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<P align="center"><FONT size="4"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION
</B></FONT>


<DIV align="center"><FONT size="3"><B>WASHINGTON, D.C. 20549</B>
</FONT></DIV>


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<P align="center"><FONT size="5"><B>Form&nbsp;20-F
</B></FONT>


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    <TD valign="top"><FONT size="3" face="wingdings">o</FONT></TD>
    <TD><FONT size="3">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="3"><B>REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g)&nbsp;OF THE SECURITIES EXCHANGE ACT OF 1934
</B></FONT></TD>
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<P align="center"><FONT size="2"><B>OR</B>
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    <TD valign="top"><FONT size="3" face="wingdings">x</FONT></TD>
    <TD><FONT size="3">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="3"><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<BR>
For the fiscal year ended December&nbsp;31, 2002
</B></FONT></TD>
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<P align="center"><FONT size="2"><B>OR</B>
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    <TD><FONT size="3">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="3"><B>TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<BR>
for the transition period from to
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<P align="center"><FONT size="2"><B>COMMISSION FILE NUMBER 033-79254</B>
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<P align="center"><FONT size="6"><B>Grupo Iusacell Celular, S.A. de C.V.
</B></FONT>


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


<P align="center"><FONT size="2"><B>Iusacell Celular Group</B><BR>
<I>(Translation of Registrant&#146;s name into English)</I>
</FONT>


<P align="center"><FONT size="2"><B>United Mexican States</B><BR>
<I>(Jurisdiction of incorporation or organization)</I>
</FONT>


<P align="center"><FONT size="2"><B>Prolongaci&#243;n Paseo de la Reforma 1236<BR>
Colonia Santa Fe<BR>
Delegaci&#243;n Cuajimalpa<BR>
05348 Mexico, D.F.</B><BR>
<I>(Address of principal executive offices)</I>
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<P align="center"><FONT size="2"><B>Securities registered or to be registered pursuant to Section&nbsp;12(b) of the Act:</B>
</FONT>


<P align="center"><FONT size="2"><B>None</B>
</FONT>


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


<P align="center"><FONT size="2"><B>None</B>
</FONT>


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


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
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    <TD valign="top"><FONT size="2">Series&nbsp;A Capital Stock</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
27,967 shares</FONT></TD>
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    <TD valign="top"><FONT size="2">Series&nbsp;B Capital Stock</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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26,865 shares</FONT></TD>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Yes <FONT face="Wingdings">&#120;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark which financial statement item the registrant has
elected to follow:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;17 <FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;18 <FONT face="Wingdings">&#120;</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></TD><TD colspan="8"><A HREF="#005">ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><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">ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#014">ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015">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="#016">ITEM 15. CONTROLS AND PROCEDURES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#017">ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#018">ITEM 16B. CODE OF ETHICS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#019">ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#020">PART III</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#021">ITEM 17. FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#022">ITEM 18. FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#023">ITEM 19. EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#024">SIGNATURES</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#025">INDEX</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#026">REPORT OF INDEPENDENT ACCOUNTANTS</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#027">CONSOLIDATED BALANCE SHEETS</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#028">CONSOLIDATED INCOME STATEMENTS</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#029">CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#030">CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#031">NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="y87971exv7w1.txt">COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES</A></TD></TR>
<TR><TD colspan="9"><A HREF="y87971exv8w1.txt">LIST OF SUBSIDIARIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="y87971exv12w1.txt">CERTIFICATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y87971exv12w2.txt">CERTIFICATION</A></TD></TR>
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<P align="center"><FONT size="2"><B>TABLE OF CONTENTS</B>
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    <TD colspan="3" valign="top"><FONT size="2"><B>PART I</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="right"><FONT size="2"><B>1</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 1.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</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" valign="top"><FONT size="2">ITEM 2.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">OFFER STATISTICS AND EXPECTED TIMETABLE</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 3.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">KEY INFORMATION</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</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" valign="top"><FONT size="2">ITEM 4.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">INFORMATION ON THE COMPANY</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 5.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">OPERATING AND FINANCIAL REVIEW AND PROSPECTS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 6.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 7.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 8.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">FINANCIAL INFORMATION</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 9.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">THE OFFER AND LISTING</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 10.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">ADDITIONAL INFORMATION</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 11.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 12.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3" valign="top"><FONT size="2"><B>PART II</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>84</B></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" valign="top"><FONT size="2">ITEM 13.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 14.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85</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" valign="top"><FONT size="2">ITEM 15.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CONTROLS AND PROCEDURES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 16A.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">AUDIT COMMITTEE FINANCIAL EXPERT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 16B.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CODE OF ETHICS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 16C.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">PRINCIPAL ACCOUNTANT FEES AND SERVICES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3" valign="top"><FONT size="2"><B>PART III</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>86</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 17.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">FINANCIAL STATEMENTS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">86</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" valign="top"><FONT size="2">ITEM 18.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">FINANCIAL STATEMENTS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" valign="top"><FONT size="2">ITEM 19.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EXHIBITS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">i</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"><FONT size="2"><B>FORWARD-LOOKING INFORMATION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Grupo Iusacell Celular, S.A. de
C.V. </I>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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Factors described in this Annual Report under Item&nbsp;3, &#147;Key Information &#151;
Risk Factors,&#148; could cause actual results to differ materially from such
forward-looking statements.
</FONT>

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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>In this Annual Report, &#147;we&#148;, &#147;our&#148; or &#147;us&#148; refers to Iusacell Celular and
its subsidiaries, unless the context otherwise requires.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Certain terms are defined the first time they are used in this Annual
Report. The &#147;Glossary of Telecommunications Terms&#148; that begins immediately
following Item&nbsp;19, &#147;Exhibits&#148; provides definitions of certain technical terms
used herein.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;30, 2000, Bell Atlantic Corporation, Iusacell&#146;s 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 names of the subsidiaries which hold Iusacell capital
stock directly remained unchanged. 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term &#147;Vodafone&#148; in this Annual Report refers to Vodafone Group Plc or
its subsidiaries, as the context requires.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise specified, all references to &#147;U.S. dollars&#148;, &#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, 2002.
Actual amounts may vary from amounts presented in this Annual Report due to
rounding.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 (not including the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents). Written requests for such copies should be
directed to <I>Grupo Iusacell Celular, S.A. de C.V.</I>, 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">ii
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "PART I" -->
<DIV align="left"><A NAME="000"></A></DIV>

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

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

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


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>A.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>DIRECTORS AND SENIOR MANAGEMENT</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>ADVISERS</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>AUDITORS</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE" -->
<DIV align="left"><A NAME="002"></A></DIV>

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


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 3. KEY INFORMATION" -->
<DIV align="left"><A NAME="003"></A></DIV>

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


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>A.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>SELECTED FINANCIAL DATA</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, 2001, 2000, 1999 and 1998. The financial information
presented for fiscal years ended December&nbsp;31, 2002, 2001 and 2000 was derived
from our audited consolidated financial statements, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 National Consumer Price Index (<I>Indice Nacional de Precios al
Consumidor</I>), also referred to as the INPC. Throughout the periods presented in
this Annual Report, Bulletin 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002. 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note 22 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="center"><FONT size="2">1</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>As of and for the Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1998</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1999</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>(Thousands of constant pesos as of December 31, 2002,</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;(Thousands of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>except operating data)<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. dollars,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>except operating</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>data)<SUP>(2)</SUP></B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B>Income Statement Data:</B></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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>Mexican GAAP:</I></B></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 colspan="3"><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 valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Services</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3,307,589</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"><FONT size="1">4,530,207</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"><FONT size="1">5,497,454</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"><FONT size="1">6,005,545</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"><FONT size="1">4,989,753</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"><FONT size="1">478,633</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><FONT size="1">506,844</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"><FONT size="1">525,393</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"><FONT size="1">558,850</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"><FONT size="1">641,737</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"><FONT size="1">591,882</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"><FONT size="1">56,775</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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"><FONT size="1">3,814,433</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"><FONT size="1">5,055,600</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"><FONT size="1">6,056,304</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"><FONT size="1">6,647,282</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"><FONT size="1">5,581,635</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"><FONT size="1">535,408</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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 valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><FONT size="1">1,035,036</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"><FONT size="1">1,291,588</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"><FONT size="1">1,547,575</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"><FONT size="1">1,560,761</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"><FONT size="1">1,549,547</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"><FONT size="1">148,638</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><FONT size="1">271,194</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"><FONT size="1">324,031</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"><FONT size="1">376,288</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"><FONT size="1">399,644</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"><FONT size="1">487,826</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"><FONT size="1">46,794</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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"><FONT size="1">1,306,230</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"><FONT size="1">1,615,619</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"><FONT size="1">1,923,863</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"><FONT size="1">1,960,405</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"><FONT size="1">2,037,373</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"><FONT size="1">195,432</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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"><FONT size="1">2,508,203</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"><FONT size="1">3,439,981</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"><FONT size="1">4,132,441</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"><FONT size="1">4,686,877</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"><FONT size="1">3,544,262</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"><FONT size="1">339,976</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><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"><FONT size="1">1,455,532</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"><FONT size="1">1,736,851</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"><FONT size="1">2,026,850</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"><FONT size="1">2,346,815</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"><FONT size="1">1,783,583</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"><FONT size="1">171,087</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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"><FONT size="1">1,073,547</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"><FONT size="1">1,712,629</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"><FONT size="1">2,516,675</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"><FONT size="1">2,715,103</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"><FONT size="1">2,121,610</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"><FONT size="1">203,512</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><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"><FONT size="1">1,325,508</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"><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"><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"><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"><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"><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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"><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"><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"><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"><FONT size="1">325,436</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"><FONT size="1">91,608</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"><FONT size="1">8,787</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Operating loss</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,346,384</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(9,499</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(411,084</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(49,605</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(269,323</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(25,836</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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"><FONT size="1">179,211</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(27,720</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><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"><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"><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"><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><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 colspan="2"><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"><FONT size="1">301,645</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"><FONT size="1">323,092</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"><FONT size="1">538,847</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"><FONT size="1">407,892</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"><FONT size="1">384,657</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"><FONT size="1">36,898</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><FONT size="1">1,129,607</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(222,244</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">20,681</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(101,252</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">507,147</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"><FONT size="1">48,647</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Gain from monetary position</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(916,914</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(794,935</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(395,722</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(174,435</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(220,633</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(21,164</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><FONT size="1">514,338</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(694,087</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">163,806</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"><FONT size="1">132,205</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"><FONT size="1">671,171</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"><FONT size="1">64,381</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Equity participation in net profit (loss)
of associated companies</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">33,573</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(57,247</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2,619</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"><FONT size="1">6,889</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(9,741</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(934</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">(Loss) income before assets tax, income
tax, minority interest and extraordinary
item</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,647,938</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">599,621</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(572,271</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(174,921</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(950,235</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(91,151</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Provisions 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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><FONT size="1">86,725</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"><FONT size="1">159,490</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"><FONT size="1">165,246</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"><FONT size="1">154,749</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"><FONT size="1">111,609</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"><FONT size="1">10,706</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><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"><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"><FONT size="1">488,024</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"><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"><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"><FONT size="1">8,861</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"><FONT size="1">850</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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"><FONT size="1">86,725</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"><FONT size="1">647,514</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"><FONT size="1">165,246</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"><FONT size="1">154,749</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"><FONT size="1">120,470</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">11,556</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Loss from continuing operations before
minority interest and extraordinary item</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,734,663</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(47,893</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(737,517</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(329,670</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,070,705</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(102,707</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><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"><FONT size="1">7,625</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"><FONT size="1">21,563</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"><FONT size="1">17,399</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"><FONT size="1">21,874</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"><FONT size="1">9,761</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"><FONT size="1">936</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Loss from continuing operations before
extraordinary item</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,727,038</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(26,330</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(720,118</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(307,796</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(101,771</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Extraordinary item<SUP>(3)</SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="1">488,024</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"><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"><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"><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"><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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"><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"><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"><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"><FONT size="1">6,847</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"><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"><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">(Loss) gain from discontinued
operations<SUP>(4)</SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(24,908</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,847</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">9,370</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"><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"><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"><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net (loss)&nbsp;profit</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,751,946</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">459,847</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(710,748</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(314,643</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(101,771</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>U.S. GAAP: </I></B><SUP>(5) (6)</SUP></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 colspan="3"><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"><FONT size="1">3,838,776</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"><FONT size="1">5,055,600</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"><FONT size="1">6,056,303</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"><FONT size="1">6,502,054</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"><FONT size="1">5,407,248</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"><FONT size="1">518,681</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Operating (loss)&nbsp;profit</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,139,268</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(100,785</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(401,713</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(446,219</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(201,668</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(19,345</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net (loss)&nbsp;profit</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,740,479</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">345,498</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(704,519</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(607,579</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(898,645</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(86,201</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B>Balance Sheet Data:</B></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 colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>Mexican GAAP:</I></B></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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Working capital</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,622,973</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(632,450</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,476,246</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(298,916</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">218,424</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"><FONT size="1">20,952</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Property and equipment, net</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">7,168,516</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"><FONT size="1">8,141,460</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"><FONT size="1">8,727,500</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"><FONT size="1">9,365,301</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"><FONT size="1">8,552,898</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"><FONT size="1">820,422</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total assets</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">13,408,186</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"><FONT size="1">14,834,482</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"><FONT size="1">14,598,623</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"><FONT size="1">15,001,603</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"><FONT size="1">13,257,311</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"><FONT size="1">1,271,685</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total debt</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">6,014,462</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"><FONT size="1">5,521,176</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"><FONT size="1">4,561,219</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"><FONT size="1">4,144,577</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"><FONT size="1">4,464,069</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"><FONT size="1">428,208</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total stockholders&#146; equity</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">4,951,735</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"><FONT size="1">7,333,609</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"><FONT size="1">8,262,708</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"><FONT size="1">8,997,898</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"><FONT size="1">7,804,737</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"><FONT size="1">748,656</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Capital stock</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">11,660,034</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"><FONT size="1">13,604,027</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"><FONT size="1">13,604,027</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"><FONT size="1">13,604,226</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"><FONT size="1">15,924,916</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"><FONT size="1">1,527,570</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>U.S. GAAP:</I></B><SUP><B>(5)</B></SUP></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 colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Working capital</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,824,083</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(877,514</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,763,892</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(510,063</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">60,305</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"><FONT size="1">5,785</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Property and equipment, net</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">6,943,307</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"><FONT size="1">7,916,254</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"><FONT size="1">8,502,293</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"><FONT size="1">9,114,500</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"><FONT size="1">8,359,446</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"><FONT size="1">801,865</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total assets</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">13,946,144</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"><FONT size="1">15,359,638</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"><FONT size="1">15,109,116</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"><FONT size="1">15,633,408</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"><FONT size="1">14,266,482</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"><FONT size="1">1,368,487</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total debt</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">6,028,962</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"><FONT size="1">5,521,176</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"><FONT size="1">4,561,219</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"><FONT size="1">4,144,577</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"><FONT size="1">4,464,069</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"><FONT size="1">428,208</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><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"><FONT size="1">1,096</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(29,728</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">26,892</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"><FONT size="1">125,957</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(6,742</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(647</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total stockholders&#146; equity</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">4,954,609</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"><FONT size="1">7,276,518</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"><FONT size="1">7,950,375</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"><FONT size="1">8,090,745</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"><FONT size="1">7,387,791</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"><FONT size="1">708,661</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">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 cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>As of and for the Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1998</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1999</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>(Thousands of constant pesos as of December 31, 2002,</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;(Thousands of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>except operating data)<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. dollars,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>except operating</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>data)<SUP>(2)</SUP></B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B>Other Financial Data:</B></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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>Mexican GAAP:</I></B></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 colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">EBITDA<SUP><B>(7)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">1,052,671</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"><FONT size="1">1,703,130</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"><FONT size="1">2,105,591</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"><FONT size="1">2,665,498</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"><FONT size="1">1,852,287</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"><FONT size="1">177,677</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">EBITDA margin<SUP><B>(8)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">28</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">34</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">35</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">40</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">33</FONT></TD>
    <TD 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>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Capital expenditures<SUP><B>(9)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">4,371,247</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"><FONT size="1">2,057,767</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"><FONT size="1">2,138,411</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"><FONT size="1">1,742,476</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"><FONT size="1">577,420</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">55,388</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><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"><FONT size="1">301,645</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"><FONT size="1">323,092</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"><FONT size="1">538,847</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"><FONT size="1">407,892</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"><FONT size="1">384,657</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"><FONT size="1">36,898</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Ratio of earnings to fixed
charges<SUP><B>(10)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">&#151;</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"><FONT size="1">2.59</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"><FONT size="1">&#151;</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"><FONT size="1">&#151;</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"><FONT size="1">&#151;</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"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B>Cash Flow Data:</B><SUP><B>(11)</B></SUP></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 colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>Mexican GAAP:</I></B></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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net resources (used)&nbsp;provided by
operating activities</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">920,314</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"><FONT size="1">1,363,956</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"><FONT size="1">1,899,653</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"><FONT size="1">2,363,563</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"><FONT size="1">510,486</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"><FONT size="1">48,967</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net resources used in investing activities</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(4,655,078</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(2,945,248</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(2,428,004</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(3,074,089</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(807,849</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">77,492</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net resources provided by financing
activities</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3,891,235</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"><FONT size="1">1,450,705</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"><FONT size="1">623,270</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"><FONT size="1">527,866</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"><FONT size="1">319,492</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"><FONT size="1">30,647</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B><I>U.S. GAAP: </I></B><SUP><B>(5)</B></SUP></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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net cash provided by operating activities</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2,302,994</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"><FONT size="1">2,341,910</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"><FONT size="1">1,624,438</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"><FONT size="1">1,628,481</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"><FONT size="1">785,254</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"><FONT size="1">75,324</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net used in investing activities</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(4,429,872</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(2,862,250</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(2,221,157</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(2,700,541</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(755,922</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(72,510</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Net cash provided by financing activities</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2,283,348</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"><FONT size="1">431,431</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"><FONT size="1">717,425</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"><FONT size="1">918,999</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"><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"><FONT size="1">0</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1"><B>Operating Data:</B></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">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Covered POPs<SUP><B>(12)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">66,712,645</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"><FONT size="1">67,591,791</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"><FONT size="1">68,376,034</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"><FONT size="1">78,585,938</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"><FONT size="1">79,843,313</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"><FONT size="1">79,843,313</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Subscribers<SUP><B>(13)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">&nbsp;</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"><FONT size="1">&nbsp;</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"><FONT size="1">&nbsp;</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"><FONT size="1">&nbsp;</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"><FONT size="1">&nbsp;</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"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Postpaid</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">277,014</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"><FONT size="1">352,289</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"><FONT size="1">442,594</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"><FONT size="1">403,988</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"><FONT size="1">351,782</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"><FONT size="1">351,782</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>



<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Prepaid</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">478,361</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"><FONT size="1">970,509</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"><FONT size="1">1,238,625</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"><FONT size="1">1,450,709</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"><FONT size="1">1,692,511</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"><FONT size="1">1,692,511</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Total subscribers</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">755,375</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"><FONT size="1">1,322,798</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"><FONT size="1">1,681,219</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"><FONT size="1">1,854,697</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"><FONT size="1">2,044,293</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"><FONT size="1">2,044,293</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Gross subscriber additions</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">747,720</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"><FONT size="1">788,438</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"><FONT size="1">1,092,895</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"><FONT size="1">1,050,620</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"><FONT size="1">1,080,683</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"><FONT size="1">1,080,683</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Average subscribers<SUP><B>(14)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">742,601</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"><FONT size="1">1,290,558</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"><FONT size="1">1,637,481</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"><FONT size="1">1,721,053</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"><FONT size="1">2,073,085</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"><FONT size="1">2,073,085</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Average monthly postpaid churn<SUP><B>(15)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2.58</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2.96</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3.51</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3.77</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3.55</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3.55</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Penetration<SUP><B>(16)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">1.13</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">1.96</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2.46</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2.36</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2.56</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2.56</FONT></TD>
    <TD nowrap><FONT size="1">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Average monthly MOUs per subscriber<SUP><B>(17)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">87</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"><FONT size="1">91</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"><FONT size="1">94</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"><FONT size="1">117</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"><FONT size="1">126</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"><FONT size="1">12</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Nominal average monthly mobile wireless
revenue per
subscriber<SUP><B>(18)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">361</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"><FONT size="1">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"><FONT size="1">322</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"><FONT size="1">370</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"><FONT size="1">384</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"><FONT size="1">37</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Nominal cost to acquire a new
subscriber<SUP><B>(19)</B></SUP></FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">3,477</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"><FONT size="1">3,277</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"><FONT size="1">3,270</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"><FONT size="1">2,677</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"><FONT size="1">2,419</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"><FONT size="1">232</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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, 2002. 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, 2002. The
inflation indices used in this Annual Report are 1.3505 for 1998,
1.2024 for 1999, 1.1036 for 2000 and 1.0570 for 2001.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Peso amounts were converted to U.S. dollars at the noon buying rate
reported by the Federal Reserve Bank of New York for December&nbsp;31, 2002,
which was Ps.10.425 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>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">In determining the peso amounts of our U.S. dollar-denominated obligations
at December&nbsp;31, 2002 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, 2002, which was
Ps.10.439 per U.S.$1.00. The difference between the noon buying rate
reported by the Federal Reserve Bank of New York 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 at December&nbsp;31, 2002 was U.S.$427.6
million. In preparing the Consolidated Financial Statements, we
multiplied this dollar amount by Ps.10.439 (the <I>Banco de M&#233;xico </I>exchange
rate at December&nbsp;31, 2002) to arrive at Ps.4,464.1&nbsp;million of total debt.
For
purposes of this Annual Report, we have converted this peso amount to U.S.
dollars for the convenience of the reader </FONT></TD>
</TR>
</TABLE>
<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>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">by dividing it by Ps.10.425 (the
noon buying rate reported by the Federal Reserve Bank of New York at
December&nbsp;31, 2002) to arrive at U.S.$428.2&nbsp;million of total debt.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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, 2002 and
the translation of peso amounts into U.S. dollars, the amounts shown for
certain balance sheet items are not equal to the actual amounts
outstanding.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">In December 1998, we discontinued the operations of our subsidiary
<I>Cellular Solutions de M&#233;xico, S.A. de C.V.</I>, which sold cellular handset
accessories. This subsidiary transferred all of its existing
inventories as of December&nbsp;31, 1998 to another one of our subsidiaries
and terminated all of its employees during January and February 1999.
See Note 18 to the Consolidated Financial Statements. Under U.S. GAAP,
the closing of this subsidiary does not constitute a discontinued
operation under Accounting Principles Board Opinion (&#147;APB Opinion&#148;) No.
30. Accordingly, the gain (loss)&nbsp;from discontinued operations is
recorded as operating income (expense).</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">See Note 22 to the Consolidated Financial Statements.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">We have never paid dividends, nor do we contemplate paying dividends
in the foreseeable future. Accordingly, we have not included in these
tables a line item for dividends declared per share.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">EBITDA as used in this Annual Report is operating profit (loss)&nbsp;plus
the sum of depreciation and amortization 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 differs from EBITDA as defined in the
instruments governing Iusacell Celular&#146;s 10% senior notes due 2004 and
Iusacell Celular&#146;s senior refinancing secured loan (as defined 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 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. EBITDA is not
(i)&nbsp;a measure determined under U.S. GAAP, (ii)&nbsp;an alternative to U.S.
GAAP operating income (loss)&nbsp;or net income (loss), or (iii)&nbsp;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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Our reconciliation of EBITDA to consolidated net profit (loss)&nbsp;under
Mexican GAAP as of December&nbsp;31, 2002, 2001 and 2000, is as follows:</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EBITDA</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,852,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps. </FONT></TD>
    <TD align="right"><FONT size="2">2,665,498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps. </FONT></TD>
    <TD align="right"><FONT size="2">2,105,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,121,610</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,715,103</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,516,675</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Integral financing cost</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(671,171</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(132,205</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(163,806</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity participation in net (loss)
gain of associated companies and
net (loss)&nbsp;gain
on sale of equity investments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,741</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Assets tax and income tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,470</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(154,749</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(165,246</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">9,761</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"><FONT size="2">21,874</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"><FONT size="2">17,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cumulative effect of the adoption of
the new accounting pronouncements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,847</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">(1,060,944</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">(710,748</FONT></TD>
    <TD><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(8)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">EBITDA margin is calculated by dividing EBITDA by the total
revenues for the respective period.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(9)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 </FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">4</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 valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Lucent Technologies and, in some cases, the net value of
long distance fiber acquired in swaps for long distance fiber of
<I>Iusatel, S.A. de C.V.</I>, a subsidiary of Iusacell Celular. 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. 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. See Item&nbsp;5, &#147;Operating and
Financial Review and Prospects &#151; Liquidity and Capital Resources &#151;
Capital Expenditures.&#148;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(10)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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)
losses from less than 50%-owned affiliates. Fixed charges include the
expensed and capitalized portions of integral financing cost. Earnings
were insufficient to cover fixed charges in 1998, 2000, 2001 and 2002.
The fixed charge coverage deficiency for the years ended December&nbsp;31,
1998, 2000, 2001 and 2002 amounted to Ps.2,736.0&nbsp;million (U.S.$262.4
million), Ps.490.3&nbsp;million (U.S.$47.0&nbsp;million), Ps.81.7&nbsp;million
(U.S.$7.8&nbsp;million) and Ps.1,408.0&nbsp;million (U.S.$135.1&nbsp;million),
respectively.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(11)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 to 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 22 to the
Consolidated Financial Statements.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(12)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Covered POPs is the aggregate number of POPs in the geographic
regions in which we have concessions for wireless services 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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(13)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Unless otherwise indicated, subscribers refers to the total number of
cellular customers included in our subscriber base in the geographic
regions we cover at the end of the respective periods. A prepaid
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 &#151; Business Overview &#151; Cellular Services &#151;
Prepaid Customers.&#148;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(14)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Average subscribers represents the rolling monthly average number of
subscribers for the respective periods.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(15)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Average monthly postpaid churn for a given period is 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. See Item
4, &#147;Information on the Company &#151; Business Overview &#151; Cellular Services &#151;
Postpaid Customers&#148; and Item&nbsp;5, &#147;Operating and Financial Review and
Prospects &#151; Results of Operations.&#148;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(16)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(17)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Effective January&nbsp;1, 2000, we changed the methodology by which we
determine average monthly minutes of use (MOUs). Under the current
methodology, average monthly MOUs per subscriber for a given period are
calculated by dividing total MOUs (which includes minutes of use from
incoming calls to postpaid customers, which had previously been
excluded) for the period by the sum of the monthly average number of
subscribers for each of the months in such period. Average monthly MOUs
for 1999, which were 77 under the methodology used in 1998 and 1999,
have been restated under the current methodology. See Item&nbsp;5,
&#147;Operating and Financial Review and Prospects &#151; Results of Operations.&#148;
When reporting average monthly MOUs per subscriber, we include &#147;incoming
calls only&#148; prepaid subscribers and the MOUs they generate.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(18)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Effective January&nbsp;1, 2000, we changed the methodology by which we
determine nominal average monthly mobile wireless revenue per subscriber
(ARPU). Under the current methodology, ARPU for a given period is
calculated by dividing the sum of the nominal monthly revenues and other
cellular revenues (excluding revenues generated from the sale of
handsets and accessories to postpaid customers) 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 1999, which
was Ps.346.0 under
the methodology effective in 1998, has been restated under the current
methodology. See Item&nbsp;5, &#147;Operating and Financial Review and Prospects &#151;
Results of Operations.&#148; When reporting ARPU, we include &#147;incoming calls
only&#148; prepaid subscribers and the revenue they generate.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">5</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 valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(19)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 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.3,527.0 under the old methodology, has been restated under
the new methodology. Nominal cost to acquire a new subscriber for 1998
has not been restated under the new methodology.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Exchange Rates</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, the Noon Buying Rate was Ps.10.425 per U.S.$1.00. These
currency conversions should not be construed as representations 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the high, low and average Noon Buying Rates
expressed in nominal pesos per U.S. dollar for each of the years ended December
31, 1998, 1999, 2000, 2001 and 2002. The Noon Buying Rate on June&nbsp;26, 2003 was
Ps. 10.458 per U.S.$1.00.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Noon Buying Rate<SUP>(1)</SUP></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Year ended December 31,</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Average(2)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD align="center"><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"><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"><FONT size="2">8.040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1999</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">9.240</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"><FONT size="2">9.562</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD align="center"><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"><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"><FONT size="2">9.183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.459</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">8.946</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"><FONT size="2">9.337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD align="center"><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"><FONT size="2">10.425</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"><FONT size="2">9.000</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"><FONT size="2">9.664</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(1)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Source: </I>Federal Reserve Bank of New York
</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(2)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Average of month-end rates for annual data.</FONT></TD>
</TR>

</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the high and low Noon Buying Rates
expressed in nominal pesos per U.S. dollar for each of the previous six months.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center" colspan="9"><FONT size="1"><B>Noon Buying Rate<SUP>(1)</SUP></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="9"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Month end</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Low</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">December&nbsp;31, 2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.425</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"><FONT size="2">10.103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">January&nbsp;31, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.978</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"><FONT size="2">10.321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">February&nbsp;28, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11.064</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"><FONT size="2">10.774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">March&nbsp;31, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11.235</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">April&nbsp;30, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.770</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"><FONT size="2">10.308</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">May&nbsp;31, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(1)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Source: </I>Federal Reserve Bank of New York.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>CAPITALIZATION AND INDEBTEDNESS</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">6</FONT>

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<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 valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>REASONS FOR THE OFFER AND USE OF PROCEEDS</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>D.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>RISK FACTORS</B></FONT></TD>
</TR>
</TABLE>

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


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>We did not receive an extension of the temporary amendment and waiver
to our senior refinancing secured loan and, as a result, the lenders under
that loan have the right to accelerate our repayment obligations.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first half of 2003, we exceeded the permitted leverage ratio
under our U.S.$266.0&nbsp;million Amended and Restated Senior Secured Credit Loan
Agreement, which we refer to as the senior refinancing secured loan, of 2.50.
On April&nbsp;28, 2003 we and the lenders entered into a temporary amendment and
waiver to the senior refinancing secured loan, which we refer to as the second
amendment and waiver, to increase the permitted leverage ratio under the senior
refinancing secured loan from 2.50 to 2.70. On May&nbsp;22, 2003, the second
amendment and waiver was extended until June&nbsp;13, 2003. On June&nbsp;12, 2003, the
second amendment and waiver was further extended until June&nbsp;26, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The second amendment and waiver has not since been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. As a result,
the lenders under the senior refinancing secured loan have the right to declare
the indebtedness under that loan immediately due and payable. If the lenders
thereunder accelerate the loan, defaults would occur under the Iusacell Celular
indenture governing the 10% senior notes due 2004 issued by us, which would
permit the holders of the Iusacell Celular senior notes to accelerate Iusacell
Celular&#146;s repayment obligations thereunder. If the lenders under the senior
refinancing secured loan choose to accelerate the maturity of their debt, we
would not have the cash resources to pay such amounts. See Item&nbsp;5, &#147;Operating
Financial Review and Prospects &#151; Liquidity and Capital Resources
&#151; Long-Term
Indebtedness &#151; Loan Covenant Waivers and Modifications.&#148;
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>We are unable to service our indebtedness and, as a result, we also
face a substantial risk of Mexican reorganization-related proceedings and
the suspension or termination of all or a portion of our business under our
concessions.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As an event of default under the senior refinancing secured loan currently
exists, the lenders under that loan have the option of taking legal action
against us, including instituting a reorganization proceeding in Mexico.
Further, we may choose to institute a voluntary reorganization proceeding
under Mexican law. If any such proceedings were to be instituted, we could not
predict their duration. We are not aware of any regulated company of our size
that has successfully completed a restructuring under the new Mexican
reorganization law since it was passed in May 2000. A reorganization
proceeding is likely to result in significant changes to our existing
obligations which could include the cancellation or rescheduling of all or part
of those obligations, including the Iusacell Celular senior notes. During the
pendency of any such proceeding, our ability to operate or manage our business,
to retain employees, to maintain existing or create new client relationships,
to continue to collect payments for our services or to obtain any type of
funding or financing would likely be materially adversely affected. Moreover,
in the event of our bankruptcy, our operating concessions which are critical to
our business, may be subject to termination. There can be no assurance that
the holders of the Iusacell Celular senior notes would receive any meaningful
recovery from a bankruptcy proceeding.
</FONT>

