss) profit after extraordinary item
(291,198
)
(672,420
)
435,049
Cumulative effect of the adoption of the new
    accounting pronouncement (Note 4d.)
6,478
—
—
Net (loss) profit for the year
Ps.
(297,676
)
Ps.
(672,420
)
Ps.
435,049
The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
F-4
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2001, 2000
AND 1999
(Notes 1, 2, 3 and 4)
Expressed in thousands of constant Mexican
pesos as of December 31, 2001
Contributions
Accumulated profits (losses)
Accumulated
for future
other
Total
Capital stock
Capital
capital stock
Legal
comprehensive
Minority
stockholders'
subscribed
contributions
increases
reserve
Prior years
For the year
income
interest
equity
Balance at December 31, 1998
Ps.
11,031,253
Ps.
92,831
Ps.
5,076
Ps.
(3,919,200
)
Ps.
(1,657,470
)
Ps.
(868,820
)
Ps.
1,037
Ps.
4,684,707
Application of 1998 net loss
(1,657,470
)
1,657,470
—
Increase in capital stock from the capitalization
    of stockholders' debt
1,839,160
1,839,160
Decrease in minority interest
(29,162
)
(29,162
)
Comprehensive profit for the year
435,049
8,381
443,430
Balance at December 31, 1999
12,870,413
92,831
5,076
(5,576,670
)
435,049
(860,439
)
(28,125
)
6,938,135
Application of 1999 net profit
21,752
413,297
(435,049
)
—
Contribution for future capital stock increases
Ps.
1,302,158
1,302,158
Increase in minority interest
53,567
53,567
Comprehensive loss for the year
(672,420
)
195,692
(476,728
)
Balance at December 31, 2000
12,870,413
92,831
1,302,158
26,828
(5,163,373
)
(672,420
)
(664,747
)
25,442
7,817,132
Application of 2000 net loss
(672,420
)
672,420
—
Increase in capital stock from the capitalization
    of stockholders' debt
110
110
Decrease in capital stock from the effects of the
    reverse stock split
(242
)
(242
)
Increase in capital stock
321
321
Contribution for future capital stock increases
893,386
893,386
Increase in minority interest
99,644
99,644
Comprehensive loss for the year
(297,676
)
297,676
)
Balance at December 31, 2001
Ps.
12,870,602
Ps.
92,831
Ps.
2,195,544
Ps.
26,828
Ps.
(5,835,793
)
Ps.
(297,676
)
Ps.
(664,747
)
Ps.
125,086
Ps.
8,512,675
The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
F-5
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE
C. V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
FINANCIAL POSITION
(Notes 1, 2, 3 and 4)
Expressed in thousands of constant
Mexican pesos as of December 31,
2001
Years Ended ?December 31,?
2001
2000
1999
Operating activities:
Loss from continuing operations
Ps.
(291,198
)
Ps.
(681,285
)
Ps.
(24,910
)
Items not requiring the use of resources:
Depreciation and amortization
2,568,688
2,380,960
1,620,273
Equity participation in net (profit) loss of
    associated companies and net (gain) loss on sale of equity
    investments
(6,518
)
(2,478
)
54,160
Minority interest
(20,694
)
(16,461
)
(20,400
)
2,250,278
1,680,736
1,629,123
Resources provided by (used for) operating
    activities:
Trade accounts receivable
68,326
168,204
(417,981
)
Related parties
12,689
26,410
69,039
Recoverable taxes and other
(1,973
)
169,792
(66,439
)
Inventories
33,852
(39,706
)
26,714
Trade accounts payable
62,102
(235,974
)
(388,630
)
Taxes and other payables
(252,647
)
(18,004
)
38,984
Income tax
15,968
36,594
(60,217
)
Employee profit sharing
2,664
(426
)
423
Other
51,323
722
(572
)
Resources provided by operating activities before
    discontinued operations, extraordinary item and cumulative
    effect of the adoption of the new accounting pronouncement
2,242,582
1,788,348
830,444
Cumulative effect of the adoption of the new
    accounting pronouncement
(6,478
)
—
—
Amortization of tax loss carry forwards
—
—
461,707
Profit (loss) from discontinued operations
—
8,865
(1,748
)
Resources provided by operating activities
2,236,104
1,797,213
1,290,403
Financing activities:
Proceeds from long-term debt
2,435,617
—
373,746
Principal payments on long-term debt
(2,819,434
)
(920,529
)
—
(Decrease) increase in notes payable
(10,357
)
12,340
(840,432
)
Contribution for future capital stock increases
893,386
1,302,158
—
Increase in capital stock
321
—
—
Decrease in capital stock
(242
)
—
—
Accumulated effect of deferred taxes
—
195,692
Increase in capital stock from the capitalization
    of stockholders' debt
110
1,839,160
Resources provided by financing activities
499,401
589,661
1,372,474
Investing activities:
Purchase of property and equipment
(1,597,768
)
(2,055,998
)
(1,708,907
)
Sale of common stock of associated companies
3,976
68,261
13,486
Acquisition of Portatel, net of cash
(495,320
)
—
—
Increase in telephones to be amortized
(521,782
)
(1,088,139
)
(862,577
)
(Purchase) sale of other assets
(297,421
)
778,805
(228,424
)
Resources used for investing activities
(2,908,315
)
(2,297,071
)
(2,786,422
)
Net (decrease) increase in cash and cash
    equivalents
(172,810
)
89,803
(123,545
)
Cash and cash equivalents at the beginning of the
    year
292,354
202,551
326,096
Cash and cash equivalents at the end of the year
Ps.
119,544
Ps.
292,354
Ps.
202,551
The accompanying twenty-five notes are an
integral part of these consolidated financial statements.
F-6
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
As of December 31, 2001, 2000 and
1999
Except as otherwise noted, expressed
in thousands of constant Mexican pesos as of
December 31, 2001.
Amounts expressed in U.S. Dollars are in
thousands.
Note 1 — Entity, Nature of Business
and Principal Stockholders
Entity and nature of business
Grupo Iusacell Celular, S.A. de C.V. (the
Company) is a holding company incorporated on October 6,
1992, and starting August 4, 1999, is subsidiary of Grupo
Iusacell, S.A. de C.V. (New Iusacell). The Company was
previously named Grupo Iusacell, S.A. de C.V. and on
March 1, 2000, changed its name from Grupo Iusacell, S.A.
de C.V. to Grupo Iusacell Celular, S.A. de C.V. (Old Iusacell).
As a part of the recapitalization and
restructuring plan of New Iusacell, a new holding company, it
was incorporated on August 6, 1998 to acquire and hold all
of the outstanding shares of Old Iusacell. In July 1999, New
Iusacell initiated an offer to exchange its two series of common
stock for the four series of common stock of Old Iusacell then
outstanding on a one for one basis. As a result of the exchange,
New Iusacell acquired 99.5% of Old Iusacell shares when the
offer expired on August 10, 1999.
On February 1, 2000, New Iusacell launched a
second exchange offer and at its conclusion, Old Iusacell's
ADS depositary, The Bank of New York, converted the remaining,
non-exchanged Old Iusacell ADSs into New Iusacell shares. As a
result of these transactions, New Iusacell increased its
ownership in Old Iusacell to 99.99%.
On June 15, 2000, New Iusacell launched a
private purchase offer under which the Company expected to
purchase the remaining Old Iusacell shares not tendered during
the two exchange offers. When this offer expired on
September 29, 2000, there was 1 share of Old Iusacell not
owned by New Iusacell. This share represented 0.002% of the
total outstanding shares of Old Iusacell at December 31,
2000.
On March 30, 2001, Old Iusacell's
stockholders approved a 30,000 to 1 reverse stock split. Upon
implementation of the reverse split in May 2001, New Iusacell
increased its ownership in Old Iusacell to 100% (Note 14).
All references to the number of shares, per share amounts and
any other reference to shares in the consolidated financial
statements and the accompanying notes to the consolidated
financial statements, unless otherwise noted, have been adjusted
to reflect the reverse split on a retroactive basis.
Old Iusacell's subsidiaries are primarily
engaged in the wireless telecommunications business and hold
concessions to operate cellular telephone systems in five market
areas (each a Region) in Mexico. Old Iusacell through its
subsidiaries, holds the non-wire line cellular concessions for
Region 5 (Guadalajara), Region 6 (Leon), Region 7
(Puebla), a cellular authorization for Region 9 (Mexico
City), and in 2001, acquired the company that holds the
concession for Region 8 (Mérida) (Note 2).
Old Iusacell subsidiaries also provide long
distance services and nationwide and international paging
services.
Principal stockholders
In February 1997, after execution of a definitive
agreement between Old Iusacell's principal stockholders and
approval by the Mexican government, Bell Atlantic Corporation
(Bell Atlantic) assumed management control of Old Iusacell from
Carlos Peralta and companies and individuals controlled by or
related to him (together, the Peralta Group). After the
incorporation of New Iusacell, Bell Atlantic also has management
control of New Iusacell.
F-7
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
On June 30, 2000, Bell Atlantic and GTE
Corporation, completed their merger, creating Verizon.
References made to Verizon with respect to dates prior to
June 30, 2000 are references to Bell Atlantic prior to its
acquisition of GTE Corporation.
On April 4, 2001, after obtaining the
authorization of the Mexican regulatory agencies and the
finalization of a stockholders' agreement between the
Peralta Group and Vodafone Group Plc (Vodafone), the Peralta
Group and Vodafone closed the transaction under which the
Peralta Group sold its 34.5% ownership in New Iusacell to
Vodafone. Verizon and Vodafone hold substantial ownership
interests (direct or indirect) in New Iusacell.
Note 2 — Acquisitions, Dispositions
and Company Structure
In November 1999, the Company liquidated its
investment in Compañía Colombiana de Telefonía
Celular, S.A. (Telecel) and recorded a loss of Ps.56,622 before
taxes.
In 2000, subsidiary Cellular Solutions de
México, S.A. de C.V. (Cellular Solutions) was merged into
another subsidiary, Iusacell, S.A. de C.V. The merger was
recorded as of December 31, 2000.
On January 1, 2001, through a capital
contribution, New Iusacell acquired the control of Iusacell PCS,
S.A. de C.V. (Iusacell PCS), substantially diluting Old
Iusacell. Consequently, the Company no longer consolidates
Iusacell PCS.
During 2001, the Company incorporated Iusatel
USA, Inc. to be engaged in the long distance business in the
United States of America.
On March 22, 2001, the Company sold its 65%
equity interest in Satelitrón, S. A. de C. V. As a result
of the sale, the Company recorded a gain of Ps.3,976 (U.S.$429)
before taxes.
Acquisition of Grupo Portatel, S. A. de C.
V.
On October 19, 2001, Old Iusacell completed
the acquisition of a 78.34% ownership in Grupo Portatel,
S. A. de C. V. and its subsidiaries (Portatel) for
Ps.522,533 (U.S.$56,588). The Company also reached an agreement
to acquire the remaining the 21.66% ownership in Portatel for
U.S.$16,150. The Company closed the acquisition of this
remaining ownership on February 8, 2002. Portatel is
engaged in the wireless communications business and holds the
concession to operate cellular telephone systems in Region 8,
which covers the Mexican states of Yucatán, Campeche,
Quintana Roo, Chiapas and Tabasco in the southeast of Mexico.
The consolidated income statements of the Company
include the consolidated results of Portatel beginning
October 19, 2001. The assets acquired and liabilities
assumed were recorded at estimated fair values as determined by
the Company's management based on information currently
available, on current assumptions as to future operations and
independent appraisals. A summary of the assets acquired and
liabilities assumed in the acquisition is as follows:
Estimated fair values:
Assets acquired
Ps.
516,239
Liabilities assumed
(152,831
)
Goodwill (amortized by the straight-line method
    over the remaining life of the concession)
159,125
Purchase price
Ps.
522,533
F-8
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Company Structure
Under the laws established by the Mexican
government, due to Verizon's control of New Iusacell, New
Iusacell may not own the majority of the voting stock of Mexican
companies that hold concessions to provide telecommunications
services other than cellular service. As of November 1998, Old
Iusacell and José Ramón Elizondo, a then director of
New Iusacell (the Mexican National), entered into a joint
venture formation agreement (the Agreement) pursuant to which
they agreed to participate together in the microwave frequencies
leasing, long distance, local telephony, PCS and paging
businesses. Old Iusacell and the Mexican National agreed that
Old Iusacell would own 94.9% of the economic interest and 49% of
the voting shares of Iusatel, S. A. de C. V. (Iusatel), the
Company's long distance concessionaire,
Iusatelecomunicaciones, S. A. de C. V. (Iusatelecomunicaciones),
the Company's fixed wireless local telephony operation,
Punto-a-Punto Iusacell, S. A. de C. V. (Punto-a-Punto Iusacell),
a microwave frequencies concessionaire and Iusacell PCS, S. A.
de C. V. (Iusacell PCS), which holds concessions for 1.9GHz
frequencies in Regions 1 and 4.
Iusatel, Iusatelecomunicaciones, Punto-a-Punto
Iusacell and Iusacell PCS are each referred herein as a
Non-Cellular Subsidiary and together, the Non-Cellular
Subsidiaries. The Mexican National owns 5.1% of the economic
interest and 51% of the voting shares of these companies.
The Mexican National does not have the unilateral
right to approve actions at the stockholder or board level of
the Non-Cellular Subsidiaries. Under each company's
by-laws, all stockholder or board actions must also be approved
by the majority of the shares held by Old Iusacell (or New
Iusacell) or a majority of the board members designated by Old
Iusacell (or New Iusacell), respectively.
The Agreement, together with each joint venture
company's by-laws, enable Old Iusacell or New Iusacell, as
the case may be, to have management control over the day-to-day
operations and financial administration of the Non-Cellular
Subsidiaries. The Mexican National cannot alone, among other
things, select, terminate or determine the compensation of
management or establish operating and capital decisions in the
ordinary course of business.
Old Iusacell signed a joint venture agreement
with a Mexican company, which holds a fifteen-year concession to
provide nationwide and international paging services through
July 2009. As of December 31, 2001, Infotelecom is owned
49%, 49% and 2%, by Old Iusacell, Banorte, S. A. (which acquired
Infomin, S.A de C.V.'s interest in Infotelecom in exchange
for the retirement of debt) and the Mexican National,
respectively. Old Iusacell committed to contribute up to
U.S.$10,500. As of December 31, 2000, Old Iusacell had
invested all U.S.$10,500. If a partner does not fulfill its
responsibilities under the joint venture agreement, sanctions
could cause such partner to lose its investment and incur a
penalty of up to U.S.$1,000.
The subsidiaries of the Old Iusacell, which are
included in the consolidated financial statements, are as
follows:
Economic interest
(direct or indirect)
as of December 31
Subsidiary
2001
2000
(%)
(%)
S.O.S. Telecomunicaciones, S. A. de C. V.
    (Region 9)
100
100
Iusacell, S. A. de C. V.
100
100
Sistecel, S. A. de C. V.
100
100
Comunicaciones Celulares de Occidente, S. A. de
    C. V. (Region 5)
100
100
Sistemas Telefónicos Portátiles
    Celulares, S. A. de C. V. (Region 6)
100
100
Telecomunicaciones del Golfo, S. A. de C. V.
    (Region 7)
100
100
Inflight Phone de México, S.A de C.
    V.
100
100
F-9
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Economic interest
(direct or indirect)
as of December 31
Subsidiary
2001
2000
(%)
(%)
Inmobiliaria Montes Urales 460, S. A. de C.
    V.
100
100
Mexican Cellular Investments, Inc.
100
100
Iusanet, S. A. de C. V.
100
100
Promotora Celular, S. A. de C. V.
100
100
Iusatelecomunicaciones
95
95
Grupo Iusacell Nicaragua, S.A.
100
100
Satelitrón, S. A. de C. V.
—
65
Infotelecom
49
49
Punto a Punto Iusacell
95
95
Grupo Portatel, S. A. de C. V. and subsidiaries
    (Region 8)
78
—
Iusatel
95
95
Iusatel USA, Inc.
100
—
Note 3 — Basis of
Presentation
a.     Basis of
presentation
The Company's consolidated financial
statements have been prepared in conformity with Mexican GAAP.