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


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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>Our parent company, Iusacell, is in default of its obligations under
its 141/4% senior notes due 2006 and, after the expiration of the grace
period, the holders of those notes will have the right to accelerate
Iusacell&#146;s repayment obligations, which will cause an event of default under
our senior refinancing secured loan.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our parent company, Iusacell, did not generate sufficient cash flows from
operations to make the June&nbsp;1, 2003 U.S.$25.0&nbsp;million interest payment on its
141/4% senior notes due 2006, which we refer to as the Iusacell senior notes.
As a result, Iusacell did not make that payment. Iusacell has a 30-day grace
period to make the payment before an event of default will occur. Since
Iusacell does not anticipate making the June&nbsp;1, 2003 interest payment within
the grace period, an event of default under the indenture governing the
Iusacell senior notes, which we refer to as the Iusacell indenture, will occur
and the holders of the Iusacell senior notes will have the right to declare
Iusacell&#146;s indebtedness under the Iusacell senior notes immediately due and
payable. The right of such holders to accelerate Iusacell&#146;s repayment
obligations under the Iusacell senior notes will cause an event of default
under the terms of our senior refinancing secured loan and the lenders would
have the right to declare the indebtedness due thereunder immediately due and
payable. If the lenders under the senior refinancing secured loan decide to
accelerate the indebtedness, this will result in an event of default under the
Iusacell Celular indenture governing the 10% senior notes due 2004 issued by
us, which will permit the holders of such notes to accelerate our repayment
obligations under the Iusacell Celular senior notes. Also, should the
foregoing defaults occur, the cross-default provisions contained in our various
other credit agreements may also be triggered.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the lenders under the senior refinancing secured loan
choose to accelerate the maturity of their debt, we would not have the cash
resources to repay such amounts. Due to the depressed state of the value of
telecommunication assets, it is unlikely that the value of the assets held by
us will be sufficient to satisfy the claims of our creditors, including the
holders of the Iusacell Celular senior notes, which could lead us to bankruptcy
or reorganization.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>There is substantial doubt as to our ability to continue as a going
concern.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In its Report of Independent Accountants dated February&nbsp;28, 2003 (except
for Note 24 for which the date is June&nbsp;27, 2003), PricewaterhouseCoopers, S.C.
stated that our event of default under the senior refinancing secured loan and
other possible events of default raise substantial doubt as to our ability to
continue as a going concern. We believe that if we are unable to successfully
negotiate with our creditors to preclude acceleration, we will be unable to
service our debt and operate as a viable company.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>Mexican reorganization laws may not be as favorable to the holders of
the Iusacell Celular senior notes as U.S. insolvency and bankruptcy laws.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The current Mexican reorganization law is based on the largely untested
<I>Ley de Concursos Mercantiles </I>enacted in May 2000 (Law of Commercial
Reorganizations), which we refer to as the LCR, which provides for two
different and separate proceedings: conciliation and bankruptcy. The
conciliation phase lasts up to 185&nbsp;days, absent protracted litigation. This
initial term is subject to extension for two 90-day periods. The objective of
the conciliation phase is to reach an agreement between the debtor and its
creditors to restructure the indebtedness of the debtor. The bankruptcy phase
does not have a specific term within which it must be concluded. It is
expected that
both proceedings are likely to require significantly more time and be
significantly more unpredictable than a reorganization or bankruptcy proceeding
under U.S. laws. If we were to be declared subject to reorganization under the
LCR, the holders of Iusacell Celular senior notes would have to file a claim in
Spanish against the estate of Iusacell in Federal District Court in Mexico
City, Mexico. Upon the court&#146;s recognition of a holder of a Iusacell Celular
senior note, as one of our creditors, that holder&#146;s claim would be unsecured
and would rank equally with all other unsecured claims filed against our
estate.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>We may be unable to fund our capital expenditure programs, or pursue
business opportunities because we are highly leveraged, have insufficient
cash flow and have limited or no access to additional capital.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 debt financing,
</FONT>

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

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<P align="left"><FONT size="2">vendor financing, borrowings and equity contributions from Iusacell and its
principal shareholders to meet such funding needs.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, our total consolidated indebtedness was
Ps.4,464.1&nbsp;million (U.S.$428.2&nbsp;million), or approximately 36.4% of our total
capitalization.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the years ended December&nbsp;31, 2001 and December&nbsp;31, 2002, our earnings
were insufficient to cover our fixed charges by Ps.81.7&nbsp;million (U.S.$7.8
million) and Ps.1,408.0&nbsp;million (U.S.$135.1&nbsp;million), respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to implement our operating strategy through 2004, we will have to
incur significant capital expenditures. Subject to the outcome of our debt
restructuring efforts, we have preliminarily budgeted a total of approximately
U.S.$382.0&nbsp;million for capital expenditures for 2003, 2004 and 2005, not
including capitalized interest. We have preliminarily budgeted approximately
U.S.$85.0&nbsp;million for capital expenditures for 2003, including up to U.S.$62.0
million to expand and develop our cellular network.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will need additional external funding in 2003 in order to make
additional investments in the central regions and expand the advance data
network capabilities into other key cities. As we make additional investments
in our cellular network and pursue long distance and data opportunities, we
will also need additional external funding in 2004 and beyond. Furthermore,
the investments required to keep pace with technological change, such as
extended coverage on the 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 the capital
markets or bank or vendor financing, on acceptable terms or at all.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our declining revenues throughout 2002, the degree to which we are
leveraged and our inability to obtain additional capital may adversely affect
our ability to finance future operations, to finance necessary capital
expenditures, 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 in the interest of holders of our
securities.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>Depreciation or devaluation of the peso relative to the U.S. dollar may
adversely affect our financial condition and results of operations.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While our sales are almost entirely denominated in pesos, the vast
majority of our obligations are denominated in U.S. dollars. As a result,
unless we enter into hedging arrangements, 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, but depreciated by 13.9% during
2002. In the past, the peso has depreciated substantially against the U.S.
dollar and may depreciate significantly in the future.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Declines in the value of the peso relative to the U.S. dollar could
adversely affect our financial condition and results of operations and 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.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>We face increasing competition which may reduce our operating margins.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face significant competition in our core cellular services business in
each region in which we operate from <I>Radiom&#243;vil Dipsa, S.A. de C.V.</I>, commonly
known as Telcel. As a subsidiary of <I>Am&#233;rica M&#243;vil, S.A. de C.V.</I>, a company
spun off from <I>Tel&#233;fonos de M&#233;xico, S.A. de C.V.</I>, the former state telephone
monopoly known as Telmex, Telcel has significantly greater internal financial
and operational resources than those available to us, nationwide cellular
concessions, a nationwide cellular network and the ability to use Telmex&#146;s
installed telecommunications systems. Competition in the Mexican cellular
services 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 substantial discounts. 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 <I>Telef&#243;nica M&#243;viles
Mexico, S.A. de C.V.</I>, which we refer to as Telef&#243;nica, a subsidiary of
</FONT>

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

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<P align="left"><FONT size="2"><I>Telef&#243;nica M&#243;viles, S.A.</I>, a Spanish telecommunications service provider, that
in 2002 concluded the acquisition of <I>Pegaso Comunicaciones y Sistemas, S.A. de
C.V.</I>, which we refer to as Pegaso, and from <I>Servicios Profesionales de
Comunicaci&#243;n, S.A. de C.V.</I>, which we refer to as Unef&#243;n, an affiliate of <I>TV
Azteca, S.A. de C.V. </I>and <I>Elektra, S.A. de C.V. </I>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>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we face increasing competition in providing long distance,
wireless local telephony and data transmission services. Competition may lead
to increases in advertising and promotional spending, along with increased
demands on access to distribution channels. These factors may lead to smaller
operating margins, greater choices for customers and increasing movement of
customers between competitors, which may make it difficult for us to retain
customers or add new customers.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Mexican government may grant additional concessions to other companies
to provide services similar to or the same as those that we provide. In
addition to Telcel and Telef&#243;nica, other competitors may also have greater
financial, corporate and other resources, which may limit our ability to
compete effectively.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>The technology we use may be made obsolete by advancements in
technology.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All companies in the global telecommunications industry must adapt to
rapid and significant changes in technology. The technology that we have
selected in our cellular services business may become obsolete by market demand
for 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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>A significant portion of our accounts receivable is represented by a
small number of distributors.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our three largest distributors accounted for 52% and 44% of our net trade
accounts receivable as of December&nbsp;31, 2002 and 2001, respectively. We have
established certain measures to reduce the risk associated with this
concentration, such as certain guarantees and liens. As a result, the absolute
number of accounts to which these receivables are attributable has decreased.
Although we believe that this distributor concentration will be reduced over
time, 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>


<P align="left"><FONT size="2"><B>Risk Factors Relating to Our Parent Company&#146;s Shareholders</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>Verizon and Vodafone, Iusacell&#146;s principal shareholders, announced that
they have agreed to sell all of their interest in Iusacell and, as a result,
Verizon will lose management control over our operations and Vodafone will
no longer provide us with other support services.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since Verizon (formerly known as Bell Atlantic) assumed management control
of Iusacell&#146;s Board of Directors and management, Verizon consultants and
Verizon personnel provided on a secondment basis to Iusacell have been
integrally involved in managing our day-to-day operations and defining and
implementing our long-term strategy. Verizon currently has the right and power
to elect a majority of the members of Iusacell&#146;s Board of Directors and, with
certain exceptions, to unilaterally determine our policies and strategy.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vodafone, Iusacell&#146;s other principal shareholder, provides us with
management, marketing, legal and other consulting services.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;13, 2003, <I>Movil Access, S.A. de C.V. </I>(Movil Access), a Mexican
telecommunications service provider and a subsidiary of <I>Biper, S.A. de C.V.</I>,
which is a part of <I>Grupo Salinas</I>, announced that it would commence a public
tender offer in Mexico and the United States to buy all of Iusacell&#146;s
outstanding capital stock. Verizon and
</FONT>

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

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<P align="left"><FONT size="2">Vodafone have announced that they have
agreed to tender all of their Iusacell shares to Movil Access. See Item&nbsp;4,
&#147;Information on the Company &#151; History and Development of the Company.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the National Banking and Securities Commission (<I>Comisi&#243;n Nacional
Bancaria y de Valores</I>) approves the tender offer and Verizon tenders all of its
Iusacell shares, Verizon will lose its ability to manage us. Verizon will then
no longer be in a position to determine our policies and strategies, provide
personnel to us on a secondment or consulting basis, manage our operations or
provide the technical support, as well as operating synergies that we have
historically relied on. We cannot predict the strategy that we will implement
following any such management change. In addition, if Vodafone tenders all of
its Iusacell shares, Vodafone will no longer provide us with management and
other services.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>The sale of Verizon&#146;s interest and Vodafone&#146;s interest in Iusacell will
constitute a change of control under the Iusacell Celular indenture and, as
a result, each holder of the Iusacell Celular senior notes may require
Iusacell Celular to repurchase all or any part of that holders&#146; Iusacell
Celular senior notes and we may be in default of our obligations under our
senior refinancing secured loan.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sale of Iusacell&#146;s shares by Verizon and Vodafone will constitute a
change of control under the Iusacell Celular indenture governing the Iusacell
Celular senior notes. As a result, each holder of the Iusacell Celular senior
notes may require Iusacell Celular to repurchase, in whole or in part, that
holder&#146;s Iusacell Celular senior notes. We cannot assure you that we will have
sufficient funds or the ability to obtain sufficient funds on a timely basis to
pay for any or all of the debt that we may have to repurchase as a result of
this change of control.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, under our senior refinancing secured loan, the sale of
Iusacell&#146;s shares by Verizon and Vodafone will constitute a change of control,
which would constitute a default and, unless the default is waived, the lenders
under that loan would have the right to declare all amounts outstanding under
that loan immediately due and payable. If the lenders accelerate amounts due
under that loan, we cannot assure you that we will have sufficient funds or the
ability to obtain sufficient funds on a timely basis to pay for those amounts
due.
</FONT>


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


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>The Mexican government may impose additional conditions on our
concessions or may take them away.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 conditions for renewal, however, are
not fully defined. 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, 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 reduce the value of our
concessions and adversely affect our financial condition and results of
operations.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>Our financial statements may not give you the same information as
financial statements prepared under U.S. generally accepted accounting
principles.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We prepare our 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, accounting for
derivative financial instruments, gains from the exchange of non-monetary
assets, the provisioning for the consolidation of facilities and sale-leaseback
transactions. In particular, all such Mexican 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 22 to our Consolidated Financial Statements.
</FONT>

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


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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>The general political and economic conditions in Mexico may adversely
affect our business, financial condition and results of operations.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a Mexican company, and most of our operations are in Mexico. As a
result, our business, financial condition and results of operations may be
significantly affected by the general condition of the Mexican economy, by
devaluation of the peso, by inflation and high interest rates in Mexico, or by
political or economic developments in Mexico. The Mexican economy contracted
at a rate of 0.3% in 2001 and grew at an annual rate of only 0.9% in 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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,
disparity of wealth 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Crises such as these could adversely affect our financial condition and
results of operations.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>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.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
our debt obligations.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>Payment of judgments entered against us will be in pesos, which may
expose holders of our debt securities to exchange rate risks.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a proceeding to enforce our obligations under our debt is brought in
Mexico, Mexican law permits us to pay a resulting judgment in pesos. Under the
Mexican Monetary Law, an obligation payable in 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>

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


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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
<I>Unidades de Inversi&#243;n</I>, which are denominated in pesos and adjusted
periodically for inflation by the Bank of 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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>The additional 10% tax on telecommunications services approved by the
Mexican Congress may adversely affect the ability of wireless companies,
including Iusacell Celular, to attract new customers.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2002, the Mexican Congress approved a surcharge that
assesses an additional 10% federal excise tax on certain wireless
telecommunications services. The tax resulted in a 10% increase in the monthly
bills of
</FONT>

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

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<P align="left"><FONT size="2">postpaid mobile wireless customers and in the cost of prepaid cards in
denominations of Ps.200.0 (U.S.$19.18) or more for the year 2002. In February
2002, we filed an injunctive action (<I>amparo</I>) challenging the Mexican
government&#146;s implementation of the tax. In October 2002, we received a
preliminary ruling in its favor by a Federal Judge, and the Mexican government
subsequently filed an appeal. In June 2003, Mexico&#146;s Supreme Court rejected
the appeal and affirmed the ruling in favor of us.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, the Mexican government implemented a modified version of the
additional 10% excise tax on certain wireless telecommunications services,
which was approved by the Mexican Congress. In March 2003, we filed an
injunctive action challenging this implementation. Until this injunctive
action is resolved, we will continue to pay the full modified additional 10%
excise tax to the Finance Ministry. In the prepaid segment, the modified
version of the additional 10% excise tax is being applied to every prepaid plan
with an airtime per-minute rate of more than Ps.3.50 (U.S.$0.34), which differs
from the 2002 initiative that taxed prepaid cards with a face value equal to or
in excess of Ps.200.0 (U.S.$19.18).
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B><I>High inflation rates in Mexico may decrease demand for our services
while increasing our costs.</I></B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 9.0%, 4.4% and 5.7% in 2000, 2001, 2002, respectively, and was 1.3%
for the three-month period ended March&nbsp;31, 2003. High inflation rates can
adversely affect our business and results of operations in the following ways:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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>
<!-- link2 "ITEM 4. INFORMATION ON THE COMPANY" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 4. INFORMATION ON THE COMPANY</B>
</FONT>

<P align="left"><FONT size="2"><B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HISTORY AND DEVELOPMENT OF THE COMPANY</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Grupo Iusacell Celular, S.A. de C.V.</I>, which was known as <I>Grupo Iusacell,
S.A. de C.V. </I>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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular&#146;s commercial name is &#147;Grupo Iusacell,&#148; but our operating
subsidiaries market their products under the single <I>Iusacell</I>&#153; brand name.
Iusacell Celular currently operates primarily in Mexico under Mexican
legislation, including, among others, the 1995 Telecommunications Law (<I>Ley
Federal de Telecomunicaciones</I>), the 1993 Foreign Investment Law (<I>Ley de
Inversi&#243;n Extranjera</I>) and the Mexican Companies Law (<I>Ley General de Sociedades
Mercantiles</I>), although the sale of our securities in the United States also
makes us subject to certain securities laws of the United States. See
&#147;&#151;
Business Overview &#151; Government Regulation&#148; for a discussion of certain of the
regulations to which we are subject.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular was formed in 1992 to hold the principal
telecommunications interests of the Peralta Group, which was primarily
comprised of 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, through one of its subsidiaries, 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 Le&#243;n), Region 7 (which includes the city of Puebla) and Region 8
(which includes the cities of Canc&#250;n and M&#233;rida). In October 1995, an Iusacell
Celular subsidiary received a concession to provide long distance service and
began providing such service in August 1996.
</FONT>

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


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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 and analog network. Through December&nbsp;31, 2002, Iusacell
Celular has purchased approximately U.S.$433.1&nbsp;million of network equipment and
services under this agreement.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Iusacell completed this offer on August&nbsp;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&#146;s series V shares
for the balance of American depositary shares representing Iusacell Celular&#146;s
series D and series L shares on a one-for-one basis. Iusacell completed this
offer 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 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;29, 1999, Iusacell Celular entered into a series of agreements
with <I>MATC Celular, S. de R.L. de C.V.</I>, the Mexican subsidiary of American Tower
Corporation, which we refer to as MATC Celular, with respect to Iusacell
Celular&#146;s existing towers and future tower needs. Under these agreements,
which were amended in May 2002, MATC Celular, among other things, is required
to build towers or find space on existing towers, which Iusacell Celular&#146;s
subsidiaries lease. The term of the lease is 10&nbsp;years with two five-year
renewal periods. As of May&nbsp;30, 2003, Iusacell Celular&#146;s subsidiaries lease
from MATC Celular 715 sites, including 320 transfer sites, a number of
built-to-suit sites and co-locations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 names of the subsidiaries which hold
Iusacell capital stock directly remained unchanged. In April 2001, Vodafone
acquired the Peralta Group&#146;s 34.5% equity interest in Iusacell for U.S.$973.4
million.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;19, 2001, Iusacell Celular completed the acquisition of a 78.3%
ownership interest in Portatel for Ps.595.3&nbsp;million (U.S.$57.1&nbsp;million).
Iusacell Celular also reached an agreement to acquire the remaining 21.7%
ownership in Portatel for Ps.168.9&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 8, which covers the states of Yucatan,
Campeche, Quintana Roo, Chiapas and Tabasco in southern Mexico. On November
2001, Iusacell completed a rights offering to holders of its outstanding Series
A and V shares and Series&nbsp;V American Depositary Shares (ADSs) for the aggregate
amount of U.S.$100.0&nbsp;million. The proceeds were used in part to finance the
acquisition of Region 8.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Over the 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.$460.4&nbsp;million in capital expenditures, primarily
for our cellular communications network, long distance network and billing,
customer care and administrative systems.
</FONT>

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

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<P align="left"><FONT size="2">See Item&nbsp;5, &#147;Operating and Financial
Review and Prospects &#151; Liquidity and Capital Resources &#151; Capital Expenditures.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first quarter of 2003, we invested approximately US$1.0&nbsp;million
in our cellular regions to expand our coverage. In 2003, subject to the
outcome of our debt restructuring efforts, we have preliminarily budgeted a
total of approximately U.S.$85.0&nbsp;million for 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. All
of this capital equipment will be deployed in Mexico. We hope to finance our
capital expenditures in 2003 through funds from our operations, vendor and
project financing and the capital markets. See Item&nbsp;5, &#147;Operating and
Financial Review and Prospects &#151; Liquidity and Capital Resources &#151; Capital
Expenditures.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;13, 2003, Movil Access, a Mexican telecommunications service
provider and a subsidiary of <I>Biper, S.A. de C.V.</I>, which is a part of <I>Grupo
Salinas</I>, announced that it would commence a public tender offer in Mexico and
the United States to buy all of Iusacell&#146;s outstanding capital stock, which
includes all of Iusacell&#146;s outstanding series A and series V shares (including
all of Iusacell&#146;s outstanding American depositary shares representing series V
shares), for U.S.$10.0&nbsp;million. In Mexico, Movil Access would offer a price of
Ps.0.05712180 (or the U.S. dollar equivalent) per series A share and
Ps.0.05712180 (or the U.S. dollar equivalent) per series V share. In the
United States, Movil Access would offer the U.S. dollar equivalent of
Ps.5.712180 per American depositary share representing series V shares.
Iusacell&#146;s two principal shareholders, Verizon (which owns a 39.4% interest in
Iusacell) and Vodafone (which owns a 34.5% interest in Iusacell), have
announced that they have agreed to tender all of their Iusacell shares to Movil
Access. The tender offer is subject to approval by the National Banking and
Securities Commission (<I>Comisi&#243;n Nacional Bancaria y de Valores</I>).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have not been any public takeover offers by us for the shares of
other companies during 2002 and 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.,
which is also where we are domiciled. Our telephone number is (5255)
5109-4400. Our agent in the United States is Puglisi &#038; Associates, 850 Library
Avenue, Suite&nbsp;204, P.O. Box 885, Newark, Delaware 19715. Our Internet website
address is www.iusacell.com. The information on our website is not
incorporated into this Annual Report.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a wireless telecommunications services provider in Mexico with
nearly 2.1&nbsp;million mobile wireless customers at December&nbsp;31, 2002,
approximately 83% of which are prepaid customers. 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&#146;s
most populous cities, and the cities of Guadalajara, Le&#243;n, Puebla, Canc&#250;n and
M&#233;rida, which combined represent approximately 80&nbsp;million POPs comprising 78%
of Mexico&#146;s total population.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since February 1997, Iusacell Celular has been (whether directly or
indirectly through Iusacell) under the management control of subsidiaries of
Bell Atlantic (which is now Verizon). From late 1993 through February 1997,
Bell Atlantic participated substantially in the financial and technological
operations of Iusacell Celular. Since Bell Atlantic assumed control of our
Board of Directors and management through its ownership interest in Iusacell,
Bell Atlantic consultants and Bell Atlantic personnel provided on a secondment
basis to Iusacell have been integrally involved in managing our day-to-day
operations and defining and implementing our long-term strategy. The
management team is supported by an experienced group of Mexican executives and
other personnel from Verizon and Vodafone. Through December&nbsp;31, 2002, Verizon
has invested approximately U.S.$1.3&nbsp;billion for its current 39.4% economic and
voting interest in Iusacell, which holds a 100% interest in Iusacell Celular.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2,044,293 subscribers as of December&nbsp;31, 2002. Of these subscribers,
as of December&nbsp;31, 2002, 351,782 were postpaid customers who purchase cellular
services pursuant to fixed-term contracts, and the remaining 1,692,511 were
customers who pay for their cellular services in advance primarily through the
purchase of prepaid calling cards. As of December&nbsp;31, 2002, approximately 69%
of these
</FONT>

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

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<P align="left"><FONT size="2">prepaid 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. Our postpaid and prepaid subscribers who can
make outgoing calls and receive incoming calls had an average monthly cellular
revenue per subscriber (ARPU)&nbsp;during 2002 of Ps.384.0 (approximately
U.S.$36.8), with prepaid subscribers in this group having an ARPU of Ps.206.0
(approximately U.S.$19.8) during 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May 1998, we launched digital service using Code Division Multiple
Access (CDMA)&nbsp;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 January 2003, we launched the
country&#146;s first CDMA2000 1XRTT voice and high-speed data network in Mexico
City. With this advanced network, we increased voice capacity and offered
subscribers new data services such as high-speed instant messaging, e-mail and
Internet access at speeds of up to 144 kilobits per second (kbps). We offer
the corporate sector mobile office capabilities and applications designed to
meet the needs of specific mobile users such as field sales and service
personnel. In addition to the 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100% of Iusacell Celular&#146;s series A shares and series B shares are owned,
directly or indirectly, by Iusacell. Iusacell currently has two principal
shareholders, Verizon and Vodafone. Verizon owns a 39.4% equity interest and
Vodafone owns a 34.5% equity interest in Iusacell. For more information on
Iusacell&#146;s principal shareholders, see Item&nbsp;7, &#147;Major Shareholders and Related
Party Transactions &#151; Major Shareholders.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Movil Access recently announced that it would commence a public tender
offer in Mexico and the United States to buy all of Iusacell&#146;s outstanding
capital stock. Verizon and Vodafone announced that they would tender all of
their Iusacell shares to Movil Access. See &#147;&#151; History and Development of the
Company.&#148;
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Digital Technology Platform</I>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August 1999, upon completion of the 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. In January 2003, we launched the first CDMA2000 1XRTT
network in Mexico City, providing advanced high-speed data transmission
services and wireless Internet primarily to corporate customers.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the fourth consecutive year, in 2002, 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
surpassed COFETEL minimum standards for dropped calls, ineffective attempts and
set-up time to place a call by 5%, 4% and 12 seconds, respectively, in the 17
audited cities in our core cellular regions, including Mexico City.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the services that we offer use the <I>Iusacell</I>(&#153;) brand name to
increase consumer awareness and customer loyalty. We believe that the high
&#147;share of voice&#148; and &#147;top of mind&#148; awareness maintained by the <I>Iusacell </I>brand
name has allowed us to make more cost-efficient marketing investments compared
with those of our competitors.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The <I>Iusacell</I>(&#153;) brand name is recognized beyond the regions where we
currently 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="center"><FONT size="2">16</FONT>



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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Region Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Geographical Coverage</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Major Cities in the Region</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD  align="center" valign="top"><FONT size="2">1</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 Rio 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 valign="bottom">
    <TD  align="center" valign="top"><FONT size="2">2</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 Rio 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>

<TR valign="bottom">
    <TD  align="center" valign="top"><FONT size="2">3</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 valign="bottom">
    <TD  align="center"  valign="top"><FONT size="2">4</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 valign="bottom">
    <TD  align="center" valign="top"><FONT size="2">5</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 valign="bottom">
    <TD   align="center" valign="top"><FONT size="2">6</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, Le&#243;n, 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">Aguascalientes, San Luis Potos&#237; and Zacatecas.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD  align="center" valign="top"><FONT size="2">7</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 valign="bottom">
    <TD   align="center" valign="top"><FONT size="2">8</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 valign="bottom">
    <TD  align="center" valign="top"><FONT size="2">9</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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1990, the Mexican government initiated the privatization of
Telmex, which was then the sole provider of landline local and long distance
service and competing in 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 <I>Grupo Carso, S.A.
de C.V.</I>, a Mexican conglomerate which owns or otherwise controls a majority of
the consortium&#146;s voting interest, SBC Communications Inc. and <I>France Telecom
S.A. </I>Subsequent to the original privatization, the Mexican government further
reduced its holdings in Telmex through additional transactions and completed
the sale 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 <I>Am&#233;rica M&#243;vil, S.A. de C.V.</I>, which is known as Am&#233;rica M&#243;vil.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Telcel holds the Cellular B-band in each of the nine cellular regions and
is Mexico&#146;s largest mobile wireless operator. Our subsidiaries hold the
Cellular A-band concession in Regions 5, 6, 7, 8 and 9. Telef&#243;nica is a
controlling shareholder in <I>Baja Celular Mexicana, S.A. de C.V.</I>, <I>Movitel del
Noreste, S.A. de C.V., Telefonia Celular de Norte, S.A. de C.V.</I>, and <I>Celular de
Telefonia, S.A. de C.V.</I>, which cumulatively hold the Cellular A-band concession
in Regions 1, 2, 3 and 4.
</FONT>

<P align="center"><FONT size="2">17</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Underserved Telecommunications Market</I>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Despite the significant increase in wireline and wireless penetration in
Mexico over the last four years, we believe that there remains 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,
2002, there were approximately 14.6 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents, for selected countries, including Latin
American countries and the United States, the number of subscribers of wireless
telephone services per 100 inhabitants as of December&nbsp;31, 2001 and December&nbsp;31,
2002:
</FONT>


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

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Wireless subscribers</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>per 100 inhabitants (1)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Country</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Spain</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">73.4</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"><FONT size="2">82.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Portugal</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77.4</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"><FONT size="2">81.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">45.1</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"><FONT size="2">48.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">34.2</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"><FONT size="2">42.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">26.4</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"><FONT size="2">25.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">25.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">20.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">19.3</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"><FONT size="2">17.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">15.5</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"><FONT size="2">15.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Source: </I>International Telecommunication Union 2003 Website.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Calling Party Pays</I>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 prepaid segment and
wireless traffic.
</FONT>


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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We became the first Mexican provider of cellular telecommunications
services in 1989, when we commenced operations 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 Iusacell Celular serves 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular&#146;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&#146;s
public and financial services sectors. Region 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
<P align="center"><FONT size="2">18</FONT>

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</FONT>

<P align="left"><FONT size="2">maquiladora industry.
Region 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 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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Subscribers and System Usage</I>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer cellular telecommunications services in a variety of plans, which
are divided into two basic groups: either &#147;postpaid&#148; &#151; where the customer is
billed monthly for the previous month based on a contracted length of service &#151;
or &#147;prepaid&#148; &#151; where the customer pays in advance for a specified volume of use
over a specified period.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, postpaid subscribers totaled 351,782, comprising
17% of our customer base. Average revenue per user (ARPU)&nbsp;in this segment was
Ps.693.0 (U.S.$66.5) as of December&nbsp;31, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also offer a number of value-added services designed specifically to
fulfill the demands of this important group of postpaid subscribers. We offer
value added services such as voicemail, call forwarding, call waiting,
three-way calling, secretarial services and provide English-speaking operators
to serve the English-speaking market in our regions. We also provide financial
news reporting, emergency services, entertainment information, reservations
services and sports reports. Moreover, CDMA digital postpaid customers 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Postpaid churn measures both voluntarily and involuntarily disconnected
subscribers. Average monthly postpaid churn for a given period is 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. For more information, see
Item&nbsp;3, &#147;Key Information &#150; Selected Financial Data.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voluntarily disconnected subscribers encompass subscribers who choose not
to continue with our postpaid services or choose one of our prepaid options.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average monthly postpaid churn for the 12&nbsp;months ended December&nbsp;31, 2002
was 3.6%. Measures taken to reduce churn include retention and loyalty
initiatives such as welcome calls, calls at maturity, anniversary calls,
proactive contract renewal campaigns, reactive retention operations and
periodic calls to customers to ensure satisfaction. In addition, we conduct
outreach calls to customers whose contracts are ending or who choose to
terminate service offering them a range of alternative service plans based on
their profile to encourage contract renewal.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In contrast to postpaid subscribers, prepaid customers typically generate
lower levels of cellular usage, have access to a limited number of value-added
services, may already own a handset, or may choose to purchase a
handset with preloaded minutes, and often are unwilling to make a fixed
financial commitment or do not have the credit profile to purchase postpaid
plan cellular services. In addition to helping customers control costs, our
prepaid programs have no monthly bill and allow customers to prepay for
cellular services in cash, credit cards and electronic means. As of December
31, 2002, prepaid ARPU was Ps.80.0 (US$7.7).
</FONT>

<P align="center"><FONT size="2">19</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The prepaid program markets four different prepaid cards, each of which
credits a specific peso denomination worth of air-time usage to an account to
be used for outgoing and long distance incoming calls over a specified period
of times.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A prepaid 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 prepaid card. The
customer&#146;s telephone number is then deactivated, and the customer is considered
to have turned over.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our current prepaid 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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">continue to be prepaid customers of Iusacell Celular by purchasing
another card or otherwise recharge the airtime in their accounts;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">become postpaid customers of Iusacell Celular; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">become either postpaid or prepaid customers of another wireless service provider.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VIVA prepaid customers normally have 60&nbsp;days to use an activated prepaid
card (except for prepaid cards in denominations of Ps.450.0, which we refer to
as Ps.450.0 prepaid cards and which provide their holders 90&nbsp;days to use an
activated card), 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 (or in the case of Ps.450.0 prepaid
cards, 90&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 (or in the case of Ps.450.0 prepaid cards, 275&nbsp;days). During this
305-day period (or 275-day period, as applicable), 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 (or
275-day period, as applicable), the customer&#146;s account automatically returns to
normal status, and a new 60- or 90-day period, as applicable, begins.
Otherwise, once the 305-day period (or 275-day period, as applicable) lapses,
the customer&#146;s telephone number is deactivated.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 1999, in order to evaluate whether we would be able to generate
additional revenues from &#147;incoming calls only&#148; customers for previously
purchased cards, we extended the period of time to use 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; prepaid customers who had reached the 185-day limit without activating a
new prepaid card. In July 2001, we reduced the initial period for spending an
activated prepaid card and activating a new card from 185&nbsp;days to the current
60&nbsp;days (or 90&nbsp;days in the case of Ps.450.0 prepaid cards). As a result, at
the time, approximately 345,000 subscribers were transferred to the &#147;incoming
calls only&#148; prepaid customer status.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002, Iusacell Celular had approximately 1,162,188
&#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 prepaid
subscribers had an average monthly revenue per subscriber during 2002 of
Ps.79.0 (approximately U.S.$7.6).
</FONT>

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

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

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 1999, we substantially completed the installation of the VIVA
prepaid operating system. The VIVA platform tracks customer turnover better
than its predecessor system. This operating system, together with initiatives
to increase the number of distribution points for prepaid cards, adjust
commissions to encourage distributors to sell prepaid cards in higher
denominations, improve customer care and otherwise improve the convenience of
the prepaid program, has enhanced our ability to add and retain prepaid
customers and has increased usage. In 2000, we implemented two important tools
for the sale of prepaid airtime: sales through automated teller machines at
banks and sales over the phone by dialing *AIRE. In early 2002, we introduced
a tool to sell prepaid airtime through our website.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through our roaming agreements with other operators, we offer nationwide
roaming service to our prepaid and postpaid cellular subscribers, and
international service only to our postpaid subscribers. Through these
agreements, subscribers can make 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 us.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 an 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 Celular 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="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 1.3%, 1.7% and 2.4% of our total revenues during 2000, 2001 and
2002, respectively. Out-roaming charges represented 6.2%, 4.9% and 3.8% of
Iusacell Celular&#146;s total revenues during 2000, 2001 and 2002, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, Codetel in the Dominican Republic, Telus in
Canada and Puerto Rico Telephone Company as well as AT&#038;T Wireless, Sprint 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. In the first half of 2003, we launched the
international short message services (&#147;SMS&#148;) with the main carriers in the U.S.
and Canada enabling our customers to send messages.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Iusatel, S.A. de C.V. </I>(Iusatel) in October 1995 and was modified in
December 1997. Our competitors in
long distance include 9 other companies operating under concessions,
including Telmex, the former long distance monopoly. In the long distance
market, we face increasing competition from alternative providers, as well as
from new technologies such as Short Message Service (SMS)&nbsp;and internet
Telephony. As a result of these factors, our long distance line of business
has contributed less to our total revenues than we expected. We believe that
competition in the Mexican long distance market has stimulated growth in demand
for long distance service.
</FONT>

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

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 other carriers. At December&nbsp;31, 2002, we
provided long distance service in 52 cities to 2,096,049 customers, 2,088,241
of which were existing customers of 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 are entitled to obtain exemptions annually from the presubscription
obligation for our cellular customers. We cannot ensure that we will receive
this exemption in the future. Revenues related to long distance services
represented 10.4% and 8.2% of our total revenues for 2001 and 2002,
respectively, not including dark fiber optic cable sales.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We 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 allowed us to acquire fibers in the long distance fiber optic
networks built by Marcatel and Bestel in central and northern Mexico in
exchange for fibers in the long distance fiber optic network we completed in
central Mexico. As a result, we obtained redundancy in central Mexico and
access to the United States border at minimal cost. We consummated the
agreement with Marcatel in July 2002. The transaction generated an
extraordinary gain of approximately Ps.53.0&nbsp;million (U.S.$5.1&nbsp;million) in the
third quarter of 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Telereunion, S.A. de C.V. </I>(which we refer
to as Telereunion), an affiliate of Telescape International, Inc. Upon the
execution 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 whereby Telereunion transferred dark fiber optic assets
in the amount of U.S.$7.4&nbsp;million to Iusatel in exchange for full settlement of
the past notes receivable in the same amount. In 2001, we also entered into a
fiber optic cable swap agreement valued at Ps.142.7&nbsp;million (U.S.$13.7&nbsp;million)
to exchange certain long-distance fiber optic cables.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#038;T, giving Iusatel two alternative
routes to deliver international long distance traffic, thereby reducing costs
and enhancing its proportional return traffic. In March 2002, the United
States Federal Communications Commission granted to Iusatel USA Inc., a
subsidiary of Iusatel, Iusacell Celular&#146;s long distance services provider, a
Section&nbsp;214 authorization that allows Iusacell to provide global or limited
global facilities-based and resale telecommunications services within the U.S.,
except those states in which Verizon has not yet received Section&nbsp;271
authorization and permissible international points. Iusatel USA Inc. has
international termination traffic contracts with several U.S. carriers
including Verizon affiliates.
</FONT>


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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;14, 1995, Iusacell Celular and <I>Infomin, S.A. de C.V.</I>, which we
refer to as Infomin, formed <I>Infotelecom, S.A. de C.V. </I>(Infotelecom) as a joint
venture to market national and international paging services. Iusacell Celular
owns 49% of Infotelecom. See &#147;&#151; Government Regulation &#151; Paging.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Infotelecom began marketing paging services in August 1996 and, at
December&nbsp;31, 2002, provided service in 34 cities including Mexico City,
Guadalajara, Monterrey, Puebla, Cuernavaca, Toluca, Quer&#233;taro, Le&#243;n, and Ciudad
Ju&#225;rez. As of December&nbsp;31, 2002, Infotelecom had 8,315 paging customers. Our
revenues from paging services represented less than 0.5% of total revenues for
each of 2001 and 2002.
</FONT>

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


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We operate public and rural telephony programs, using 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 uses our cellular network to provide
telecommunications coverage in areas with little or no basic service. As of
December&nbsp;31, 2002, we had 48,885 cellular telephones in service under our
public and rural telephony programs, representing a 28.7% increase compared to
37,972 cellular phones in service as of December&nbsp;31, 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, we were providing, on a trial basis pending
approval from Mexico&#146;s Ministry of Communications and Transport (<I>Secretar&#237;a de
Comunicaciones y Transportes</I>), which we refer to as the SCT, local wireless
service in the 450 MHz frequency band to 7,041 customers in selected markets in
Region 9. We do not charge our local wireless customers fees for incoming
calls.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We experienced substantial delays in obtaining the SCT&#146;s approval of our
technical and economic plans for local wireless service in the 450 MHz
frequency band. However, on June&nbsp;10, 1997, we reached an agreement with SCT
agreed on a process according to which we 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 all
nine geographic regions 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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 1997, <I>Iusatelecomunicaciones, S.A. de C.V.</I>
(Iusatelecomunicaciones), Iusacell Celular&#146;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.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Satelitr&#243;n,
S.A. de C.V.</I>, which we refer to as Satelitr&#243;n, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the latter part of 2001, we began providing fixed data transmission
services. We offer three types of services through our fiber optic network
calling: (i)&nbsp;private lines such as E-1, E3/DS3 and STM1 directly to carriers
and large corporate customers; (ii)&nbsp;Internet access to carriers and ISP
providers; and (iii)&nbsp;digital multiservices connection to the customer&#146;s private
branch exchange (PBX)&nbsp;to reduce costs for cellular and long distance calls to
carriers and corporate customers.
</FONT>

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

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2003, we launched Mexico&#146;s first CDMA2000 1XRTT voice and
high-speed mobile data network in Mexico City. With this advanced network, we
have increased our voice capacity and offer subscribers new data services such
as high-speed access for internet, intranet, e-mail, instant messaging,
multiple download for multimedia applications and M2M solutions at speeds of up
to 144 kilobits per second (kbps). Our targeted customers are primarily
Mexican-based carriers and corporations.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1998, the SCT issued three 20-year concessions to
<I>Punto-a-Punto Iusacell, S.A. de C.V. </I>(Punto-a-Punto Iusacell), 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.45.0&nbsp;million (U.S.$4.3&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
capacity in these frequencies to other users to enable them to install their
own microwave links.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 installed
links in those frequencies.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taken as a whole, our business is not materially affected by seasonality.
</FONT>


<P align="left"><FONT size="2"><B>Sources of Revenues</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a breakdown of our total revenues by source for the years ended
December&nbsp;31, 2001 and 2002, see Item&nbsp;5, &#147;Operating and Financial Review and
Prospects &#151; Operating Results &#151; Year Ended December&nbsp;31, 2002 Compared to Year
Ended December&nbsp;31, 2001.&#148;
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our marketing strategy is directed to achieve profitable growth,
particularly in our mobile wireless business. We have focused our sales and
marketing strategy on the high-value digital customer, defined as the person
who utilizes and depends on cellular communications on a daily basis. We seek
to increase our average monthly revenue per subscriber, control and sustain our
churn rates, decrease the cost of acquiring additional postpaid and prepaid
subscribers and grow our mobile wireless subscriber base profitably.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the second half of 2002, we performed a deeper segmentation in our
subscriber base. Our mobile wireless subscribers are now cataloged according
to four different usage profiles. We are implementing distribution,
advertising, customer service support and pricing plans targeted to each
specific customer segment and to increase airtime usage. Our customer
relationship management initiatives have included a variety of tools that
manage the relationship cycle from sales, to support and billing.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 corporate 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,
2002, Iusacell Celular had 57,513 points of distribution, as compared to
45,985, 20,762, 6,522 and 2,280 at December&nbsp;31, 2001, 2000, 1999 and 1998,
respectively. As of December&nbsp;31, 2002 these points of sale comprised 128
customer sales and service centers owned and operated by Iusacell Celular,
1,152 points of sale operated by independent distributors and national
</FONT>
<P align="center"><FONT size="2">24</FONT>


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<P align="left"><FONT size="2">retailers who offer all of our products, and 55,837 points of sale for
distribution only of VIVA prepaid cards, also operated by independent
distributors.
</FONT>

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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have reconfigured each of our customer sales and service centers to
offer one-stop-shopping for a variety of cellular, long distance and
accessories. Walk-in customers can subscribe to cellular service postpaid
plans, purchase prepaid cards, sign up for long distance service and purchase
equipment such as handsets and accessories. In an effort to maximize customer
loyalty, reduce postpaid churn and prepaid 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 key
distribution channels.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 8 new customer sales and service
centers. In 2002, we opened 1 new customer sales and service center. We now
have a total of 128 customer sales and service centers throughout our cellular
regions. In the second half of 2002, we decided to perform a series of
revisions to our service centers, including performance and location
assessments. As a result, in 2003 and 2004, we will perform the re-location
and remodeling of all of the owned stores, and we will continue opening stores
in high-traffic areas and shopping centers nationwide.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2001 face-to-face customer service was integrated into certain of our
owned stores in an effort to further personalize the service. In 2003, we
expect to include a customer service representative in all of the stores we
own.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To service the needs of our corporate customers, we have created a direct
sales force, which, at December&nbsp;31, 2002, included 79 full-time sales
representatives. This group of trained representatives seeks to increase sales
by:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">aggressively pursuing sales opportunities in the corporate segment;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">&#147;bundling&#148; combinations of services into customized packages
designed to meet customers&#146; requirements;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">developing and marketing new services to satisfy the demands of such customers; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">educating corporate purchasing managers about alternative pricing plans and services.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These direct sales representatives are distributed along our service
regions to deliver personalized service.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to broaden our market, we maintain relationships with a broad
network of exclusive distributors and national retailers that, at December&nbsp;31,
2002, sold all of our products at 1,548 points of sale in Mexico. With the
intention of relying to a lesser extent on certain large distributors, in 2002
we began to directly contract with key
distribution channels that had previously been served via third party
distributors. In addition, VIVA prepaid cards were distributed at an
additional 55,837 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="center"><FONT size="2">25</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We retain commission agents as a flexible sales force in all of our mobile
wireless regions. The agents function as cellular service brokers for us,
working out of their own premises to better target their customers. These
agents provide additional distribution outlets with minimal support from us.
We used to retain commission agents as a flexible sales force throughout our
regions with management from our customer sales and service centers. This
channel was redeployed in early 2003.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, Iusacell Celular engages telemarketing service
providers as a direct marketing mechanism or to follow up on targeted outbound
calls and receive calls through an 800 number.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have implemented three important electronic tools for the sale of
prepaid airtime: sales through automated teller machines at banks, sales over
the phone by dialing *AIRE and sales through our website &#150;www.iusacell.com.
Sales at ATM machines are charged against our customer&#146;s bank account by using
a personal identification number. We have implemented ATM sales at
Banamex-Citibank, BBVA Bancomer, Bital and Bancrecer. In first half of 2003,
we entered into additional ATM distribution agreements for the sale of prepaid
airtime. Sales using *AIRE and our website are charged to our customer&#146;s
credit card.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2002, Iusacell Celular launched an integrated media plan, including a
repositioning campaign, also emphasizing the benefits of our products. The
effort is supported by the <I>Iusacell</I>&#153; brand image. All product offerings
have been marketed under the single, <I>Iusacell</I>&#153; brand name which was
reinaugurated as <I>Iusacell Valora tu Espacio </I>in 2002, as part of the
repositioning campaign launched in the later part of the year. This
customer-oriented campaign was focused on customer satisfaction and supported
by higher value offerings.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 and Iusacell Celular, with an emphasis on customer care and to target
potential subscribers through a coordinated print, radio, television and fixed
and moving outdoor advertising campaigns. 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="left"><FONT size="2"><B>Customer Service</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We view superior customer service as essential in order to distinguish
ourselves in the competitive Mexican wireless telecommunications market.
Postpaid customers can access dedicated support by dialing *611, where trained
customer service representatives are equipped to answer questions regarding
services and products 24 hours a day. 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 post-sales support, is
essential to developing brand loyalty and supports the efforts of our sales
force to cross-sell our services and products. Prepaid customers can access
support by dialing *VIVA.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The VIVA prepaid operating system has improved customer satisfaction
through automated activation, automated self service menus through the
Integrated Voice Response (IVR)&nbsp;system, voice messaging and other services and
has lowered the cost of support services.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
</FONT>
<P align="center"><FONT size="2">26</FONT>

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<P align="left"><FONT size="2">with real-time data and a full customer profile
in hand. 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
Celular&#146;s services and products. We completed the process of upgrading our
Automatic Call Distribution (ACD)&nbsp;system in the second half of 2002. At the
same time, we also completed the process of upgrading our monitoring and
workforce management systems.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1998, we opened two call centers that provide more automated and
efficient service to customers. In 2002, we consolidated these facilities into
one center that manages all customer care operations for all of our concession
areas. In order to accelerate the problem resolution process at both the call
centers and in our company owned stores, we implemented the Customer Attention
Support Team (CAST)&nbsp;program, which has been extended to all of 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
addition, we are in the process of dedicating a customer support function in
each company-owned store.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, we redesigned the compensation plan for customer care
representatives. Whereas our customer care representatives previously received
a fixed salary under our compensation plan, the compensation plan today is
designed to motivate the customer service force by compensating customer care
representatives based on performance as measured according to various service
indicators. This plan provides continuous training and certification and basic
salary and monetary incentives designed to encourage resolution of customer
problems, subscriber retention, loyalty, precision and quality.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 </I>(EMA)&nbsp;to Iusacell Celular&#146;s customer care process. Our most
recent quality audit was conducted in mid-2002; however, we did not seek
re-certification. At year-end 2002, we began the certification review process
for Customer Operations Performance Center (COPC)&nbsp;accreditation, which
certifies customer contact operations according to international best
practices.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>General</I>. Iusacell Celular offers a variety of flexible pricing options
for our mobile wireless service. The primary components of the postpaid
pricing plans include monthly fees, additional per-minute usage charges and a
number of free minutes per month. The prepaid program markets cards which
credit peso amounts to a customer&#146;s account. The cards can be used for
outgoing and long distance incoming calls over a period of 60&nbsp;days (or in the
case of Ps.450.0 prepaid cards, 90&nbsp;days). See Item&nbsp;4, &#147;Information on the
Company &#151; Business Overview &#151; Cellular Services &#151; Prepaid Customers.&#148; Most of
the postpaid plans include a selection of free cellular handsets. The prepaid
plans do not provide free cellular handsets.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We continually review market pricing in order to maintain a competitive
offer and attract customers from our target market. As a result, 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 &#151; Trend Information &#151; Price Increases and
Rollbacks.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Postpaid Plans</I>. The 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 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
minutes included, a less expensive handset and higher per minute airtime
charges than those options chosen by high-usage customers.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2003, we launched a new set of postpaid value plans aimed to
position us as the best alternative for the targeted high-value market segment.
These new postpaid plans were designed according to the needs of targeted
consumer segments and are supported by advertising and marketing campaigns that
anchor the effort.
</FONT>

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

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The three new postpaid value plans include a NAFTA plan, in which local
calls, as well as calls within Mexico, the U.S. and Canada, are all priced at
the same per minute rate; an unlimited nights and weekends designed to increase
cellular traffic leveraging non-peak utilization hours; and a basic plan with
affordable rates designed to compete directly with competitors&#146; plans by
incorporating higher baseline minutes. Furthermore, we offer multi-line plans
designed to fit the communication needs of small groups of users. Finally, in
Region 8, the region we have entered most recently, we offer local plans with
competitive per minute pricing.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer to our corporate customers either a flexible combination of our
various service packages at a volume rate or a large pool of minutes that can
be shared among all users at a competitive per minute price.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Prepaid Plans</I>. In contrast to postpaid subscribers, prepaid customers
typically generate lower 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. In addition to helping
customers control costs, our prepaid programs have no monthly bill and allow
customers to prepay for cellular services in cash.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September 1997, we introduced our VIVA prepaid service. VIVA provides
for automated reactivation and value-added services such as voice-messaging.
As of December&nbsp;31, 2002, VIVA prepaid cards were available in denominations of
Ps.100.0, Ps.150.0, Ps.250.0 and Ps.450.0. In February 2003, new prepaid cards
with aggressive prices per minute were launched in an effort to increase
airtime recharges and to respond to the new tax initiatives implemented by the
Mexican government in January 2003. See Item&nbsp;3, &#147;Key Information &#151; Risk
Factors &#151; Risk Factors Relating to Doing Business in Mexico.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Hybrid Plans</I>. In 2000, we launched a hybrid plan which features elements
of postpaid and prepaid plans targeted at high school and university-aged
youths who want the status of a cellular phone but want to control their usage.
In March 2003, we decided to discontinue the hybrid plans because of the high
level of churn experienced.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We can activate a phone within 15 minutes or less for any prepaid and
postpaid customers through the use of new technologies such as Over The Air
Service Provisioning. For postpaid customers who intend to pay their monthly
charges either with a credit card or in cash there is an automatic credit
scoring process prior to the delivery and activation of a cellular telephone.
Depending on the risk profile resulting from the credit scoring, the deposit
requirements are determined automatically.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Billing is currently administered using five different billing systems,
including a cellular customer care and billing system provided by <I>Schlumberger
Distribution Mexico, S.A. de C.V. </I>(SchlumbergerSema) 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 a half-an-hour basis for processing by our billing systems. We
have measures in place that enable us to recover billing information that may
be lost as a result of disasters.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We invoice our postpaid customers at the end of each month for the
previous month&#146;s service. All customers have 21 credit days, after which they
receive an overdue balance notification, except for a select number of postpaid
customers distinguished by volume, which customers are allowed 36 credit days.
Our payment policy stipulates that after 60&nbsp;days of non-payment, lines are
suspended, and after 120&nbsp;days of nonpayment, these lines are disconnected and
considered as delinquent accounts.
</FONT>

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

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We mitigate our credit exposure in five ways:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">by performing an automatic credit scoring and depending on the risk
profile, we may require our customers to prepay a certain number of
monthly fees;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">by requiring payment to be made by credit card;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">by establishing credit limits and portfolio segmentation, according to customers&#146; credit quality; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">by offering prepaid services, which eliminate all credit risk.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2000 and 2001, we reserved approximately 1.6% and 1.7% of our cellular
revenues in each year for doubtful accounts. For 2002, we reserved
approximately 1.1% of our revenues for doubtful accounts.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we also record a revenue provision for those postpaid
customers who have fallen behind on 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 monthly fees upon suspension, in hopes 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>


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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After a thorough analysis that we conducted in coordination with Bell
Atlantic in 1996, we elected to deploy CDMA digital technology instead of
TDMA/GSM technology. Currently, all Verizon affiliates are successfully using
CDMA technology, including those operating in the U.S. markets. CDMA offers
significantly greater call-carrying capacity, superior voice quality, longer
telephone battery life and greater fraud protection than TDMA. In addition,
CDMA is easier to upgrade than TDMA. CDMA data capabilities are superior to
any GSM/GPRS network.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1997, Iusacell Celular signed an agreement with subsidiaries
of Lucent Technologies for the replacement of Iusacell Celular&#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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, our integrated mobile wireless network was
comprised of 6 cellular switches, 582 cellular cell sites, 31 microwave
repeaters, covering 43&nbsp;million inhabitants or 50% of Mexico&#146;s total population
in our concessioned regions. During 2002, we added 45 new cellular cell sites.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, we have 678 microwave links, all of which are owned by us, with
either SDH or PDH technology. Additionally, we have leased lines located mainly
in Region 8. In 1996, we launched long distance services, supported by 3
switches and fiber optic links. Currently, we have 5,176 kilometers of fiber
optic backbone network, in both metropolitan and long distance segments, using
SDH (STM16 capacity in the backbone) and two LD switches operating. In 2001,
we introduced the new Dense Wavelength Division Multiplexing (DWDM)&nbsp;technology
in several high-traffic segments of our fiber optic network to increase
capacity. In 2002, we expanded this technology to three existing links of the
fiber optic network.
</FONT>

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

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a network operations and control center (NOCC)&nbsp;in Mexico City
which oversees, administers and provides technical support to all our cellular
regions. During 2000, we implemented a new network administration system that
provides better surveillance and administration of network performance. In
2002, we installed another center for network operations in Toluca that
provides an alternative monitoring capability for the network in the event an
emergency occurs at the NOCC in Mexico City.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2002, we started providing two-way Short Message Service (SMS)&nbsp;and
since January 2003, we have been providing Packet Switched Data (PSD)&nbsp;services
using 3G-1XRTT standard. Currently, we provide 1XRTT services in Mexico City,
Toluca, Cuernavaca and Valle de Bravo and expect to expand our coverage by the
end of 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our strategy for the future is to improve our coverage, to focus on our
target market (according to our marketing strategy) and to maintain superior
performance and voice quality standards. We will continue to maintain
transmitting equipment to serve both analog and digital equipment. Currently,
we are marketing tri-mode cellular telephones capable of sending and receiving
both analog and digital transmissions in order to support roaming service
between our cellular regions. We will increase coverage and optimize
technology such as the 1XRTT network in order to support the latest data
applications, the Over the Air Service Provisioning Technology and transitions
to the next-generation technology for long distance communications services.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently uses the JD Edwards World Software for Enterprise Resource
Planning (ERP), working mainly with various accounting and administrative
modules. We implemented this system in 1994 and have been basically using the
same version of the JD Edwards World Software since implementation. However,
in recognition of the need to upgrade our technology, to improve financial
processes and to take steps to comply with the Sarbanes-Oxley Act of 2002, we
intend on implementing a new release of the JD Edwards World Software in 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To improve the flow of information within the company, we intend on
implementing a corporate data warehouse system in 2003. This repository system
will contain all data related to business processes and will be updated on a
regular basis to ensure that available data will be preserved.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wireless mobile communication 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 such rates are set on the basis
of cost. The offering of wireless mobile communication services in Mexico is
highly competitive with one operator, Telcel, commanding a significant share of
the market.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular faces competition from Telcel, which is the largest
wireless communications provider. Telcel holds the Cellular B-band concession.
<I>Telef&#243;nica M&#243;viles, S.A. </I>also operates its Cellular Band A concessions in the
northern part of Mexico through its Mexican subsidiary. In May 2002,
Telef&#243;nica announced an aggressive expansion program with over U.S.$1.5&nbsp;billion
in capital expenditures planned through 2005 to expand capacity, integrate
their concession areas and overlay a GSM network on their existing
infrastructure. 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 10
additional cities in Mexico.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also face competition from companies providing mobile wireless
telecommunications services using alternative existing technologies. <I>Nextel de
M&#233;xico, S.A. de C.V. </I>began marketing its enhanced specialized mobile radio
services in 1998 and covers 15 cities in Mexico.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In providing long distance telephone service, we face competition from 9
other concession holders, including Telmex and <I>Alestra S.A. de C.V. </I>and <I>Avantel
S.A. de C.V.</I>, joint venture companies in which AT&#038;T and MCI WorldCom,
respectively, 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
</FONT>
<P align="center"><FONT size="2">30</FONT>

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<P align="left"><FONT size="2">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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In providing data transmission services, we compete for customers with
Telmex, state-owned <I>Telecomunicaciones de M&#233;xico </I>and operational long distance
companies to form a highly competitive market with more than 20 participants.
In addition, we believe that the current Mexican data transmission industry
includes over 1,000 private networks that provide data transmission services.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, local telephony, mobile and other telecommunications
services 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;applications to obtain concessions to install, maintain and operate telecommunications systems;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the establishment of technical standards for the provision of telecommunications services;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the grant, revocation and modification of concessions and permits; and
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the auction of spectrum.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2001 and 2002, 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 cannot ensure that the initiative will
be presented to Congress for approval in 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 us and our subisidiaries, 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"><FONT size="2"><B>Concessions and Permits</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 align="center"><FONT size="2">31</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the type of network, system or service;
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the allocated spectrum, if applicable;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the geographical region in which the holder of the concession may provide the service;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the required capital expenditure program;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the term during which such service may be provided;
</FONT>

<P>
<TABLE align="center" cellspacing="0" cellpadding="0" border="0" width="100%">
 <TR>
  <TD valign='top' width='2%'><FONT size="2">&nbsp;</FONT></TD>
  <TD valign='top' width='1%'><FONT size="2">&#149;</FONT>
</TD>
  <TD valign='top' width='2%'><FONT size="2">&nbsp;</FONT></TD>
  <TD valign='top' width='95%'><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>
</TABLE>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any other rights and obligations affecting the concession holder.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the 1995 Telecommunications Law and the 1993 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). There are no foreign investment participation restrictions with
respect to operations conducted under permits.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">expiration of its term;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">resignation by the concession holder or the permit holder;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">revocation;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">expropriation; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">dissolution or bankruptcy of the concession holder or the permit holder.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">unauthorized or unjustified interruption of service;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the taking of any action that impairs the rights of other concessionaires or permit holders;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">failure to comply with the obligations or conditions specified in the concession or permit;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">failure to provide interconnection services to other holders of
telecommunications concessions and permits;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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>
</TABLE>
<P align="center"><FONT size="2">32</FONT>


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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">participation of any foreign government in the capital stock of the
holder of the concession or permit.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the SCT may establish for any concession further events which
could result in revocation of that concession.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Mexican government has 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Mexican
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. We are 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Original Concession</I>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;1, 1957, as amended, which we refer to as the
Original Concession, to <I>Servicio Organizado Secretarial, S.A.</I>, which merged
into <I>SOS Telecomunicaciones, S.A. de C.V.</I>, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 equal
to 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 radio
communications network.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">33</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the 1995 Telecommunications Law, SOS applied to renew
the Original Concession in March 1997. 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 continue negotiating the terms and conditions for such
extension and division with COFETEL.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Comunicaciones Celulares de Occidente, S.A. de C.V.</I>, known as
Comcel, <I>Sistemas Telef&#243;nicos Port&#225;tiles Celulares, S.A. de C.V.</I>, known as
Portacel, <I>Telecomunicaciones del Golfo, S.A. de C.V.</I>, known as Telgolfo, and
<I>Portatel del Sureste, S.A. de C.V. </I>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 cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Subsidiary</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percent of Gross Revenues Payable To Mexican Government</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Comcel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Portacel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Telgolfo</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Portatel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">34</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 venture so long as Verizon continued to control the
management of Iusacell and Iusacell Celular continued to hold more than 49% of
the voting shares of Infotelecom.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 expect the transfer of the concession to be
implemented in 2003. The financial statements of Infotelecom are consolidated
with the financial statements of Iusacell Celular. See Note 2 to the
Consolidated Financial Statements.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the modified concession, Iusatel is required to comply with
technical specifications and had to serve using 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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2 to the Consolidated
Financial Statements.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe our right to provide local telephony service is derived from
the Original Concession. The Original Concession, as granted, permitted SOS to
provide radiocommunications service to vehicle-mounted terminal equipment
nationwide.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">35</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These regulations classified radiocommunications services on the basis of
the networks used to provide such services rather than on 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="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s approval of our technical and economic plans for local
wireless service in the 450 MHz frequency band.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However, we have reached an agreement with the SCT on a technical process
by which we can provide local wireless service in the 450 MHz frequency band in
some of the 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November 1998, Mr.&nbsp;Elizondo agreed to subscribe 5.1% of the capital
stock of Iusatelecomunicaciones, 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 (<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 2 to the Consolidated Financial Statements.
</FONT>

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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dedicated Microwave Circuit Services Permit</I>
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">secretarial service;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">voice mail; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">data transmission.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</FONT>
<P align="center"><FONT size="2">36</FONT>

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<P align="left"><FONT size="2">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"><FONT size="2"><B>Foreign Ownership Restrictions</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November 1998, Iusacell 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. Iusacell retained 49% of the voting shares of these
subsidiaries, representing 4.9% of their capital. Iusacell also holds 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,
Iusacell holds a 94.9% equity interest in these two subsidiaries, whose
financial results it consolidates.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To participate in the auctions for concessions for microwave frequencies
concluded in September 1997, we formed Punto-a-Punto Iusacell, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moreover, in December 1998 Mr.&nbsp;Elizondo acquired a 2% interest in
Infotelecom, from us. As a result, Iusacell currently holds only 49% of this
entity, complying with the condition precedent necessary to allow Iusacell&#146;s
other partner, Infomin, a Mexican controlled company, to transfer its paging
concession to Infotelecom, as previously agreed.
</FONT>


<P align="left"><FONT size="2"><B>Rates for Telecommunications Services</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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,
</FONT>
<P align="center"><FONT size="2">37</FONT>