The consolidated financial statements have been presented in
thousands of constant Mexican pesos as of December 31, 2001
as required by Bulletin B-10, "Recognition of the
Effects of Inflation on Financial Information", as amended,
issued by the MIPA (Bulletin B-10).
b.     Consolidated
financial statements
Those companies in which the Company holds 50% or
more of the capital stock and/or exercises control over
operating and financing activities are included in the
consolidated financial statements. In addition, while the
Company owns less than 50% of the voting common stock of the
Non-Cellular Subsidiaries, it consolidates them because it
exercises management control over their day-to-day operations
and financial administration by appointment of the stockholders
and other arrangements (Note 2). All significant
inter-company balances and transactions have been eliminated in
consolidation.
c.     Use of
estimates
The preparation of financial statements in
conformity with Mexican GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
F-10
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 4 — Accounting
Policies
A summary of the Company's significant
accounting policies is as follows:
a.     Monetary
unit
The financial statements are presented in Mexican
pesos (Ps.), the currency that, based on Mexican laws, must be
used to prepare the accounting records of the Company and its
Mexican subsidiaries.
b.     Effects of
inflation on the financial statements
The consolidated financial statements of the
Company have been prepared in accordance with Bulletin B-10. The
Third Amendment to Bulletin B-10 requires the restatement of all
comparative financial statements to constant Mexican pesos as of
the date of the most recent balance sheet presented.
Accordingly, the consolidated financial statements have been
restated as follows:
•
The balance sheet amounts as of December 31,
    2000 presented in the consolidated financial statements have
    been restated to constant Mexican pesos as of December 31,
    2001 based on the National Consumer Price Index (NCPI) published
    by Banco de México (the Mexican Central Bank).
•
Consolidated income statements for the current
    and prior years have been restated to constant Mexican pesos as
    of December 31, 2001 using the NCPI from the periods in
    which the transactions occurred.
•
Bulletin B-12, "Statement of Changes in
    Financial Information", issued by the MIPA (Bulletin B-12),
    addresses the presentation of the statement of changes in
    financial position when financial statements have been restated
    to constant Mexican pesos as of the latest balance sheet date.
    Bulletin B-12 identifies the origin and application of resources
    representing differences between beginning and ending balance
    sheet amounts in constant Mexican pesos, excluding the effect of
    holding non-monetary assets. Bulletin B-12 also provides that
    monetary and foreign exchange gains and losses should not be
    eliminated from resources provided by operating or financing
    activities.
The items that originate from the recognition of
effects of inflation on financial information are as follows:
Restatement
of non-monetary assets
Inventories are valued at the average price of
the purchases made during the period and are restated using the
NCPI, without exceeding net realizable value.
Based on the Fifth Amendment to Bulletin B-10,
property and equipment, net, and depreciation for the year are
restated using the NCPI, without exceeding net realizable value.
Property and equipment are depreciated using the
straight-line method, based on the restated values. During the
second quarter of 2001, the Company completed a technical review
of the remaining useful lives of certain analog and digital
network equipment. As a result, the weighted-average useful life
for certain communications equipment is now ten years compared
with the previous 8.7 years. This change represented a
F-11
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
reduction of approximately Ps.452,000 in
depreciation expense for the year. The average annual rates of
depreciation used by the Company are as follows:
2001
2000
(%)
(%)
Buildings and facilities
4
4
Communications equipment
10
12
Furniture and fixtures
10
9
Transportation equipment
17
18
Computer equipment
29
21
Cellular rental telephones
25
25
The Company does not capitalize integral
financing cost for assets under construction, unless the
integral financing cost generated by loans are directly
attributable to those assets. For the years ended
December 31, 2001 and 2000, the Company did not capitalize
integral financing cost. Integral financing costs capitalized
during 1999 were Ps.184,718.
Investments in associated companies are accounted
for using the equity method based on the associated
company's equity and are adjusted for the effects of
inflation in accordance with Bulletin B-10.
Restatement
of stockholders' equity
The contributed and earned capital accounts
include the effect of restatement determined by applying the
NCPI factor from the date capital was contributed or earned. The
restatement represents the amount required to maintain the
contributions and accumulated results in constant Mexican pesos
as of December 31, 2001.
The excess or deficit from restatement of capital
account is an element of stockholders' equity that includes
surplus or deficit from holding non-monetary assets, which
represents the excess or deficit in specific values of net
non-monetary assets in comparison with the increase attributable
to general inflation as measured by the NCPI.
Integral
financing (gain) cost
Integral financing (gain) cost is comprised
of net interest expense, foreign exchange gains and losses,
gains and losses from net monetary position and fluctuations in
the market value of hedge derivative contracts on
foreign-denominated debt.
Foreign exchange gains and losses on transactions
denominated in currencies other than Mexican pesos result from
fluctuations in exchange rates between the date transactions are
recorded and the date of settlement or period end.
Gains and losses from net monetary position
represent the effects of inflation, as measured by the NCPI, on
the Company's monetary assets and liabilities at the
beginning of each month. If monetary liabilities exceed monetary
assets, there is a gain from monetary position. If monetary
liabilities are less than monetary assets, there is a resulting
loss from monetary position.
c.     Cash and cash
equivalents
During 2000, the MIPA issued Bulletin C-1,
"Cash", applicable to all Mexican companies beginning
January 1, 2001. This Bulletin provides guidance for the
valuation of foreign currencies and precious metals as currency.
F-12
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Cash and cash equivalents consist primarily of
bank deposits. The Company invests its excess cash in deposits
with major banks.
As the Company follows the practices mentioned in
the Bulletin, the adoption of this Bulletin did not have a
material effect on the Company's financial statements and
disclosures.
d.     Financial
instruments
Effective January 1, 2001, Bulletin C-2,
"Financial Instruments", issued by the MIPA (Bulletin
C-2), requires that all financial instruments be recorded in the
balance sheet at their fair value and changes in the fair value
be recorded in each period in the income statement. Bulletin C-2
also requires that derivative financial instruments used for
hedging purposes be recorded in the balance sheet and valued
using the same valuation criteria used to value the hedged asset
or liability.
The Company's financial instruments consist
principally of cash and cash equivalents, accounts receivable
and payable, notes payable, long-term debt, and foreign currency
and interest hedge contracts.
The Company use derivative financial instruments
to manage the risk of variable interest rates and foreign
currency exchange fluctuations, which under Bulletin C-2,
are classified as hedge transactions.
The carrying amounts of financial instruments, as
reflected in the balance sheet, approximate their fair value as
of December 31, 2001, except for long-term debt which has a
quoted market value and for the foreign currency and interest
rate hedge contracts, which as of January 1, 2001, are
valued using the same valuation criteria used to value the
hedged asset or liability (Note 21).
As a result of the adoption of this new
accounting pronouncement, the Company recognized a cumulative
loss on derivative financial instruments of Ps.6,478 as of
January 1, 2001. Prior to January 1, 2001, the Company
recorded interest rate and foreign currency hedge contracts on a
cash basis.
e.
Allowance for doubtful accounts
The Company cancels service to customers with
invoices that are 60 days past due. The allowance for
doubtful accounts represents the Company's estimate of the
probable loss inherent in all accounts receivable due to general
historical trends of customer performance and factors
surrounding the specific customer's credit risk. The
Company wrote off accounts receivable for Ps.119,225 and
Ps.42,657 in 2001 and 2000, respectively. The charge to income
for the year for the allowance for doubtful accounts amounted to
Ps.108,432, Ps.94,531 and Ps.105,526 in 2001, 2000 and 1999,
respectively.
f.
Investment in associated companies
The Company carries under the equity method
long-term investments in associated companies in which it owns
between 20% and 50% of the company's voting common stock
and over which the Company can exercise significant influence.
Under the equity method, such investments are carried at cost
adjusted for the Company's share of the net income or
losses of these companies and the effects of restatement of
non-monetary assets in the associated companies. The effects of
transactions with such associated companies are eliminated
before applying the equity method.
g.
Cellular telephones
The cost of cellular telephones given to
customers under exclusive service contracts is amortized on a
straight-line basis based on the nature and terms of the service
contracts to match costs with the timing of earned revenues.
During the second quarter of 2001, the Company decided to reduce
the amortization period of cellular telephones from an average
of eighteen months to twelve months. This change represented an
F-13
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
increase of approximately Ps.184,347 in
amortization expense for the year. The cost of such telephones
is included in other assets, net of accumulated amortization,
and does not exceed market value.
At the end of the contract term, the customer
keeps the cellular telephone. In the event of an early
termination of an exclusive service contract, the customer
either (i) is required to return the phone to the Company
or (ii) acquires the telephone at its book value on the
date of termination.
The cost of cellular telephones sold to customers
is recorded as cost of sales based on the average cost of such
telephones. Telephones leased to customers are included in fixed
assets and are depreciated over the initial lease period,
generally two years.
h.
Concessions
Costs related to the acquisition of concessions
granted by the Mexican government to provide cellular telephone
services have been capitalized and are included in other assets.
Such costs are amortized on a straight-line basis over the
initial term of the respective concession. The Mexican
government requires the Company's compliance with the
specific terms of each concession. Through December 31,
2001, the Company had complied substantially with such
requirements, except for certain informational requirements of
the Mexican authorities. The Company believes that such
noncompliance does not expose it to any risk of concession
forfeiture, or any other material liability.
i.
Advertising
Advertising costs are expensed as incurred. The
cost of prepaid media advertising (including television air
time, magazine, directory and other print media) is deferred and
recorded in other assets until the advertising airtime or space
is used, at which time, such cost is recognized as an operating
expense. Advertising expense amounted to Ps.430,993, Ps.349,851
and Ps.260,344 for 2001, 2000 and 1999, respectively.
j.
Excess of cost of investment in subsidiaries
    over book value
The excess of cost over the book value of net
assets of acquired subsidiaries is amortized on a straight-line
basis over twenty years. Amortization expense was Ps.159,030,
Ps.154,293 and Ps.192,273 in 2001, 2000 and 1999, respectively.
k.
Evaluation of long-lived assets
The Company evaluates the recoverability of its
long-lived assets when events and circumstances indicate that
such assets might be impaired. The Company determines impairment
by comparing the undiscounted cash flows estimated to be
generated by these assets to their respective carrying amounts.
In the event impairment exists, a loss is recognized based on
the amount by which the carrying value exceeds the fair value of
the asset. If quoted market prices for an asset are not
available, fair market value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with
the risk involved. Losses on property and equipment to be
disposed of are determined in a similar manner, except that fair
market values are reduced for the cost to dispose.
l.
Deferred income taxes and employee profit
    sharing
As of January 1, 2000, the Company adopted
the provisions of revised Bulletin D-4, "Accounting
Treatment of Income Tax, Assets Tax and Employee Profit
Sharing", issued by the MIPA, (Bulletin D-4). This
revised Bulletin significantly modifies the previous accounting
treatment for the calculation of deferred taxes by the partial
liability method to a method based on comprehensive assets and
liabilities. The new method requires the recognition of future
tax consequences based on the difference between the financial
F-14
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
statements and tax basis of assets and
liabilities — temporary differences — as of
the date of the financial statements.
The accumulated effect at the beginning of the
year, because of the adoption of Bulletin D-4, increased
the deferred tax asset by Ps.172,031 and increased
stockholders' equity by the same amount. There was no net
effect to income for the years ended December 31, 2001 and
2000, since the Company decided to increase the net deferred
income tax asset and offset it by the creation of an allowance
to reduce the value of the tax losses carry forward
(Note 12).
Employee profit sharing is a statutory labor
obligation payable to employees and determined, for each
subsidiary with employees, on its pretax income, as adjusted, in
accordance with the provisions of Mexican labor and tax laws.
m.
Seniority premiums
In accordance with Mexican labor law, the
Company's employees are entitled to seniority premiums upon
retirement after 15 years of service or upon dismissal,
disability or death. The Company follows Bulletin D-3,
"Labor Obligations", issued by the MIPA
(Bulletin D-3). Under Bulletin D-3, the actuarially
determined projected benefit obligation is computed using
estimates of salaries that will be in effect at the time of
payment.
Personnel not yet eligible for seniority premiums
are also included in the determination of the obligation with
necessary adjustments made in accordance with the probability
that these employees will reach the required seniority. At
December 31, 2001, the average seniority of the eligible
employees was less than 4 years. The Company's
liability and related costs for seniority premiums are
immaterial for all periods presented.
In accordance with Mexican labor law, the Company
is liable for severance payments to employees who are dismissed
under certain circumstances. Such compensation is expensed when
paid.
The Company has no employee pension plans and
does not provide for post-retirement benefits.
n.     Profit (loss)
per share
Bulletin B-14, "Earnings per
Share", issued by the MIPA (Bulletin B-14), requires
disclosure in the income statement of the basic net profit
(loss) per share and diluted profit (loss) per share, and the
per share effect of any extraordinary item affecting the net
profit or loss for the year. Basic profit (loss) per share is
computed by dividing profit (loss) available to common
stockholders by the weighted-average number of common shares
outstanding for the year. The computation of diluted profit
(loss) per share is similar to basic profit (loss) per share,
except that the denominator is increased to include the number
of additional common shares that would have been outstanding if
the potentially dilutive common shares had been issued. For the
years ended December 31, 2001, 2000 and 1999, the Company
did not compute nor disclose diluted profit (loss) per share
since it was not required by Bulletin B-14 because, for
those years, the Company incurred losses from continuing
operations.
o.     Revenue
recognition
Cellular air time is recorded as revenue as
service is provided except for revenue from the sale of prepay
cards which is recognized at the date of sale. The Company
recognizes the revenue on the sale of prepay cards at the date
of sale rather than on a deferred basis because the length of
the average consumption period for such prepay cards is not
significant, i.e., approximately one to one and a half months,
and it is not material to results of operations for all periods
presented. Sales and cost of sales of equipment and related
services are recorded when goods are delivered and services are
provided. Cellular access charges are billed in advance and
F-15
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
recognized when the services are provided. Other
revenues, mainly from paging and long distance services, are
recognized when the related services are provided.
p.     Foreign
currency transactions
Foreign currency transactions are recorded at the
exchange rates in effect at the transaction date. Assets and
liabilities denominated in foreign currencies are translated to
Mexican pesos using the exchange rates in effect at the time of
settlement or valuation at each balance sheet date, with the
resulting exchange differences being recognized as exchange
gains or losses.
q.     Comprehensive
income (loss)
The Company adopted Bulletin B-4,
"Comprehensive Income", issued by the MIPA,
(Bulletin B-4), effective January 1, 2001. Based on
Bulletin B-4, the comprehensive income (loss) includes the
Company's consolidated net loss and any other item that,
because of specific accounting guidance, is recorded directly as
a part of stockholders' equity, and which are not capital
stock increases, decreases and/or distributions.
The comprehensive income (loss) line included in
the consolidated statement of stockholders' equity
represents the result of the performance of the Company during
the year (Note 20).
r.
New accounting pronouncements
In November 2001, the MIPA issued the revised
Bulletin C-9, "Liabilities, Provisions, Contingent
Assets and Liabilities and Commitments"
(Bulletin C-9), which establishes a methodology for
valuation, presentation and disclosure of liabilities and
provisions, as well as for valuation and disclosure of
contingent assets and liabilities, and for disclosure for
commitments. The revised Bulletin C-9 states that
(i) all contingent assets that have a practical true
realization must be accounted and disclosed in the financial
statements; (ii) contingent assets that have a probable
realization cannot be accounted for in the financial statements,
but must be disclosed; and (iii) contingent assets that do
not have a probable realization and cannot be accounted for in
the financial statements are not required to be disclosed.
Bulletin C-9 requires disclosure of committed amounts when
it represents significant fixed assets additions. The provisions
of Bulletin C-9 are required to be applied beginning on
January 1, 2003, although early adoption is recommended.
In addition, in December 2001, the MIPA issued
revised Bulletin C-8, "Intangible Assets"
(Bulletin C-8), which defines intangible assets as costs
incurred and rights or privileges acquired that will generate a
future economic benefit. Revised Bulletin C-8 states that
pre-operating costs should be expensed as a period cost, unless
they could be classified as development costs. Bulletin C-8
requires that intangible assets with finite useful lives should
be amortized over its useful life. The provisions of
Bulletin C-8 are required to be applied beginning on
January 1, 2003, although early adoption is recommended.
Management is currently evaluating the impact
that the adoption of Bulletin C-8 and Bulletin C-9
will have on its consolidated financial statements.
Note 5 — Related
Parties
Until April 4, 2001, the Peralta Group held
substantial ownership interest in the Company. The Peralta Group
holds ownership interests in various other entities, primarily
Industrias Unidas, S. A. de C. V. (IUSA) and
related entities, which still are customers of or suppliers to
the Company.