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<P align="left"><FONT size="2">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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 negotiated with Telmex to obtain similar
terms for both our long distance business and local cellular interconnection
rate and these terms have been maintained until 2003.
</FONT>


<P align="left"><FONT size="2"><B>United States Regulation</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1982, Bell Atlantic, like other regional Bell operating companies, was
subject to a consent decree which we refer to as the Decree, resulting from
anti-trust litigation between the United States Department of Justice against
AT&#038;T. The Decree required AT&#038;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Telecommunications Act of 1996 (hereinafter referred to as the &#147;1996
Act&#148;), which became effective on February&nbsp;8, 1996, includes provisions that
open local telephony markets to competition and permitted regional Bell
operating companies, such as the local operating telephone companies of the
former Bell Atlantic, to provide interLATA services (long distance), video
programming and to engage in manufacturing, under certain conditions. 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since Iusacell 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)&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 cable
systems and satellite 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 1996 Act eliminated certain restrictions under the Decree including:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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 </FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">38</FONT>

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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><FONT size="2">&nbsp;</FONT></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other laws of the United States may restrict activities of Iusacell 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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">39</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"><FONT size="2"><B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ORGANIZATIONAL STRUCTURE</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100% of our shares are owned by <I>Grupo Iusacell, S.A. de C.V. </I>The
following table shows our direct and indirect subsidiaries, their principal
lines of business, their countries of incorporation and the percentages of our
ownership interest and voting power as of December&nbsp;31, 2002.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>% direct and</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>% direct and</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>indirect</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>indirect</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Country of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>economic</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>voting</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Subsidiary</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Line of Business</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Incorporation</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>interest</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>interest</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>SOS Telecomunicaciones, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Region 9 cellular
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Comunicaciones Celulares de Occidente,
S.A. de C.V.</I><SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Region 5 cellular
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Sistemas Telef&#243;nicos Port&#225;tiles
Celulares, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Region 6 cellular
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Telecomunicaciones del Golfo,
S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Region 7 cellular
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusacell, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Sales and marketing
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Sistecel, S.A. de C.V</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Administrative services
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusatel, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD 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 align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">94.9</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">49.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD 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="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Long distance U.S
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">94.9</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">49.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusatelecomunicaciones, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Local wireless
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">94.9</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">49.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Grupo Iusacell Nicaragua, S.A.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Inactive
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Nicaragua
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Punto-a-Punto Iusacell, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Microwave transmission
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">94.9</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">49.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Infotelecom, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Paging
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">49.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">49.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Inmobiliaria Montes Urales 460,
S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Real estate
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusanet, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Editorial Celular, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Publishing
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">40.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">40.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Grupo Portatel, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Region 8 cellular
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Portatel del Sureste, S.A. de
C.V.</I><SUP>(3)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
Region 8 cellular
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mexican Cellular Investment, Inc.</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Holding company for <I>Comunicaciones Celulares de Occidente, S.A. de
C.V.</I>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" 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 nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">100.0</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Held through Mexican Cellular Investment, Inc.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Held through <I>Iusatel, S.A. de C.V.</I></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(3)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Held through <I>Grupo Portatel, S.A. de C.V.</I></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the above companies, including those in which we own directly or
indirectly a minority voting interest, except for <I>Editorial Celular, S.A. de
C.V.</I>, are consolidated with the financial statements of Iusacell Celular. See
Note 2 to the Consolidated Financial Statements.
</FONT>

<P align="left"><FONT size="2"><B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PROPERTY, PLANT AND EQUIPMENT</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, we operated in our service regions a total of 128
customer sales and service centers, 582 cellular cell sites, 123 repeaters, 31
cellular 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, Guanajuato,
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">40</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;29, 1999, we entered into a series of agreements, which
agreements were amended in May 2002, with MATC Celular with respect to our
existing towers and future tower needs. As of May&nbsp;30, 2003, our subsidiaries
lease from MATC Celular 715 sites, including 320 transfer sites, a number of
built-to-suit sites and co-locations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, the book value of our property and equipment,
before accumulated depreciation of Ps.6,894.2&nbsp;million (U.S.$661.3&nbsp;million),
consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Value</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>(in thousands of constant pesos</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>as of December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>and millions of U.S. dollars)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Property and Equipment</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,725.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">165.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">10,762.2</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"><FONT size="2">1,032.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">379.3</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"><FONT size="2">36.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">61.9</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"><FONT size="2">5.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,759.9</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"><FONT size="2">168.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">1.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">68.9</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"><FONT size="2">6.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">678.0</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"><FONT size="2">65.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1.1</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"><FONT size="2">0.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Item&nbsp;5, &#147;Operating and Financial Review and Prospects &#151; Liquidity and
Capital Resources &#151; Capital Expenditures&#148; for a discussion of our planned
capital expenditures and existing encumbrances on our property and equipment.
See also Notes 4 and 8 to the Consolidated Financial Statements.
</FONT>

<!-- link2 "ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>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, 2002. The
U.S. dollar translations provided in this Annual Report are, unless otherwise
indicated, calculated at the Noon Buying Rate at December&nbsp;31, 2002, which was
Ps.10.425 per U.S.$1.00. Sums may not add due to rounding.</I>
</FONT>

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


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion and analysis is intended to help you understand
and assess the significant changes and trends in the historical results of
operations and financial condition of Iusacell Celular and its subsidiaries and
the factors affecting our financial resources.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consolidated Financial Statements have been prepared in accordance
with Mexican GAAP, which differs in certain significant respects from U.S.
GAAP. Note 22 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. Note 22 to the Consolidated Financial Statements also
provides a reconciliation to U.S. GAAP of Iusacell Celular&#146;s net income (loss)
for the years ended December&nbsp;31, 2000, 2001 and 2002 and of stockholders&#146;
equity as of December&nbsp;31, 2001 and 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a Mexican company, we maintain our financial records in pesos.
Pursuant to Bulletin B-10, &#147;Recognition of the Effects of Inflation on
Financial Information,&#148; and Bulletin 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 in comparable monetary units. Bulletin B-10 requires us to
restate non-monetary assets, non-monetary liabilities and the
</FONT>
<P align="center"><FONT size="2">41</FONT>

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<P align="left"><FONT size="2">components of
stockholders&#146; equity using the INPC. We have not eliminated the effects of
these inflation accounting principles in the reconciliation to U.S. GAAP. See
Note 22 to the Consolidated Financial Statements.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, 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 2000, 2001 and 2002, the
rates of inflation in Mexico, as measured by changes in the INPC, were 9.0%,
4.4% and 5.7%, respectively. The inflation indices used are 1.1036 for 2000
figures and 1.0570 for 2001 figures.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, &#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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">net interest expense or interest income;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">net foreign exchange gains or losses; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">net gains or losses on monetary position.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 required to repay the specified amount of the foreign currency liability.
We incurred a foreign exchange loss in 2000 and 2002 on our U.S. dollar
denominated debt as the peso depreciated against 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 required to repay the specified amount of the
foreign currency liability. In 2001, we incurred a foreign exchange gain on
our U.S. dollar denominated debt as the peso appreciated against the U.S.
dollar.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2000, 2001 and 2002, as the purchasing power of the
peso declines over time.
</FONT>


<P align="left"><FONT size="2"><B>Devaluation and Inflation</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
in recent years, depreciating by 1.5% and 13.7% against the U.S. dollar in 2000
and 2002, respectively, and appreciating by 4.8% in 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 4.4% in 2001 and 5.7% in
2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">42</FONT>

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<P align="left"><FONT size="2"><B>Impact of Devaluation and Inflation on our Results of Operations</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Significant inflation leads to an upward restatement of our assets,
resulting in a substantial increase in depreciation and amortization
expense; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See &#147;&#151; Liquidity and Capital Resources &#151; Certain Hedging Activities&#148; and
Item&nbsp;11, &#147;Quantitative and Qualitative Disclosures about Market Risk&#148; for a
description of contracts we have used to hedge against the devaluation of the
peso and inflation.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1999, we entered into a series of agreements with MATC
Celular. These agreements, which were amended in May 2002, among other things,
gave MATC Celular the right to acquire approximately 350 of our existing
non-strategic towers. We sold and leased back a total of 67 non-strategic
towers to MATC Celular for approximately Ps.91.6&nbsp;million in net gains in 2002.
During 2001 and 2002, we sold and leased back a total of 311 non-strategic
cellular towers to MATC Celular and fulfilled our contractual obligation under
the existing agreements. We have no further commitment with MATC Cellular to
sell additional towers. We are leasing back these towers from MATC Celular and
subleasing them to our operating subsidiaries.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The difference between the sale price and book value of the towers sold is
being recorded as a reduction in operating expense. In 2002, we recorded an
expense reduction under Mexican GAAP of Ps.91.6&nbsp;million in connection with our
sale of 67 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 2002. Under U.S. GAAP, the gain was deferred and recognized on
a pro-rata basis over the life of the lease. See Note 22 to the Consolidated
Financial Statements for a further discussion.
</FONT>

<P align="center"><FONT size="2">43</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"><FONT size="2"><B>Results of Operations</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents results of operations data for the years
ended December&nbsp;31, 2001 and 2002.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Change</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="11"><FONT size="1"><B>(In millions of constant<BR>December 31, 2002 pesos except <BR>percentages)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">6,647.3</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"><FONT size="2">5,581.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,960.4</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"><FONT size="2">2,037.4</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"><FONT size="2">3.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">2,346.8</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"><FONT size="2">1,783.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">2,715.1</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"><FONT size="2">2,121.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(21.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other operating income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">325.4</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"><FONT size="2">91.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(71.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49.6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(269.3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(442.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">132.2</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"><FONT size="2">671.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(407.7</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314.6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,060.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(237.2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Revenues</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Our cellular service
revenues also include revenues attributable to in-roaming and long distance
service revenue generated by our mobile wireless subscribers, revenues from the
provision of telecommunication services in Mexico other than mobile wireless
telephone service, including long distance service revenues from non-mobile
subscribers and revenues from the provision of data transmission, fixed local
wireless and paging services. Our service revenues 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 the 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"><FONT size="2"><B>Year Ended December&nbsp;31, 2002 Compared to Year Ended December&nbsp;31, 2001</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the sources of our revenues for the years
ended December&nbsp;31, 2001 and 2002:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Change</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="19"><FONT size="1"><B>(In millions of constant pesos as of December 31, 2002, except percentages)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">6,005.6</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"><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"><FONT size="2">4,989.7</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"><FONT size="2">89.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">641.7</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"><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"><FONT size="2">591.9</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"><FONT size="2">10.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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"><FONT size="2">6,647.3</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"><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"><FONT size="2">5,581.6</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"><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">44</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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below presents service revenues by source for the years ended
December&nbsp;31, 2001 and 2002:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Change</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="19"><FONT size="1"><B>(In millions of constant pesos as of December 31, 2002, except percentages)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">3,002.7</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"><FONT size="2">50.0</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"><FONT size="2">1,517.7</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"><FONT size="2">30.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49.5</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,842.4</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"><FONT size="2">30.7</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"><FONT size="2">2,631.4</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"><FONT size="2">52.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(42.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">686.4</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"><FONT size="2">11.4</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"><FONT size="2">436.2</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"><FONT size="2">8.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(36.5</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">474.1</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"><FONT size="2">7.9</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"><FONT size="2">338.1</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"><FONT size="2">6.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28.7</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other<SUP>(4)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">66.3</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"><FONT size="2">1.4</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">6,005.6</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"><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"><FONT size="2">4,989.7</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"><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16.9</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Figures include intercompany eliminations.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 for and prepaid outgoing minutes net
of unbilled minutes. Incoming and outgoing airtime is charged on a
per-minute basis.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(3)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 magazines, as well as in-roaming service revenue. Does not
include charges for related airtime. Customers using SMS 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>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(4)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Includes administrative revenues from our parent company, Iusacell.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The customer base increased 10.2% in 2002, growing from 1,854,697
customers in 2001 to 2,044,293 in 2002. The 2002 growth occurred primarily
during the first half of the year as management focused on increasing the
prepaid customer base. During the second half of the year, both gross and net
additions declined comparatively, reflecting the new emphasis on high-value
customers. Year over year subscriber growth was negatively impacted by this
change in strategy. A high churn rate, particularly in the prepaid and
&#147;incoming calls only&#148; base, combined with continued economic pressures on
Mexican consumption contributed to the decline.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid customers increased 16.7% in 2002, from 1,450,709 customers in
2001 to 1,692,511 in 2002. The increase in 2002 reflects our efforts at that
time to expand that segment. &#147;Incoming calls only&#148; prepaid customers, the
substantially majority of whom generate little traffic, grew by 51.3% in 2002,
from 768,076 customers in 2001 to 1,162,188 in 2002. Revenues from these
customers do not have certain costs associated with them which we incur in
connection with postpaid customers, such as sales commissions, advertising and
bad debt expenses. A prepaid customer is included as a customer if the
customer&#146;s telephone number remains activated at the end of the reporting
period. During the third quarter 2001, we reduced the initial period for using
an activated prepaid card from 185&nbsp;days to 60&nbsp;days effective July&nbsp;1, 2001. If
a 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 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 the third quarter 2001, we began to turn over &#147;incoming
calls only&#148; prepaid customers who had reached the end of the additional 305-day
period without activating a new card or otherwise recharging the airtime in
their accounts. In February 2003, in coordination with the launch of
promotional prepaid cards, we extended the initial period for using an
activated Ps.450.0 prepaid card from 60&nbsp;days to 90&nbsp;days.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2002, postpaid customers declined 12.9% to 351,782 or 17.2% of total
subscribers, due to lower gross additions and increased disconnections of
customers. The December&nbsp;31, 2002 postpaid subscriber data includes
approximately 48,885 public telephony customers who are considered postpaid
customers due to the contractual nature of their service.
</FONT>

<P align="center"><FONT size="2">45</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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross additions for 2002 totaled 1,080,683 customers, which represents a
2.9% increase over 2001. These additions were mainly derived from the
strategic focus on prepaid additions during the first half of 2002. During the
second half of 2002, however, we implemented a strategic shift, which triggered
sales of higher-value products through changes in the commission structure, but
actually resulted in a decrease in gross additions during the second half of
2002, particularly in the low and ultra-low value prepaid segments.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average monthly churn for the year declined from 3.9% in 2001 to 3.4% in
2002, although churn increased during the second half of the year as we
actively sought to remove non- or low-revenue producing prepaid customers.
Postpaid subscriber churn decreased from an average monthly level of 3.8% in
2001 to 3.6% in 2002. We have adopted strict collection procedures to reduce
bad debt expense and have implemented new activation policies and retention
programs.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of higher gross additions and lower average churn, net
additions increased 9.0%, from 173,947 customers in 2001 to 189,596 in 2002.
This includes the extraordinary removal during the third quarter of 2002 of
44,506 customers who were determined to be inactive prepaid users and were not
taken into consideration in the blended churn rate for the year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total service revenues decreased by 16.9% to Ps.4,989.8&nbsp;million in 2002,
from Ps.6,005.6&nbsp;million in 2001, representing 89.4% and 90.3% of total revenues
in 2002 and 2001, respectively. Service revenues decreased as a result of
fewer postpaid customers and lower nominal average monthly cellular revenue per
customer (ARPU).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Monthly fees from postpaid subscribers decreased 42.8% in 2002 from
Ps.2,631.4&nbsp;million in 2001 to Ps.1,842.4&nbsp;million in 2002. Monthly fees
decreased primarily due to fewer postpaid customers and an increase in the
number of hybrid subscribers as a proportion of the total postpaid base,
particularly during the first half of 2002. Airtime revenues decreased 49.5%
from Ps.3,002.6&nbsp;million in 2001 to Ps.1,517.7&nbsp;million in 2002, primarily as a
result of fewer postpaid subscribers. Long distance cellular revenue decreased
by 36.5% from Ps.686.3&nbsp;million in 2001 to Ps.436.4&nbsp;million in 2002. This
decrease is the result of fewer postpaid subscribers and a higher proportion of
incoming only subscribers in the prepaid subscriber base.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Blended average monthly minutes of use (MOUs) for 2002 decreased 25.0%,
from 84 minutes to 63 minutes, primarily due to a higher proportion of prepaid
customers in our subscriber base and reduced consumption. Among postpaid
customers, average monthly MOUs decreased 14.4%, from 250 minutes in 2001 to
214 minutes in 2002, mainly due to the increased proportion of hybrid customers
who have lower consumption patterns than the remainder of the postpaid customer
base. Average MOUs increased 3.6% among prepaid customers, from 28 minutes in
2001 to 29 minutes in 2002, primarily due to promotions aimed at increasing use
by higher value customers in the prepaid customer base.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ARPU decreased 28.5% from Ps.267.0 in 2001 to Ps.191.0 in 2002, as a
result of lower average MOUs and the higher proportion of prepaid customers in
our customer base. Postpaid ARPU decreased 13.2% from Ps.798.0 in 2001 to
Ps.693.0 in 2002, primarily as a result of a higher proportion of hybrid
customers in our customer base. Prepaid ARPU declined 11.1% from Ps.90.0 in
2001 to Ps.80.0 in 2002, due to a higher proportion of lower revenue generating
customers in the customer base during the first half of the year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Telephone Equipment and Other Revenues</I>. Telephone equipment and other
revenues decreased 7.8% in 2002, from Ps.641.7&nbsp;million in 2001 to Ps.591.9
million in 2002. This decrease was primarily due to lower postpaid gross sales
and lower revenues from out-roaming in 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cost of Sales. </I>Our cost of sales includes cost of services, cost of
telephone equipment and other costs. Total cost of sales remained relatively
flat in 2002 at Ps.2,037.4&nbsp;million. As a percentage of total revenues, cost of
sales increased to 36.5% compared to 29.5% in 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cost of Services. </I>Cost of services includes taxes and fees on revenues
payable to the Mexican government, interconnection costs, and 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 increased to 27.8% in 2002 from 23.5% in 2001,
although in absolute peso terms, Iusacell Celular&#146;s cost of services declined
0.7% to
</FONT>
<P align="center"><FONT size="2">46</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"><FONT size="2">Ps.1,549.5&nbsp;million in 2002 as compared to Ps.1,560.8&nbsp;million in 2001.
This decrease resulted from stringent financial controls we implemented in
2002, despite higher lease costs associated with an increased number of
non-strategic towers sold to and leased back from MATC Celular during the year.
See &#147;&#151; Tower Monetization.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cost of Telephone Equipment and Other. </I>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 of telephone equipment and other
increased 22.1% in 2002 from Ps.399.6&nbsp;million in 2001 to Ps.487.8&nbsp;million
primarily due to partial subsidizing of telephones sold to prepaid customers
and higher cost of dark fiber optic sales. As a percentage of revenues, other
costs increased from 6.0% in 2001 to 8.7% in 2002. As a percentage of the
telephone equipment and other revenues, the cost of telephone equipment and
other increased to 82.4% in 2002 from 62.3% in 2001. The cost of a cellular
handset given to a postpaid customer is amortized over 12&nbsp;months, the average
length of our cellular contract, instead of being immediately expensed in the
period in which the customer receives the telephone.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expenses decreased 24.0% from Ps.2,346.8&nbsp;million in 2001 to
Ps.1,783.6&nbsp;million in 2002. As a percentage of total revenues, operating
expenses decreased from 35.3% in 2001 to 32.0% in 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a percentage of total revenues, sales and advertising expenses
decreased to 24.4% in 2002 from 26.3% in 2001. In peso terms, sales and
advertising expenses decreased 21.9% from Ps.1,747.6&nbsp;million in 2001, to
Ps.1,364.6&nbsp;million in 2002, 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses decreased 30.1% from Ps.599.2&nbsp;million
in 2001 to Ps.419.0&nbsp;million in 2002, due to stringent cost controls, lower
headcount and restructured compensation plans. As a percentage of total
revenues, general and administrative expenses declined to 7.5% in 2002 from
9.0% in 2001.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We had other income of Ps.91.6&nbsp;million in 2002 mainly as a result of the
sale of 67 towers to MATC Celular. The same towers were leased back from MATC
Celular by our subsidiary <I>Iusacell Arrendadora, S.A. de C.V. </I>See &#147;&#151; Tower
Monetization.&#148; In 2001, we had other income of Ps.325.4&nbsp;million from the sale
of 244 towers.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expenses decreased 21.9% from Ps.2,715.1
million in 2001 to Ps.2,121.6&nbsp;million in 2002, primarily due to a reduced level
of capital expenditures during the period, lower handset amortization expenses
attributable to lower postpaid gross additions, more cost-effective handset
purchases and better targeted handset subsidies for high-value customers.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We reported an operating loss of Ps.269.3&nbsp;million in 2002, as compared to
a loss of Ps.49.6&nbsp;million in 2001. Excluding the benefit of tower sales and
the impact of fiber optic inventory sales in both years, we would have reported
operating losses of Ps.360.9&nbsp;million and Ps.375.0&nbsp;million in 2002 and 2001,
respectively.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded an integral financing cost of Ps.671.2&nbsp;million in 2002,
compared to a cost of Ps.132.2&nbsp;million in 2001. This difference was primarily
driven by a Ps.507.1&nbsp;million foreign exchange loss resulting from the 13.8%
depreciation of the peso against the US dollar during the year, compared to a
4.8% appreciation recorded in 2001 resulting in an exchange gain that year. As
a result of a higher inflation rate in 2002 of 5.7% compared to a 4.4%
inflation rate in 2001, gains from monetary position increased 26.5%.
</FONT>

<P align="center"><FONT size="2">47</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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Net Loss</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generated a net loss of Ps.1,060.9&nbsp;million in 2002 compared to a loss
of Ps.314.6&nbsp;million in 2001. This result was due primarily to the larger
operating loss and increased integral financing cost. Excluding the tower and
fiber optic-related benefits, we would have reported a net loss of Ps.1,152.6
million in 2002 and Ps.640.1&nbsp;million in 2001.
</FONT>


<P align="left"><FONT size="2"><B>Year Ended December&nbsp;31, 2001 Compared to Year Ended December&nbsp;31, 2000</B>
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the sources of our revenues for the years
ended December&nbsp;31, 2000 and 2001:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="19"><FONT size="1"><B>(In millions of constant pesos as of December 31, 2002, except percentages)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Change</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">5,497.5</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"><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"><FONT size="2">6,005.6</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"><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"><FONT size="2">9.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">558.8</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"><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"><FONT size="2">641.7</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"><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"><FONT size="2">14.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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"><FONT size="2">6,056.3</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"><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"><FONT size="2">6,647.3</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"><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"><FONT size="2">9.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below presents service revenues by source for the years ended
December&nbsp;31, 2001 and 2000:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>Year Ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="19"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2000<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001<SUP>(1)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Change</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ps.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="19"><FONT size="1"><B>(In millions of constant pesos as of December 31, 2002, except percentages)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">

<TD colspan="2"><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"><FONT size="2">2,677.7</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"><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"><FONT size="2">3,002.7</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"><FONT size="2">50.0</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"><FONT size="2">12.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,808.2</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"><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"><FONT size="2">1,842.3</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"><FONT size="2">30.7</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"><FONT size="2">1.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">562.8</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"><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"><FONT size="2">686.4</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"><FONT size="2">11.4</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"><FONT size="2">22.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">448.8</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"><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"><FONT size="2">474.2</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"><FONT size="2">7.9</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"><FONT size="2">5.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">5,497.5</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"><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"><FONT size="2">6,005.6</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"><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"><FONT size="2">9.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
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</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Figures include intercompany eliminations.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 for and prepaid outgoing minutes net
of unbilled minutes. Incoming and outgoing airtime is charged on a
per-minute basis.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(3)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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 magazines, as well as in-roaming service revenue. 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We had 1,854,697 and 1,681,219 mobile wireless subscribers at December&nbsp;31,
2001 and 2000, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid 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 prepaid
subscribers in Region 8 in southern Mexico as a result of our acquisition of
Portatel which represent 6.8% of the total prepaid subscriber base at December
2001. &#147;Incoming calls only&#148; prepaid customers, the substantial 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
</FONT>
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<P align="left"><FONT size="2"> postpaid customers, such as sales commissions, advertising or bad debt
expenses. A prepaid 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
prepaid card from 185&nbsp;days to 60&nbsp;days effective July&nbsp;1, 2001. If a 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 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 the third quarter 2001, we began to turn over &#147;incoming calls
only&#148; prepaid customers who had reached the end of the additional 305-day
period without activating a new card or otherwise recharging the airtime in
their accounts.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. The December&nbsp;31, 2001 postpaid subscriber data includes
approximately 37,972 public telephony numbers that have been considered
postpaid customers since January&nbsp;1, 2000.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total service revenues increased by 9.2% to Ps.6,005.6&nbsp;million (U.S.$576.1
million) in 2001 from Ps.5,497.5&nbsp;million (U.S.$527.3&nbsp;million) in 2000 and
represented 90.3% and 90.8% of total revenues in 2001 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Monthly fees from postpaid subscribers grew by 1.9% from Ps.1,808.2
million (U.S.$173.4&nbsp;million) in 2000 to Ps.1,842.3&nbsp;million (U.S.$176.7&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.2,677.7
million (U.S.$256.9&nbsp;million) in 2000 to Ps.3,002.7&nbsp;million (U.S.$288.0&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.686.4&nbsp;million (U.S.$65.8&nbsp;million) in 2001 from
Ps.562.8&nbsp;million (U.S.$54.0&nbsp;million) in 2000. This growth is the result of
higher usage by the subscriber base.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average monthly MOUs for all subscribers for 2001 (excluding &#147;incoming
calls only&#148; prepaid customers) were 117, an increase of 24.5% as compared to
the average monthly MOUs of 94 in 2000. MOUs among postpaid customers
increased by 1.6% from 246 in 2000 to 250 in 2001. MOUs among prepaid customers
also increased by 40.6% from 32 in 2000 to 45 in 2001. This increase in MOUs
was driven by increased traffic growth and greater usage by the total prepaid
subscriber base and the reduction of the period within which to use the prepaid
card from 180&nbsp;days to 60&nbsp;days.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nominal average monthly cellular revenue per subscriber for all
subscribers (excluding &#147;incoming calls only&#148; prepaid customers) increased 15.0%
to Ps.391 (U.S.$37.5) in 2001 from Ps.340 (U.S.$32.6) in 2000. The increase
was driven mainly by higher usage by the subscriber base, increased traffic
growth and the reduction of the period within which to use the prepaid card
from 180&nbsp;days to 60&nbsp;days.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Postpaid subscriber churn increased to an average monthly level of 3.8% in
2001 from 3.5% in 2000. We have adopted strict collection procedures to reduce
the bad debt expense and have implemented new activation policies and retention
programs.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Telephone Equipment and Other</I>. Telephone equipment and other revenues
increased 14.8% to Ps.641.7&nbsp;million (U.S.$61.6&nbsp;million) in 2001 from Ps.558.8
million (U.S.$53.6&nbsp;million) in 2000. The 14.8% increase in revenues resulted
mainly from increased out-roaming fees.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of sales increased 1.9% to Ps.1,960.4&nbsp;million (U.S.$188.0
million) in 2001 from Ps.1,923.9&nbsp;million (U.S.$184.6&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="center"><FONT size="2">49</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cost of Services</I>. 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.1,560.8&nbsp;million (U.S.$149.7&nbsp;million) in 2001 from
Ps.1,547.6&nbsp;million (U.S.$148.4&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 &#147; &#151; Tower Monetization&#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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Cost of Telephone Equipment and Other</I>. Cost of telephone equipment and
other increased 6.2% to Ps.399.6&nbsp;million (U.S.$38.3&nbsp;million) in 2001 from
Ps.376.3&nbsp;million (U.S.$36.1&nbsp;million) in 2000 primarily due to the three-month
consolidation of Portatel, partial subsidization of telephones sold to prepaid
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 cellular contract, instead of being immediately expensed in the
period in which the customer received the telephone.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expenses increased 15.8% to Ps.2,346.8&nbsp;million (U.S.$225.1
million) in 2001 from Ps.2,026.8&nbsp;million (U.S.$194.4&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 increased to 25.6% in 2001 from 24.6% in 2000. In peso terms, sales
and advertising expenses increased 14.9%, to Ps.1,704.1&nbsp;million (U.S.$163.5
million) from Ps.1,483.2&nbsp;million (U.S.$142.3&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.642.6
million (U.S.$61.6&nbsp;million) in 2001, from Ps.543.6&nbsp;million (U.S.$52.1&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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Other Income</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We had other income of Ps.325.4&nbsp;million (U.S.$31.2&nbsp;million) in 2001 mainly
as a result of the sale of 244 towers to MATC Celular. The same towers were
leased back from MATC Celular by Iusacell&#146;s subsidiary, <I>Iusacell Arrendadora,
S.A de C.V</I>. See &#147;&#151; Tower Monetization&#148;.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.2,715.1&nbsp;million (U.S.$260.4&nbsp;million)
in 2001, from Ps.2,516.7&nbsp;million (U.S.$241.4&nbsp;million) in 2000 primarily due to
the higher postpaid handset amortization expense in 2001.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We reported an operating loss of Ps.49.6&nbsp;million (U.S.$4.8&nbsp;million) in our
Consolidated Financial Statements in 2001, compared to an operating loss of
Ps.411.1&nbsp;million (U.S.$39.4&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.375.0&nbsp;million
(U.S.$36.0&nbsp;million).
</FONT>

<P align="center"><FONT size="2">50</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recorded an integral financing cost of Ps.132.2&nbsp;million (U.S.$12.7
million) in 2001 compared to an integral financing cost of Ps.163.8&nbsp;million
(U.S.$15.7&nbsp;million) in 2000. The lower cost was attributable to several
factors. Net interest expense decreased by 24.3% from Ps.538.8&nbsp;million
(U.S.$51.7&nbsp;million) in 2000 to Ps.407.9&nbsp;million (U.S.$39.1&nbsp;million) in 2001 as
a result of lower interest rates and a stronger peso which appreciated by 4.8%
against the U.S. dollar from December 2000 to December 2001. Also due to this
appreciation of the peso, we recorded a foreign exchange gain of Ps.101.3
million (U.S.$9.7&nbsp;million) in 2001 compared to a foreign exchange loss of
Ps.20.7&nbsp;million (U.S.$2.0&nbsp;million) in 2000. We also posted a lower gain in
monetary position of Ps.174.4&nbsp;million (U.S.$16.7&nbsp;million) in 2001 compared to a
gain of Ps.395.7&nbsp;million (U.S.$38.0&nbsp;million) in 2000 due to the effect on 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="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Net Loss</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the factors described above, our net loss was Ps.314.6
million (U.S.$30.2&nbsp;million) in 2001 compared to a net loss of Ps.710.7&nbsp;million
(U.S.$68.2&nbsp;million) in 2000.
</FONT>