F-16
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
A summary of related party accounts and notes
receivable, including interest, as of December 31, is as
follows:
2001
2000
IUSA and related entities
Ps.
1,333
Ps.
5,788
Iusacell PCS
41,714
—
New Iusacell
—
44,566
Total
Ps.
43,047
Ps.
50,354
Accounts receivable result from the financing of
related parties' operations, the sale of cellular telephone
services and operating lease contracts.
Accounts and notes payable to related parties,
including interest, as of December 31, are as follows:
2001
2000
Verizon
Ps.
58,074
Ps.
155,134
Vodafone
2,008
—
New Iusacell
34,790
—
Iusacell Arrendadora, S.A. de C.V.
11,475
—
Iusacell Infraestructura, S.A. de C.V.
45,535
—
Iusacell Infraestructura de México, S.A. de
    C.V.
8,634
—
Total
Ps.
160,516
Ps.
155,134
Accounts payable result from services rendered by
the seconded employees assigned by Verizon and operating lease
contracts for certain communications equipment.
Old Iusacell made advance payments of U.S.$15,000
to Northern Telecom (CALA) Corporation (Nortel) in 1994. Legal
counsel believed that Nortel is legally obligated to refund the
U.S.$15,000 advance to Old Iusacell. Therefore in 2000, Verizon
acquired rights to a refund of the advance from Nortel to be
applied in future purchases by Verizon from Nortel, in exchange
for a dollar-for-dollar reduction in payables by the Company to
Verizon.
The following is an analysis of the related party
transactions described above:
Years ended December 31
2001
2000
1999
Service revenue
Ps.
52,639
Ps.
12,088
Ps.
16,214
Lease income
—
—
4,790
Total income
Ps.
52,639
Ps.
12,088
Ps.
21,004
Cellular telephones repair expenses
Ps.
15,619
Ps.
17,343
Technical expenses
59,333
88,959
Ps.
6,285
Lease expenses
156,326
7,744
6,397
Interest expense
2,624
—
—
Total expenses
Ps.
233,902
Ps.
114,046
Ps.
12,682
F-17
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 6 — Inventories,
Net
As of December 31, inventories, net,
consisted of the following:
2001
2000
Cellular telephones and accessories
Ps.
343,330
Ps.
290,620
Less: Allowance for obsolete and slow-moving
    inventories
(110,756
)
(51,329
)
232,574
239,291
Goods in transit
6,521
6,808
Advances to suppliers
675
3,289
Ps.
239,770
Ps.
249,388
Note 7 — Investments
As of December 31, the Company's
investments were as follows:
2001
2000
Entity
Ownership
Investment
Ownership
Investment
Editorial Celular, S. A. de C. V
40.00
%
Ps.
16,108
40.
00
%
Ps.
15,086
AMCEL
—
14,689
—
14,688
Other
—
3,266
—
3,178
Ps.
34,063
Ps.
32,952
Editorial Celular, S.A. de C.V. is accounted for
by the equity method. For each of the three years in the period
ended December 31, 2001, the Company's share of net
earnings (losses) of Editorial Celular, S.A. de C.V. was of
Ps.2,542, Ps.2,478 and Ps.2,462, respectively.
For the years ended December 31, 2001 and
1999, the gain (loss) on sale of equity investments was of
Ps.3,976 and (Ps.56,622), respectively.
F-18
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 8 — Property and
Equipment, Net
a.     At
December 31, property and equipment, net consisted of:
2001
2000
Buildings and facilities
Ps.
1,623,380
Ps.
1,605,917
Communications equipment
9,820,210
8,334,971
Furniture and fixtures
194,989
183,236
Transportation equipment
79,475
64,106
Computer equipment
1,446,438
1,142,450
Cellular rental telephones
9,137
1,399
13,173,629
11,332,079
Accumulated depreciation
(5,604,699
)
(4,207,703
)
7,568,930
7,124,376
Land
65,859
59,682
Construction in progress
1,225,477
924,881
Advances to suppliers
—
147,920
Ps.
8,860,266
Ps.
8,256,859
b.     Depreciation
expense was Ps.1,226,130, Ps.1,292,146 and Ps.788,430 for 2001,
2000 and 1999, respectively.
c.     In December 1999,
the Company entered into a series of agreements with MATC
Celular, S. de R. L. de C. V. (an affiliated company of
American Tower Corporation) ("MATC Celular"). These
agreements, among other things, gave MATC Celular the right to
acquire approximately 350 existing Old Iusacell non-strategic
towers. During 2001, Old Iusacell and some of its subsidiaries
sold 244 non-strategic towers to MATC Celular, for Ps.348,754
(U.S.$36,600) generating a gain on the sale, before taxes, of
Ps.307,886. As a part of this agreement, a subsidiary of New
Iusacell signed a lease contract for the same towers with MATC
Celular for a minimum mandatory term of ten years, a term that
could be automatically extended for two additional periods of
five years each (Note 13a.).
Under Mexican GAAP, Bulletin D-5,
"Leases", (Bulletin D-5) establishes the general
criteria for capital and operating lease transactions.
Sale-leaseback transactions are recognized with the use of the
general criteria of Bulletin D-5. The timing of the
recognition of a gain derived from sale-leaseback transactions
should be based on the subsequent lease classification criteria
of the leaseback portion of the transaction. If the subsequent
leaseback is accounted for as an operating lease, full immediate
gain recognition is allowed, whereas, if the subsequent
leaseback is accounted for as a capital lease, the gain is
deferred and amortized in proportion with the estimated useful
life of the asset leased. Based upon this criteria, the
sale-leaseback agreement with MATC Celular was recorded by the
Company as an operating lease and consequently, the Ps.307,886
gain was recognized at the date of the sale and has been
recorded as other operating income in the consolidated income
statement for the year ended December 31, 2001.
F-19
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 9 — Other Assets
a.     At
December 31, other assets consisted of the following:
2001
2000
Concessions
Ps. 806,193
Ps. 428,417
Cellular telephones to be amortized
3,322,914
2,919,915
Prepaid expenses
351,094
341,823
Advance payments
374,567
161,593
Pre-operating expenses
21,631
91,384
Other
259,637
200,259
Deferred income taxes (Note 12)
172,031
179,600
5,308,067
4,322,991
Accumulated amortization
(3,426,763
)
(2,433,372
)
Ps. 1,881,304
Ps. 1,889,619
b.     Concessions and
cellular telephone amortization expense was Ps.1,183,528,
Ps.934,521 and Ps.639,570 in 2001, 2000 and 1999, respectively.
Note 10 — Notes Payable and
Long-Term Debt
As of December 31, 2001 and 2000, the
long-term debt of the Company consisted of the following:
U.S. Dollars 2001
2001
2000
Senior notes due 2004
U.S.$150,000
Ps.1,375,425
Ps.1,504,895
Amended and restated syndicated loan
265,622
2,435,617
—
Long-term bank loan
—
—
1,057,913
Revolving credit facility
—
—
846,330
Eximbank financing
—
—
504,250
Commerzbank financing
—
—
256,389
BBVA Bancomer handset facilities
—
—
25,082
415,622
3,811,042
4,194,859
Current portion of long-term debt
—
—
1,344,059
U.S.$
415,622
Ps.3,811,042
Ps.2,850,800
a.     Senior notes
due 2004
On July 25, 1997, Old Iusacell completed an
offering of long-term, senior notes due July 15, 2004 for
U.S.$150,000, accruing interest at a fixed rate of 10%, payable
semi-annually starting January 15, 1998 (the Notes Due 2004).
The Notes Due 2004 are redeemable at the option of Old Iusacell,
in whole or in part, at any time on or after July 15, 2001
starting at a redemption price of 105.0% of principal amount
plus accrued interest, if any, declining to 102.5% after
July 15, 2002, and finally to 100.0% after July 15,
2003.
The Notes Due 2004 may also be redeemed at a
price equal to 100.0% of principal amount plus accrued interest,
if any, in the case of legal changes adversely affecting the
treatment of the withholding taxes on payments to holders of the
Notes Due 2004.
F-20
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
b.     Amended and
restated syndicated loan
On March 29, 2001, Old Iusacell completed
the restructuring of its long-term bank loan, its revolving
credit facility, and the payment of the Eximbank financing and
the Commerzbank financing by entering into an amended and
restated senior secured loan agreement (the amended and restated
syndicated loan), which consists of:
(i) The Tranche A Loan for an aggregate
    principal amount of U.S.$189,805 for the purpose of refinancing
    existing indebtedness under the long-term bank loan and the
    revolving credit facility and under a certain bridge loan used
    to pay the January 2001 principal amortization payments under
    the long-term bank loan and the revolving credit facility.
(ii) The Tranche B Loan for an
    aggregate principal amount of U.S.$75,817 for the purpose of
    paying existing indebtedness under the Eximbank financing and
    the Commerzbank financing and under a certain bridge loan used
    to pay also in January 2001 a principal amortization payment
    under the Commerzbank financing.
The amended and restated syndicated loan provides
for interest at a rate per annum equal to one, two, three or six
month LIBOR at Old Iusacell's option plus a spread ranging
from, depending on Old Iusacell's leverage ratio, 1.75% to
2.25% with quarterly interest payments which began on
May 29, 2001. Principal installments will be due beginning
2004 through 2006.
There was no gain or loss recognized from this
loan restructuring.
c.     Covenants and
collateral
The amended and restated syndicated loan and the
Notes Due 2004 contain certain restrictive covenants, including
the maintenance of certain financial ratios, restrictions on
incurring additional debt, limitations on capital expenditures
and restrictions on the sale or lease of Old Iusacell's
assets. As of December 31, 2001 and 2000, Old Iusacell had
complied with such covenants.
On November 30, 2000, Old Iusacell obtained
the Fourth Amendment to the long-term bank loan and the
revolving credit facility. On the same date, Old Iusacell also
obtained a waiver, consent and second amendment to the Eximbank
financing and to the Commerzbank financing (the Second
Amendment). The Second Amendment and the Fourth Amendment
allowed the Company, among other things, to: (i) dispose of
certain telecommunications equipment (Note 8c.) under
certain conditions such as the funds obtained on the sale be
used to acquire additional assets; (ii) the sublease of
such communications equipment by Old Iusacell or any of its
subsidiaries; (iii) the sale of one of Old Iusacell's
subsidiaries, Satelitrón, S. A. de C. V.; (iv) the
release of the mortgage of a real property and (v) Old
Iusacell's incurrence on or before March 31, 2001 of
unsecured indebtedness with maturities not to exceed
12 months of an aggregate principal amount of not more than
U.S.$20,000.
On December 7, 2001 the Amended and Restated
syndicated loan was amended and a waiver and consent was granted
in order to allow Old Iusacell to (i) create liens encumbering
initial deposits and margin deposits securing indebtedness under
any interest rate protection agreement or other interest hedging
agreement up to the principal amount of indebtedness of Old
Iusacell and its subsidiaries with floating rate of interest;
(ii) loan or advance to New Iusacell in lieu of paying
dividends at such times and in such amounts as shall be
necessary to permit New Iusacell to pay scheduled interest
(including any tax gross — up with respect thereto)
and principal payments as and when due in respect of the Notes
due 2006; and (iii) loan or advance to New Iusacell in lieu
of paying dividends in an amount not to exceed U.S.$5,000.
Old Iusacell's obligations under the amended
and restated syndicated loan are unconditionally guaranteed,
jointly and severally, by the principal operating and
concession-holding subsidiaries of Old Iusacell and
F-21
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
are secured by the pledge of substantially all
capital stock and equity interests held by Old Iusacell and by
all cellular concessions, and by a first lien on substantially
all assets used in connection with or related to such
concessions.
At December 31, 2001, the Company's
long-term debt matures as follows:
Years ended December 31,
U.S. Dollars
Mexican pesos
2002
—
—
2003
—
—
2004
U.S.$
249,608
Ps.
2,288,781
2005
132,811
1,217,808
2006
33,203
304,453
Total
U.S.$
415,622
Ps.
3,811,042
d.     Notes
payable
As of December 31, notes payable consisted
of the following:
U.S. Dollars
2001
2001
2000
Handset facility
U.S.$
12,000
Ps.
110,034
Credit facility
—
—
Ps.
120,391
Total
U.S.$
12,000
Ps.
110,034
Ps.
120,391
In February 2001, Old Iusacell obtained a handset
acquisition financing facility from Banco Santander Mexicano,
which consisted of a one-year senior unsecured credit facility
in a principal amount of U.S.$12,000. Loans outstanding under
this facility provided for interest at an annual rate of
6.9938%. Interest is paid quarterly and the principal was paid
on February 19, 2002.
In December 2000, Old Iusacell obtained a
credit facility from Banco Santander Mexicano, to be used solely
to acquire cellular handsets, in the principal amount of
U.S.$12,000. Loans outstanding under this facility provided for
interest at an annual rate of LIBOR plus 1.85%. The Company drew
down the entire U.S.$12,000 during December 2000. This facility
was repaid on February 8, 2001.
Note 11 — Notes Payable to
Suppliers
As of December 31, notes payable to
suppliers consisted of the following:
2001
2000
Short-term:
The Motorola Facility
Ps.
83,501
—
The TV Azteca Facility
40,000
—
Total short-term
Ps.
123,501
—
The Motorola Facility
On March 31, 2000, Portatel, through one of
its subsidiaries, obtained a five-year credit facility from
Motorola Credit Corporation (Motorola) to be used solely to
acquire communications equipment, in the principal amount of
U.S.$9,106 (the Motorola Facility). Drawdowns under the Motorola
Facility were
F-22
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
available for one year. Loans outstanding under
the Motorola Facility accrue interest at a variable annual rate
of six-month LIBOR plus 6%. Principal and interest are payable
in April 2002. Portatel drew down the entire U.S.$9,106
during 2000 and 2001. As a part of the agreement, Portatel was
required to keep an escrow account to deposit monthly the
accrued interest on the loans outstanding.
The Motorola Facility contains certain
restrictive covenants including the maintenance of certain
financial ratios and restrictions on the payment of dividends.
As of December 31, 2001, Portatel had complied with such
covenants.
The TV Azteca Facility
On November 5, 2001, the Company, through
one of its subsidiaries, obtained a credit facility from TV
Azteca, S. A. de C. V. to be used solely to acquire television
air time, in the principal amount of Ps.40,000 (the TV Azteca
Facility). The facility provides for interest at a variable
annual rate of TIIE times 1.5. Principal and interest are
payable in six monthly installments starting January 31,
2002.
Note 12 — Income Tax, Net Assets Tax
and Employee Profit Sharing
As of December 31, 2001, 2000 and 1999, the
provision for income taxes consisted of current income tax and
assets tax of Ps.146,404, Ps.156,335 and Ps.612,596,
respectively.
Old Iusacell has filed annual consolidated income
tax returns since the tax year beginning January 1, 1994.
Starting the year ended December 31, 2000, New Iusacell is
the holding company for tax consolidation purposes.
The statutory income tax rate in Mexico is 35%.
As a result of the amendment to the income tax law enacted on
January 1, 2002, the 35% statutory income tax rate will be
reduced annually starting in 2003, and continue to decrease
until the statutory rate is 32% in 2005. Consequently, the
effect of the gradual decrease in the statutory Income Tax rate
will reduce the deferred tax asset in 2003. For the years ended
December 31, 2001 and 1999, the Company generated tax
profits of Ps.117,751 and Ps.1,319,163, which were totally
offset by the application of tax loss carry forwards. For the
year ended December 31, 2000, the Company generated a tax
loss Ps.716,875.
F-23
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
At December 31, 2001 and 2000, the main
temporary differences the Company recognizes for the calculation
of deferred income taxes were as follows:
2001
2000
Allowance for doubtful accounts
Ps.
210,891
Ps.
221,684
Liability accruals
71,214
74,427
Income tax losses carry forwards and tax credits
3,495,151
3,316,217
Inventories
(253,689
)
(249,388
)
Property and equipment
(1,867,485
)
(1,211,122
)
Telephones to be amortized
(174,968
)
(731,636
)
Concessions
(308,269
)
(20,847
)
Temporary differences
1,172,845
1,399,335
Income tax rate
35
%
35
%
Deferred income tax asset
410,496
489,767
Valuation allowance
(238,465
)
(310,167
)
Deferred income tax asset
Ps.