<P align="left"><FONT size="2"><B>Income Tax, Asset Tax and Employees&#146; Profit Sharing</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 (<I>Iusatel, S.A. de C.V.</I>, <I>Iusatelecomunicaciones, S.A. de
C.V.</I>, <I>Infotelecom, S.A. de C.V.</I> and <I>Punto-a-Punto Iusacell, S.A. de C.V.</I>) which are not
included in our annual consolidated income 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2000, the Mexican Finance Ministry (<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 Finance Ministry ruled that
Iusacell Celular&#146;s net operating loss carryforwards could 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.165.2&nbsp;million, Ps.154.7&nbsp;million and
Ps.111.6&nbsp;million as
asset tax for 2000, 2001 and 2002 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 2002 and paid the asset taxes
specified above. In 2000, as a result of the new tax consolidation rules, we
paid Ps.47.4&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. In
2002, due to the change in the statutory income tax rate which became effective
annually in 2003, Iusacell and its subsidiaries reduced the deferred tax asset
in 2002, resulting in a provision of deferred asset tax of 163.1 million.
See Note 12 to the Consolidated Financial Statements for a discussion of our
tax loss carryforwards.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2"><B>New Mexican Accounting Pronouncements</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November 2001, the MIPA issued the revised Bulletin C-9, &#147;Liabilities,
Provisions, Contingent Assets and Liabilities and Commitments&#148; (Bulletin C-9),
which establishes a methodology for valuation, presentation and
</FONT>
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<P align="left"><FONT size="2"> 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)&nbsp;all contingent assets
that have a practical true realization must be accounted for 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 C-9 requires disclosure of committed amounts when it
represents significant fixed assets additions. The provisions of Bulletin C-9
were required to be applied beginning on January&nbsp;1, 2003, although early
adoption was recommended.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in December 2001, the MIPA issued revised Bulletin C-8,
&#147;Intangible Assets&#148; (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 can be classified as development costs.
Bulletin C-8 requires that intangible assets with finite useful lives should be
amortized over their useful lives and those with an indefinite life should no
longer be amortized. The provisions of Bulletin C-8 are required to be applied
beginning on January&nbsp;1, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management is currently evaluating the impact that the adoption of these
bulletins will have on our financial statements.
</FONT>


<P align="left"><FONT size="2"><B>U.S. GAAP Reconciliation</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The principal differences between Mexican GAAP and U.S. GAAP as they
relate to Iusacell Celular 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,
capitalized interest, goodwill and indefinite-lived intangible assets
amortization and sale-leaseback transactions. See Note 22 to the Consolidated
Financial Statements for a reconciliation to U.S. GAAP of stockholders&#146; equity
and net profit (loss)&nbsp;for the respective periods presented.
</FONT>


<P align="left"><FONT size="2"><B>New U.S. Accounting Pronouncements</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2001, the Financial Accounting Standards Board (&#147;FASB&#148;) issued
SFAS No.&nbsp;143 &#147;Accounting for Obligations Associated with the Retirement of
Long-Lived Assets.&#148; The objectives of SFAS 143 are to establish accounting
standards for the recognition and measurement of tangible long-lived asset
retirement obligations and their associated asset retirement costs. SFAS 143
is effective for fiscal years beginning after June&nbsp;30, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April 2002, the FASB issued SFAS No.&nbsp;145 &#147;Rescission of SFAS No.&nbsp;4, 44,
and 64, Amendment of SFAS 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 No.&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
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&nbsp;15, 2002, and those for SFAS 13 will be effective for
transactions occurring after May&nbsp;15, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2002, the FASB issued SFAS No.&nbsp;146, &#147;Accounting for Costs
Associated with Exit or Disposal Activities.&#148; This statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF)&nbsp;Issue No.&nbsp;94-3,
&#147;Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit on Activity (Including Certain Costs incurred in Restructuring)&#148;.
EITF Issue No.&nbsp;94-3 required accrual of liabilities related to exit and
disposal activities at a plan (commitment)&nbsp;date. SFAS 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. The provisions of this statement are effective
for exit or disposal activities that are initiated after December&nbsp;31, 2002.
</FONT>

<P align="center"><FONT size="2">52</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FASB Interpretation No.&nbsp;45, &#147;Guarantor&#146;s Accounting and Disclosure
Requirements for Guarantees&#148;, (FIN 45) was issued on November 2002. FIN 45
requires that a liability be recognized at the inception of certain guarantees
for the fair value of the obligation, including the ongoing obligation to stand
ready to perform over the term of the guarantee. Guarantees, as defined in FIN
45, include contracts that contingently require us to make payments to a
guaranteed party based on changes in an underlying that is related to an asset,
liability or equity security of the guaranteed party, performance guarantees,
indemnification agreements or indirect guarantees of indebtedness of others.
This new accounting is effective for certain guarantees issued or modifies
after December&nbsp;31,2002. In addition, FIN 45 requires certain additional
disclosures.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS 148, &#147;Accounting for Stock-Based Compensation &#151; Transition and
Disclosure &#151; an amendment of SFAS No.&nbsp;123&#148;, was issued on December&nbsp;31, 2002.
SFAS 148 provides alternative methods of transition for a voluntary change to
the fair value-based method of accounting for stock-based employee
compensation. SFAS 148 also amends the disclosure requirements of SFAS 123,
&#147;Accounting for Stock-Based Compensation&#148;, to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2003, the FASB issued Interpretation 46 &#147;Consolidation of
Variable Interest Entities, an interpretation of ARB No.&nbsp;51&#148; (FIN 46). FIN 46
provides a new framework for identifying variable interest entities (VIEs) and
determining when a company should include the assets, liabilities,
non-controlling interests and results of activities of a VIEs created after
January&nbsp;31, 2003 and is effective beginning in the third quarter of 2003 for
VIEs created prior to issuance of the interpretation. We are presently
evaluating the impact, if any, that this new standard will have on its
financial position or results of operations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April 2003, the FASB issued SFAS No.&nbsp;149, &#147;Amendment of Statement 133
on Derivative Instruments and Hedging Activities.&#148; This statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
133, &#147;Accounting for Derivative Instruments and Hedging Activities.&#148; This
statement is effective prospectively for contracts entered into or modified
after June&nbsp;30, 2003 and prospectively for hedging relationships designated
after June&nbsp;30, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May 2003, the FASB issued SFAS No.&nbsp;150, &#147;Accounting For Certain
Financial Instruments with Characteristics of Both Liabilities and Equity.&#148;
This statement improves the accounting for certain financial instruments that,
under previous guidance, issuers could account for as equity, and requires that
these instruments be classified as liabilities in statements of financial
position. This statement is effective prospectively for financial instruments
entered into or modified after May&nbsp;31, 2003 and otherwise is effective at the
beginning of the first interim period beginning after June&nbsp;15, 2003. This
statement shall be implemented by reporting the cumulative effect of a change
in an accounting principle for financial instruments created before the
issuance date of the statement and still existing at the beginning of the
interim period of adoption.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are presently evaluating the impact, if any, that these new standards
will have on our consolidated financial statements.
</FONT>


<P align="left"><FONT size="2"><B>Critical Accounting Policies and Estimates</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 that require management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. We base our estimates on historical
experience, where applicable, and other assumptions that we believe are
reasonable under the circumstances. Actual results may differ from our
estimates under different assumptions or conditions. In the opinion of our
management, our most critical accounting policies under both Mexican GAAP and
U.S. GAAP are those that require management to make estimates and assumptions
that affect the reported amounts related to the accounting for revenue
recognition, allowance for doubtful accounts, the evaluation of long-lived
assets, property plant and equipment, goodwill, and deferred taxes. For a full
description of all of our accounting policies, see Notes 4 and 22 to the
Consolidated Financial Statements included in this Annual Report.
</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are certain critical estimates that we believe require significant
judgment in the preparation of our consolidated financial statements. We
consider an accounting estimate to be critical if:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">It requires us to make assumptions because information was not
available at the time or it included matters that were highly uncertain
at the time we were making the estimate, and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Changes in the estimate or different estimates that we could have
selected would have had a material impact on our financial condition or
results of operations.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Revenue Recognition</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular airtime is recorded as revenue as service is provided. Until
December&nbsp;31, 2001, revenue from the sale of prepaid cards was recognized at the
date of sale. We had recognized the revenue on the sale of prepaid cards at
the date of sale rather than on a deferred basis because the length of the
average consumption period for such prepaid cards was not significant, i.e.,
approximately one to one-and-a-half months, and it was not material to results
of operations for 2001 and 2000. Starting January&nbsp;1, 2002, we started to
recognize revenue from the sale of the prepaid cards as service is provided
because the increasing length of the average consumption period for such
prepaid cards. Revenues from the sale of prepaid cards associated with
services that have not been provided are deferred until the services are
provided and are included in the line item &#147;taxes and other payables&#148; in the
accompanying consolidated balance sheets. 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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Allowance for Doubtful Accounts</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The allowance for doubtful accounts represents our estimate of losses
resulting from the failure or inability of our customers to make required
payments. 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&#146; trends or
any of the above mentioned factors could materially affect our bad debt
expense.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Evaluation of Long-Lived Assets</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 undiscounted cash flows to be generated by the assets and
the possible impact that inflation may have on our ability to generate cash
flow since, with inflation accounting, the carrying value is restated for
inflation prior to performing an impairment analysis. Key assumptions we
evaluate in preparing an undiscounted cash flow analysis include inflation,
currency fluctuations and future revenue growth. The use of different
estimates or assumptions within our undiscounted cash flow model could result
in undiscounted cash flows lower than the current carrying value of our assets,
therefore requiring the need to compare the carrying values to their fair
values. Our estimates and assumptions take into consideration all relevant
business and market factors which are known to us at the time, some of which
may change in future periods due to factors outside of our control (including
shareholder strategic decisions). Should these factors adversely change in
future periods, we would be required to reevaluate the carrying value of our
long-lived assets and cash flow impairment calculations could possibly change.
</FONT>



<P align="center"><FONT size="2">54</FONT>



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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Property, Plant and Equipment</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We depreciate property, plant and equipment and other intangible assets
with a definite life using straight-line methods over the period of time we
estimate we will benefit from each asset.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon adoption of Statement of Financial Accounting Standards (SFAS)&nbsp;No.
142, &#147;Goodwill and Other Intangible Assets&#148;, we were required to reassess the
useful lives of our other intangible assets, which consist primarily of Mexican
government telecommunications concessions (&#147;Concessions&#148;). Although
Concessions are issued with a stated term, the renewal of specific Concessions
is a routine matter involving a nominal fee and we have determined that
regulatory, competitive, and economic, factors currently exist that limit the
useful life of our Concessions. Prospectively, we will continue to
periodically re-evaluate our determination of an indefinite useful life with
regard to Concessions.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of mobile wireless telephones given to customers under exclusive
service contracts is amortized on a straight-line basis. During 2001, we
reduced the amortization period of mobile wireless telephones from an 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the second quarter of 2001, we 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 reduction of approximately Ps.477,764.0 in depreciation expense for 2001.
The average annual rates of depreciation used by us are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do 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, 2002,
2001 and 2000, we did not capitalize integral financing cost.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Mexican GAAP, we amortize goodwill on a straight-line basis over a
period of 20&nbsp;years. For a discussion of goodwill under U.S. GAAP, see Note
22g. to the Consolidated Financial Statements.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have recorded a net deferred tax asset mainly reflecting the benefit of
tax loss carry forwards, which expire in varying amounts in the future.
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 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 tax
loss carry forwards, given the fact that we&#146;ve experienced significant losses,
a valuation allowance for a majority of the asset has been recognized. Our
estimates and assumptions take into
</FONT>
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<P align="left"><FONT size="2">consideration all relevant business and
market factors which are known to us at the time, some of which may change in
future periods due to factors outside of our control (including shareholder
strategic decisions). Should these factors adversely change in future periods,
we would be required to reevaluate the recoverability of the net deferred tax
assets.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our estimate of future taxable income is based primarily on and supported
by (i)&nbsp;additional increases in revenues generated by the CPP feature with an
important taxable operating margin, (ii)&nbsp;the change in Mexican income tax law
to increase the useful lives for network equipment from 3.3&nbsp;years to 12.5
years, representing an important decrease in depreciation expense for income
tax purposes and (iii)&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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>LIQUIDITY AND CAPITAL RESOURCES</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, which was 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"><FONT size="2"><B>General</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Funds will not be sufficient to meet our debt service and principal
amortization requirements, working capital requirements and capital expenditure
needs for our existing businesses through 2003. Iusacell and Iusacell Celular
have engaged Morgan Stanley as our financial advisor to assist us in developing
a comprehensive debt restructuring plan. We are still in the process of
developing such a plan and have not yet presented a restructuring plan to our
creditors.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our future operating performance and ability to service and repay our
indebtedness will be subject to many factors, including a successful debt
restructuring, future economic and competitive conditions and to financial,
business and other factors, many of which are beyond our control.
</FONT>


<P align="left"><FONT size="2"><B>Changes in Financial Position</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 years ended
December&nbsp;31, 2001 and 2002, our earnings were insufficient to cover our fixed
charges by Ps.81.7&nbsp;million (U.S.$7.8&nbsp;million) and Ps.1,408.0&nbsp;million
(U.S.$135.1&nbsp;million), respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.4,464.1
million (U.S.$428.2&nbsp;million) outstanding at December&nbsp;31, 2002, 4.4% higher in
pesos than the total debt of Ps.4,275.1&nbsp;million (U.S.$410.1&nbsp;million)
outstanding at December&nbsp;31, 2001. At December&nbsp;31, 2002, Iusacell Celular&#146;s
average cost of outstanding bank debt was approximately 6.3%, with a remaining
average maturity of approximately 2.0&nbsp;years. 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 2.9
years. At December&nbsp;31, 2002, Iusacell Celular&#146;s ratio of debt to total
capitalization was 36.4% compared to 32.2% at December&nbsp;31, 2001.
</FONT>

<P align="center"><FONT size="2">56</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Cash Flows From Operating Activities</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generated positive cash flows from operating activities in the year
ended December&nbsp;31, 2001 and the year ended December&nbsp;31, 2002. Net cash
generated by operating activities was Ps.510.5&nbsp;million (U.S.$49.0&nbsp;million) for
2002 compared to Ps.2,363.6&nbsp;million (U.S.$226.7&nbsp;million) generated in 2001.
The decrease in 2002 resulted primarily from a Ps.775.3&nbsp;million (U.S.$74.4
million) larger loss from continuing operations than in 2001, caused primarily
by a Ps.539.0&nbsp;million (U.S.$51.7&nbsp;million) increased integral financing cost and
by a Ps.219.7&nbsp;million (U.S.$21.1&nbsp;million) increased operating loss, net of a
decrease in depreciation and amortization expense of Ps.593.5&nbsp;million
(U.S.$56.9&nbsp;million), and a decrease in resources used in working capital of
Ps.559.0&nbsp;million (U.S.$53.6&nbsp;million). We generated positive cash flows from
operating activities in the year ended December&nbsp;31, 2000, of Ps.1,899.7&nbsp;million
(U.S.$182.2&nbsp;million).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Cash Flows from Financing Activities</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2002, net cash provided by financing
activities amounted to Ps.319.5&nbsp;million (U.S.$30.6&nbsp;million) compared to
Ps.527.9&nbsp;million (U.S.$50.6&nbsp;million) for the year ended December&nbsp;31, 2001. The
decrease was mainly attributable to a decrease in the principal payments on
long-term debt of Ps.2,980.1&nbsp;million (U.S.$285.9&nbsp;million), a decrease in the
proceeds received from long-term debt of Ps.2,263.9&nbsp;million (U.S.$217.2
million) and a decrease of Ps.944.3&nbsp;million (U.S.$90.6&nbsp;million) from
contributions from our parent company, Iusacell. Both figures, payments and
proceeds, were materially affected by a significant foreign exchange loss in
2002. Net cash provided by financing activities in 2000 was Ps.623.3&nbsp;million
(U.S.$59.8&nbsp;million). The decrease in 2001 from 2000 was mainly due to a
decrease in the principal payments on long term debt of Ps.2,007.1&nbsp;million
(U.S.$192.5&nbsp;million), a decrease in the contribution for future capital stock
increases of Ps.432.1&nbsp;million (U.S.$41.4&nbsp;million) and a decrease in the
accumulated effect of deferred taxes of Ps.206.8&nbsp;million (U.S.$19.8&nbsp;million),
partially offset by an increase in the proceeds received from long-term debt of
Ps.2,574.4&nbsp;million (U.S.$246.9&nbsp;million).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Cash Flows Used for Investing Activities</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities was Ps.807.8&nbsp;million (U.S.$77.5
million) in 2002. We purchased Ps.599.1&nbsp;million (U.S.$57.5&nbsp;million) of
property and equipment in 2002. Net cash used in investing activities was
Ps.3,074.1&nbsp;million (U.S.$294.9&nbsp;million) in 2001 and was primarily attributable
to purchases of property and equipment of Ps.1,688.8&nbsp;million (U.S.$162.0
million), the acquisition of Portatel of Ps.523.6&nbsp;million (U.S.$50.2&nbsp;million)
and other assets of Ps.861.7&nbsp;million (U.S.$82.7&nbsp;million).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities in 2000 was Ps.2,428.0&nbsp;million
(U.S.$232.9&nbsp;million). In 2000, we made investments in an aggregate amount of
Ps.3,323.4&nbsp;million (U.S.$318.8&nbsp;million). Substantially all of these
expenditures were for the purchase of property, equipment and other assets,
partially offset by the sale of other assets of Ps.823.2&nbsp;million (U.S.$79.0
million).
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, we had recorded a net deferred tax asset of
Ps.163.9&nbsp;million (U.S.$15.7&nbsp;million) mainly reflecting the benefit of tax loss
carryforwards, which expire in varying amounts between 2005 and 2012.
Realization is dependent on generating sufficient taxable income prior to the
expiration of the tax 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, 2002 will be realized based on our business
plan estimate of future taxable income over the next five years in an amount
sufficient to utilize such net deferred tax losses.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our estimate of future taxable income is based primarily on and supported
by (i)&nbsp;additional increase in revenues generated by the CPP feature with an
important taxable operating margin, (ii)&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 (iii)&nbsp;an increase in 2003
of the potential effects of additional cost cutting.
</FONT>

<P align="center"><FONT size="2">57</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, we had a valuation allowance of Ps.903.6&nbsp;million
(U.S.$86.7&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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002, we had net operating losses for income tax purposes
that may be carried forward and applied against future taxable earnings of
Ps.4,695.3&nbsp;million (U.S.$450.4&nbsp;million) expiring in various amounts from 2005
through 2012. See Note 12 to the Consolidated Financial Statements.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Capital Expenditures</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003 and 2004, subject to the outcome of our debt restructuring
efforts, we have preliminarily budgeted amounts for capital expenditures to
expand our network infrastructure, expand our cellular and long distance
networks, enhance our billing and customer care systems, and support existing
operations and new business opportunities. The degree and timing of capital
expenditures will remain strongly dependent on the nature, timing and success
of our debt restructuring efforts, the competitive environment and economic
developments in Mexico, including inflation and exchange rates, the timing of
regulatory actions and on the availability of new funding from suitable debt
and/or equity financing.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the outcome of our debt restructuring efforts, we have
preliminarily budgeted a total of approximately U.S.$248.0&nbsp;million for capital
expenditures for 2003 and 2004, not including amounts in respect of capitalized
interest. We have preliminarily budgeted approximately U.S.$85.0&nbsp;million for
capital expenditures for 2003, including up to U.S.$62.0&nbsp;million to expand and
develop our cellular network.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first quarter of 2003, we invested approximately U.S.$1.0
million in our cellular regions to expand our coverage. We have preliminarily
budgeted the remaining U.S.$22.0&nbsp;million for system and quality upgrades.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital expenditures in 2002 were U.S.$63.4&nbsp;million. From this
amount, approximately U.S.$58.2&nbsp;million was used primarily for the development
of the wireless network in central regions and to construct new and remodel
existing customer sales and service centers. The balance of U.S.$5.2&nbsp;million
was primarily used to develop and increase the quality of the wireless network
in the recently acquired Region 8 in southern Mexico.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital expenditures in 2001 were U.S.$193.0&nbsp;million of which
approximately U.S.$189.8&nbsp;million was used primarily for the development of our
wireless network and to construct new and remodel existing customer sales and
service centers. Approximately U.S.$175.0&nbsp;million of this amount was used for
the development of the Iusacell Celular wireless network.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditure amounts were derived using historical pesos translated
at the exchange rate in effect at the end of the corresponding year.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Contractual Obligations</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table outlines our 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, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described in Item&nbsp;3, &#147;Key Information &#151; Risk Factors &#151; Risk Factors
Relating to Iusacell Celular &#151; <I>We did not receive an extension of the temporary
amendment and waiver to our senior refinancing secured loan and, as a result,
the lenders under that loan have the right to accelerate our repayment
obligations</I>&#148;, the second amendment
</FONT>
<P align="center"><FONT size="2">58</FONT>


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<P align="left"><FONT size="2">and waiver has not been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. The lenders
under the senior refinancing secured loan have the right to declare the
indebtedness under that loan immediately due and payable. See also
&#147;&#151;
Long-Term Indebtedness &#151; Loan Covenant Waivers and Modifications.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, Iusacell did not generate sufficient cash flows from its
operations to make the June&nbsp;1, 2003 U.S.$25.0&nbsp;million interest payment on the
Iusacell senior notes. Iusacell has a 30-day grace period to make the payment
before an event of default will occur. If Iusacell does not make such payment
within that grace period, the holders of such notes will have the right to
accelerate Iusacell&#146;s obligations thereunder, which will cause an event of
default under the terms of our senior refinancing secured loan. As a result,
the lenders under that loan will have the right to accelerate the loan, and if
such lenders accelerate, an event of default under the Iusacell Celular senior
notes will occur, permitting the holders of such notes to accelerate our
repayment obligations under the Iusacell Celular senior notes.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table does not reflect as current the effects of our default
under the senior refinancing secured loan, as the senior refinancing secured
loan has not yet been declared immediately due and payable. Depending on
subsequent events and the progress of our restructuring efforts, we expect our
payment obligations to change. See Note 24 to the Consolidated Financial
Statements.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>Payments due by Period</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15"><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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="19"><FONT size="1"><B>(Figures in thousands of U.S. Dollars as of December 31, 2002)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD  nowrap align="center"  colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD  valign="top"  align="center" colspan="2"><FONT size="1"><B>Iusacell Celular Indebtedness<sup>(1)</sup></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2005</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2006</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2007</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Thereafter</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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 align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><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"><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">265,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Short-term credit lines:</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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&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">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,000</FONT></TD>
    <TD nowrap><FONT size="2"><SUp>(2)</SUp></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,000</FONT></TD>
    <TD nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total indebtedness</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,000</FONT></TD>
    <TD nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><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"><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">427,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Operating
Leases<SUP>(3)</SUP></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2005</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2006</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2007</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Thereafter</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">10,398</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"><FONT size="2">10,302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,054</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,054</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">29,126</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"><FONT size="2">80,008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">11,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">58,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">21,571</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"><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"><FONT size="2">18,078</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"><FONT size="2">17,190</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"><FONT size="2">16,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">45,764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">138,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">These amounts include principal payments.</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">As of June&nbsp;27, 2003, this amount has been paid in full.</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">These amounts include the minimum lease payments.</FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><B>Long-Term Indebtedness</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Iusacell Celular Senior Notes</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July 1997, Iusacell Celular issued U.S.$150.0&nbsp;million of its 10% Senior
Notes due 2004 (the &#147;Iusacell Celular senior notes&#148;), under an indenture dated
as of July&nbsp;25, 1997 among Iusacell Celular, the subsidiaries of Iusacell
Celular guaranteeing the Iusacell Celular senior notes and First Union National
Bank (now Wachovia Bank National Association), 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 we also refer to as the Iusacell Celular senior notes and which are
also governed by the Iusacell Celular indenture, pursuant to an exchange offer
registered with the SEC.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">59</FONT>


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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 amounts due under the Iusacell
Celular senior notes by a second priority lien on its cellular concessions and
certain equipment.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Senior Refinancing Secured Loan</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">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, the
proceeds of which were used to make a principal amortization payment
under the senior secured credit facility in January 2001; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">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, the proceeds of
which were used to make a principal amortization payment under the
Eximbank facilities in January 2001.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 8 was mortgaged under this loan, and all capital stock and
equity interests of Portatel were pledged under this loan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
31, 2004, the outstanding amount of the senior refinancing secured loan will
become due on that date.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Loan
Covenant Waivers and Modifications</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;7, 2001, Iusacell Celular and the lenders entered into an
amendment and waiver to the senior refinancing secured loan, which we refer to
as the first amendment and waiver, to permit 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 related
tax gross-up amount) and principal payments 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 exceeding U.S.$5.0&nbsp;million to discharge other
liabilities of Iusacell incurred in the ordinary course of business, so long as
an event of default has not occurred under the senior refinancing secured loan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first half of 2003, Iusacell Celular exceeded the permitted
leverage ratio (as defined in the senior refinancing secured loan) of 2.50.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2003, Iusacell Celular received notice from the lenders of the
occurrence of two defaults under the senior refinancing secured loan. One
default occurred as a result of Iusacell Celular&#146;s failure to notify the
lenders that Iusacell Celular had opened and closed several bank accounts
related to its telecommunications business. The other default occurred as a
result of Iusacell Celular&#146;s failure to notify the lenders that Iusacell
Celular had failed to
register a mortgage on certain assets of Portatel with the
Telecommunications Registry, which is maintained by the SCT. Iusacell Celular
has since registered the mortgage and requested, but has not yet received, the
consent of the lenders with respect to the opening and closing of those bank
accounts.
</FONT>

<P align="center"><FONT size="2">60</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;28, 2003, Iusacell Celular and the lenders entered into a
temporary amendment and waiver to the senior refinancing secured loan, which we
refer to as the second amendment and waiver, to increase the permitted leverage
ratio under the senior refinancing secured loan from 2.50 to 2.70. Under the
second amendment and waiver, Iusacell Celular temporarily agreed not to make
any restricted payment, loan or advance to, or repay any loan or advance from
any affiliate, provided that if Iusacell Celular or any of its subsidiaries
makes any payment on the principal of any indebtedness (as defined in the
senior refinancing secured loan), Iusacell Celular or the relevant subsidiary
will simultaneously prepay a pro rata amount outstanding under the senior
refinancing secured loan. On May&nbsp;22, 2003, the second amendment and waiver was
extended until June&nbsp;13, 2003. On June&nbsp;12, 2003, the second amendment and
waiver was further extended until June&nbsp;26, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The second amendment and waiver has not since been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. The lenders
under the senior refinancing secured loan have the right to declare the
indebtedness under that loan immediately due and payable.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our credit ratings were lowered several times during 2002 by major credit
rating agencies. On August&nbsp;26, 2002, Moody&#146;s Investors Service Inc. (Moody&#146;s)
downgraded Iusacell Celular&#146;s senior unsecured rating from Ba2 to B3, all with
a negative outlook. On November&nbsp;15, 2002, Moody&#146;s downgraded Iusacell
Celular&#146;s senior unsecured rating from B3 to Ca.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most recently, on May&nbsp;27, 2003, Standard &#038; Poor&#146;s Ratings Services
(Standard and Poor&#146;s) announced that it had lowered Iusacell Celular&#146;s senior
secured rating from CCC&#043; to CC and Iusacell Celular&#146;s unsecured debt rating
from CCC- to C. On June&nbsp;3, 2003, Standard &#038; Poor&#146;s affirmed Iusacell Celular&#146;s
senior secured rating at CC and Iusacell Celular&#146;s senior unsecured debt rating
at C. Subsequently, Standard &#038; Poor&#146;s withdrew all the ratings assigned to
Iusacell Celular and its debt instruments.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of these actions, our ability to obtain short-term and
long-term financing and the cost of such financing have been adversely
affected.
</FONT>

<P align="left"><FONT size="2"><B>Certain Hedging Activities</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
22, 2000, Iusacell Celular entered into a second foreign exchange hedge using
forward rate contracts for U.S.$15.0&nbsp;million to hedge the interest payments on
the Iusacell Celular senior notes coming due over the period from July 2001 to
January 2002. This transaction resulted in a U.S.$1.7&nbsp;million loss. On August
9, 2001, Iusacell Celular entered into a third foreign exchange hedge using
forward rate contracts for U.S.$11.0&nbsp;million of its indebtedness coming due
over the period from November 2001 to November 2002. This transaction resulted
in a U.S.$0.1&nbsp;million loss.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.$150.0&nbsp;million and interest of U.S.$34.5&nbsp;million on the Iusacell
Celular senior notes. 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 would become due between July 2002 and July 2004. In October 2002,
Iusacell Celular in order to improve liquidity by eliminating cash collateral
requirements took advantage of a temporary weakness in the Mexican peso and
opted to terminate the hedge transaction resulting in a U.S.$1.7&nbsp;million loss.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, we did not have any forward rate contracts in
place.
</FONT>

<P align="center"><FONT size="2">61</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"><FONT size="2"><B>Interest Rate Collars</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July 1998, Iusacell Celular entered into an interest rate collar
agreement for a notional amount of U.S.$35.0&nbsp;million until July&nbsp;30, 2002. The
collar agreement limited the maximum effective LIBOR cost to 6.12% if six-month
LIBOR was lower than 7.12%, and 7.12% if LIBOR equaled or exceeded 7.12%.
Iusacell Celular could participate in a decline in LIBOR to 5.30%.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;30, 2002. This collar
agreement limited the maximum effective LIBOR cost to 5.82% if six-month LIBOR
was lower than 6.82%, and 6.82% if LIBOR equaled or exceeded 6.82%. Iusacell
Celular could participate in a decline in LIBOR to 4.75%.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2002, due to the significant decrease in
the LIBOR interest rates, Iusacell Celular recognized additional interest
expense of U.S.$1.0&nbsp;million for the interest rate collars, which was offset by
the lower interest expense on its floating rate debt.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2002, Iusacell and Iusacell Celular engaged Morgan Stanley as
our financial advisor to assist us in developing a comprehensive debt
restructuring plan. Iusacell and Iusacell Celular are still in the process of
developing such a plan and have not yet presented a restructuring plan to our
creditors.
</FONT>


<P align="left"><FONT size="2"><B>Recent Equity Offerings</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;million (U.S.$244.0&nbsp;million) in additional equity to Iusacell
Celular. Neither of Iusacell&#146;s principal shareholders, Verizon or Vodafone,
have any obligation to contribute equity to Iusacell Celular.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1999, we entered into a series of agreements with MATC
Celular. These agreements, which were amended in May 2002, among other things,
gave MATC Celular the right to acquire approximately 350 of our existing
non-strategic towers. We sold and leased back a total of 67 non-strategic
towers to MATC Celular for approximately Ps.91.6&nbsp;million in net gains in 2002.
During 2001 and 2002, we sold and leased back a total of 311 non-strategic
cellular towers to MATC Celular and fulfilled our contractual obligation under
the existing agreements. We have no further commitment with MATC Celular to
sell additional towers. We are leasing back these towers from MATC Celular and
subleasing them to its operating subsidiaries.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have never paid dividends, 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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Iusacell Celular does not undertake research and development activities.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>D.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>TREND INFORMATION</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
<P align="center"><FONT size="2">62</FONT>

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</FONT>


<P align="left"><FONT size="2"><B>Price Increases and Rollbacks</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have attempted, and continue to attempt, to exercise price leadership
in the Mexican cellular market, with a strategy of increasing our prices to
keep pace with inflation if economic and competitive conditions permit.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In late March 1999, we raised airtime prices on our postpaid plans by
approximately 12% on a weighted average basis and approximately 6% for prepaid
customers. Our competitors also increased their prices.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In mid-April 2001, after not having raised our fees 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 our competitors have not increased their prices. Our revenues
will be adversely affected to the extent that our price increases cannot keep
pace with inflation.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Mexican authorities resolved several critical regulatory issues over
the last several years and will likely continue to resolve additional important
regulatory issues during 2003 which may have a material effect on Iusacell
Celular&#146;s financial condition and results of operations.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 negotiated with Telmex to obtain similar
terms for both our long distance business and local cellular interconnection
rates and these terms have been maintained until 2003.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, which provides that the wireline or fixed wireless party that
makes a local call to a cellular telephone, 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The interconnection rate is frozen at Ps.1.90 per minute or fraction of a
minute. The price which Telmex may charge its customers is 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.
</FONT>