172,031
Ps.
179,600
The Company has recorded a net deferred tax asset
of Ps.172,031 reflecting, mainly, the benefit of tax loss carry
forwards, which expire in varying amounts between 2005 and 2010.
Realization is dependent on generating sufficient taxable income
prior to expiration of the loss carry forwards. Although
realization is not assured, management believes it is more
likely than not that most of the net deferred tax asset at
December 31, 2001 will be realized based on the
Company's business plan estimate of future taxable income
over the next five years in an amount sufficient to utilize the
net deferred tax losses recorded as of December 31, 2001.
The Company's estimate of future taxable
income is based primarily on and supported by (i) the
significant improvement in operating performance through 2001,
as evidenced by the success of the implementation of the Verizon
wireless business model. This model has produced strong
subscriber annual compound growth of 50% through 2001, improved
revenues mainly driven by subscriber growth and lower network
and operating costs, (ii) Vodafone's strong experience
and success in the prepay market, (iii) additional increase
in revenues generated by the Calling Party Pays feature with an
important taxable operating margin, (iv) the change in the
income tax law to increase the useful lives for network
equipment from 3.3 years to 12.5 years, representing
an important decrease in depreciation expense for income tax
purposes and (v) an increase in 2001 of the potential
effects of additional cost cutting.
The amount of the deferred tax asset considered
realizable could be reduced in the near term if estimates of
future taxable income during the carry forward periods are
reduced.
As of December 31, 2001 and 2000, the
Company had a valuation allowance of Ps.238,465 and Ps.310,167,
respectively, to reduce its deferred tax assets to estimated
realizable value. The valuation allowance primarily relates to
the deferred tax assets arising from tax loss carry forwards and
tax credits.
F-24
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
At December 31, 2001, the Company had the
following net operating losses for income tax purposes that may
be carried forward and applied against future taxable earnings:
Amount
Expiration
Year of loss
of loss
year
1995
Ps.771,716
2005
1996
17,087
2006
1997
545,001
2007
1998
461,950
2008
2000
716,875
2010
These losses are indexed for inflation from the
year incurred to the sixth month of the year utilized.
Accordingly, these amounts include inflation up to June 2001.
Due to the restructuring of the Company related to
Verizon's assumption of management control (Note 2), the
Company did not include additional tax losses for Ps.982,749,
relating to one of its subsidiaries, Iusatelecomunicaciones, and
may not be able to apply these losses against other
subsidiaries' profits in 2002 and beyond.
The 1.8% net assets tax is calculated on the
average value of substantially all assets less certain
liabilities. This tax is required to be paid if this computation
exceeds the amount of income tax. The 1.8% net assets tax paid
may be utilized as a credit against future income tax in the
years in which the Company generates an income tax in excess of
the assets tax. The assets tax is available as a carry forward
for up to ten years and is subject to restatement based on the
NCPI when used. As of December 31, 2001, net assets tax
available as a carry forward was Ps.428,025 which expires in
2007.
Employee profit sharing, generally 10%, is
computed on taxable income, with adjustments to exclude
inflationary effects and the restatement of depreciation
expense. In the years ended December 31, 2001 and 2000, the
Company did not generate any taxable income for profit sharing
purposes.
The effective rate reconciliation as of
December 31, is as follows:
2001
2000
1999
(Loss) profit on continuing operations before
    taxes
Ps.
(165,488
)
Ps.
(541,411
)
Ps.
567,286
Statutory Income Tax rate
35
%
35
%
35
%
Income tax (benefit) expense at statutory
    rate
(57,921
)
(189,494
)
198,550
Add (deduct):
Inventory purchases less cost of sales
(1,505
)
(13,897
)
44,006
Depreciation and amortization
(229,727
)
(122,727
)
(333,843
)
Differences between interest and inflationary
    gains or losses
75,893
80,398
155,935
Provision for doubtful accounts
(3,778
)
18,156
29,414
Telephones to be amortized
194,834
(41,492
)
223,850
Goodwill amortization
59,442
57,749
67,557
Other
3,975
(39,600
)
76,238
Income Tax expense (benefit) for the year
Ps.
41,213
Ps.
(250,907
)
Ps.
461,707
Effective rate
(25
)%
46
%
81
%
Net assets tax
Ps.
146,404
Ps.
156,335
Ps.
150,889
F-25
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 13 — Commitments and
Contingencies
As of December 31, 2001, the Company had the
following commitments and contingent liabilities:
a.     The Company has
    entered into operating lease agreements for administrative
    offices, sales branches and service facilities and since 2001,
    operating lease agreements with MATC Celular for the lease of
    towers (Note 8c.). These lease agreements expire at various
    dates through 2011, and some agreements contain options for
    renewal. Lease expense was Ps.157,159, Ps.164,074 and Ps.129,954
    for the years ended December 31, 2001, 2000 and 1999,
    respectively.
Future annual minimum rental payments under
    existing leases as of December 31, 2001 are as follows:
2002
Ps.
273,890
2003
246,300
2004
232,793
2005
224,586
2006
214,849
Thereafter
842,995
Ps.
2,035,413
b.     The Company may
    have contingent liabilities for taxes and penalties that the tax
    authorities may assess based on audits of prior years' tax
    returns. During 1997, the Mexican tax authorities completed an
    audit of Old Iusacell and two of its subsidiaries (Iusacell,
    S.A. de C.V. and SOS Telecomunicaciones, S. A. de
    C. V.). As a result of those investigations, Old Iusacell
    was assessed and paid a Ps.21,881 penalty in 1999 by the tax
    authorities for an incorrectly deducted interest expense. The
    tax authorities have claimed no other assessment.
c.     In April 1998,
    Old Iusacell learned that the Montes Urales property was subject
    to two liens. Such liens were not identified when Inmobiliaria
    Montes Urales 460, S. A. de C. V. was acquired in
    1994, nor was Old Iusacell notified of such liens subsequent to
    the acquisition. To date, the liens have not been removed and it
    is uncertain as to when the liens will be removed, if at all and
    consequently, Old Iusacell is not able to sell the property.
    Such property is being leased to third parties.
d.     Old Iusacell has
    certain commitments derived from its joint venture agreement
    with Infomin, S. A. de C. V. (Note 2).
e.     During April
    2001, Iusatel, a subsidiary of the Company, reached an agreement
    to settle the outstanding amounts due related to the special
    projects implemented by Teléfonos de México,
    S. A. de C. V. (Telmex) to permit competition in long
    distance telephony. Iusatel agreed to pay for its portion of
    such special projects in two parts: (i) a fixed payment of
    approximately U.S.$13,600, payable in twelve equal monthly
    installments beginning in April 2001, and (ii) a
    U.S.$0.0053 per full minute, usage-based surcharge to the local
    wire line interconnection rate from January 1, 2001 through
    December 31, 2004 for long distance calls terminated in
    Telmex's local wire line network.
f.     Iusacell,
    S. A. de C. V., a subsidiary of the Company, decided
    to sue and seek compensatory damages from one of the
    Company's distributors as a result of the latter's
    decision to breach its distribution agreement.
F-26
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
g.     On
    January 1, 2002 the Mexican Congress approved a tax law
    reform that assesses an additional 10% excise tax on certain
    wireless telecommunications services. In February 2002 the
    Company filed an injunction action to challenge the Mexican
    government's implementation of the tax.
Note 14 — Contributed
Capital
During the years ended December 31, 2001,
2000 and 1999, the following transactions took place:
On February 10, 1999, the Technical
Committee approved the subscription of 2 series L
shares of Old Iusacell for the Executive Employee Stock Purchase
Plan (the Stock Purchase Plan).
On March 3, 1999, Old Iusacell converted an
amount of Ps.446,805 (U.S.$31,000) into 1,476 series A
shares of Old Iusacell. The 1,476 series A shares of Old
Iusacell were initially subscribed by Verizon, of which 50%, or
738, of such shares, were then sold to Carlos Peralta. There was
no gain or loss recognized from the sale.
On August 10, 1999, the Company concluded a
corporate reorganization. The Company's corporate
reorganization included the following transactions:
a.     An exchange offer
    by New Iusacell of its series A and V ADSs and shares, for Old
    Iusacell's series A, B, D and L ADSs and shares on a
    one-for-one basis. At the end of the exchange offer,
    approximately 230 series D and L shares were not tendered.
b.     The stockholders
    of Old Iusacell who participated in the exchange were also
    offered the option to purchase an aggregate of 747 series V
    shares of New Iusacell, in the form of ADSs or shares. A total
    of 613 series V shares were subscribed.
c.     Primary and
    secondary offerings under which New Iusacell sold 787
    series V shares, and Verizon and the Peralta Group sold
    3,380 series V shares of New Iusacell.
On December 31, 1999, a total of 12,167
series A shares were subscribed through the capitalization of
stockholders' debt. The total amount converted was of
Ps.1,392,355. The Board of Directors of the Company ratified
this increase on February 21, 2000.
At the February 21, 2000, ordinary and
extraordinary stockholders' meetings, the series D and
series L shares and a portion of series A shares, were
converted into series B shares.
On March 30, 2001, 1 series A
share was subscribed through the capitalization of
stockholders' debt. The total amount converted was of
Ps.110. After this capital stock increase, Company's
stockholders' approved a 30,000 to 1 reverse stock
split. The reverse stock split became effective on May 7,
2001. This resulted in the cancellation of fractions of shares
and a corresponding decrease of Ps.242 in capital stock.
On August 24, 2001, 3 series A
shares were subscribed by the Company's stockholders for an
amount of Ps.321.
F-27
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The changes in the number of shares of common
stock for the period January 1, 2000 through
December 31, 2001 are analyzed as follows:
Number
of shares
January 1, 1999 balance
41,183
February 10,1999 — issuance of
    common stock for the Stock Purchase Plan
2
March 3,1999 — issuance of common
    stock for the Stock Purchase Plan
1,476
December 31, 1999 — issuance of
    common stock through the capitalization of debt
12,167
December 31, 1999 balance (restated to give
    effect to the reverse stock split)
54,828
No changes
—
December 31, 2000 balance
54,828
March 30, 2001 — issuance of
    common stock through the capitalization of stockholders'
    debt
1
August 24, 2001 — issuance of
    common stock
3
December 31, 2001 balance
54,832
During 2001 and 2000, New Iusacell has made
contributions to the Company, for future capital stock increases
in an aggregate amount of Ps.2,195,544.
At December 31, 2001 and 2000, the issued
and outstanding shares of common stock of the Company, without
par value, are as follows (the 2000 number of issued and
outstanding shares has been restated to give effect to the
reverse stock split):
2001
2000
series A
27,967
27,963
series B
26,865
26,865
Total
54,832
54,828
Series A and B represent shares entitling
the holder of each share to one vote at the Company's
stockholders' meetings. Stockholder actions on certain
matters require approval by both series A and series B
stockholders.
Series A shares must always represent no
less than 51% of the capital stock with full voting rights and
may be acquired by Mexicans or foreigners. Series B shares may
also be acquired by foreigners or Mexicans.
Note 15 — Executive Employee
Stock Purchase Plan
After the exchange offer in 1999, Old Iusacell
participates in the Stock Purchase Plan of its parent company,
New Iusacell.
Note 16 — Earned
Capital
Under Mexican law, a legal reserve must be
created and increased annually by 5% of the annual net earnings
until it reaches 20% of the nominal amount of a
corporation's capital stock. This reserve is not available
for dividends, but may be used to reduce a deficit or be
transferred to capital.
Dividends paid will be free of income tax if paid
out of the Net Taxable Income Account (CUFIN). A 35% rate will
be paid on the amount exceeding the balance of the CUFIN by
multiplying the dividend paid by
F-28
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
a factor of 1.5385. The applicable tax will be
payable by the Company, and it may be credited against the
income tax the Company is subject to in the following three
fiscal years. Dividends paid will not be subject to any tax
withholding.
At December 31, 2001, the balance on the
CUFIN is approximately Ps.133,419.
The contributed capital and earned capital
accounts consist of the following:
December 31, 2001
Accumulated
adjustments for
Historical value
inflation
Total
Capital stock subscribed
Ps. 5,748,813
Ps. 7,121,789
Ps.12,870,602
Capital contributions
18,655
74,176
92,831
Contribution for future capital stock increases
2,134,320
61,224
2,195,544
Legal reserve
(11,411
)
38,239
26,828
Accumulated losses from prior years
(4,140,737
)
(1,695,056
)
(5,835,793
)
Net loss for the year
(5,221
)
(292,455
)
(297,676
)
Accumulated other comprehensive income
172,031
(836,778
)
(664,747
)
Total
Ps. 3,916,450
Ps. 4,471,139
Ps. 8,387,589
December 31, 2000
Accumulated
adjustments for
Historical value
inflation
Total
Capital stock subscribed
Ps. 5,748,627
Ps. 7,121,786
Ps.12,870,413
Capital contributions
18,655
74,176
92,831
Contribution for future capital stock increases
1,247,278
54,880
1,302,158
Legal reserve
(11,411
)
38,239
26,828
Accumulated losses from prior years
(3,548,501
)
(1,614,872
)
(5,163,373
)
Net loss for the year
(592,236
)
(80,184
)
(672,420
)
Accumulated other comprehensive income
172,031
(836,778
)
(664,747
)
Total
Ps. 3,034,443
Ps.4,757,247
Ps.7,791,690
Note 17 — Foreign Currency
Position
The balance sheet as of December 31 includes
assets and liabilities denominated in U.S. Dollars, as follows:
2001
2000
Monetary assets
U.S.$
163,715
U.S.$
68,177
Monetary liabilities
477,105
497,082
Net monetary liability position in U.S. Dollars
U.S.$
313,390
U.S.$
428,905
Equivalent in nominal Mexican pesos
Ps.2,873,630
Ps.4,121,691
As of December 31, 2001 and 2000, most of
the communications equipment and inventories of cellular
telephones and accessories are of foreign origin (Notes 6
and 8).
F-29
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
During 2001, 2000 and 1999, interest income and
interest expense on assets and liabilities denominated in U.S.
Dollars were as follows:
2001
2000
1999
Interest income
U.S.$
1,587
U.S.$
491
U.S.$
769
Interest expense
35,675
24,891
36,130
Net interest expense
U.S.$
34,088
U.S.$
24,400
U.S.$
35,361
Equivalent in nominal Mexican pesos
Ps.312,570
Ps.234,479
Ps.335,880
Operating results for the years ended
December 31, 2001, 2000 and 1999 include depreciation and
amortization expenses, related to fixed assets and inventories
of foreign origin.
The exchange rates as of December 31, 2001
and 2000 were Ps.9.1695 and Ps.9.6098 per U.S. Dollar,
respectively. At the issuance date of these financial
statements, March 1, 2002, the exchange rate in effect was
Ps.9.1303 per U.S. Dollar.
Note 18 — Project 450
During 1994, Old Iusacell created a subsidiary to
provide fixed wireless local telephony services using the 450
MHz frequency band (Project 450). At December 31, 2001 and 2000,
Old Iusacell's investment in Project 450 amounted to
Ps.31,080 and Ps.35,309, respectively.
Given the capabilities of digital technology and
the success the Company has had thus far with its deployment,
the Company is exploring alternatives for providing local
telephony service, including fixed or limited zone wireless
service in the 800 MHz and 1.9 GHz bands.
Note 19 — Discontinued
Operations
In December 1998, Old Iusacell decided to
discontinue the operations of Cellular Solutions, a subsidiary
entity dedicated to the sale of accessories for cellular
handsets. Cellular Solutions transferred all its existing
inventories as of December 31, 1998 to another subsidiary
of Old Iusacell and terminated all of Cellular Solutions'
employees during January and February 1999.
Financial information regarding Cellular
Solutions as of and for the years ended December 31, 2000
and 1999, was as follows:
2000
1999
Current assets
Ps.
2,070
Ps.
1,755
Total assets
2,070
1,755
Total liabilities
422
37,821
Revenues
—
—
Gross profit
—
—
Loss from operations before income taxes
—
—
Provision for income taxes
—
—
(Profit) loss on disposal
(8,865
)
1,748
Net (profit) loss
Ps.
(8,865
)
Ps.
1,748
F-30
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 20 — Comprehensive
Income
For the years ended December 31, 2001, 2000
and 1999, comprehensive income consisted of the following:
2001
2000
1999
Net (loss) profit for the year
Ps.
(297,676
)
Ps.
(672,420
)
Ps.
435,049
Other comprehensive income:
Deficit from restatement
—
—
8,381
Accumulated effect of deferred taxes
—
195,692
—
Total other comprehensive income
—
195,692
8,381
Total comprehensive income
Ps.
(297,676
)
Ps.
(476,728
)
Ps.
443,430
Note 21 — Financial
Instruments
The Company determines the fair value of
outstanding financial instruments as follows:
a.     Cash and cash
    equivalents: the carrying value approximates fair value due to
    its short-term nature.
b.     Accounts
    receivable and payable: the carrying value approximates fair
    value due to its short-term nature.
c.     Notes payable:
    Carrying value approximates fair value due to its short-term
    nature.
d.     Long-term debt:
    the Company estimates the fair value of its long-term debt based
    on public and current rates available for debt of the same
    remaining duration.
e.     Derivatives: the
    Company determines the fair value of derivative financial
    instruments as follows:
Foreign-currency exchange forward
contracts
The Company purchases foreign-currency exchange
forward contracts with contract terms of up to three years to
protect itself against the adverse effect that exchange rate
fluctuations may have on foreign currency-denominated
liabilities, principally U.S. dollars.
During 2001, 2000 and 1999, the Company used
derivative instruments to hedge its foreign-currency exposure of
approximately 50% of the principal and interest payments coming
due over the next year. In August and October 2001, the Company
also used foreign-currency exchange forward contracts to hedge
its exchange rate exposure on the senior notes due 2004 for
U.S.$150,000 and its interest payments of U.S.$51,000. These
derivatives were highly effective since a foreign currency rate
change on the forward contract is offset by a corresponding
change in the value of the hedged loan.
These contracts are at a fixed price and have
maturity dates through July 2004 and forward rates ranging from
U.S.$9.1707 to U.S.$12.8035.
For the year ended December 31, 2001, due to
the strength of the Mexican Peso to the U.S. Dollar, the Company
recognized an exchange loss of Ps.16,759 on the derivatives,
which was offset by the gain on the hedged liabilities.
F-31
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The Company is exposed to credit loss from
counterpart nonperformance, but does not anticipate any such
loss from the foreign-currency exchange forward rate contracts,
which are with major financial institutions.
Interest rate collars
In July 1998, Old Iusacell entered into an
interest rate collar agreement for a notional amount of
U.S.$35,000 until July 30, 2002. The collar agreement
limits the maximum effective LIBOR cost to 6.12% if six-month
LIBOR is lower than 7.12% and 7.12% if LIBOR equals or exceeds
7.12%. Old Iusacell can participate in a decline in LIBOR to
5.30%.
On February 26, 1999, Old Iusacell entered
into an additional interest rate collar agreement to limit the
maximum interest rate, which must be paid on U.S.$15,000 of its
floating rate debt until July 2002. This collar agreement limits
the maximum effective LIBOR cost to 5.82% if six-month LIBOR is
lower than 6.82% and 6.82% if LIBOR equals or exceeds 6.82%. Old
Iusacell can participate in a decline in LIBOR to 4.75%.
For the year ended December 31, 2001, due to
the significant decrease in the LIBOR interest rates, the
Company recognized additional interest expense of Ps.5,390 for
the interest rate collars, which was offset by the lower
interest expense on its floating rate debt. Accordingly, these
derivatives were highly effective.
The U.S.$50,000 aggregate notional amount of the
interest rate collar agreements does not quantify risk or
represent assets or liabilities of the Company, but is used in
the determination of cash settlements under the agreements.
The Company is exposed to credit loss from
counterpart nonperformance, but does not anticipate any such
loss from the interest rate collar agreements, which are with a
major financial institution.
At December 31, the fair values of financial
instruments were as follows:
2001
2000
Carrying value
Fair value
Carrying value
Fair value
Cash and cash equivalents
Ps.
119,544
Ps.
119,544
Ps.
292,354
Ps.
292,354
Accounts receivable
1,172,053
1,172,053
1,201,644
1,201,644
Accounts payable
1,362,946
1,362,946
1,482,277
1,482,277
Foreign currency hedge contracts
—
(169,416
)
—
(44,181
)
Interest rate collars
—
(14,460
)
—
161
Notes payable
110,034
110,034
120,391
120,391
Long-term debt:
Senior notes due 2004
1,375,425
1,416,688
1,504,895
1,459,748
Amended and restated syndicated loan
2,435,617
2,435,617
—
—
Long-term bank loan
—
—
1,057,913
1,057,913
Revolving credit facility
—
—
846,330
846,330
Eximbank financing
—
—
504,250
504,250
Commerzbank financing
—
—
256,389
256,389
BBVA Bancomer handset facilities
—
—
25,082
25,082
F-32
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 22 — Segment
Information
The Company's segment data is prepared in
accordance with International Accounting Standard No. 14
(revised). Reportable segments are those that are based on the
Company's method of internal reporting.
The Company has three reportable segments that it
operates and manages as strategic business units that offer
different products and services. The Company measures its
reportable segments based on operating profit (loss), including
inter-segment revenues and corporate expenses that are allocated
to the operating segments and excluding any non-recurring items.
Inter-segment transactions are accounted for at current market
prices. The Company evaluates the performance of its segments
and allocates resources to them based on earnings before
interest, taxes, depreciation and amortization (EBITDA) and
operating income (loss). The accounting policies underlying the
reported segment data are the same as those described in the
summary of significant accounting policies (Note 4).
The Company's three reportable segments and
their principal activities are:
Cellular
—
The Company operates and provides wireless cellular telephone
services in five of the nine Regions in the Mexican market. The
Company serves customers in large metropolitan areas such as
Mexico City, Guadalajara, León, Puebla and Mérida. The
Company's services include "value added services"
such as voice mail and caller identification of incoming calling
numbers.
Long
distance
— The Company
provides long distance services for which its first natural
market is its cellular subscriber base. The Company is also
providing these services to residential and commercial entities.
The Company uses its own switches and transmission equipment and
a combination of fiber optic lines, microwave links, satellite
transmission and lines leased from Telmex to provide these
services.
Other
businesses
— The Company
provides paging, local telephony, microwave links and data
transmission services.
The tables below present information about
reportable segments for the years ended December 31, 2001,
2000 and 1999 under Mexican GAAP measurement:
Year Ended December 31, 2001
Long
Other
Total
Reconciling
Total
Cellular
distance
businesses
segments
items(2)
consolidated
Revenues — third party
Ps.
5,881,162
Ps.
293,478
Ps.
114,180
Ps.
6,288,820
Ps.
—
Ps.
6,288,820
Revenues — affiliates
3,012,463
632,848
1,228,656
4,873,967
(4,873,967
)
—
Depreciation and amortization
2,447,607
101,916
27,238
2,576,761
(8,073
)
2,568,688
Operating profit (loss)
(378,814
)
(117,818
)
(207,887
)
(704,519
)
657,589
(46,930
)
EBITDA(1)
2,068,793
(15,902
)
(180,649
)
1,872,242
649,516
2,521,758
Total assets
17,146,274
934,973
652,690
18,733,937
(4,541,314
)
14,192,623
Capital expenditures
1,541,316
89,482
17,713
1,648,511
—
1,648,511
F-33
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Year Ended December 31, 2001
Long
Other
Total
Reconciling
Total
Cellular
distance
businesses
segments
items(2)
consolidated
Revenues — third party
Ps.
5,550,534
Ps.
69,566
Ps.
112,785
Ps.
5,732,885
Ps.
(3,175
)
Ps.
5,729,710
Revenues — affiliates
2,773,585
529,206
668,500
3,971,291
(3,971,291
)
—
Depreciation and amortization
275,309
90,594
22,797
2,388,700
(7,740
)
2,380,960
Operating income (loss)
(97,234
)
(123,002
)
(160,486
)
(380,722
)
(8,194
)
(388,916
)
EBITDA(1)
2,178,075
(32,408
)
(137,689
)
2,007,978
(15,934
)
1,992,044
Total assets
16,646,812
1,120,341
890,375
18,657,528
(4,846,153
)
13,811,375
Capital expenditures
1,762,368
81,759
178,968
2,023,095
—
2,023,095
Year Ended December 31, 2001
Long
Other
Total
Reconciling
Total
Cellular
distance
businesses
segments
items(2)
consolidated
Revenues — third party
Ps.
4,470,081
Ps.
126,160
Ps.
185,029
Ps.
4,781,270
Ps.
1,701
Ps.
4,782,971
Revenues — affiliates
2,065,321
392,312
509,132
2,966,765
(2,966,765
)
—
Depreciation and amortization
1,557,521
61,097
9,357
1,627,975
(7,702
)
1,620,273
Operating income (loss)
101,447
(136,279
)
(81,571
)
(116,403
)
107,417
(8,986
)
EBITDA(1)
1,658,967
(75,182
)
(72,213
)
1,511,572
99,715
1,611,287
Total assets
15,086,925
362,663
817,651
16,267,239
(2,232,724
)
14,034,515
Capital expenditures
1,817,748
119,396
12,513
1,949,657
—
1,949,657
(1)
EBITDA as used by the Company is operating profit
    (loss) plus the sum of depreciation and amortization. The
    Company's reconciliation of EBITDA to consolidated net
    profit (loss) under Mexican GAAP as of December 31, 2001,
    2000 and 1999, is as follows:
Years Ended December 31,
2001
2000
1999
EBITDA
Ps.
2,521,758
Ps.
1,992,044
Ps.
1,611,287
Depreciation and amortization
(2,568,688
)
(2,380,960
)
(1,620,273
)
Other (expense) income, net
—
—
(26,225
)
Integral financing (cost) gain
(125,076
)
(154,973
)
656,657
Equity participation in net profit (loss) of
    associated companies and net gain (loss) on sale of equity
    investments
6,518
2,478
(54,160
)
Income tax and assets tax
(146,404
)
(156,335
)
(150,889
)
Minority interest
20,694
16,461
20,400
Profit (loss) from discontinued operations
—
8,865
(1,748
)
Cumulative effect of the adoption of the new
    accounting principle
(6,478
)
—
—
Net (loss) profit for the year
Ps.
(297,676
)
Ps.
(672,420
)
Ps.
435,049
(2)
Reconciling items primarily reflect inter-segment
    eliminations and certain non-recurring items.
F-34
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Note 23 — Significant Differences
Between Mexican GAAP and United States Generally Accepted
Accounting Principles
The Company's consolidated financial
statements are prepared on a Mexican GAAP basis, which differs
in certain significant respects from United States generally
accepted accounting principles (U.S. GAAP).
The reconciliation to U.S. GAAP does not include
the reversal of the adjustments to the financial statements for
the effects of inflation required under Mexican
Bulletin B-10. The application of Bulletin B-10
represents a comprehensive measure of the effects of price-level
changes in the financial statements based on historical cost for
Mexican and U.S. accounting purposes. The principal differences,
other than inflation accounting, between Mexican and U.S. GAAP
are listed below together with an explanation, where
appropriate, of the adjustments that affect consolidated net
income for each of the three years in the period ended
December 31, 2001, and stockholders' equity as of
December 31, 2001 and 2000.
a.     Deferred
income taxes
As mentioned in Note 4m., as of
January 1, 2000, the Company adopted revised
Bulletin D-4. Under the new methodology of
Bulletin D-4, the Company recognized future tax
consequences based on the difference between the financial
statements and tax basis of assets and liabilities —
temporary differences — as of the date of the
financial statements. Until December 31, 1999, deferred
income taxes were provided for identifiable, non-recurring
timing differences (those expected to reverse over a definite
period of time) at rates in effect at the time such differences
originated, and benefits from tax loss carryforwards were not
allowed to be recognized before the period in which the
carryforward was utilized. For purposes of the reconciliation to
U.S. GAAP, the Company has applied Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes", for all periods presented.
SFAS 109 requires an asset and liability
method of accounting whereby deferred taxes are recognized for
the tax consequences of all temporary differences between the
financial statement carrying amounts and the related tax basis
of assets and liabilities. Under U.S. GAAP, the effect on
deferred taxes of a change in tax rate is recognized in income
in the period that includes the enactment date.
b.     Pre-operating
costs
Under Mexican GAAP, the Company capitalized
certain pre-operating costs. Under U.S. GAAP, pre-operating
costs are expensed as incurred. As mentioned in Note 2, the
Company no longer consolidates Iusacell PCS. Consequently, in
2000, the investment is recorded at cost and the pre-operating
costs which were expected to be amortized under Mexican GAAP
once operations commenced will now form part of the basis of the
investment.
c.     Derivative
financial instruments
As mentioned in Note 21, the Company has
entered into interest rate collar agreements to hedge an
aggregate notional amount of U.S.$50,000 of its floating rate
debt. Additionally, the Company purchased foreign-currency
forward exchange contracts, which at December 31, 2001,
hedged a notional amount of U.S.$201,000 in debt. The Company
employs risk management strategies using foreign currency
forwards and interest rate collar agreements. The Company does
not hold derivatives for trading purposes.
As mentioned in Note 4e., effective
January 1, 2001, the Company adopted Bulletin C-2,
which requires that all financial instruments, including those
used for hedging purposes, be recorded in the balance sheet at
their fair value and changes in the fair value to be recorded in
the income statement for each period. Bulletin C-2 also
requires that derivative financial instruments used for hedging
purposes, be recorded in the balance sheet and valued using the
same valuation criteria used to value the hedged asset or
liability. Based on
F-35
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
this valuation criteria, under Mexican GAAP since
the hedged liabilities are not carried at fair value, the
Company did not record the derivative financial instruments
related to those hedged liabilities at fair value but rather,
the Company keeps the derivative financial instrument
instruments valued at the exchange rate at the end of the year.
Prior to January 1, 2001, derivative financial instruments
were recorded on a cash basis under Mexican GAAP.
Under U.S. GAAP, effective January 1, 2001,
the Company adopted SFAS 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended
by SFAS 137 and 138. Under FAS 133, all derivatives
are also recognized on the balance sheet at their fair value.
The Company's derivative financial
instruments are classified as cash flow hedges based on certain
criteria established by SFAS 133. Accordingly, the
effective portion of the gain or loss of the hedged instrument
is reported in accumulated other comprehensive income, and its
ineffective portion is reported in earnings. All of the
Company's derivatives were considered highly effective. The
portion of accumulated other comprehensive income to be
reclassified into earnings over the next 12 months is
expected to be immaterial.
Prior to January 1, 2001, the differential
to be paid or received as interest rates changed was accrued and
recognized as an adjustment of interest expenses at the balance
sheet date. Additionally, the related amount payable or
receivable from counter-parties was included in accrued other
expenses at the balance sheet date.
The cumulative effect on the adoption of this new
accounting pronouncement amounted to Ps.6,478 as of
January 1, 2001.
d.     Gain from the
exchange of non-monetary assets
In 2001, the Company entered into a fiber optic
cable swap agreement with Telereunión to exchange certain
long-distance fiber optic cables fair valued at Ps.142,679.
Under Mexican GAAP, the Company recorded the transaction as both
an acquisition (at the carrying value of the asset sold) and
sale of fixed assets based on the contract amount, resulting in
a gain on the sale of Ps.137,397, for the year ended
December 31, 2001. Under U.S. GAAP, because the assets
exchanged are similar productive assets and, on a net basis, no
cash was exchanged, the transaction does not result in the
recognition of earnings. Consequently, under U.S. GAAP, the
acquisition and sale would not have been recorded.
In December 1998, the Company entered into
another similar fiber optic cable swap agreement with Bestel for
Ps.244,663, resulting in a gain on the sale of Ps.213,063 that
was not recorded under U.S. GAAP.
The cumulative effect of this type of
transactions at December 31, 2001 is Ps.350,460.
e.     Sale-leaseback
transaction with MATC Celular
As mentioned in Note 8c., during 2001 the Company
sold and leased-back 244 non strategic towers to MATC Celular.
Under Mexican GAAP, sale-leaseback transactions
are recognized with the use of the general criteria for capital
and operating lease transactions pursuant to Bulletin D-5,
"Leases". The timing of the recognition of a gain
derived from sale-leaseback transactions should be based on the
subsequent lease classification criteria of the leaseback
portion of the transaction. If the subsequent leaseback is
accounted for as an operating lease, full immediate gain
recognition is allowed whereas if the subsequent leaseback is
accounted for as a capital lease, the gain is deferred and
amortized in proportion with the estimated useful life of the
asset leased. Based upon these criteria, the sale-leaseback
agreement with MATC was recorded by the Company as an operating
lease and consequently, the Ps.307,886 gain was recognized at
the date of the sale.