<P align="center"><FONT size="2">63</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.$200.0&nbsp;million in Iusacell capital expenditure requirements from 1998 to
2000.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2001, Telmex, Avantel and Alestra announced a preliminary
agreement under which 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
million, 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
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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Quality Standards</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we met COFETEL&#146;s quality standards in 2000, we nevertheless
voluntarily determined to compensate our subscribers in Region 9 in light of
perceived quality problems during 1999 due to network digitalization and rapid
traffic growth. As of December&nbsp;31, 1999, our postpaid subscribers each
received 20% more included minutes in each of their postpaid packages in April
and May 2000 and our prepaid customers, each received five free minutes. The
financial impact of this voluntary compensation program was not material.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell met COFETEL&#146;s quality standards, that in 2001 were as follows:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Drop calls 6%</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Ineffective attempts 5%</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portatel significantly increased its quality standards in the fourth
quarter of 2001, the rate of ineffective attempts improved to 0.7% after
initial audits in the city of M&#233;rida indicated a 14.9% rate in July 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Drop calls 4%</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Ineffective attempts 5%</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Connection time 12 seconds</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">64</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2002 quality tests began June&nbsp;3, 2002 and ended December&nbsp;13, 2002, and
covered 19 of our largest cities in terms of number of wireless mobile users.
The verification covered 70% of the total wireless mobile users in Mexico. The
results of the test indicated that Iusacell met COFETEL quality standards.
</FONT>


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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2001, <I>SAGO Interamericana, S.A. de C.V. </I>(SAGO), a distributor that
represented at that time slightly less than 10% of our monthly gross postpaid
additions and approximately 2% of our monthly gross prepaid 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 (U.S.$4.2&nbsp;million) in
net receivables owed to us by SAGO.
</FONT>


<P align="left"><FONT size="2"><B>E. OFF-BALANCE SHEET ARRANGEMENTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
</FONT>


<P align="left"><FONT size="2"><B>F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For tabular disclosure of our contractual obligations, please see &#147;&#151;
Liquidity and Capital Resources &#151; Contractual Obligations.&#148;
</FONT>

<!-- link2 "ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A five-member Board of Directors manages Iusacell Celular. Under the
Iusacell Shareholders Agreement, Vodafone has the right to nominate one
director. 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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>A.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>DIRECTORS AND SENIOR MANAGEMENT</B></FONT></TD>
</TR>
</TABLE>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;30, 2003, Iusacell Celular elected new directors. The following
table presents information with respect to our directors at April&nbsp;30, 2003:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Age</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Position(s)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Carlos Espinal G</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
53</FONT></TD>
    <TD valign="top"><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 valign="bottom">
    <TD valign="top"><FONT size="2">Russell A. Olson</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
44</FONT></TD>
    <TD valign="top"><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">
    <TD valign="top"><FONT size="2">Anthony Llompart</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
40</FONT></TD>
    <TD valign="top"><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">
    <TD valign="top"><FONT size="2">Richard Harman</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
53</FONT></TD>
    <TD valign="top"><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">
    <TD valign="top"><FONT size="2">Javier Martinez del Campo</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
43</FONT></TD>
    <TD valign="top"><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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The term of each director expires upon the election of his successor at a
duly convened general ordinary shareholders meeting.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;Espinal, Olson or Llompart, Ignacio Gomez Morin for
Mr.&nbsp;Martinez del Campo, and Jack Lester for Mr.&nbsp;Harman.
</FONT>

<P align="center"><FONT size="2">65</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Carlos Espinal G. </I>has been a member of the Board of Directors of Iusacell
Celular since April 2003. Mr.&nbsp;Espinal has also been a member of the Board of
Directors of Iusacell since April 2002 and has served as Senior Group
Vice-President, International &#151; Americas for Verizon Communications, Inc. since
April 2002. Before being appointed the Senior Group Vice-President, since
April 2000 Mr.&nbsp;Espinal served as Chairman and Chief Executive Officer of CTI
Movil, a leading wireless carrier in Argentina, of which Verizon was a
significant shareholder. Before joining CTI Movil, Mr.&nbsp;Espinal served as
General Manager and then as President and Chief Executive Officer of CODETEL.
Prior to joining GTE/Verizon, Mr.&nbsp;Espinal served as Chairman and/or Chief
Executive Officer of various large multinational firms in the industrial sector
in Mexico, Venezuela and Thailand, and was the Managing Director of Hondutel
(the Honduran telephone company). He has been a member of several professional
and industry associations throughout Latin America. After graduating with
honors in electronic engineering from the Universidad Javeriana in Colombia,
Mr.&nbsp;Espinal enrolled in a graduate program in telecommunications engineering at
NTT in Japan. Later, he obtained a master&#146;s degree in industrial engineering
and management from the Asian Institute of Technology in Thailand and completed
the Program for Management Development at Harvard Business School.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Russell A. Olson </I>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 &#151; Finance from the University of Arizona and a M.S. degree in
Finance from Fairfield University.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Anthony Llompart </I>has been a member of the Board of Directors of Iusacell
Celular since April 2003. Mr.&nbsp;Llompart is also Vice-President of Sales &#038;
Distribution for Iusacell since April&nbsp;29, 2002. Mr.&nbsp;Llompart served 3&nbsp;years as
Director Channel Management for Verizon International and has held a variety of
sales and marketing positions for Verizon and its predecessor company, GTE, for
over 8&nbsp;years. These positions include sales management, product management,
distribution, and customer support. Mr.&nbsp;Llompart has over 12&nbsp;years experience
in the wireless industry. He holds a bachelor&#146;s degree in business management
from the University of Phoenix.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Richard Harman </I>has been a principal member of the Board of Directors of
Iusacell Celular since April&nbsp;30, 2003 and an alternate member of the Board of
Directors of Iusacell Celular since April, 2001. Mr.&nbsp;Harman is also an
alternate member of the Board of Directors of Iusacell. Mr.&nbsp;Harman is the
Managing Director, Operations Development for the Vodafone Americas Region.
Mr.&nbsp;Harman has been in the wireless telecommunications business for the last 23
years and during this time, he has held various positions in Pacific Bell,
AirTouch and Vodafone. Mr.&nbsp;Harman has worked in multiple countries from Europe
and South America. Previously, he served as the Chief Operating Officer of
Vodafone Poland, and Chief Operating Officer of Globalstar Brazil. Mr.&nbsp;Harman
holds a bachelors and master&#146;s degree from the San Diego State University in
California.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Javier Mart&#237;nez del Campo Lanz </I>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 <I>De Ovando y Mart&#237;nez del Campo, S.C. </I>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 <I>Grupo Gigante,
S.A. de C.V.</I>, one of Mexico&#146;s largest retailers.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>COMPENSATION</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate amount of compensation, including, without limitation, base
salary and benefits, paid by Iusacell in 2002 to all directors and executive
officers as a group was Ps.62.0&nbsp;million (U.S.$5.9&nbsp;million), compared to Ps.84.8
million (U.S.$8.1&nbsp;million) in 2001. 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 &#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
</FONT>
<P align="center"><FONT size="2">66</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"><FONT size="2">provide executive
officers with use of an automobile. In addition, we provide our executive
officers and other employees with food stamps (up to Ps.1,264.0 per month), gas
stamps (up to 200 liters per month) and with contributions to a savings plan
(up to Ps.1,665.8 per month).
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>BOARD PRACTICES</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>D.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>EMPLOYEES</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002, Iusacell Celular and our subsidiaries had an
aggregate of 1,685 full-time and part-time employees, 96 temporary employees
and 5 full time Verizon seconded employees or consultants. Approximately 33.6%
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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>E.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>SHARE OWNERSHIP</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>A.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>MAJOR SHAREHOLDERS</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell owns, directly and indirectly, 100% of our outstanding 27,967
Series&nbsp;A shares and 100% of our outstanding 26,865 Series&nbsp;B shares. Iusacell
has two principal shareholders. The first, Verizon, holds its interest in us
through its subsidiaries. Since February 1997, we have been under management
control of subsidiaries of Bell Atlantic, which is now Verizon. Our second
principal shareholder is a subsidiary of Vodafone Group Plc.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#038;T in 1984, 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 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.$67.6&nbsp;billion and U.S.$4.0&nbsp;billion, respectively,
for the fiscal year ended December&nbsp;31, 2002, and total assets of approximately
U.S.$167.5&nbsp;billion at such date.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the United States, Verizon Communications is the largest provider of
wireline and wireless telephone service in 29 states and the District of
Columbia, with 135.8&nbsp;million access lines and employing 229,500 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 32.5&nbsp;million subscribers. Verizon Wireless
has a presence in 49 of the top 50 U.S. markets and it covers nearly 90% of the
United States population.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Verizon has wireline and/or wireless operations in 32 countries and
territories in the Americas, Europe, Asia and the Pacific, with 3.2&nbsp;million
attributable access lines and 8.7&nbsp;million attributable wireless customers as of
December&nbsp;31, 2002. Verizon is also the world&#146;s largest provider of print and
on-line directory information.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Verizon is a reporting company under the Exchange Act. Bell Atlantic and
GTE were reporting companies under the Exchange Act. Reports and information
filed with the Commission by Verizon, Bell Atlantic and GTE may be inspected
and copied at the public reference facility maintained by the Commission at
Room&nbsp;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.
</FONT>

<P align="center"><FONT size="2">67</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Vodafone is the largest mobile
operations network company in the world, with more than 112.5&nbsp;million
subscribers, calculated based on Vodafone&#146;s percentage interest in the relevant
wireless companies, and a presence in 28 countries. Vodafone also owns
interests in wireless carriers in Europe, the United States, the Asia/Pacific
region, the Middle East and Africa. Vodafone companies are among 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 acquisition of
Mannesmann AG in 2001 and is expanding its wireless data services.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No other shareholder owns more than 5% of any class of Iusacell&#146;s shares.
At April&nbsp;30, 2003, based on the information made available to us, Iusacell&#146;s
shareholders&#146; ownership interests were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>Number of Shares</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Shareholders</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>A Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>V Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>%</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Verizon <SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><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"><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"><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"><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"><FONT size="2">39.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Vodafone<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><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"><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"><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"><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"><FONT size="2">34.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Public investors<SUP>(3)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><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"><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"><FONT size="2">26.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><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"><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"><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"><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"><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"><FONT size="2">100.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The address of Verizon Communications Inc. is: 1095 Avenue of the
Americas, New York, New York.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The address of the Vodafone Group Plc is: Max Eunvelaan 61, 3062
MA. Rotterdam, The Netherlands.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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;Iusacell&#146;s directors and officers as a group own, in the aggregate, less
than 1.0% of Iusacell&#146;s shares.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of Iusacell&#146;s series V shares outstanding at May&nbsp;30, 2003, 116,038,100
series V shares were held in the form of American Depositary Shares (ADS)&nbsp;by 35
holders of record based on information made available to us and provided by our
depositary, The Bank of New York. Assuming that the holders of ADSs are
located in the United States, then 23.9% of the series V shares (which includes
all of the series V shares which are held in the form of ADSs except for the
1,400,000 series V shares held by Verizon which are held in the form of ADSs)
are held in the United States. In May 2003, we completed a reverse split/ADS
ratio change by modifying the ratio of shares of common stock of Iusacell per
ADS, from ten (10)&nbsp;shares per ADS to one hundred (100)&nbsp;shares per ADS. The
ratio change did not affect holders of Iusacell&#146;s ordinary shares and was
effected without charge to investors.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August 1999, Iusacell completed a reorganization. The reorganization
included U.S.$132.5&nbsp;million in borrowings from its principal shareholders
between August 1998 and March 1999 that were immediately converted into 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 Iusacell&#146;s 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, we then held 99.9%
of the outstanding Iusacell Celular shares. See Item&nbsp;4, &#147;Information on the
Company &#151; History and Development of the Company.&#148; This second exchange offer
diluted both Verizon and the Peralta Group&#146;s ownership interests by placing
additional series V shares with public shareholders.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;30, 2000, Iusacell Celular&#146;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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
</FONT>
<P align="center"><FONT size="2">68</FONT>

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<P align="left"><FONT size="2"> 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;4, 2001, Vodafone purchased 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;27, 2001, Iusacell&#146;s 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.$100.0&nbsp;million. The subscription period began on October
5, 2001 and ended on November&nbsp;1, 2001. Iusacell&#146;s principal shareholders,
Verizon and Vodafone, purchased their pro rata portion of series A and series V
shares. Sixty-seven percent (67%) of the non-Verizon and Vodafone series V
shareholders exercised their rights to purchase additional shares. In
addition, Verizon&#146;s subscription included all of the series V shares offered
to, but not subscribed for by public shareholders.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of April&nbsp;30, 2003, Verizon held a 39.4% interest in Iusacell and
Vodafone held a 34.5% interest in Iusacell.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;13, 2003, Movil Access, a Mexican telecommunications service
provider and a subsidiary of <I>Biper, S.A. de C.V.</I>, which is a part of <I>Grupo
Salinas</I>, announced that it would commence a public tender offer in Mexico and
the United States to buy all of Iusacell&#146;s outstanding capital stock. Verizon
and Vodafone have announced that they have agreed to tender all of their
Iusacell shares to Movil Access. See Item&nbsp;4, &#147;Information on the Company &#150;
History and Development of the Company.&#148;
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular&#146;s by-laws also provide that resolutions of its
shareholders will be valid when approved by shareholders representing 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following transactions are subject to a supermajority vote by our Board of Directors or our shareholders:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">certain investments, joint ventures and mergers within the
telecommunications business involving assets in excess of U.S.$100.0
million;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">certain dispositions of assets for consideration in excess of
U.S.$30.0&nbsp;million;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">incurrence of indebtedness in an amount exceeding U.S.$100.0
million in the aggregate within any fiscal year;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">certain issuances of capital stock in an amount exceeding U.S.$50.0
million in the aggregate within any fiscal year;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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>
</TABLE>
<P align="center"><FONT size="2">69</FONT>

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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">termination of concessions relating to telecommunications
operations;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the granting of powers-of-attorney in connection with any such
supermajority transactions.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>RELATED PARTY TRANSACTIONS</B></FONT></TD>
</TR>
</TABLE>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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>


<P align="left"><FONT size="2"><B>Consulting and Secondment Agreements</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 entered into a similar agreement with Iusacell
applicable to Iusacell Celular.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to consulting services and seconded employees provided in
2002, Iusacell Celular has been credited by Verizon for a total of U.S.$7.2
million to adjust for 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 Iusacell a total
of U.S.$219,216.0 for consulting fees and secondment agreements in 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2001, Verizon and Iusacell 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 with respect to consulting services and seconded
employees and a credit against any and all future such charges until the sum of
all canceled charges equals U.S.$15.0&nbsp;million.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to consulting services for 2003, Iusacell and Verizon have
reached an agreement in which Iusacell Celular will pay a fixed fee of U.S.$1.8
million plus any applicable tax gross-up amount.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot predict whether these consulting and secondment agreements will
continue to remain in place, as Verizon and Vodafone have announced that they
would tender all of their Iusacell shares to Movil Access. See Item&nbsp;4,
&#147;Information on the Company &#150; History and Development of the Company.&#148;
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GTE Telecommunications Services, Inc., which we refer to as TSI, provides
clearinghouse services for roaming arrangements. In 2002, TSI paid us
U.S.$134,821.0 for such services. In October 2001, we entered into an
inter-carrier roaming agreement with Verizon Wireless in the United States.
</FONT>

<P align="center"><FONT size="2">70</FONT>

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<P align="left"><FONT size="2"><B>Interests of Directors</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Javier Mart&#237;nez del Campo, a director of Iusacell Celular since
February 1997, and Mr.&nbsp;Ignacio G&#243;mez Morin, an alternate director of Iusacell
Celular since February 1997, are members of the law firm of <I>De Ovando y
Mart&#237;nez del Campo, S.C.</I>, which, in 2002, provided legal services to Iusacell
and Iusacell Celular in the amount of approximately Ps.1.1&nbsp;million
(U.S.$105,516.0).
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>INTERESTS OF EXPERTS AND COUNSEL</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not Applicable.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 8. FINANCIAL INFORMATION" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 8. FINANCIAL INFORMATION</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>A.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION</B></FONT></TD>
</TR>
</TABLE>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Item&nbsp;19(a) for a list of financial statements filed under Item&nbsp;18.
</FONT>


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

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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2001, <I>SAGO Interamericana, S.A. de C.V.</I>, 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 prepaid 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>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2002, <I>Telemedic S.A de C.V. </I>filed a lawsuit against us seeking
compensatory damages. We are now in the process of submitting evidence to the
judge. Compensatory damages, if any, shall be determined by the judge at the
end of the process.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May 2003, <I>Comercializadora Ingran, S.A. de C.V. </I>filed a lawsuit against
us, seeking compensatory and consequential damages. We recently filed before
the court an answer to the lawsuit and the period for submission of evidence to
the judge will begin in the near future. Compensatory damages, if any, will be
determined by the judge at the end of the period.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Injunctive action against additional 10% excise tax</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2002, the Mexican Congress approved a surcharge that
assesses an additional 10% federal excise tax on certain wireless
telecommunications services. The tax resulted in a 10% increase in the monthly
bills of postpaid mobile wireless customers and in the cost of prepaid cards in
denominations of Ps.200.0 (U.S.$19.18) or more for the year 2002. In February
2002, we filed an injunctive action (amparo)&nbsp;challenging the Mexican
government&#146;s implementation of the tax. In October 2002, we received a
preliminary ruling in favor of us by a Federal Judge, and the Mexican
government subsequently filed an appeal. In June 2003, Mexico&#146;s Supreme Court
rejected the appeal and affirmed the ruling in favor of us.
</FONT>

<P align="center"><FONT size="2">71</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, the Mexican government implemented a modified version of the
additional 10% excise tax on certain wireless telecommunications services,
which was approved by the Mexican Congress. In March 2003, we filed an
injunctive action (amparo)&nbsp;challenging this implementation. Until this
injunctive action is resolved, we will continue to pay the full modified
additional 10% excise tax to the Finance Ministry.
</FONT>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently do not pay any dividends nor do we contemplate paying
dividends in the foreseeable future.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>SIGNIFICANT CHANGES</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">No significant change has occurred since the date of the financial statements filed under Item&nbsp;18.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 9. THE OFFER AND LISTING" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 9. THE OFFER AND LISTING</B>
</FONT>


<P align="left"><FONT size="2"><B>A. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OFFER AND LISTING DETAILS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular does not currently have, and does not currently intend to
apply to have, any securities listed on any stock exchange or other regulated
markets.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular&#146;s series D and L shares had been listed on the Mexican
Stock Exchange until their delisting on February&nbsp;29, 2000. ADSs representing
10 Iusacell Celular series D shares had been listed on the New York Stock
Exchange from June&nbsp;21, 1994 until their delisting on August&nbsp;10, 1999 and traded
under the symbol CEL.d. ADSs representing 10 Iusacell Celular series L shares
had been listed on the New York Stock Exchange from June&nbsp;21, 1994 until their
delisting 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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>PLAN OF DISTRIBUTION</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>MARKETS</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular does not currently have, and does not currently intend to
apply to have, any securities listed on any stock exchange or other regulated
markets. See &#147;&#151; Offer and Listing Details.&#148;
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>D.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>SELLING SHAREHOLDERS</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>E.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>DILUTION</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>F.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>EXPENSES OF THE ISSUE</B>
Not applicable.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 10. ADDITIONAL INFORMATION" -->
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<P align="left"><FONT size="2"><B>ITEM 10. ADDITIONAL INFORMATION</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>A.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>SHARE CAPITAL</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Not applicable.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">72</FONT>

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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>B.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>MEMORANDUM AND ARTICLES OF ASSOCIATION</B></FONT></TD>
</TR>
</TABLE>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 A and series V shares of Iusacell.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular&#146;s corporate purpose is found under Article&nbsp;Two of its
by-laws. Iusacell Celular&#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"><FONT size="2"><B>Directors</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2"><B>Voting Rights and Shareholders&#146; Meetings</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell holds, directly or indirectly, 100% of the series A and B shares
of Iusacell Celular.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each series A and series B share entitles the holder thereof to one vote
at any general meeting of the shareholders of Iusacell Celular.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 and the corresponding alternate director.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 or
category of holders 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Ley General de Sociedades Mercantiles</I>, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our by-laws, the quorum on a first call for an ordinary general
shareholders&#146; 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
</FONT>
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<P align="left"><FONT size="2">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 a
majority of each of the outstanding series A and series B shares is required.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 series A and series
B shares present is required.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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 of Directors 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 than 15% of the outstanding shares of Iusacell Celular
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 Celular and not only to the individual shareholders&#146; interests.
</FONT>


<P align="left"><FONT size="2"><B>Shareholder Conflicts of Interest</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>


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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The series A and series B shares have the same dividend rights. The
declaration and payment of such dividends will depend upon Iusacell Celular&#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
</FONT>
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<P align="left"><FONT size="2">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.
Iusacell Celular has outstanding debt obligations which limits the amount of
dividends that can be paid in any given year or prohibit dividends entirely.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2"><B>Changes in Share Capital and Rights of Shareholders</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders may also approve the redemption of fully-paid shares with
retained earnings. Such a redemption would be effected by a repurchase of
shares by lot.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fixed portion of our capital stock may only be increased or decreased
by resolution of an extraordinary general meeting of the shareholders 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>



<P align="center"><FONT size="2">75</FONT>


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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Fixed and Variable Capital</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The covenants contained in the Iusacell Celular indenture and the senior
credit refinancing secured loan limit Iusacell Celular&#146;s ability to issue
variable capital shares.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the opinion of <I>De Ovando y Mart&#237;nez del Campo, S.C.</I>, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Appraisal Rights</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P align="center"><FONT size="2">76</FONT>

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<P align="left"><FONT size="2"><B>Foreign Investment Regulation</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a general rule, the 1993 Foreign Investment Law allows foreign
investments in up to 100% of the capital stock of Mexican companies, except for
those engaged in specified restricted industries, such as basic telephone
service, where foreign investments are limited to 49% of the voting capital
stock. Foreign investors may, however, participate in excess of 49% of the
voting capital stock of a Mexican corporation engaged in the cellular telephone
business with the prior 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 &#151; Business Overview &#151; Government Regulation &#151;
Foreign Ownership Restrictions.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Mexican companies, including Iusacell.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>C.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>MATERIAL CONTRACTS</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;29, 1999, Iusacell Celular entered into a series of agreements
with MATC Celular, the Mexican subsidiary of American Tower Corporation, with
respect to Iusacell Celular&#146;s existing towers and future tower needs. Under
these agreements, which were amended in May 2002, MATC Celular, among other
things, is required to build towers or find space on existing towers, which
Iusacell Celular&#146;s subsidiaries lease. The term of the lease is 10&nbsp;years with
two five-year renewal periods. As of May&nbsp;30, 2003, Iusacell Celular&#146;s
subsidiaries lease from MATC Celular 715 sites, including 320 transfer sites, a
number of built-to-suit sites and co-locations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See also, Item&nbsp;5, &#147;Operating and Financial Review and Prospects&#151;Liquidity
and Capital Resources,&#148; for a summary of Iusacell Celular&#146;s material credit
agreements and indentures.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>D.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>EXCHANGE CONTROLS</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>E.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>TAXATION</B></FONT></TD>
</TR>
</TABLE>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">77</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">a citizen or resident of the United States;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Treasury regulations promulgated thereunder, published rulings by the U.S.
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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
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 985 of
the Code) is not the U.S. dollar.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 the 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 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>


<P align="left"><FONT size="2"><B>United States Tax Consequences to Holders of Notes</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Payments of Interest and Additional Amounts</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally, payments of interest and any additional amounts (i.e.,
&#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
</FONT>
<P align="center"><FONT size="2">78</FONT>

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

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

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Sale, Exchange or Retirement of a Note</I></B>
</FONT>

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

<P align="center"><FONT size="2">79</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Foreign Tax Credit and Effect of Withholding Taxes</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Information Reporting and Backup Withholding</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 (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>


<P align="left"><FONT size="2"><B>Mexican Tax Consequences to Holders of Notes</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 in Mexico.
</FONT>

<P align="center"><FONT size="2">80</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Taxation of Payments of Interest and Principal</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 or 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">that Iusacell Celular has 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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">that Iusacell Celular timely files 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, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: (1)&nbsp;shareholders
of Iusacell Celular 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, 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2003, 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, 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. Otherwise, holders of the Notes should
consult their tax advisors as to the possible application of the Treaty Rate.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular has agreed, subject to the exceptions and limitations
contained in the indentures 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">81</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Taxation of the Sale and other Disposition of the Notes</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Income Tax Law gains resulting from a Foreign Holder&#146;s sale or
other disposition of Notes are considered interest.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Transfer and other Taxes</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>F.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>DIVIDENDS AND PAYING AGENTS</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>G.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>STATEMENT BY EXPERTS</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>H.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>DOCUMENTS ON DISPLAY</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>I.</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>SUBSIDIARY INFORMATION</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>

<!-- link2 "ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B>
</FONT>

<P align="left"><FONT size="2"><B>Interest Rate Risk</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular&#146;s earnings are affected by changes in interest rates as a
result of long-term borrowings. For a description of Iusacell Celular&#146;s
long-term borrowings, see Item&nbsp;5, &#147;Operating and Financial Review and Prospects
&#151; Liquidity and Capital Resources &#151; Long-Term Indebtedness.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iusacell Celular has fixed rate debt under its Iusacell Celular senior
notes and a Banco Santander credit facility. Iusacell Celular also had, as of
December&nbsp;31, 2002, variable debt under the senior refinancing secured loan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 limited the maximum effective LIBOR cost to 6.12% if six-month
LIBOR was lower than 7.12% and 7.12% if LIBOR equaled or exceeded 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,
</FONT>
<P align="center"><FONT size="2">82</FONT>

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<P align="left"><FONT size="2">Iusacell Celular&#146;s maximum effective
LIBOR cost was limited to 5.82% if six-month LIBOR was lower than 6.82% and, if
six-month LIBOR equalled or exceeded 6.82%, then Iusacell Celular&#146;s maximum
effective LIBOR cost would be limited to 6.82%. These interest rate collar
agreements expired on July&nbsp;30, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the debt obligations and derivative
instruments that are sensitive to changes in interest rates held by Iusacell
Celular as of December&nbsp;31, 2002. With respect to the debt, the tables present
principal payment obligations that exist by maturity date and the related
average interest rate. 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 published by <I>Banco de M&#233;xico </I>at
December&nbsp;31, 2002, which was U.S.$1.00 = Ps.10.4393. The
following table does not reflect as current the effects of our
default under the senior refinancing secured loan, as the senior
refinancing secured loan has not yet been declared immediately due
and payable. Depending on subsequent events and the progress of our
restructuring efforts, we expect our payment obligations to change.
See Note 24 to the Consolidated Financial Statements.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="31"><FONT size="1"><B>As of December 31, 2002 &#151; Expected Maturity Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="31"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2005</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2006</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2007</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Thereafter</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Fair Value</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="31"><FONT size="1"><B>in millions of Mexican pesos (U.S. dollars)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Fixed Rate Debt</B></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 valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>U. S. Dollar denominated</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125.3</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"><FONT size="2">1,565.9</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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,691.2</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"><FONT size="2">935.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.3</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.4</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Mexican Peso denominated</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Variable Rate Debt</B></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 valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>U. S. Dollar denominated</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,039.8</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"><FONT size="2">1,386.5</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"><FONT size="2">346.5</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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,772.8</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"><FONT size="2">2,772.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.1</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Mexican Peso denominated</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Interest Rate Derivatives</B></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 valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Interest Rate Collars</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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&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><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><I>&nbsp;</I></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Note: To determine the weighted-average interest rate for variable rate
debt, LIBOR interest rate was forecasted by CIEMEX-WEFA assuming 1.33% for
2003, 1.84% for 2004, 2.24% for 2005, 2.4% for 2006 and 3.15% for 2007.</I></FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><B>Foreign Currency Risk</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary foreign currency exposure relates to our foreign currency
denominated debt. Our debt obligations are denominated in U.S. dollars while
we generate revenues in Mexican pesos. Therefore, we are 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1999, we 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, we 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 and October 2001, we hedged using
forward rate contracts 100% of the principal U.S.$150.0&nbsp;million and U.S.$34.5
million of associated interest of the Iusacell Celular senior notes. In
October 2002, we opted to unwind the full foreign exchange hedge contracted in
2001; however, we will continue to look for opportunities to enter into cost
efficient, foreign exchange hedging positions when appropriate.
</FONT>

<P align="center"><FONT size="2">83</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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes our debt that is sensitive to changes in
foreign currency exchange rates as of December&nbsp;31, 2002. With respect to the
debt, the tables present principal payment obligations that exist by maturity
date and the related average interest rate. 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
published by <I>Banco de M&#233;xico </I>at December&nbsp;31, 2002, which was U.S.$1.00 =
Ps.10.4393. The
following table does not reflect as current the effects of our
default under the senior refinancing secured loan, as the senior
refinancing secured loan has not yet been declared immediately due
and payable. Depending on subsequent events and the progress of our
restructuring efforts, we expect our payment obligations to change.
See Note 24 to the Consolidated Financial Statements.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="27"><FONT size="1"><B>As of December 31, 2002 &#151; Expected Maturity Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="27"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2003</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2004</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2005</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2006</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2007</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Thereafter</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Fair Value</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="31"><FONT size="1"><B>In millions of Mexican Pesos (U.S. dollars)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Fixed Rate Debt</B></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 valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>U. S. Dollar denominated</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125.3</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"><FONT size="2">1,565.9</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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,691.2</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"><FONT size="2">935.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.3</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.4</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Variable Rate Debt</B></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 valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>U. S. Dollar denominated</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,039.8</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"><FONT size="2">1,386.5</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"><FONT size="2">346.5</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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,772.8</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"><FONT size="2">2,772.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.1</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.5</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Forward Exchange Derivatives</B></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 valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Receive Mexican Pesos/Pay
U.S.Dollars</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Receive U.S. Dollars/Pay Mexican
Pesos</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><I>&nbsp;</I></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Note: To determine the weighted-average interest rate for variable rate
debt, LIBOR interest rate was forecasted by CIEMEX-WEFA assuming 1.33%. for
2003, 1.84% for 2004, 2.24% for 2005, 2.4% for 2006 and 3.15% for 2007.</I></FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</B>
</FONT>

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

<!-- link1 "PART II" -->
<DIV align="left"><A NAME="013"></A></DIV>

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

<!-- link2 "ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first half of 2003, we exceeded the permitted leverage ratio
(as defined in the senior refinancing secured loan) of 2.50. On April&nbsp;28,
2003, we and the lenders entered into the second amendment and waiver to
increase the permitted leverage ratio under the senior refinancing secured loan
from 2.50 to 2.70. Under the second amendment and waiver, we temporarily
agreed not to make any restricted payment, loan or advance to, or repay any
loan or advance from any affiliate, provided that if we or any of our
subsidiaries make any payment on the principal of any indebtedness (as defined
in the senior refinancing secured loan), we or the relevant subsidiary will
simultaneously prepay a pro rata amount outstanding under the senior
refinancing secured loan. On May&nbsp;22, 2003, the second amendment and waiver was
extended until June&nbsp;13, 2003. On June&nbsp;12, 2003, the second amendment and
waiver was further extended until June&nbsp;26, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The second amendment and waiver has not since been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. See Item&nbsp;5,
&#147;Operating and Financial Review and Prospects &#151; Liquidity and Capital Resources
&#151; Long-Term Indebtedness &#151; Loan Covenant Waivers and Modifications.&#148;
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;1, 2003, Iusacell failed to make a U.S.$25.0&nbsp;million interest
payment which was due on the Iusacell senior notes. While Iusacell has a
30-day grace period to make the payment before an event of default will occur,
Iusacell does not expect to make the June&nbsp;1, 2003 interest payment within that
grace period. As a result, an event of default under the indenture governing
the Iusacell senior notes will occur and the holders of those notes will have
the right to declare those notes immediately due and payable. The right of the
holders of the Iusacell senior notes to accelerate Iusacell&#146;s repayment
obligations under those notes will cause an event of default under the terms of
our
</FONT>
<P align="center"><FONT size="2">84</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"><FONT size="2"> senior refinancing secured loan and the lenders will have the right to
declare that loan immediately due and payable. If the lenders under the senior
refinancing secured loan accelerate the loan, an event of default will also
occur under the Iusacell Celular indenture, in which case the holders of the
Iusacell Celular senior notes will have the right to accelerate our repayment
obligations under the Iusacell Celular senior notes.
</FONT>

<!-- link2 "ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS" -->
<DIV align="left"><A NAME="015"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</FONT>

<!-- link2 "ITEM 15. CONTROLS AND PROCEDURES" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 15. CONTROLS AND PROCEDURES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Evaluation of Disclosure Controls and Procedures. </I>The person performing
similar functions of a principal executive officer and the person performing
similar functions of a principal financial officer of Iusacell Celular have
evaluated the effectiveness of Iusacell Celular&#146;s disclosure controls and
procedures (as such term is defined in Rules&nbsp;13a-14(c) and 15d-14(c) under the
Exchange Act) as of a date within 90&nbsp;days prior to the filing date of this
Annual Report (the &#147;Evaluation Date&#148;). Based on such evaluation, such persons
have concluded that, as of the Evaluation Date, Iusacell Celular&#146;s disclosure
controls and procedures are effective in alerting them on a timely basis to
material information relating to Iusacell Celular (including its consolidated
subsidiaries) required to be included in Iusacell Celular&#146;s reports filed or
submitted under the Exchange Act.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Changes in Internal Controls. </I>Since the Evaluation Date, there have not
been any significant changes in Iusacell Celular&#146;s internal controls or in
other factors that could significantly affect such controls. No significant
deficiencies and material weaknesses were identified that required corrective
actions.
</FONT>

<!-- link2 "ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT" -->
<DIV align="left"><A NAME="017"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable. Applies to fiscal years ending on or after July&nbsp;15, 2003.
</FONT>

<!-- link2 "ITEM 16B. CODE OF ETHICS" -->
<DIV align="left"><A NAME="018"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 16B. CODE OF ETHICS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May, 2002 we adopted a code of ethics. Our code of ethics applies to
all of our employees, including the principal executive officer, principal
financial officer, principal accounting officer and controller and persons
performing similar functions. During 2002, we implemented training courses in
the code of ethics to all our employees. Every new employee is provided also
with training and a copy of our code of ethics. Our code of ethics, together
with an English translation, is also posted on our internet website:
www.iusacell.com.
</FONT>

<!-- link2 "ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES" -->
<DIV align="left"><A NAME="019"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers, which has been appointed by Iusacell&#146;s Board of
Directors, has served as the independent public accountants for Iusacell and
its subsidiaries for each of the fiscal years in the three-year period ended
December&nbsp;31, 2002. Each year, the Audit Committee submits a recommendation to
Iusacell&#146;s Board of Directors to ratify the re-appointment of Iusacell&#146;s
independent public accountants.
</FONT>

<P align="center"><FONT size="2">85</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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents the aggregate fees for professional audit
services and other services rendered by PricewaterhouseCoopers to Iusacell
Celular in 2002.
</FONT>


<P align="center"><FONT size="2"><B>Fees Paid to PricewaterhouseCoopers</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="77%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Thousands of pesos</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Audit Fees<SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Audit-related Fees<SUP>(2)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tax Fees<SUP>(3)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All Other Fees<SUP>(4)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">14,292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Audit fees include services performed by the independent accountant
to comply with generally accepted accounting standards in Mexico and the
United States. Audit fees also include fees for services provided by
the independent accountants in connection with statutory and regulatory
filings or engagements, comfort letters, statutory audits, attest
services, consents and assistance with and review of documents filed
with the SEC.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Audit-related fees include employee benefit plan audits, accounting
consultations and audits in connection with internal control reviews,
attest services that are not required by statute or regulation and
consultation concerning financial accounting and reporting standards.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(3)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Tax fees include fees for tax compliance, tax planning and tax
advice. Tax compliance generally involves preparation of original and
amended tax returns, claims for refund and tax payment-planning
services. Tax planning and tax advice encompass assistance with tax
audits and appeals, employee benefit plans and requests for rulings or
technical advice from taxing authorities.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(4)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">All other fees include mainly services related to the purchasing
information system implementation and design.</FONT></TD>
</TR>
</TABLE>
<!-- link1 "PART III" -->
<DIV align="left"><A NAME="020"></A></DIV>

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

<!-- link2 "ITEM 17. FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="021"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 17. FINANCIAL STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have responded to Item&nbsp;18 in lieu of responding to this Item&nbsp;17.
</FONT>

<!-- link2 "ITEM 18. FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="022"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 18. FINANCIAL STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
pages F-1 to F-54.
</FONT>

<P align="center"><FONT size="2">86</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 19. EXHIBITS" -->
<DIV align="left"><A NAME="023"></A></DIV>

<P align="left"><FONT size="2"><B>ITEM 19. EXHIBITS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Documents filed as exhibits to this Annual Report.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>No.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">1.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By-laws (<I>estatutos</I>) of <I>Grupo Iusacell Celular, S.A. de C.V.</I>
effective April&nbsp;4, 2001 (incorporated by reference to Exhibit&nbsp;1 to
Iusacell Celular&#146;s Annual Report on Form&nbsp;20-F for fiscal year 2000
&#150; File No.&nbsp;033-79254).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.1</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 herein by reference
to Exhibit&nbsp;2(a) to Iusacell&#146;s Annual Report on Form&nbsp;20-F for
fiscal year 2000 &#151; File No.&nbsp;001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.2</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 <I>Grupo Iusacell Celular,
S.A. de C.V.</I>, certain subsidiaries of <I>Iusacell Celular, S.A. de
C.V. </I>and First Union National Bank, as trustee (incorporated
herein by reference to Exhibit&nbsp;4.1 to the Registration Statement
F-4 &#151; Registration Number 333-37431).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</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 <I>Grupo
Iusacell Celular, S.A. de C.V.</I>, Lucent Technologies World
Services, Inc. and <I>Lucent Technologies de M&#233;xico, S.A. de C.V.</I>
(incorporated herein by reference to Exhibit&nbsp;A to Iusacell
Celular&#146;s Annual Report on Form&nbsp;20-F for fiscal year 1997).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</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 <I>Grupo Iusacell
Celular, S.A. de C.V. </I>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 <I>BBVA Bancomer S.A.</I>, as Arrangers
(incorporated herein by reference to Exhibit&nbsp;4(b) to Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2000 &#151; File No.
001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Master Lease Agreement (English version),
dated as of May&nbsp;16, 2002, among <I>MATC Celular, S. de R.L. de C.V.</I>,
<I>Grupo Iusacell Celular, S.A. de C.V. </I>and <I>Iusacell Arrendadora,
S.A. de C.V. </I>(incorporated herein by reference to Exhibit&nbsp;4.3 to
Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151; File
No.&nbsp;001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Master Lease Agreement (English version),
dated as of May&nbsp;16, 2002, between <I>MATC Celular, S. de R.L. de C.V.</I>
and <I>Grupo Iusacell Celular, S.A. de C.V.</I>, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit&nbsp;4.4 to Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal
year 2002 &#151; File No.&nbsp;001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Build-to-Suit and Site Development Agreement,
dated as of May&nbsp;16, 2002, between <I>MATC Celular, S. de R.L. de C.V.</I>
and <I>Grupo Iusacell Celular, S.A. de C.V.</I>, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit&nbsp;4.5 to Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal
year 2002 &#151; File No.&nbsp;001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
First Amendment and Waiver, dated as of December&nbsp;7, 2001, to the
Amended and Restated Credit Agreement, dated as of July&nbsp;25, 1997,
as amended and restated as of March&nbsp;29, 2001 among <I>Grupo Iusacell
Celular, S.A. de C.V.</I>, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit&nbsp;4.3 of Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2001 &#151; File No.
001-14938).</FONT></TD>
</TR>
</TABLE>
</CENTER>
<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>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>No.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Second Amendment and Waiver, dated as of April&nbsp;28, 2003, to the
Amended and Restated Credit Agreement, dated as of July&nbsp;25, 1997,
as amended and restated as of March&nbsp;29, 2001 among <I>Grupo Iusacell
Celular, S.A. de C.V.</I>, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit&nbsp;4.7 of Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151; File No.
001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
First Amendment to the Second Amendment and Waiver, dated as of
April&nbsp;28, 2003, to the Amended and Restated Credit Agreement,
dated as of July&nbsp;25, 1997, as amended and restated as of March&nbsp;29,
2001 among <I>Grupo Iusacell Celular, S.A. de C.V.</I>, the lenders party
thereto, and JP Morgan Chase Bank as Administrative Agent and
Collateral Agent (incorporated herein by reference to Exhibit&nbsp;4.8
of Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151;
File No.&nbsp;001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Second Amendment, dated as of June&nbsp;10, 2003, to the Second
Amendment and Waiver dated as of April&nbsp;28, 2003, to the Amended
and Restated Credit Agreement, dated as of July&nbsp;25, 1997, as
amended and restated as of March&nbsp;29, 2001 among <I>Grupo Iusacell
Celular, S.A. de C.V.</I>, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit&nbsp;4.8 of Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151; File No.
001-14938).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">7.1*</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>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">8.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
List of subsidiaries.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">12.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certification pursuant to 18 U.S.C. Section&nbsp;1350, as adopted
pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Executive Officer).</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">12.2*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certification pursuant to 18 U.S.C. Section&nbsp;1350, as adopted
pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Financial Officer).</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Filed herewith.</FONT></TD>
</TR>
</TABLE>
<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>




<P align="center"><FONT size="2"><B>GLOSSARY OF TELECOMMUNICATIONS TERMS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">1XRTT:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Analog:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Band:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A range of frequencies between two defined limits.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">CDMA:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Cellular A-band:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The range of frequencies used to provide cellular wireless service between
825-835 MHz and between 870-880 MHz of the radio spectrum.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Cellular B-band:&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The range of frequencies used to provide cellular wireless service between
835-845 MHz and between 880-890 MHz of the radio spectrum.</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Channel:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A pathway for the transmission of information between a sending point and a
receiving point.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Covered POPS:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The number of POPs in a defined area for whom a cellular signal is accessible.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">CPP:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Digital:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Hertz:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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)
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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">IMTS:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">LATA:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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&#038;T corporation.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">89</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>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">PCS:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">PCS A-band:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 GHz of the radio spectrum.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">PCS B-band:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 GHz of the radio spectrum.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">PCS D-band:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">PCS E-band:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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.</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Penetration Rate:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">POPs:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 <I>Instituto Nacional de Estad&#237;stica, Geograf&#237;a e Inform&#225;tica </I>(the National
Institute of Statistics, Geography and Information Processing, &#147;INEGI&#148;) to
the official 1990 census figures. Population figures for 2002 have been
calculated by applying the forecast annual population growth rate for 2002 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, 2002. 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>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Roaming:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Switch:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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 valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">TDMA:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" 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>
</CENTER>
<P align="center"><FONT size="2">90</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>
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="024"></A></DIV>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 align="left"><FONT size="2">GRUPO IUSACELL CELULAR, S.A. DE C.V.
</FONT>
<P align="left"><FONT size="2"><u>By: /s/ CARLOS ESPINAL G.</u><BR>
Carlos Espinal G.<BR>
Chairman of the Board and Series&nbsp;A Director and Attorney-in-Fact
</FONT>
<P align="left"><FONT size="2"><u>By: /s/ RUSSELL A. OLSON</u><BR>
Russell A. Olson<BR>
Series&nbsp;A Director and Attorney-in-Fact
</FONT>
<P align="left"><FONT size="2">Date: June&nbsp;30, 2003
</FONT>
<P align="center"><FONT size="2">91</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"><FONT size="2"><B>CERTIFICATIONS</B>
</FONT>

<P align="left"><FONT size="2">I, Carlos Espinal G., certify that:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">I have reviewed this annual report on Form&nbsp;20-F of <I>Grupo Iusacell Celular,
S.A. de C.V.</I>;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">4.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The registrant&#146;s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules&nbsp;13a-14 and 15d-14) for the registrant and
have:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">a.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">b.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">evaluated the effectiveness of the registrant&#146;s disclosure
controls and procedures as of a date within 90&nbsp;days prior to the
filing date of this annual report (the &#147;Evaluation Date&#148;);</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">c.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">and presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">5.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The registrant&#146;s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the
equivalent function):</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">a.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant&#146;s
ability to record, process, summarize and report financial data and
have identified for the registrant&#146;s auditors any material
weaknesses in internal controls; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">b.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant&#146;s
internal controls; and</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">6.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The registrant&#146;s other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Date: June&nbsp;30, 2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Carlos Espinal G.
<HR size="1" noshade></FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">Carlos Espinal G.<BR>
Chairman of the Board and Series&nbsp;A Director (principal
executive officer)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">92</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"><FONT size="2"><B>CERTIFICATIONS</B>
</FONT>


<P align="left"><FONT size="2">I, Russell A. Olson, certify that:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">I have reviewed this annual report on Form&nbsp;20-F of <I>Grupo Iusacell Celular,
S.A. de C.V.</I>;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">4.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The registrant&#146;s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules&nbsp;13a-14 and 15d-14) for the registrant and
have:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">a.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">b.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">evaluated the effectiveness of the registrant&#146;s disclosure
controls and procedures as of a date within 90&nbsp;days prior to the
filing date of this annual report (the &#147;Evaluation Date&#148;);</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">c.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">and presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">5.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The registrant&#146;s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant&#146;s auditors and the audit
committee of registrant&#146;s board of directors (or persons performing the
equivalent function):</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">a.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant&#146;s
ability to record, process, summarize and report financial data and
have identified for the registrant&#146;s auditors any material
weaknesses in internal controls; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">b.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant&#146;s
internal controls; and</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">6.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The registrant&#146;s other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Date: June&nbsp;30, 2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Russell A. Olson
<HR size="1" noshade></FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">Russell A. Olson<BR>
Series&nbsp;A Director (principal financial officer)</FONT></TD>
</TR>
</TABLE>
</CENTER>


<P align="center"><FONT size="2">93</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>AUDITED CONSOLIDATED FINANCIAL STATEMENTS<BR>
DECEMBER 31, 2002, 2001 AND 2000</B>
</FONT>

<!-- link2 "INDEX" -->
<DIV align="left"><A NAME="025"></A></DIV>

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

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>CONTENTS</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PAGE</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Report of Independent Accountants</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Consolidated Balance Sheets &#151; December&nbsp;31, 2002 and
2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Consolidated Income Statements &#151; Fiscal Years Ended
December&nbsp;31, 2002, 2001 and 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Consolidated Statements of Changes in Stockholders&#146;
Equity &#151; Fiscal Years Ended December&nbsp;31, 2002, 2001 and
2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Consolidated Statements of Changes in Financial
Position &#151; Fiscal Years Ended December&nbsp;31, 2002, 2001
and 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Notes to the Consolidated Financial Statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>



<TR valign="bottom" bgcolor="#eeeeee">
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Schedule
II &#151; Valuation and Qualifying Accounts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">S-II</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
<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>
<!-- link3 "REPORT OF INDEPENDENT ACCOUNTANTS" -->
<DIV align="left"><A NAME="026"></A></DIV>

<P align="center"><FONT size="2"><B>REPORT OF INDEPENDENT ACCOUNTANTS</B>
</FONT>

<P align="left"><FONT size="2">Mexico City, February&nbsp;28, 2003, except for Note 24 for which the date is June
27, 2003.
</FONT>


<P align="left"><FONT size="2">The Board of Directors and Stockholders of<BR>
<I>Grupo Iusacell Celular, S.A. de C.V.</I>:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have audited the accompanying consolidated balance sheets of <I>Grupo
Iusacell Celular, S.A. de C.V. </I>and subsidiaries (the Company) as of December
31, 2002 and 2001, 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, 2002 and the financial
statement schedule included in this Form&nbsp;20-F. These financial statements and
the 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Grupo Iusacell Celular, S.A. de C.V. </I>and
subsidiaries as of December&nbsp;31, 2002 and 2001, 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,
2002, in conformity with accounting principles generally accepted in Mexico.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting principles generally accepted in Mexico vary in certain
significant respects from accounting principles generally accepted in the
United States and as allowed by Item&nbsp;18 to Form&nbsp;20-F. 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, 2002 expressed in
Mexican Pesos and the determination of consolidated stockholders&#146; equity at
December&nbsp;31, 2002 and 2001 also expressed in Mexican Pesos to the extent
summarized in Note 22 to the consolidated financial statements.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As mentioned in
Note 24 to the consolidated financial statements, the Company has incurred a
technical default and violated a financial leverage covenant under its Amended
and Restated Syndicated Loan. The Company obtained an amendment that expired on
June&nbsp;26, 2003, and as a result, the Company is in default of a financial
leverage covenant under the Amended and Restated Syndicated Loan, which
constitutes an event of default under that loan. Accordingly, the lenders under
the Amended and Restated Syndicated Loan have the right to declare the
indebtedness under their loan immediately due and payable. If the lenders under
the Amended and Restated Syndicated Loan accelerate loan payment, default would
occur under the indenture governing the Senior Notes due 2004, which give the
right to the holders of the Senior Notes due 2004 to accelerate the Company&#146;s
repayment obligations. If the lenders of the Amended and Restated Syndicated
Loan and/or the holders of the Senior Notes due 2004 accelerate their loan
payments, defaults would occur under the indenture governing the Senior Notes
due 2006 of the Company&#146;s parent company, Grupo Iusacell, S.A. de C.V. (Grupo
Iusacell).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, as mentioned in Note 24 to the consolidated financial
statements, on June&nbsp;1, 2003, Company&#146;s parent company, Grupo Iusacell, S.A. de
C.V. (Grupo Iusacell) failed to make its scheduled interest payment on its
Senior Notes due 2006. This will constitute an event of default if Grupo
Iusacell does not make such interest payment within a thirty-day cure period.
If an event of default occurs, it would permit the holders of the notes to
accelerate their payment. The right of such holders to accelerate Grupo
Iusacell&#146;s repayment obligations will cause an event of default under the terms
of the Amended and Restated Syndicated Loan and under the indentures
</FONT>
<P align="center"><FONT size="2">F-2</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"><FONT size="2"> governing the Senior Notes due 2004, which would permit the lenders and
the holders of the notes to declare their indebtedness immediately due and
payable.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, as discussed in Note 24 to the consolidated financial
statements, Grupo Iusacell announced that its two largest shareholders have
recently agreed to tender all of their shares, representing 73.90% of Grupo
Iusacell&#146;s outstanding shares to an unrelated party. This event, if
consummated, will transfer control of Grupo Iusacell and of the Company to a
new unrelated party. Under the indentures governing the Senior Notes due 2004,
this constitutes a change of control under which the holders of the notes have
the right to require the Company to repurchase such holders&#146; notes. This also
constitutes a change of control and would constitute an event of default under
the Amended and Restated Syndicated Loan so the lenders under the Amended and
Restated Syndicated Loan would have the right to declare all amounts
outstanding under the Amended and Restated Syndicated Loan immediately due and
payable.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These conditions raise substantial doubt about the Company&#146;s ability to
continue as a going concern. These matters and management&#146;s plans are more
fully discussed in Note 24 to the consolidated financial statements. The
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2">PRICEWATERHOUSECOOPERS</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="50%"><FONT size="2">/s/ Jos&#233; S. Oropeza de la Cruz<BR>
<HR size="1" noshade>
Jos&#233; S. Oropeza de la Cruz<BR>
Audit Partner</FONT></TD>
</TR>
</TABLE>
<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>
<!-- link3 "CONSOLIDATED BALANCE SHEETS" -->
<DIV align="left"><A NAME="027"></A></DIV>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>CONSOLIDATED BALANCE SHEETS<BR>
(Notes 1, 2, 3 and 4)</B>
</FONT>


<P align="center"><FONT size="2"><B>Expressed in thousands of<BR>
constant Mexican pesos as of December&nbsp;31, 2002</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="10" align="CENTER"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>ASSETS</B></FONT></DIV></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>CURRENT ASSETS:</B></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents (Note 4c.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trade, net of Ps. 93,603 and Ps. 222,912 of
allowance for doubtful accounts in 2002 and 2001,
respectively (Note 4e.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">638,135</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"><FONT size="2">629,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Due from related parties (Note 5)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">60,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">45,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">445,996</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"><FONT size="2">564,142</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,144,998</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"><FONT size="2">1,238,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inventories &#151; Net (Note 6)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">253,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">1,329,183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,618,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Investments (Note 7)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,421</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Property and equipment &#151; Net (Note 8)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,552,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,365,301</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other assets &#151; Net (Note 9)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,462,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,988,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Excess of cost of investments in subsidiaries over
book value &#151; Net of accumulated amortization of
Ps. 960,022 in 2002 and Ps. 838,784 in 2001 (Note
4j.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,878,797</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"><FONT size="2">1,993,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">13,257,311</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">15,001,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="10" align="CENTER"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></FONT></DIV></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>CURRENT LIABILITIES:</B></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">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Notes payable (Note 10d.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">116,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">271,762</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"><FONT size="2">581,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Notes payable to suppliers, short-term (Note 11)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">130,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Due to related parties (Note 5)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">110,566</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"><FONT size="2">169,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">552,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">859,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax (Note 12)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">50,705</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">57,604</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Employee profit sharing (Note 12)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,821</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">1,110,759</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"><FONT size="2">1,917,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long-term debt (Note 10)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,338,797</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"><FONT size="2">4,028,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other accounts payable, long-term (Notes 4d. and 4m.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">57,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">5,452,574</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"><FONT size="2">6,003,704</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Commitments and contingencies (Note 13)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>STOCKHOLDERS&#146; EQUITY:</B></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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Contributed capital (Notes 14 and 15):</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">
    <TD colspan="2"><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"><FONT size="2">15,924,916</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"><FONT size="2">13,604,226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">98,122</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"><FONT size="2">98,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,023,038</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"><FONT size="2">13,702,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,320,690</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earned capital (Note 15):</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"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated (losses)&nbsp;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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">28,357</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"><FONT size="2">28,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,483,076</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,168,433</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,515,663</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,454,719</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(702,638</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(702,638</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">7,804,737</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"><FONT size="2">8,865,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">132,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">7,804,737</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"><FONT size="2">8,997,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">13,257,311</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">15,001,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2"><I>The accompanying twenty-four notes are an integral part of these consolidated financial statements.</I>
</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>


<!-- link3 "CONSOLIDATED INCOME STATEMENTS" -->
<DIV align="left"><A NAME="028"></A></DIV>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES</B>
</FONT>


<P align="center"><FONT size="2"><B>CONSOLIDATED INCOME STATEMENTS<BR>
(Notes 1, 2, 3 and 4)</B>
</FONT>


<P align="center"><FONT size="2"><B>Expressed in thousands of<BR>
constant Mexican pesos as of December&nbsp;31, 2002</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 valign="bottom">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,989,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,005,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,497,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">591,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">641,737</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"><FONT size="2">558,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,581,635</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,647,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,056,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,549,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,560,761</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"><FONT size="2">1,547,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">487,826</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">399,644</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"><FONT size="2">376,288</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,037,373</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"><FONT size="2">1,960,405</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"><FONT size="2">1,923,863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">3,544,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,686,877</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"><FONT size="2">4,132,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,783,583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,346,815</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,026,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">2,121,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,715,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,516,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">91,608</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"><FONT size="2">325,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(269,323</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49,605</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(411,084</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 valign="bottom" bgcolor="#eeeeee">

<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest
expense &#151; Net</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">384,657</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"><FONT size="2">407,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">538,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Foreign exchange (gain)&nbsp;loss  &#151; Net</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">507,147</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(101,252</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(220,633</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(174,435</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(395,722</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">671,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">132,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">163,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity participation in net loss (profit)&nbsp;of associated
companies and net loss (gain)&nbsp;on sale of equity
investments (Notes 2 and 7)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,889</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loss from continuing operations before assets tax,
income tax and minority interest</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(950,235</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(174,921</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(572,271</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">111,609</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"><FONT size="2">154,749</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"><FONT size="2">165,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">8,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">120,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">154,749</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"><FONT size="2">165,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,070,705</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(329,670</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(737,517</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">9,761</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"><FONT size="2">21,874</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"><FONT size="2">17,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(307,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(720,118</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit from discontinued operations (net of income tax)
(Note 18)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,370</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loss after discontinued operations</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(307,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cumulative effect of the adoption of the new accounting
pronouncement <br>(Note 4d.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2"><I>The accompanying twenty-four notes are an integral part of these consolidated financial statements.</I>
</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>


<!-- link3 "CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY" -->
<DIV align="left"><A NAME="029"></A></DIV>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES
</B></FONT>

<P align="center"><FONT size="2"><B>CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS&#146; EQUITY<BR>
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000<BR>
(Notes 1, 2, 3 and 4)</B>
</FONT>


<P align="center"><FONT size="2"><B>Expressed in thousands of constant Mexican pesos<BR>
as of December&nbsp;31, 2002</B>
</FONT>


<DIV align="left"></DIV>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="21%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Contributions</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>for future</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Accumulated profits (losses)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Capital stock</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Capital</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>stock</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subscribed</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>contributions</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>increase</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Legal reserve</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Prior years</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>For the year</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">13,604,027</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">98,122</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</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"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">5,365</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">5,894,540</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">459,847</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="1">22,992</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"><FONT size="1">436,855</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(459,847</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Contributions
for future
stock
increase</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"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">1,376,381</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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><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>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(710,748</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="1">13,604,027</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"><FONT size="1">98,122</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"><FONT size="1">1,376,381</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">28,357</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(5,457,685</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(710,748</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(710,748</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">710,748</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="1">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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(256</FONT></TD>
    <TD 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>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="1">339</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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><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"><FONT size="1">944,309</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><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>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(314,643</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Balance at December
31, 2001</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">13,604,226</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"><FONT size="1">98,122</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"><FONT size="1">2,320,690</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"><FONT size="1">28,357</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(6,168,433</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(314,643</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Application of 2001
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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(314,643</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Capitalization of
contributions for
future capital
stock increases</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">2,320,690</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(2,320,690</FONT></TD>
    <TD 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>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Balance at December
31, 2002</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">15,924,916</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">98,122</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">28,357</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">(Ps.</FONT></TD>
    <TD align="right"><FONT size="1">6,483,076</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">(Ps.</FONT></TD>
    <TD align="right"><FONT size="1">1,060,944</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
</TABLE>

<BR clear="all">
<P align="right"><FONT size="2">&#091;Additional columns below&#093;</FONT>
<P align="left"><FONT size="2">&#091;Continued from above table, first column(s) repeated&#093;</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Accumulated</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>other</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>comprehensive</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Minority</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>stockholders</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>income</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>interest</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>equity<sup>1</sup></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="1">(Ps.</FONT></TD>
    <TD align="right"><FONT size="1">909,484</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">29,728</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">7,333,609</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 align="right"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Contributions
for future
stock
increase</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"><FONT size="1">1,376,381</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 align="right"><FONT size="1">56,620</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"><FONT size="1">56,620</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="1">206,846</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(503,902</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(702,638</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">26,892</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"><FONT size="1">8,262,708</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</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"><FONT size="1">116</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(256</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</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"><FONT size="1">339</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="1">944,309</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 align="right"><FONT size="1">105,325</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"><FONT size="1">105,325</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(314,643</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Balance at December
31, 2001</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(702,638</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">132,217</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"><FONT size="1">8,997,898</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Application of 2001
net loss</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">314,643</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</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"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Capitalization of
contributions 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"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(132,217</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(132,217</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">Balance at December
31, 2002</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="1">(Ps.</FONT></TD>
    <TD align="right"><FONT size="1">702,638</FONT></TD>
    <TD nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="1">Ps.</FONT></TD>
    <TD align="right"><FONT size="1">7,804,737</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="1">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
</TABLE>
<BR clear="all">

<P align="center"><FONT size="2"><I>The accompanying twenty-four notes are an integral part of these consolidated financial statements.</I>
</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>


<!-- link3 "CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION" -->
<DIV align="left"><A NAME="030"></A></DIV>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES</B>
</FONT>


<P align="center"><FONT size="2"><B>CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION<BR>
(Notes 1, 2, 3 and 4)</B>
</FONT>


<P align="center"><FONT size="2"><B>Expressed in thousands of constant Mexican pesos<BR>
as of December&nbsp;31, 2002</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Year ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Operating Activities:</B></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">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">307,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">720,118</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 valign="bottom">
    <TD colspan="2"><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"><FONT size="2">2,121,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,715,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,516,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity participation in net loss (gain)&nbsp;of associated
companies and net loss (gain)&nbsp;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"><FONT size="2">9,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,890</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred income tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,761</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(21,874</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,399</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,069,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,378,544</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"><FONT size="2">1,776,539</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Resources (used for) 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 valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,918</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72,221</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"><FONT size="2">177,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Related parties, net</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(74,465</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,412</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">118,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,085</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">179,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">217,739</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(41,969</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(440,070</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">65,642</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(249,424</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(306,889</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(267,048</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(19,030</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,899</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,878</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"><FONT size="2">38,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,821</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,816</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(450</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(54,844</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Resources (used for) 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"><FONT size="2">510,486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,370,410</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"><FONT size="2">1,890,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,847</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Resources (used for) provided by operating activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(510,486</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,363,563</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"><FONT size="2">1,899,656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Financing activities:</B></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">
    <TD colspan="2"><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"><FONT size="2">310,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,574,447</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,980,142</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(973,000</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Increase (decrease)&nbsp;in notes payable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,966</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,947</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,043</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">944,309</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"><FONT size="2">1,376,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(256</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">319,492</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">527,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">623,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Investing activities:</B></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">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(599,067</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,688,841</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,173,190</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Purchase) sale of common stock of associated companies</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(185,210</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,203</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"><FONT size="2">72,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(523,553</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(551,524</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,150,163</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Purchase) disposal of other assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(23,572</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,374</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">823,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(807,849</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,074,089</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,428,004</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net increase (decrease)&nbsp;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"><FONT size="2">22,129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(182,660</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">94,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">126,358</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"><FONT size="2">309,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">214,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">309,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2"><I>The accompanying twenty-four notes are an integral part of these consolidated financial statements.</I>
</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>


<!-- link3 "NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="031"></A></DIV>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
AS OF DECEMBER 31, 2002, 2001 AND 2000</B>
</FONT>


<P align="center"><FONT size="2"><B>Except as otherwise noted, expressed<BR>
in thousands of constant Mexican pesos as of December&nbsp;31, 2002.<BR>
Amounts expressed in U.S. Dollars are in thousands.</B>
</FONT>

<P align="left"><FONT size="2"><B>Note 1 &#151; Entity, Nature of Business and Principal Stockholders:</B>
</FONT>