F-36
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Under U.S. GAAP, SFAS 28, "Accounting
for Sales with Lease Backs", this sale-leaseback
transactions should be recognized as a single financing
transaction in which any profit or loss on the sale is deferred
and amortized by the seller, who becomes the lessee. As the
Company retained "more than a minor part but less than
substantially all" of the use of the assets leased and the
profit on the sale does not exceed the present value of the
minimum lease payments, the Company deferred Ps.270,879 of the
gain at the transaction date. In addition, as the leaseback
qualified as an operating lease, the Company is amortizing the
deferred gain against the gross rental charged to expense over
the lease term. Consequently, the U.S. GAAP net income for the
year ended December 31, 2001 was decreased Ps.261,124.
f.     Capitalized
interest
Mexican GAAP allows, but does not require,
capitalization of financing costs as part of the cost of assets
under construction. Financing costs capitalized include interest
costs, gains from monetary position and foreign exchange losses.
U.S. GAAP requires the capitalization of interest
during the construction of qualifying assets. In an inflationary
economy, such as Mexico, acceptable practice is to capitalize
interest net of the monetary gain on the related Mexican Peso
debt, but not on U.S. dollar or other stable currency debt.
U.S. GAAP does not allow the capitalization of foreign
exchange losses.
g.     Amortization
of goodwill
Under Mexican GAAP, the Company amortizes
goodwill on a straight-line basis over a period of 20 years.
In July 2001, the FASB issued SFAS 141,
"Business Combinations," and No. 142,
"Goodwill and Other Intangible Assets." SFAS 141
supercedes Accounting Principles Board Opinion
(APB) No. 16, "Business Combinations" and
amends or supercedes a number of related interpretations of APB
16. SFAS 141 eliminates the pooling-of-interests method of
accounting for business combinations and changes the criteria to
recognize intangible assets apart from goodwill. SFAS 142
supercedes APB 17, "Intangible Assets." Under
SFAS 142, goodwill and indefinite-lived intangible assets
are no longer amortized but are reviewed annually, or more
frequently if impairment indicators arise, for impairment.
SFAS 141 is effective for any business
combination accounted for by the purchase method that is
completed after June 30, 2001. Accordingly, the Company
applied SFAS 141 to the Portatel acquisition and
SFAS 142 to the intangible assets acquired therein.
The provisions of SFAS 142 are required to
be applied to goodwill and other intangible assets acquired
prior to July 1, 2001 starting with fiscal years beginning
after December 15, 2001. The Company expects that due to
the adoption of SFAS 141 and 142, amortization of
approximately Ps.169,833, corresponding to all of the
Company's goodwill at December 31, 2001, will not be
recorded during 2002, which previously would have been.
h.     Effect of
inflation accounting on U.S. GAAP adjustments
In order to determine the net effect on the
financial statements of recognizing certain of the adjustments
described above, it is necessary to recognize the effects of
applying the Mexican GAAP inflation accounting principles (see
Note 4b.) to such adjustments.
F-37
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
i.     Minority
interest
Under Mexican GAAP, the minority interest in
consolidated subsidiaries is presented as a separate component
within the stockholders' equity section of the consolidated
balance sheet. For U.S. GAAP purposes, minority interest is not
included in stockholders' equity and accordingly, is
excluded to arrive at U.S. GAAP stockholders' equity.
j.     Provision for
consolidation of facilities
During the year ended December 31, 1996, the
Company recorded a provision for consolidation of facilities
related to the sale of its then corporate headquarters. Since
the Company has not had the ability to remove such headquarters
from operations, under U.S. GAAP, pursuant to the provisions of
SFAS 121, "Accounting for the Impairment of Long-Lived
assets and for Long-Lived Assets to Be Disposed Of," an
impairment charge would not have been recorded at
December 31, 1996, therefore, for U.S. GAAP, the provision
is reversed.
k.     Net income
(loss) and stockholders' equity under U.S.
GAAP
The following is a summary of net
(loss) profit and stockholders' equity adjusted to
take into account certain material differences between Mexican
GAAP and U.S. GAAP:
Years Ended December 31,
2001
2000
1999
Net (loss) profit under Mexican GAAP
Ps.
(297,676
)
Ps.
(672,420
)
Ps.
435,049
Deferred income taxes (Note 23a.)
—
—
(15,102
)
Pre-operating costs (Note 23b.)
—
—
(78,522
)
Derivative financial instruments (Note 23c.)
—
6,146
7,732
Gain from the exchange of non-monetary assets
    (Note 23d.)
(116,091
)
—
—
Gain on the sale lease-back transaction
    (Note 23e.)
(261,124
)
—
—
Capitalized interest (Note 23f.)
91,878
—
—
Amortization of goodwill (Note 23g.)
1,989
—
—
Minority interest (Note 23i.)
5,921
—
—
Effect of inflation accounting on U.S. GAAP
    adjustments (Note 23h.)
288
(253
)
(22,290
)
Net (loss) profit under U.S. GAAP
Ps.
(574,815
)
Ps.
(666,527
)
Ps.
326,867
F-38
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
As of December 31,
2001
2000
Stockholders' equity under Mexican GAAP
Ps.
8,512,675
Ps.
7,817,132
Pre-operating costs (Note 23b.)
(78,522
)
(78,522
)
Derivative financial instruments (Note 23c.)
(183,876
)
161
Gain from the exchange of non-monetary assets
    (Note 23d.)
(329,154
)
(213,063
)
Gain on the sale lease-back transaction
    (Note 23e.)
(261,124
)
—
Capitalized interest (Note 23f.)
91,878
—
Amortization of goodwill (Note 23g.)
1,989
—
Minority interest (Note 23i.)
(119,165
)
(25,442
)
Provision for consolidation of facilities
    (Note 23j.)
19,741
19,741
Stockholders' equity under U.S. GAAP
Ps.
7,654,442
Ps.
7,520,007
Provided below is an analysis of changes in
stockholders' equity under U.S. GAAP:
As of December 31,
2001
2000
Opening balance
Ps.7,520,007
6,884,123
Increase in capital stock and contributions for
    future capital stock increases
893,575
1,302,158
Net loss for the year
(574,815
)
(666,527
)
Other comprehensive income
(184,325
)
253
Closing balance
Ps.7,654,442
Ps.7,520,007
l) Discontinued operations
As described in Note 19, in December 1998,
Old Iusacell decided to discontinue the operations of its
subsidiary, Cellular Solutions, which was in the business of
selling accessories for cellular handsets, and consequently,
recognized a gain (loss) from discontinued operations
amounting to Ps.8,865 and (Ps.1,747), for the years ended
December 31, 2000 and 1999, respectively. Under U.S. GAAP,
the closing of this subsidiary does not constitute a
discontinued operation under APB No. 30. Accordingly, the
gain (loss) from discontinued operations is recorded as
operating income (expense).
m) Extraordinary item
Under Mexican GAAP, the utilization of the
Company's tax loss carryforwards in 1999 is classified as
an extraordinary item and presented as a separate line item in
the consolidated income statement. Under U.S. GAAP, the
utilization of the Company's tax loss carryforward is
recorded as a component of the taxation expense.
n) Depreciation
Under Mexican GAAP, depreciation is not included
in the measure of gross profit. Under U.S. GAAP, Ps.1,204,824,
Ps.1,292,146 and Ps.788,430 for the years ended
December 31, 2001, 2000 and 1999, respectively, are
reclassified to cost of sales.
F-39
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
o) Supplementary U.S. GAAP
disclosures
1) Cash flow information
Under U.S. GAAP, SFAS 95, "Statement of Cash
Flows", a statement of cash flows is required, which
presents only movements in cash and excludes non-cash items.
SFAS 95 does not provide any specific guidance with respect
to inflation-adjusted financial statements. However, it is
accepted practice to adjust cash flows from operating activities
for the monetary gains and losses and unrealized foreign
exchange gains and losses.
Years Ended December 31,
2001
2000(*)
1999(*)
Operating activities:
Net (loss) profit under U.S. GAAP
Ps. (574,815
)
Ps. (666,527
)
Ps. 326,867
Adjustments to reconcile net loss to cash (used
    in) provided by operating activities:
Depreciation
1,204,824
1,292,146
788,430
Amortization
1,340,569
1,088,814
831,843
Gain on the sale of towers
(46,762
)
—
—
Equity in (profit) loss of associated
    companies
(2,542
)
(2,478
)
(2,462
)
Gain on sale of equity investments
(3,976
)
—
56,622
Increase in allowance for doubtful accounts
108,432
94,531
105,526
Increase (decrease) in allowance for
    obsolete and slow-moving inventories
66,014
42,408
(5,443
)
Minority interest
(26,615
)
(16,461
)
(20,400
)
Deferred income taxes and employee profit sharing
—
—
165,993
Gain on net monetary position and foreign
    exchange losses
(261,108
)
(354,564
)
(940,036
)
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable
(91,178
)
147,484
(645,561
)
Inventories
(42,692
)
(82,115
)
32,157
Increase (decrease) in:
Trade accounts payable and related parties
75,082
(167,571
)
1,633,265
Taxes and other payable
(213,930
)
124,280
(72,119
)
Income tax
20,694
36,169
(38,492
)
Other
(11,334
)
722
(570
)
Net cash provided by operating activities
1,540,663
1,536,838
2,215,620
F-40
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Years Ended December 31,
2001
2000(*)
1999(*)
Financing activities:
Proceeds from notes payable and long-term debt
—
120,391
1,197,349
Payments of notes payable and long-term debt
(24,024
)
(743,812
)
(789,183
)
Contributions for future capital stock increases
893,386
1,302,158
—
Capital stock increases
79
—
—
Net cash provided by financing activities
869,441
678,737
408,166
Investing activities:
Purchase of property and equipment, net
(1,602,862
)
(2,055,998
)
(1,708,907
)
Proceeds from sales of investments in associated
    companies
3,976
68,261
13,486
Proceeds from the sale of the towers
358,499
—
—
Acquisition of Portatel, net of cash
(495,320
)
—
—
Purchase of other assets
(819,204
)
(113,641
)
(1,012,479
)
Net cash used in investing activities
(2,554,911
)
(2,101,378
)
(2,707,900
)
Translation and inflation effects in cash
(28,003
)
(24,393
)
(39,428
)
Net (decrease) increase in cash
(172,810
)
89,804
(123,542
)
Cash at beginning of year
292,354
202,550
326,092
Cash at the end of year
Ps. 119,544
Ps. 292,354
Ps. 202,550
Interest paid
Ps. 384,754
Ps. 401,683
Ps. 390,386
Income tax paid
Ps. 114,268
Ps. 140,784
Ps. 102,516
Supplemental disclosures of non-cash activities:
Conversion of debt to equity
Ps. 110
Ps. —
Ps. 1,839,160
(*)
Certain reclassifications were made in prior
    years to conform to classifications used in the most recent year.
2) The assets tax charged to the provision
for assets tax for the years ended December 31, 2001, 2000
and 1999 was as follows:
Years Ended December 31,
2001
2000
1999
Asset tax not offset by current taxes
Ps.146,404
Ps.156,335
Ps.150,889
Deferred tax
—
—
15,102
Provision for taxes
Ps.146,404
Ps.156,335
Ps.165,991
F-41
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
3) Deferred income taxes
Significant components of deferred income taxes
under U.S. GAAP are as follows:
December 31, 2001
SFAS 109
SFAS 109
applied to
applied to
Mexican GAAP
U.S. GAAP
Balances
adjustments
Total
Deferred assets:
Allowance for doubtful accounts
73,812
—
73,812
Net operating loss carryforwards and tax credits
1,223,303
—
1,223,303
Reorganization reserve
24,925
—
24,925
Gain from the exchange of non-monetary assets
—
115,204
115,204
Pre-operating costs
—
27,483
27,483
Derivative financial instruments
—
64,357
64,357
Gain on the sale lease-back transaction
—
91,393
91,393
Valuation allowance
(238,465
)
(266,280
)
(504,745
)
Deferred tax assets
1,083,575
32,157
1,115,732
Deferred liabilities:
Inventories
88,791
—
88,791
Property and equipment
653,620
—
653,620
Cellular telephones to be amortized
61,239
—
61,239
Concessions
107,894
—
107,894
Capitalized interest
—
32,157
32,157
Deferred tax liabilities
911,544
32,157
943,701
Net deferred tax assets
172,031
—
172,031
F-42
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31, 2000
SFAS 109
SFAS 109
applied to
applied to
Mexican GAAP
U.S. GAAP
Balances
adjustments
Total
Deferred assets:
Allowance for doubtful accounts
77,589
—
77,589
Net operating loss carryforwards and tax credits
1,160,676
—
1,160,676
Reorganization reserve
26,050
—
26,050
Gain from the exchange of non-monetary assets
—
74,572
74,572
Pre-operating costs
—
27,483
27,483
Valuation allowance
(310,167
)
(101,999
)
(412,166
)
Deferred tax assets
954,148
56
954,204
Deferred liabilities:
Inventories
Ps.
87,286
Ps.
—
Ps.
87,286
Property and equipment
423,894
—
423,894
Cellular telephones to be amortized
256,072
—
256,072
Concessions
7,296
—
7,296
Derivative financial instruments
—
56
56
Deferred tax liabilities
774,548
56
774,604
Net deferred tax assets
Ps.
179,600
Ps.
—
Ps.
179,600
4) New Accounting Pronouncements
The FASB recently issued SFAS 143,
"Accounting for Obligations Associated with the Retirement
of Long-Lived Assets", which is effective for fiscal years
beginning after June 15, 2002. The objectives of
SFAS 143 are to establish accounting standards for the
recognition and measurement of an asset retirement obligation
and its associated asset retirement cost.
In 2001, the FASB issued SFAS No. 144
"Accounting for the Impairment of Long-Lived Assets"
(SFAS 144) which supersedes SFAS No. 121
"Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of" (SFAS 121), and
APB No. 30, "Reporting the Results of
Operations — Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions".
SFAS 144 provides new guidance on (1) the recognition
of impairment losses on long-lived assets to be held and used or
to be disposed of and (2) how the results of a discontinued
operation are to be measured and presented. It also broadens the
definition of what constitutes a discontinued operation. It is
effective for fiscal years beginning after December 15,
2001.
In April of 2002, the FASB issued SFAS 145,
"Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical
Corrections." As a result, companies will no longer be
allowed to classify gains and losses from extinguishments of
debt as extraordinary items unless they meet the criteria of
APB 30. Gain and losses from extinguishments of debt that
have been classified as extraordinary in prior years that do not
meet the criteria of APB 30 shall be reclassified on a go
forward basis. In addition, SFAS 145 requires that capital
leases that are modified so that the resulting lease agreement
is classified as an operating lease be accounted for under the
sale-leaseback provisions of SFAS 28 or 98, as applicable,
instead of SFAS 13. The provisions of this statement with
regard to SFAS 4 will be effective for fiscal years
beginning after May 15, 2002, and those for SFAS 13
will be effective for transactions occurring after May 15,
2002.
F-43
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The Company is presently evaluating the impact,
if any, that these new standards will have on its consolidated
financial statements.
5) U.S. GAAP requires the desegregation of
the account balances as disclosed below. There is no similar
requirement under Mexican GAAP. As of December 31, the
account balances were as follows:
2001
2000
Recoverable taxes and other:
Interconnection fees
Ps.
88,463
Ps.
142,425
Recoverable VAT
205,985
204,624
Other taxes
22,093
60,296
Other
217,179
106,844
Ps.
533,720
Ps.
514,189
2001
2000
Taxes and other payables:
Taxes and rights payable
Ps.
201,931
Ps.
178,413
Interest payable
83,878
100,489
Other
527,193
709,640
Ps.
813,002
Ps.
988,542
6) A significant portion of our trade
receivables is represented by a small number of distributors. In
2001, our three largest distributors accounted for 44% and 24%
of our net trade accounts receivable as of December 31,
2001 and 2000. Management has established certain measures to
reduce the risk associated with this concentration such as
certain guarantees and property liens. Management believes that
this distributor concentration will be reduced over time as the
size of our operations grows. However, results of operations
could be negatively affected, at least in the short term, if any
defaults on payment occur with respect to these distributors.
Note 24 — Condensed
Consolidated Financial Information
As mentioned in Note 10, in July 1997, the
Company issued U.S.$150,000 of senior notes due 2004 as part of
its refinancing program. The Notes Due 2004 are guaranteed on a
senior subordinated, basis pursuant to guarantees by most of the
Company's directly and indirectly wholly owned subsidiaries
(Guarantor Subsidiaries). The subsidiary guarantees are full,
unconditional, joint and several.
Presented below is condensed consolidating
financial information as of December 31, 2001 and 2000 and
for the three years ended December 31, 2001 for i) the
parent company; ii) the combined Guarantor Subsidiaries;
iii) the combined non-Guarantor Subsidiaries;
iv) eliminations; and v) the Company's
consolidated financial statements.
Where applicable, the equity method has been used
by the parent company with respect to its investments in certain
subsidiaries for the respective periods presented.
The Company has not presented separate financial
statements and other disclosure concerning each of the Guarantor
Subsidiaries because management has determined that such
information is not material to investors.
F-44
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED BALANCE SHEET
As of December 31, 2001
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
Current assets:
Cash and short-term investments
Ps.
126,071
Ps.
(4,037
)
Ps.
(2,490
)
Ps.
—
Ps.
119,544
Accounts receivable:
Trade, net
—
660,092
34,069
(98,875
)
595,286
Related parties
349,024
1,476,140
—
(1,782,117
)
43,047
Recoverable taxes and other
127,695
266,138
326,877
(186,990
)
533,720
476,719
2,402,370
360,946
(2,067,982
)
1,172,053
Inventories, net
3,369
204,680
31,721
—
239,770
Total current assets
606,159
2,603,013
390,177
(2,067,982
)
1,531,367
Investment in associated companies
4,002,044
216,356
—
(4,184,337
)
34,063
Property and equipment, net
6,809,332
723,081
1,329,609
(1,756
)
8,860,266
Other assets, net
739,403
444,038
325,640
372,223
1,881,304
Excess of investment cost over book value, net
1,885,623
—
—
—
1,885,623
Total assets
Ps.
14,042,561
Ps.
3,986,488
Ps.
2,045,426
Ps.
(5,881,852
)
Ps.
14,192,623
Current liabilities:
Notes payable and notes payable to suppliers
Ps.
150,034
Ps.
—
Ps.
83,501
Ps.
—
Ps.
233,535
Trade accounts payable
161,510
347,909
83,636
(43,111
)
549,944
Related parties
—
—
1,941,910
(1,781,394
)
160,516
Taxes and other payable
141,571
702,726
264,111
(295,406
)
813,002
Income tax
38,966
7,989
10,212
—
57,167
Total current liabilities
492,081
1,058,624
2,383,370
(2,119,911
)
1,814,164
Long-term debt
3,811,042
—
—
—
3,811,042
Notes payable to suppliers
51,686
3,056
—
—
54,742
Total liabilities
4,354,809
1,061,680
2,383,370
(2,119,911
)
5,679,948
Commitments and contingencies
—
—
—
—
—
Stockholders' equity:
Capital contributions
15,137,687
6,132,335
2,374,920
(8,485,965
)
15,158,977
Earned capital
(5,449,935
)
(3,207,527
)
(2,712,864
)
4,598,938
(6,771,388
)
Minority interest
—
—
—
125,086
125,086
Total stockholders' equity
9,687,752
2,924,808
(337,944
)
(3,761,941
)
8,512,675
Total liabilities and stockholders' equity
Ps.
14,042,561
Ps.
3,986,488
Ps.
2,045,426
Ps.
(5,881,852
)
Ps.
14,192,623
Total stockholders' equity under Mexican GAAP
Ps.
9,687,752
Ps.
2,924,808
Ps.
(337,944
)
Ps.
(3,761,941
)
Ps.
8,512,675
Pre-operating costs
—
—
(78,522
)
—
(78,522
)
Derivative financial instruments
(183,876
)
—
—
—
(183,876
)
Gain from exchange of non-monetary assets
—
—
(329,154
)
—
(329,154
)
Gain on the sale lease-back transaction
(143,558
)
(113,153
)
(4,413
)
—
(261,124
)
Capitalized interest
91,878
—
—
—
91,878
Amortization of goodwill
1,989
—
—
—
1,989
Minority interest
—
—
—
(119,165
)
(119,165
)
Provision for consolidation of facilities
19,741
—
—
—
19,741
Total stockholders' equity under U.S. GAAP
Ps.
9,473,926
Ps.
2,811,655
Ps.
(750,033
)
Ps.
(3,881,106
)
Ps.
7,654,442
F-45
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED INCOME
STATEMENT
For the Year Ended December 31, 2001
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Total revenues
Ps.1,034,734
Ps.8,744,472
Ps.1,323,932
Ps.(4,814,318
)
Ps.6,288,820
Total cost of sales
76,066
3,759,312
435,141
(2,415,831
)
1,854,688
Gross profit
958,668
4,985,160
888,791
(2,398,487
)
4,434,132
Operating expenses
(36,484
)
3,883,053
488,425
(2,422,620
)
1,912,374
Depreciation and amortization
1,229,448
1,216,293
131,020
(8,073
)
2,568,688
Operating (loss) profit
(234,296
)
(114,186
)
269,346
32,206
(46,930
)
Integral financing results:
Interest (income) expense, net
195,337
(73,699
)
260,495
3,763
385,896
Foreign exchange (gain) loss, net
(73,900
)
(18,018
)
(3,876
)
2
(95,792
)
(Gain) loss from monetary position
(120,003
)
49,647
(90,918
)
(3,754
)
(165,028
)
1,434
(42,070
)
165,701
11
125,076
Equity participation in net (gain) loss of
    associated companies
(3,497
)
(15,264
)
—
12,243
(6,518
)
Provision for assets tax
58,774
87,022
7,090
(6,482
)
146,404
Cumulative effect of the adoption of the new
    accounting principle
6,478
—
—
—
6,478
Minority interest
191
—
—
(20,885
)
(20,694
)
Net loss for the year
Ps.(297,676
)
Ps.(143,874
)
Ps. 96,555
Ps. 47,319
Ps.(297,676
)
Net loss for the year under Mexican GAAP
Ps.(297,676
)
Ps.(143,874
)
Ps. 96,555
Ps. 47,319
Ps.(297,676
)
Gain from the exchange of non-monetary assets
—
—
(116,091
)
—
(116,091
)
Gain on the sale lease-back transaction
(143,558
)
(113,153
)
(4,413
)
—
(261,124
)
Capitalized interest
91,878
—
—
—
91,878
Amortization of goodwill
1,989
—
—
—
1,989
Minority interest
—
—
—
5,921
5,921
Effects of inflation on US GAAP adjustments
288
—
—
—
288
Net (loss) profit for the year under US GAAP
Ps.(347,079
)
Ps.(257,027
)
Ps. (23,949
)
Ps. 53,240
Ps. 574,815
F-46
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
For the Year Ended December 31,
2001
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Operating activities:
Net (loss) profit for the year
Ps.
(347,079
)
Ps.
(257,027
)
Ps.
(23,949
)
Ps.
53,240
Ps.
(574,815
)
Adjustments to reconcile net loss to cash
    provided by (used in) operating activities:
Depreciation and amortization
1,227,459
1,216,293
109,714
(8,073
)
2,545,393
Equity in net loss (earnings) of associated
    companies and net gain on sale of equity investments
(6,518
)
—
—
—
(6,518
)
Gain on the sale of the towers
(25,709
)
(20,263
)
(790
)
—
(46,762
)
Increase in allowance for doubtful accounts
—
108,432
—
—
108,432
Increase in allowance for obsolete and
    slow-moving inventories
—
66,014
—
—
66,014
Minority interest
(191
)
—
—
(26,424
)
(26,615
)
Gain on net monetary position and foreign
    exchange losses
(187,713
)
31,629
(94,794
)
(10,230
)
(261,108
)
Changes in operating assets and liabilities:
Accounts receivable
(102,290
)
(31,075
)
41,480
707
(91,178
)
Inventories
754
(25,537
)
(17,053
)
(856
)
(42,692
)
Trade accounts payable and related parties
608,170
(230,298
)
(291,453
)
(11,337
)
75,082
Taxes and other payable
29,943
(241,831
)
65,985
(68,027
)
(213,930
)
Income Tax
38,966
7,982
(2,354
)
(23,900
)
20,694
Other
51,686
(335
)
(27
)
(62,658
)
(11,334
)
Net cash provided by (used in) operating
    activities
1,287,478
623,984
(213,241
)
(157,558
)
1,540,663
Investing activities:
Purchase of property and equipment, net
(1,328,368
)
66,598
(441,282
)
100,190
(1,602,862
)
Proceeds from the sale of the towers
197,092
155,349
6,058
—
358,499
Investment in associated companies, net of cash
    acquired
(491,344
)
—
—
—
(491,344
)
Purchase of other assets
(681,350
)
(854,862
)
(464,746
)
1,181,754
(819,204
)
Net cash (used in) provided by investing
    activities
(2,303,970
)
(632,915
)
(899,970
)
1,281,944
(2,554,911
)
Financing activities:
Payments of notes payable and long-term debt
(24,024
)
—
—
—
(24,024
)
Capital stock increases and contributions for
    future capital stock increases
893,465
—
1,108,703
(1,108,703
)
893,465
Net cash provided by (used in) financing
    activities
869,441
—
1,108,703
(1,108,703
)
869,441
Translation and inflation effects in cash
(12,017
)
(214
)
(89
)
(15,683
)
(28,003
)
Net decrease in cash
(159,068
)
(9,145
)
(4,597
)
—
(172,810
)
Cash at beginning of year
285,139
5,108
2,107
—
292,354
Cash at the end of year
Ps.
126,071
Ps.
(4,037
)
Ps.
(2,490
)
Ps.
—
Ps.
119,544
F-47
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED BALANCE SHEET
As of December 31, 2000
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
ASSETS
Current assets:
Cash and short-term investments
Ps.
285,139
Ps.
5,108
Ps.
2,107
Ps.
—
Ps.
292,354
Accounts receivable:
Trade, net
—
654,046
10,878
(27,823
)
637,101
Related parties
999,939
1,606,090
36,214
(2,591,889
)
50,354
Recoverable taxes and other
25,405
349,541
391,549
(252,306
)
514,189
1,025,344
2,609,677
438,641
(2,872,018
)
1,201,644
Inventories, net
4,123
245,157
14,669
(14,561
)
249,388
Total current assets
1,314,606
2,859,942
455,417
(2,886,579
)
1,743,386
Investment in associated companies
2,026,594
291,181
—
(2,284,823
)
32,952
Property and equipment, net
6,549,393
822,444
888,327
(3,305
)
8,256,859
Other assets, net
395,200
989,998
175,869
328,552
1,889,619
Excess of investment cost over book value, net
1,888,559
—
—
—
1,888,559
Total assets
Ps.
12,174,352
Ps.
4,963,565
Ps.
1,519,613
Ps.
(4,846,155
)
Ps.
13,811,375
Current liabilities:
Notes payable
Ps.
1,464,450
Ps.
—
Ps.
—
Ps.
—
Ps.
1,464,450
Trade accounts payable
204,255
293,220
39,839
(43,580
)
493,734
Related parties
—
414,937
2,313,375
(2,573,177
)
155,135
Taxes and other payable
111,628
944,557
198,126
(265,769
)
988,542
Income tax
—
7
12,565
25,591
38,163
Total current liabilities
1,780,333
1,652,721
2,563,905
(2,856,935
)
3,140,024
Long-term debt
2,850,800
—
—
—
2,850,800
Other liabilities long-term
—
3,391
27
1
3,419
Total liabilities
4,631,133
1,656,112
2,563,932
(2,856,934
)
5,994,243
Commitments and contingencies
—
—
—
—
—
Stockholders' equity:
Capital contributions
12,938,520
6,132,736
1,266,217
(7,374,229
)
12,963,244
Earned capital
(6,697,459
)
(2,825,283
)
(2,310,536
)
5,359,566
(6,473,712
)
Minority interest
—
—
—
25,442
25,442
Contributions for future capital Stock increases
1,302,158
—
—
—
1,302,158
Total stockholders' equity
7,543,219
3,307,453
(1,044,319
)
(1,989,221
)
7,817,132
Total liabilities and stockholders' equity
Ps.
12,174,352
Ps.
4,963,565
Ps.
1,519,613
Ps.
(4,846,155
)
Ps.
13,811,375
Total stockholders' equity under Mexican GAAP
Ps.
7,543,219
Ps.
3,307,453
Ps.
(1,044,319
)
Ps.
(1,989,221
)
Ps.
7,817,132
Minority interest
—
—
—
(25,442
)
(25,442
)
Pre-operating costs
—
—
(78,522
)
—
(78,522
)
Derivative financial instruments
161
—
—
—
161
Gain from exchange of non-monetary assets
—
—
(213,063
)
—
(213,063
)
Provision for consolidation of facilities
19,741
—
—
—
19,741
Total stockholders' equity under U.S. GAAP
Ps.
7,563,121
Ps.
3,307,453
Ps.
(1,335,904
)
Ps.
(2,014,663
)
Ps.
7,520,007
F-48
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED INCOME
STATEMENT
For the Year Ended December 31, 2000
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Total revenues
Ps.
1,021,567
Ps.
7,928,632
Ps.
753,978
Ps.
(3,974,467
)
Ps.
5,729,710
Total cost of sales
63,992
3,394,991
393,959
(2,032,826
)
1,820,116
Gross profit
957,575
4,533,641
360,019
(1,941,641
)
3,909,594
Operating expenses
59,145
3,450,438
333,675
(1,925,708
)
1,917,550
Depreciation and amortization
1,289,980
992,655
106,065
(7,740
)
2,380,960
Operating (loss) profit
(391,550
)
90,548
(79,721
)
(8,193
)
(388,916
)
Integral financing result:
Interest expense (income), net
276,760
(72,425
)
305,457
(3
)
509,789
Foreign exchange loss (gain), net
12,976
5,934
656
—
19,566
(Gain) loss from monetary position
(324,248
)
97,266
(164,169
)
16,769
(374,382
)
(34,512
)
30,775
141,944
16,766
154,973
Equity participation in net (gain) loss of
    associated companies
290,751
(64,820
)
—
(228,409
)
(2,478
)
Provision for assets tax
24,631
118,323
13,381
—
156,335
Minority interest
—
—
—
(16,461
)
(16,461
)
Profit from discontinued operations
—
—
—
(8,865
)
(8,865
)
Net loss for the year
Ps.
(672,420
)
Ps.
6,270
Ps.
(235,046
)
Ps.
228,776
Ps.
(672,420
)
Net loss for the year under Mexican GAAP
Ps.
(672,420
)
Ps.
6,270
Ps.
(235,046
)
Ps.
228,776
Ps.
(672,420
)
Derivative financial statements
6,146
—
—
—
6,146
Effects of inflation on US GAAP adjustments
(253
)
—
—
—
(253
)
Net (loss) profit for the year under US GAAP
Ps.
(666,527
)
Ps.
6,270
Ps.
(235,046
)
Ps.
228,776
Ps.
(666,527
)
F-49
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
For the Year Ended December 31,
2000
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Operating activities:
Net (loss) profit for the year
Ps.
(666,527
)
Ps.
6,270
Ps.
(235,046
)
Ps.
228,776
Ps.
(666,527
)
Adjustments to reconcile net loss to cash
    provided by (used in) operating activities:
Depreciation and amortization
1,289,980
992,655
106,065
(7,740
)
2,380,960
Equity in net loss (earnings) of associated
    companies and net gain on sale of equity investments
290,751
—
—
(293,229
)
(2,478
)
Increase in allowance for doubtful accounts
—
94,531
—
—
94,531
Increase in allowance for obsolete and
    slow-moving inventories
—
42,408
—
—
42,408
Minority interest
—
—
—
(16,461
)
(16,461
)
Gain on net monetary position and foreign
    exchange losses
(311,019
)
103,200
(163,513
)
16,768
(354,564
)
Changes in operating assets and liabilities:
Accounts receivable
—
(52,819
)
(619
)
200,922
147,484
Inventories
(1,833
)
(83,759
)
(4,278
)
7,755
(82,115
)
Trade accounts payable and related parties
826,801
(502,655
)
387,938
(879,655
)
(167,571
)
Taxes and other payable
(123,924
)
431,221
40,453
(223,470
)
124,280
Income Tax
(1,458
)
(103
)
12,139
25,591
36,169
Other
—
762
(40
)
—
722
Net cash provided by (used in) operating
    activities
1,302,771
1,031,711
143,099
(940,743
)
1,536,838
Investing activities:
Purchase of property and equipment, net
(1,673,199
)
52,352
(107,968
)
(327,183
)
(2,055,998
)
Investment in associated companies, net cash
    acquired
(192,315
)
45,078
—
215,498
68,261
Purchase of other assets
119,568
(1,003,434
)
(47,449
)
817,674
(113,641
)
Net cash (used in) provided by investing
    activities
(1,745,946
)
(906,004
)
(155,417
)
705,989
(2,101,378
)
Financing activities:
Proceeds from notes payable and long-term debt
126,655
—
—
(6,264
)
120,391
Payments of notes payable and long-term debt
(743,812
)
—
—
—
(743,812
)
Contributions for future capital Stock increases
1,302,158
(191,380
)
14,270
177,110
1,302,158
Net cash provided by (used in) financing
    activities
685,001
(191,380
)
14,270
170,846
678,737
Translation and inflation effects in cash
(5,931
)
(9,690
)
(20
)
(8,752
)
(24,393
)
Net increase (decrease) in cash
235,895
(75,363
)
1,932
(72,660
)
89,804
Cash at beginning of year
49,244
80,471
175
72,660
202,550
Cash at the end of year
Ps.
285,139
Ps.
5,108
Ps.
2,107
Ps.
—
Ps.
292,354
F-50
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED INCOME
STATEMENT
For the Year Ended December 31, 1999
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Total revenues
Ps. 713,673
Ps.6,716,000
Ps. 662,795
Ps.(3,309,497
)
Ps.4,782,971
Total cost of sales
25,683
2,653,270
445,134
(1,595,592
)
1,528,495
Gross profit
687,990
4,062,730
217,661
(1,713,905
)
3,254,476
Operating expenses
129,874
3,058,046
293,734
(1,838,465
)
1,643,189
Depreciation and amortization
781,391
772,344
72,234
(5,696
)
1,620,273
Operating (loss) profit
(223,275
)
232,340
(148,307
)
130,256
(8,986
)
Other expenses
—
—
—
26,225
26,225
Integral financing results:
Interest (income) expense, net
(64,966
)
(151,445
)
345,988
176,092
305,669
Foreign exchange gain (loss), net
(198,139
)
(15,920
)
3,800
—
(210,259
)
Gain (loss) from monetary position
(506,610
)
109,836
(180,747
)
(174,546
)
(752,067
)
(769,715
)
(57,529
)
169,041
1,546
(656,657
)
Equity participation in net (gain) loss of
    associated companies
(3,657
)
—
—
57,817
54,160
Provision for assets tax
94,735
31,844
(19
)
486,036
612,596
Minority interest
(19,556
)
1,903
—
(2,747
)
(20,400
)
Amortization of tax loss carry-forwards
—
—
—
(461,707
)
(461,707
)
Loss from discontinued operations
—
—
—
1,748
1,748
Net profit (loss) for the year
Ps. 474,918
Ps. 256,122
Ps. (317,329
)
Ps. 21,338
Ps.(435,049
)
Net profit (loss) for the year under Mexican
    GAAP
Ps. 474,918
Ps. 256,122
Ps. (317,329
)
Ps. 21,338
Ps. 435,049
Deferred income taxes
(15,102
)
—
—
—
(15,102
)
Pre-operating costs
—
—
(78,522
)
—
(78,522
)
Derivative financial instruments
7,732
—
—
—
7,732
Effect of inflation on U.S. GAAP adjustments
(22,290
)
—
—
—
(22,290
)
Net profit (loss) for the year under U.S. GAAP
Ps. 445,258
Ps. 256,122
Ps. (395,851
)
Ps. 21,338
Ps. 326,867
F-51
Table of Contents
GRUPO IUSACELL CELULAR, S. A. DE C. V. AND
SUBSIDIARIES
(subsidiary of Grupo Iusacell, S. A. de C.
V.)
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
For the Year Ended December 31,
1999
Combined
Combined
Parent
Guarantor
Non-guarantor
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
Operating activities:
Net profit (loss) for the year
Ps.
445,258
Ps.
256,122
Ps.
(395,851
)
Ps.
21,338
Ps.
326,867
Adjustments to reconcile net loss to cash
    provided by (used in) operating activities:
Depreciation and amortization
781,391
772,344
72,234
(5,696
)
1,620,273
Equity in net (earnings) loss of associated
    companies and net gain on sale of equity investments
(3,657
)
—
—
57,817
54,160
Increase in allowance for doubtful accounts
—
103,749
1,345
432
105,526
Increase in allowance for obsolete and
    slow-moving inventories
(60
)
(5,291
)
(269
)
177
(5,443
)
Minority interest
(19,556
)
1,903
—
(2,747
)
(20,400
)
Deferred income taxes and employee profit sharing
229,519
(130,256
)
88
66,642
165,993
Gain on net monetary position and foreign
    exchange losses
(658,129
)
25,086
(176,902
)
(130,091
)
(940,036
)
Changes in operating assets and liabilities:
Accounts receivable
—
(466,345
)
2,384
(181,600
)
(645,561
)
Inventories
3,607
13,609
19,132
(4,191
)
32,157
Trade accounts payable and related parties
975,331
(94,779
)
111,419
641,294
1,633,265
Taxes and other payable
(270,358
)
362,092
27,606
(191,459
)
(72,119
)
Income tax
(82,672
)
45,177
(1,083
)
86
(38,492
)
Other
—
(573
)
1
2
(570
)
Net cash provided by (used in) operating
    activities
1,400,674
882,838
(339,896
)
272,004
2,215,620
Investing activities:
Purchase of property and equipment, net
(1,163,881
)
(411,304
)
(94,224
)
(39,498
)
(1,708,907
)
Investment in associated companies, net cash
    acquired
291,903
(121,490
)
—
(156,927
)
13,486
Purchase of other assets
(813,847
)
(98,372
)
(17,096
)
(83,164
)
(1,012,479
)
Net cash (used in) provided by investing
    activities
(1,685,825
)
(631,166
)
(111,320
)
(279,589
)
(2,707,900
)
Financing activities:
Proceeds from notes payable and long-term debt
869,120
—
391,521
(63,292
)
1,197,349
Payments of notes payable and long-term debt
(789,183
)
(142,686
)
—
142,686
(789,183
)
Net cash provided by (used in) financing
    activities
79,937
(142,686
)
391,521
79,394
408,166
Translation and inflation effects in cash
(34,999
)
3,922
(8,235
)
(116
)
(39,428
)
Net increase (decrease) in cash
(240,213
)
112,908
(67,930
)
71,693
(123,542
)
Cash at beginning of year
289,458
(32,437
)
68,104
967
326,092
Cash at the end of year
Ps.
49,245
Ps.
80,471
Ps.
174
Ps.
72,660
Ps.
202,550
Note 25 — Subsequent
Events
As mentioned in Note 13c., the Montes Urales
property was subject to a lien. On May 29, 2002, the
Company's complaint was resolved in its favor.
Consequently, the lien will be lifted in the Public Registry of
Property.
F-52
Table of Contents
GRUPO IUSACELL
SCHEDULE II — VALUATION AND
QUALIFYING ACCOUNTS
Years Ended 1999, 2000 and 2001
(Amounts expressed in Thousands of Mexican
Pesos (Ps.)
with Purchasing Power as of December 31,
2001)
Balance at
Charged to
Charged to
Balance at
beginning
costs and
other
end of
of period
expenses
accounts
Deductions
period
Allowance for obsolete and slow-moving inventories
1999
Ps.
14,364
Ps.
(5,443
)
Ps.
0
Ps.
0
Ps.
8,921
2000
8,921
42,408
0
0
51,329
2001
51,329
66,014
0
6,587
110,756
Allowance for doubtful accounts
1999
Ps.
85,771
Ps.
105,526
Ps.
0
Ps.
21,487
Ps.
169,810
2000
169,810
94,531
0
42,657
221,684
2001
221,684
108,432
0
119,225
210,891
S-I
Table of Contents
ITEM
19.     EXHIBITS
1.
By-laws (estatutos) of Grupo Iusacell Celular,
    S.A. de C.V effective April 4, 2001; incorporated by
    reference in the Company's 2000 Annual Report on
    Form 20-F submitted to the SEC in June 2001
2.
(a)
Shareholders Agreement dated as of March 30,
    2001 by and among Iusacell, Bell Atlantic Latin America
    Holdings, Inc., Bell Atlantic International, Inc., Bell Atlantic
    New Zealand Holdings, Inc. and Vodafone Americas B.V.;
    incorporated by reference in the Company's 2000 Annual
    Report on Form 20-F submitted to the SEC in June
    2001
2.
(b)(ii)
Indenture dated as of July 25, 1997 among
    Grupo Iusacell Celular, S.A. de C.V., certain subsidiaries of
    Iusacell Celular, S.A. de C.V. and First Union National Bank, as
    trustee. (incorporated herein by reference to Exhibit 4.1
    of the Registration Statement F-4 — Registration
    Number 333-37431)
**
2.
(c)
Not applicable.
3.
Not applicable.
4.
(a)
Agreement for Equipment, Furnish and Installation
    for Iusacell's Cellular Network, dated as of
    December 10, 1997 among Grupo Iusacell Celular, S.A. de
    C.V., Lucent Technologies World Services, Inc. and Lucent
    Technologies de México, S.A. de C.V. pursuant to which
    Grupo Iusacell Celular, S.A. de C.V. agreed to replace its
    analog wireless cellular network with a new Lucent Technologies
    analog and digital network
***
4.
(b)
Amended and Restated Credit Agreement, dated as
    of July 25, 1997, as amended and restated as of
    March 29, 2001 among Grupo Iusacell Celular, S.A. de C.V.
    and JP Morgan, as sole Bookrunner and Lead Arranger, and The
    Chase Manhattan Bank, as Administrative Agent and Collateral
    Agent, BNP Paribas, Citibank N.A., The Toronto-Dominion Bank and
    BBVA Bancomer S.A., as Arrangers by which Grupo Iusacell Celular
    S.A. de C.V. refinanced certain credit facilities in an amount
    of U.S.$265.6 million; incorporated by reference in the
    Company's 2000 Annual Report on Form 20-F submitted to
    the SEC in June 2001
5.
Not applicable.
6.
See Item 3 — Consolidated
    Financial Statements.
7.
Computation of ratio of earnings to fixed charges
E-134
8.
List of subsidiaries
E-135
9.
Not applicable.
10.
None.
*
Previously filed with Registration Statement on
    Form F-4 No. 333-95547 submitted to the SEC on
    January 27, 2000.
**
Previously filed with Registration Statement on
    Form F-4 No. 333-37431 submitted to the SEC on
    October 8, 1997.
***
Previously filed with the Annual Report on
    Form 20-F of Iusacell Celular for the fiscal year ending
    December 31, 1997.
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GLOSSARY OF TELECOMMUNICATIONS TERMS
1XRTT
A member of CDMA 2000 which is a family of
    standards that defines the radio interface allowing a smooth
    transition from CDMA (1S-95) systems. This family of standards
    involve some variants and the services, offerings, such as voice
    and packet data on a single carrier (1XRTT), data only (1X-DO).
Analog
A transmission method employing a continuous
    electrical signal that varies in amplitude or frequency in
    response to changes in sound, light, position, etc., impressed
    on a transducer in the sending device.
Band
A range of frequencies between two defined limits.
CDMA
Code Division Multiple Access, the
    highest-capacity commercial digital standard available. CDMA
    increases capacity by transmitting a large number of
    simultaneous conversations over a single channel, assigning
    unique codes that can be re-assembled at the receiving end.
Cellular A-band
The range of frequencies used to provide cellular
    wireless service between 825-835 MHz and between
    870-880 MHz of the radio spectrum.
Cellular B-band
The range of frequencies used to provide cellular
    wireless service between 835-845 MHz and between
    880-890 MHz of the radio spectrum.
Channel
A pathway for the transmission of information
    between a sending point and a receiving point.
Covered POPS
The number of POPs in a defined area for whom a
    cellular signal is accessible.
CPP
Calling Party Pays is a cellular telephony
    payment structure in which the party that places a call to a
    cellular telephone is billed for interconnection access, and the
    recipient is not billed for the airtime charges corresponding to
    the call.
Digital
A method of storing, processing and transmitting
    information through the use of distinct electronic or optical
    pulses that represent the binary digits 0 and 1. Digital
    transmission and switching technologies employ a sequence of
    discrete, distinct pulses to represent information, as opposed
    to the continuous analog signal.
Hertz
The unit measuring the frequency with which an
    alternating electromagnetic signal cycles through the zero-value
    state between lowest and highest states. One hertz (abbreviated
    Hz) equals one cycle per second; KHz (kilohertz) stands for
    thousands of hertz; MHz (megahertz) stands for millions of
    hertz; and GHz (gigahertz) stands for billions of hertz.
IMTS
Improved mobile telephone service; IMTS systems
    are analog mobile telephone systems that employ a single
    powerful radio base station to communicate with IMTS mobile
    telephones that are within approximately a 25-mile radius.
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LATA
Local access and transport area; an area in which
    a local exchange carrier is permitted to provide service as
    designated by the 1982 United States federal court decree
    resulting from antitrust litigation brought by the United States
    Department of Justice against AT&T corporation.
PCS
Personal communications services. PCS represents
    a digital wireless communications service with the ability to
    provide features such as voice, video and data applications,
    short messaging, voicemail, caller identification, call
    conferencing and call forwarding.
PCS A-Band
The range of frequencies used to provide PCS
    wireless services between 1.850-1.865 GHz and between
    1.930-1.945 GHz of the radio spectrum.
PCS B-Band
The range of frequencies used to provide PCS
    wireless services between 1.870-1.885 GHz and between
    1.950-1.965 GHz of the radio spectrum.
PCS D-Band
The range of frequencies used to provide PCS
    wireless services between 1.865-1.870 GHz and between
    1.945-1.950 GHz of the radio spectrum.
PCS E-Band
The range of frequencies used to provide PCS
    wireless services between 1.885-1.890 GHz and between
    1.965-1.970 GHz of the radio spectrum.
Penetration Rate
A cellular operator's subscribers within a
    defined area derived by total POPs within that area.
POPs
The population for a particular area based on the
    2000 Mexican census. Population figures for 1996, 1997, 1998 and
    1999 have been calculated by applying the forecast annual
    population growth rate for 1995, as published by the Instituto
    Nacional de Estadística, Geografía e Informática
    (the National Institute of Statistics, Geography and Information
    Processing, "INEGI") to the official 1990 census
    figures. Population figures for 2001 have been calculated by
    applying the forecast annual population growth rate for 2001 to
    the data derived from the 2000 Mexico census. Where the
    population information is set forth without reference to a year,
    the information given is as of December 31, 2001. The SCT
    divides Mexico into nine geographic Regions for the provision of
    cellular service (individually a "Region" and
    collectively the "Regions"). Information regarding the
    numbers of POPs within a given Region has been calculated using
    the national population growth rate, as published by INEGI.
    Information regarding the number of POPs within a given city has
    been calculated using the growth rate for that city, as
    published by INEGI, which may not be the same as the national
    growth rate published by INEGI. The number of POPs in any Region
    or other geographic area should not be confused with the current
    number of users of wireless services in that Region or other
    geographic area and is not indicative of the number of users of
    wireless services in the future.
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Roaming
A service offered by mobile communications
    providers which allows a subscriber to use his or her telephone
    while in the service area of another carrier.
Switch
A device that opens or closes circuits or selects
    the paths or circuits to be used for transmission of
    information. Switching is the process of interconnecting
    circuits to form a transmission path between users.
TDMA
Time division multiple access, a standard of
    digital cellular technology, which provides more call carrying
    capacity than analog, but less than CDMA, by interlacing
    conversations on a single channel through time-sharing methods.
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SIGNATURES
Pursuant to the requirements of Section 12
of the Securities Exchange Act of 1934, the registrant certifies
that it meets all requirements for filing on Form 20-F and
has duly caused this Annual Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
GRUPO IUSACELL CELULAR,
S.A.
    DE C.V.
By:
/s/ PETER H. BURROWES
Peter H. Burrowes
Attorney-in-fact
By:
/s/ RUSSELL A. OLSON
Russell A. Olson
Attorney-in-fact
Date: June 28, 2002
109