<P align="left"><FONT size="2"><B>Entity and nature of business:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Grupo Iusacell Celular, S.A. de C.V. </I>is a holding company incorporated on
October&nbsp;6, 1992, and as mentioned in the following paragraph, starting August
4, 1999, is subsidiary of <I>Grupo Iusacell, S.A. de C.V. </I>(New Iusacell). On March
1, 2000, changed its name from <I>Grupo Iusacell, S.A. de C.V. </I>to <I>Grupo Iusacell
Celular, S.A. de C.V. </I>(Old Iusacell).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a part of the recapitalization and restructuring plan of <I>Grupo
Iusacell, S.A. de C.V.</I>, a new holding company, New Iusacell 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 99.50% of Old Iusacell shares when the offer expired on August&nbsp;10,
1999.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Old Iusacell and its subsidiaries are referred collectively herein as the
Company.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 100.00% (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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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 (M&#233;rida) (Note 2).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Old Iusacell subsidiaries also hold concessions to provide long distance
services and nationwide and international paging services.
</FONT>


<P align="left"><FONT size="2"><B>Principal stockholders:</B>
</FONT>

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

<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">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="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 34.50%
ownership in New Iusacell to Vodafone. Verizon and Vodafone hold substantial
ownership interests (direct or indirect) in New Iusacell.
</FONT>


<P align="left"><FONT size="2"><B>Note 2 &#151; Acquisitions, Dispositions and Company Structure:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2001, through a capital contribution, New Iusacell acquired
the control of <I>Iusacell PCS, S.A. de C.V. </I>(Iusacell PCS), substantially
diluting Old Iusacell. Consequently, the Company no longer consolidates
Iusacell PCS.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2001, the Company incorporated Iusatel USA, Inc. to be engaged in
the long distance business in the United States of America. Iusatel USA, Inc.
started operations in December 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;22, 2001, the Company sold its 65.00% equity interest in
<I>Satelitr&#243;n, S.A. de C.V. </I>As a result of the sale, the Company recorded a gain
of Ps. 4,203 (U.S.$429) before taxes.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2002, <I>Inflight Phone de M&#233;xico, S.A. de C.V. </I>and <I>Promotora Celular,
S.A. de C.V.</I>, were merged into <I>Iusacell, S.A. de C.V. </I>The merger was recorded
as of July&nbsp;31, 2002.
</FONT>


<P align="left"><FONT size="2"><B>Acquisition of </B><B><I>Grupo Portatel, S.A. de C.V.</I></B><B>:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;19, 2001, Old Iusacell completed the acquisition of a 78.34%
ownership in <I>Grupo Portatel, S.A. de C.V. </I>and its subsidiaries (Portatel) for
Ps. 552,317 (U.S.$56,588). The Company also reached an agreement to acquire
the remaining 21.66% ownership in Portatel for Ps. 157,630 (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 the Region 8, which covers
the Mexican states of Yucatan, Campeche, Quintana Roo, Chiapas and Tabasco in
the southeast of Mexico.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="85%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">696,534</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Liabilities assumed</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(206,210</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">219,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">709,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>Company Structure:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
Jose Ramon 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Old Iusacell and the Mexican National agreed that Old Iusacell would own
94.90% of the economic interest and 49.00% of the voting shares of <I>Iusatel,
S.A. de C.V. </I>(Iusatel), the Company&#146;s long distance concessionaire,
<I>Iusatelecomunicaciones, S.A. de C.V. </I>(Iusatelecomunicaciones), the Company&#146;s
fixed wireless local telephony operation, <I>Punto-a-Punto Iusacell, S.A. de C.V.</I>
(Punto-a-Punto Iusacell), a microwave frequencies concessionaire and <I>Iusacell
PCS, S.A. de C.V. </I>(Iusacell PCS), which holds concessions for 1.9GHz
frequencies in Regions 1 and 4.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 would own 5.10% of the economic
interest and 51.00% of the voting shares of these companies.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Mexican National does not have the unilateral right to approve actions
at the shareholder or board level of the Non-Cellular Subsidiaries. Under each
company&#146;s by-laws, all shareholder or board action 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, Infotelecom is owned
49.00%, 49.00% and 2.00%, by Old Iusacell, <I>Banorte, S.A. </I>(which acquired
<I>Infomin, S.A. de C.V.</I>&#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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subsidiaries of Old Iusacell, which are included in the consolidated
financial statements, are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Economic interest</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>(direct or indirect,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>as of December 31)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Subsidiary</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>S.O.S. Telecomunicaciones, S.A. de C.V. </I>(Region 9)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusacell, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Sistecel, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Comunicaciones Celulares de Occidente, S.A. de C.V. </I>(Region 5)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Sistemas Telef&#243;nicos Port&#225;tiles Celulares, S.A. de C.V. </I>(Region 6)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Telecomunicaciones del Golfo, S.A. de C.V. </I>(Region 7)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Inflight Phone de M&#233;xico, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Inmobiliaria Montes Urales 460, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Economic interest</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>(direct or indirect,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>as of December 31)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Subsidiary</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mexican Cellular Investments, Inc.</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusanet, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Promotora Celular, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusatelecomunicaciones, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Grupo Iusacell Nicaragua, S.A.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Infotelecom, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Punto a Punto Iusacell, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Grupo Portatel, S.A. de C.V. </I>and subsidiary (Region 8)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusatel, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Iusatel USA, Inc.</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>Note 3 &#151; Basis of Presentation:</B>
</FONT>


<P align="left"><FONT size="2"><B>a. Basis of presentation</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s consolidated financial statements have been prepared in
conformity with Accounting Principles Generally Accepted in Mexico (Mexican
GAAP). The consolidated financial statements have been presented in thousands
of constant Mexican pesos as of December&nbsp;31, 2002 as required by Bulletin B-10,
&#147;Recognition of the Effects of Inflation on Financial Information&#148;, as amended,
issued by the Mexican Institute of Public Accountants (MIPA) (Bulletin B-10).
</FONT>


<P align="left"><FONT size="2"><B>b. Consolidated financial statements</B>
</FONT>

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


<P align="left"><FONT size="2"><B>c. Use of estimates</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="left"><FONT size="2"><B>Note 4 &#151; Accounting Policies:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A summary of the Company&#146;s significant accounting policies is as follows:
</FONT>


<P align="left"><FONT size="2"><B>a. Monetary unit</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>b. Effects of inflation on the financial statements</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The balance sheet amounts as of December&nbsp;31, 2001 presented
in the consolidated financial statements have been restated to
constant Mexican pesos as of December&nbsp;31, 2002 based on the National
Consumer Price Index (NCPI)&nbsp;published by <I>Banco de M&#233;xico </I>(the
Mexican Central Bank).</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Consolidated income statements for the current and prior
years have been restated to constant Mexican pesos as of December
31, 2002 using the NCPI from the periods in which the transactions
occurred.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The items that originate from the recognition of effects of inflation on
financial information are as follows:
</FONT>


<P align="left"><FONT size="2"><B><I>Restatement of non-monetary assets:</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 reduction of approximately
Ps. 477,764 in depreciation expense for 2001. The average annual rates of
depreciation used by the Company are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(%)</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002,
2001 and 2000, the Company did not capitalize integral financing cost.
</FONT>



<P align="center"><FONT size="2">F-12</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2"><B><I>Restatement of stockholders</I></B><I>&#146; </I><B><I>equity:</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2"><B><I>Integral financing (gain)&nbsp;cost:</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>c.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Cash and cash equivalents</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents consist primarily of bank deposits. The Company
invests its excess cash in deposits with major banks.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>d.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Financial instruments</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <BR>
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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Until October 2002, the Company used 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.
On October 7 and 10, 2002, the Company early terminated the derivative
financial instruments used for hedging purposes (Note 20).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The carrying amounts of the Company&#146;s financial instruments, as reflected
in the balance sheet, approximate their fair value as of December&nbsp;31, 2002 and
2001, except for long-term debt which has a quoted market value and
</FONT>

<P align="center"><FONT size="2">F-13</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">for the foreign currency and interest rate hedge contracts, which as of
January&nbsp;1, 2001, were valued using the same valuation criteria used to value
the hedged asset or liability (Note 20).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the adoption of this new accounting pronouncement, the
Company recognized a cumulative loss on derivative financial instruments of
Ps.6,847 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>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>e.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Allowance for doubtful accounts</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.190,645 and Ps.126,021 in 2002 and 2001, respectively. The charge to income
for the year for the allowance for doubtful accounts amounted to Ps.61,336,
Ps.114,613 and Ps.99,919 in 2002, 2001 and 2000, respectively.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>f.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Investment in associated companies</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company carries under the equity method long-term investments in
associated companies in which it owns between 20.00% and 50.00% 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>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>g.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Cellular telephones</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cost of cellular telephones given to customers under exclusive service
contracts is amortized 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 increase of approximately Ps.194,855 in amortization expense for
2001. Until December&nbsp;31, 2001, the cost of such telephones was included in
other assets, net of accumulated amortization. Starting January&nbsp;1, 2002, it is
included in Recoverable taxes and other. Such cost does not exceed market
value.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>h.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Concessions</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, the Company had complied substantially with such
requirements, except for certain informational requirements of the Mexican
authorities.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company believes that such noncompliance does not expose it to any
risk of concession forfeiture, or any other material liability.
</FONT>

<P align="center"><FONT size="2">F-14</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>i.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Advertising</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.280,151, Ps.455,560 and Ps.369,792
for 2002, 2001 and 2000, respectively.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>j.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Excess of cost of investment in subsidiaries over book value</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.168,903, Ps.168,095 and Ps.163,088 in 2002, 2001
and 2000, respectively.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>k.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Evaluation of long-lived assets</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>l.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Deferred income taxes and employee profit sharing</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of January&nbsp;1, 2000, the Company adopted the provisions of revised
Bulletin D-4, &#147;Accounting Treatment of Income Tax, Assets Tax and Employee
Profit Sharing&#148;, 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
statements and tax basis of assets and liabilities -temporary differences- as
of the date of the financial statements.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146; equity by the same amount (Note 12).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>m.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Seniority premiums</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 D-3, &#147;Labor
Obligations&#148;, 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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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="center"><FONT size="2">F-15</FONT>

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

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has no employee pension plans and does not provide for
post-retirement benefits.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>n.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Revenue recognition</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular air time is recorded as revenue as service is provided. Until
December&nbsp;31, 2001, revenue from the sale of prepaid cards was recognized at the
date of sale. The Company had recognized the revenue on the sale of prepaid
cards at the date of sale rather than on a deferred basis because the length of
the average consumption period for such prepaid cards was not significant,
i.e., approximately one to one-and-a-half months, and it was not material to
results of operations for 2001 and 2000. Starting January&nbsp;1, 2002, the Company
started to recognize revenue from the sale of the prepaid cards as service is
provided because the increasing length of the average consumption period for
such prepaid cards. Revenues from the sale of prepaid cards associated with
services that have not been provided are deferred until the services are
provided and are included in taxes and other payable in the accompanying
consolidated balance sheet. 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 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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>o.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Foreign currency transactions</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>p.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Comprehensive income (loss)</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income (loss)&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The comprehensive income (loss)&nbsp;line included in the consolidated
statement of stockholders&#146; equity represents the result of the performance of
the Company during the year (Note 19).
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>q.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>New accounting pronouncements</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In November 2001, the MIPA issued the revised Bulletin C-9, &#147;Liabilities,
Provisions, Contingent Assets and Liabilities and Commitments&#148; (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)&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)
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&nbsp;1, 2003, although early adoption is
recommended.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in December 2001, the MIPA issued revised Bulletin C-8,
&#147;Intangible Assets&#148; (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 and that indefinite life intangibles
no longer be amortized. The provisions of Bulletin 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">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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management is currently evaluating the impact that the adoption of
Bulletin C-8 and Bulletin C-9 will have on its consolidated financial
statements.
</FONT>


<P align="left"><FONT size="2"><B>Note 5 </B>&#151; <B>Related Parties:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A summary of related party accounts and notes receivable, including
interest, as of December&nbsp;31, is as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Iusacell PCS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2"> 14,220</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">44,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">46,647</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">60,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">45,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable result from the financing of related parties&#146;
operations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts and notes payable to related parties, including interest, as of
December&nbsp;31, are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">79,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">61,384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">2,989</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"><FONT size="2">2,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusacell Arrendadora, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,695</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"><FONT size="2">12,129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusacell Infraestructura, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,669</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"><FONT size="2">48,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Iusacell Infraestructura de M&#233;xico, S.A.
de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">110,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">169,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is an analysis of the related party transactions described
above:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">99,587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">55,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">12,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cellular telephones repair expense</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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">16,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">18,332</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Technical expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">21,163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">62,715</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"><FONT size="2">94,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lease expense</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">197,391</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"><FONT size="2">62,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">15,710</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"><FONT size="2">2,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">234,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">247,234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">120,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Acquisition of handsets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">28,917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>Note 6 &#150; Inventories, Net:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, inventories, net, consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">138,936</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">362,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(103,238</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(117,069</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">245,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">35,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">253,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>Note 7 &#150; Investments:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, the Company&#146;s investments were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Entity</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ownership</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Investment</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ownership</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Investment</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><I>Editorial Celular, S.A. de C.V.</I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40.00</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">13,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40.00</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">17,026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,021</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</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><HR size="1" 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><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">34,421</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">36,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Editorial Celular, S.A. de C.V. </I>is accounted for by the equity method. For
each of the three years in the period ended December&nbsp;31, 2002, the Company&#146;s
share of net (losses)&nbsp;earnings of <I>Editorial Celular, S.A. de C.V. </I>was of
(Ps.9,741), Ps.2,686 and Ps.2,619, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2001, the gain on sale of equity
investments was of Ps.4,203.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>Note 8 &#150; Property and Equipment, Net:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, property and equipment, net consisted of:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,725,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,715,913</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">10,762,211</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,379,961</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">379,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">61,925</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"><FONT size="2">84,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,759,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,528,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">10,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,699,179</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"><FONT size="2">13,924,525</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated depreciation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,894,181</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,924,166</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,804,998</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"><FONT size="2">8,000,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">68,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">677,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,295,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,552,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,365,301</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation expense was Ps.1,411,470, Ps.1,296,019 and Ps.1,365,798
for 2002, 2001 and 2000, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1999, the Company entered into a series of agreements with
<I>MATC Celular, S. de R.L. de C.V. </I>(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 2002 and 2001, Old Iusacell and some of its
subsidiaries sold 67 and 244 non-strategic towers to MATC Celular,
respectively, for Ps.98,098 (U.S.$10,050) and Ps.368,633 (U.S.$36,600),
respectively, generating a gain on the sale, before taxes, of Ps.91,608 and
Ps.325,436, respectively. 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.).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Mexican GAAP, Bulletin D-5, &#147;Leases&#148;, (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.91,608 and Ps.325,436 gains were recognized at the
date of the sale and have been recorded as other operating income in the
consolidated income statements for the years ended December&nbsp;31, 2002 and 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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>Note 9 &#150; Other Assets, Net:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, other assets consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Concessions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">852,154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">852,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cellular telephones to be amortized (Note 4g.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,512,320</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">332,795</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"><FONT size="2">371,106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">459,479</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"><FONT size="2">395,917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">25,506</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22,864</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">104,270</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"><FONT size="2">274,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred income taxes, net (Note 12)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">163,170</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"><FONT size="2">181,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,937,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,610,626</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated amortization</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(475,362</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,622,088</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,462,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,988,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concessions and cellular telephone amortization expense was Ps.541,237,
Ps.1,250,989 and Ps.987,789 in 2002, 2001 and 2000, respectively. In January
2002, cellular telephones were reclassified to current assets (Note 4g.).
</FONT>


<P align="left"><FONT size="2"><B>Note 10 &#150; Notes Payable and Long-Term Debt:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002 and 2001, the long-term debt of the Company
consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. Dollars</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Secured senior notes due 2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,565,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,453,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">2,772,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,574,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">415,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,338,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,028,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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 valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>a.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Secured senior notes due 2004</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;25, 1997, Old Iusacell completed an offering of long-term, secured
senior notes due July&nbsp;15, 2004 for U.S.$150,000, accruing interest at a fixed
rate of 10.00%, payable semi-annually starting January&nbsp;15, 1998 (the Notes Due
2004).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 105.00% of principal amount plus accrued interest, if any, declining
to 102.50% after July&nbsp;15, 2002, and finally to 100.00% after July&nbsp;15, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Notes Due 2004 may also be redeemed at a price equal to 100.00% 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>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>b.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Amended and restated syndicated loan, as amended</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">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><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">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.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, depending on Old Iusacell&#146;s leverage ratio, from 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There was no gain or loss recognized from this loan restructuring.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;7, 2001 the amended and restated syndicated loan was amended,
and a waiver and consent were granted by the lenders allowing Old Iusacell 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 Old Iusacell
and its subsidiaries with floating rates of interest; (ii)&nbsp;make loans or
advances to New Iusacell in lieu of paying dividends at such times and in such
amounts as 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 to the Notes Due 2006 and (iii)&nbsp;make loans or advances to
New Iusacell in lieu of paying dividends in an amount not to exceed U.S.$5,000,
so long as an event of default has not occurred, to discharge other liabilities
of New Iusacell incurred in the ordinary course of business.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>c.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Covenants and collateral</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002 and 2001, Old Iusacell had complied with such
covenants.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002, the Company&#146;s debt matures as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. Dollars</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Mexican pesos</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">249,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,605,727</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">1,386,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><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"><FONT size="2">346,616</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">415,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,338,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>d.</B></FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2"><B>Notes payable</B></FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, notes payable consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. Dollars</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><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><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Handset facility</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&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">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Handset facility</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">116,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">12,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">116,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;25, 2002, Old Iusacell obtained a handset acquisition
financing facility from <I>Banco Santander Mexicano, S.A. </I>(Santander), which
consisted of a one-year unsecured credit facility in a principal amount of
U.S.$12,000. Loans outstanding under this facility provided for interest at an
annual variable rate of LIBOR plus a spread of 1.00%. Interest was paid
quarterly. At the maturity date of this facility, February&nbsp;25, 2003, Old
Iusacell reached an agreement with Santander to refinance a portion of this
facility under which Old Iusacell paid Santander U.S.$7,000 plus accrued
interest, and refinance the remaining U.S.$5,000. The refinanced facility
consists of an unsecured five-months credit facility in a principal amount of
U.S.$5,000. This loan provides for interest at an annual fixed rate of 3.84%.
Interest and principal will be paid in five equal monthly installments starting
March&nbsp;25, 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This facility contains certain restrictive covenants. As of December&nbsp;31,
2002, Old Iusacell had complied with such covenants.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February 2001, Old Iusacell obtained a handset acquisition financing
facility from Santander, which consisted of a one-year 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 was paid
quarterly and the principal was paid on February&nbsp;19, 2002.
</FONT>


<P align="left"><FONT size="2"><B>Note 11 &#150; Notes Payable to Suppliers:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, notes payable to suppliers consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="61%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Short-term:</B></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">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">88,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">130,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>The Motorola Facility:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
available for one year. Loans outstanding under the Motorola Facility accrue
interest at a variable annual rate of six-month LIBOR plus 6.00%. 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. This facility was repaid on April 2002.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>The TV Azteca Facility:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;5, 2001, the Company, through one of its subsidiaries,
obtained a credit facility from <I>TV Azteca, S.A. de C.V. </I>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 1.50. Principal and interest are payable in six monthly
installments starting January&nbsp;31, 2002. This facility was repaid during 2002.
</FONT>


<P align="left"><FONT size="2"><B>Note 12 &#150; Income Tax, Net Assets Tax and Employee Profit Sharing</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2002, the provision for income taxes
consisted of current income tax and assets tax of Ps.111,609 and deferred
income tax of Ps.8,861.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2001 and 2000, the provision for income taxes consisted
of current income tax and assets tax of Ps.154,749 and Ps.165,246,
respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 reduced the deferred tax
asset in 2002. For the year ended December&nbsp;31, 2002, the Company generated a
tax loss Ps.1,323,319. For the year ended December&nbsp;31, 2001, the Company
generated a tax profit of Ps.124,463, which was totally offset by the
application of tax loss carry forwards.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002 and 2001, the main temporary differences the Company
recognizes for the calculation of deferred income taxes were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">93,603</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">222,912</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">32,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">75,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">5,104,701</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"><FONT size="2">3,694,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(35,698</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(268,149</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,706,854</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,973,932</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(141,345</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(184,941</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Concessions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(308,268</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(325,840</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">2,039,026</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"><FONT size="2">1,239,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">713,659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">433,894</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Valuation allowance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(541,628</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(252,057</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">181,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax rate change</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,861</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net deferred income tax asset</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">163,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">181,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has recorded a net deferred tax asset of Ps.163,170
reflecting, mainly, the benefit of tax loss carry forwards, which expire in
varying amounts between 2005 and 2012. 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, 2002 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, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s estimate of future taxable income is based primarily on and
supported by (i)&nbsp;additional increase in revenues generated by the Calling Party
Pays feature with an important taxable operating margin, (ii)&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 (iii)&nbsp;an increase in 2003 of the potential effects
of additional cost cutting.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002 and 2001, the Company had a valuation allowance of
Ps.541,628 and Ps.252,057, 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="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002, 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 cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Year of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Amount</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Expiration</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>loss</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>of loss</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>year</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1995</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">809,831</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"><FONT size="2">2005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">17,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">571,918</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"><FONT size="2">2007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">484,766</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"><FONT size="2">2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">474,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,323,319</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"><FONT size="2">2012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2002. 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.1,008,088, relating to one of its subsidiaries,
Iusatelecomunicaciones, and may not be able to apply these losses against other
subsidiaries&#146; profits in 2003 and beyond.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002, net assets
tax available as a carry forward was Ps.497,718 which expires in 2007.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2002 and 2001, the
Company did not generate any taxable income for profit sharing purposes.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effective rate reconciliation as of December&nbsp;31, was as follows:
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loss on continuing operations before taxes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD nowrap align="right"><FONT size="2">950,235</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD nowrap align="right"><FONT size="2">174,921</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD nowrap  align="right"><FONT size="2">572,271</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(332,582</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(61,222</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(200,295</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(210,000</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,591</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(14,689</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(290,542</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(242,821</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(129,722</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">167,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">80,219</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"><FONT size="2">84,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">19,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,993</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19,191</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">133,366</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">205,940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(43,857</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">59,116</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"><FONT size="2">62,828</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"><FONT size="2">61,040</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax rate change</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,109</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,202</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(41,857</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax (benefit)&nbsp;expense for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">460,061</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">43,562</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">265,209</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effective rate</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">48</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">46</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">111,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">154,749</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"><FONT size="2">165,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>Note 13 &#150; Commitments and Contingencies:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, the Company had the following commitments and
contingent liabilities:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Iusacell Arrendadora, S.A. de C.V. </I>(an
affiliated company) 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.382,842, Ps.166,117 and Ps.173,426 for the years
ended December&nbsp;31, 2002, 2001 and 2000, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future annual minimum rental payments under existing leases as of December
31, 2002 are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">419,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">393,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">376,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">367,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">349,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,155,209</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">3,061,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Inmobiliaria Montes
Urales 460, S.A. de C.V. </I>was acquired in 1994, nor was Old Iusacell notified of
such liens subsequent to the acquisition. During 2002, the liens have been
removed.
</FONT>

<P align="center"><FONT size="2">F-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="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Old Iusacell has certain commitments derived from its joint venture
agreement with <I>Infomin, S.A. de C.V. </I>(Note 2).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 <I>Tel&#233;fonos de M&#233;xico, S.A. de C.V. </I>(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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Iusacell, S.A. de C.V.</I>, 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 their distribution agreement. In the same act,
such distributor also sued <I>Iusacell, S.A. de C.V. </I>The decision of the Court in
the first instance has been not to set a favorable opinion to any of the parts.
Both parties have appealed the Court&#146;s decision.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. The Company has obtained a
favorable resolution against this 10% excise tax and the Mexican government has
filed an appeal.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February 2003, the Company has filed an injunction action to challenge
the Mexican government regarding the same excise tax for the year 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A supplier of the Company has sued <I>Iusacell, S.A. de C.V. </I>for the
improper termination of their agreement. The Company has obtained a favorable
resolution in the first instance. The supplier has filed an appeal.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A client of the Company has sued <I>SOS Telecomunicaciones, S.A. de C.V.</I>,
a subsidiary of the Company. The process is in a preliminary stage.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed in Note 10, the Company has important borrowings, which
require, among other things, compliance with certain financial ratios,
specifically a debt/EBITDA ratio on a quarterly basis. If the Company incurs
operating losses during the first quarter of 2003 and/or the debt has a
substantial increase due to the Mexican peso devaluation relative to the U.S.
dollar, the Company might not be in compliance with the financial covenant
ratio under the Amended and Restated Syndicated loan agreement.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Company breaches the financial covenant ratio and does not obtain a
waiver, this could result in the acceleration of the Amended and Restated
Syndicated loan, and because of cross-defaults, the Notes due 2004, the Notes
due 2006 of New Iusacell for U.S.$350,000 and BNP financings of affiliated
companies for U.S.$26,648, could become due and payable. Based upon current
projections, the Company believes it is probable that it does not comply with
the existing financial covenant ratio unless it is modified or waived. The
Company plans to request an amendment to the debt/EBTIDA covenant ratio,
increasing it to 3.5x from 2.5x.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has started to explore, together with external financial and
legal advisors, the possibility of entering into a debt restructuring process.
Although no assurances can be given, the Company expects to successfully
conclude such restructuring during 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s ability to fulfill its long-term financial commitments
depends on the results of these negotiations.
</FONT>


<P align="left"><FONT size="2"><B>Note 14 &#150; Contributed Capital:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the years ended December&nbsp;31, 2002, 2001 and 2000, the following
transactions took place:
</FONT>

<P align="center"><FONT size="2">F-26</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the February&nbsp;21, 2000, ordinary and extraordinary stockholders&#146;
meetings, the series D and series L shares and a portion of series A shares,
were converted into series B shares.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;30, 2001, 1 series A share was subscribed through the
capitalization of stockholders&#146; debt. The total amount converted was of
Ps.116. After this capital stock increase, Company&#146;s stockholders&#146; approved a
30,000 to 1 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.256 in capital stock.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August&nbsp;24, 2001, 3 series A shares were subscribed by the Company&#146;s
stockholders for an amount of Ps.339.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2001 and 2000, New Iusacell made contributions to the Company for
future capital stock increases in an aggregate amount of Ps.2,320,690.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;31, 2002, Company&#146;s stockholders&#146; approved an increase of the fixed
and variable portions of the capital stock. This increase was made as follows:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase of the fixed portion of the capital stock amounted to
Ps.39,187, which were subscribed by the Company&#146;s stockholders at their
ownership proportion at the date of the increase. No new shares were issued on
this subscription.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase of the variable portion of the capital stock was
subscribed through the issuance of 20,266 shares, of which 10,335 were series A
shares and the remaining 9,931 were series B shares. This portion increase
amounted to Ps.2,281,503.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This increase was made through the capitalization of contributions for
future capital stock increases.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The changes in the number of shares of common stock for the period January
1, 2001 through December&nbsp;31, 2002 are analyzed as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="87%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of shares</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">January&nbsp;1, 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">March&nbsp;30, 2001 &#150; 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"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">August&nbsp;24, 2001 &#150; issuance of common stock</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance as of December&nbsp;31, 2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">May&nbsp;31, 2002 &#150; issuance of common stock through
the capitalization of 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"><FONT size="2">20,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">75,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-27</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002 and 2001, the issued and outstanding shares of common
stock of the Company, without par value, are as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">38,302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">36,796</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,865</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">75,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 A and series B stockholders.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;B shares may also be acquired by foreigners or Mexicans.
</FONT>


<P align="left"><FONT size="2"><B>Note 15 &#151; Earned Capital:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2002, the balance on the CUFIN is approximately
Ps.147,157.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The contributed capital and earned capital accounts consist of the
following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Accumulated</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Historical</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Adjustments for</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Value</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Inflation</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,880,528</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,044,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">15,924,916</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">79,467</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">98,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Legal reserve</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,411</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39,768</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"><FONT size="2">28,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,145,958</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,337,118</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,483,076</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(730,023</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(330,921</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(874,669</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(702,638</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">3,183,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,620,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,804,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Accumulated</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Historical</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Adjustments for</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Value</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Inflation</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,748,813</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,855,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">13,604,226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><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"><FONT size="2">79,467</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">98,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">2,131,715</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"><FONT size="2">188,975</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"><FONT size="2">2,320,690</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Legal reserve</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,411</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39,768</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"><FONT size="2">28,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,140,737</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,027,696</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,168,433</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,221</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(309,422</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">172,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(874,669</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(702,638</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">3,913,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,951,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,865,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>Note 16 &#151; Foreign Currency Position:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The balance sheet as of December&nbsp;31 includes assets and liabilities
denominated in U.S. Dollars, as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Monetary assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">13,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">163,715</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">463,386</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"><FONT size="2">477,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">449,461</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">313,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 align="left"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,692,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,873,630</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002 and 2001, most of the communications equipment and
inventories of cellular telephones and accessories are of foreign origin (Notes
6 and 8).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2002, 2001 and 2000, interest income and interest expense on assets
and liabilities denominated in U.S. Dollars were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD  align="right"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">1,587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD  align="right"><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">28,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">24,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">28,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">34,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">U.S.$</FONT></TD>
    <TD align="right"><FONT size="2">24,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 align="left"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">292,666</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">312,570</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">234,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating results for the years ended December&nbsp;31, 2002, 2001 and 2000
include depreciation and amortization expenses, related to fixed assets and
inventories of foreign origin.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exchange rates as of December&nbsp;31, 2002 and 2001 were Ps.10.4393 and
Ps.9.1695, per U.S. dollar, respectively. At the issuance date of these
financial statements, February&nbsp;28, 2003, the exchange rate in effect was
Ps.11.03 per U.S. Dollar.
</FONT>


<P align="left"><FONT size="2"><B>Note 17 &#151; Project 450:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A subsidiary was established to provide fixed wireless local telephony
services using the 450 MHz frequency band (Project 450). At December&nbsp;31, 2002
and 2001, Old Iusacell&#146;s investment in Project 450 amounted to Ps.29,014 and
Ps.32,852, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2"><B>Note 18 &#151; Discontinued Operations:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial information regarding Cellular Solutions as of and for the year
ended December&nbsp;31, 2000, was as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">2,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">446</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit on disposal</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,370</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net profit</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,370</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>Note 19 &#151; Comprehensive Income:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the years ended December&nbsp;31, 2002, 2001 and 2000, comprehensive income
consisted of the following:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">503,902</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>Note 20 &#151; Financial Instruments:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company determines the fair value of outstanding financial instruments
as follows:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents: the carrying value approximates fair value
due to its short-term nature.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and payable: the carrying value approximates fair
value due to its short-term nature.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable: Carrying value approximates fair value due to its
short-term nature.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivatives: the Company determines the fair value of derivative
financial instruments as follows:
</FONT>


<P align="left"><FONT size="2"><B>Foreign-currency exchange forward contracts</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company purchased 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Notes due 2004 for U.S.$150,000 and its interest
payments of U.S.$34,500. Until its early termination, these derivatives were
highly effective since a foreign currency rate change on the forward contract
was offset by a corresponding change in the value of the hedged loan.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In October 2002, the Company early terminated its foreign-currency
exchange forward contracts hedging its exchange rate exposure on the Notes due
2004, paying a termination fee of U.S.$1,687.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2002, the Company does not have any foreign-currency
exchange contracts.
</FONT>


<P align="left"><FONT size="2"><B>Interest rate collars</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;30, 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These interest rate collars expired during 2002.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, the fair values of financial instruments were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Carrying</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Fair</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Carrying</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Fair</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>value</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>value</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>value</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>value</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,144,998</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"><FONT size="2">1,144,998</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"><FONT size="2">1,238,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,238,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">988,505</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">988,505</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,859,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,859,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(179,073</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest rate collar</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(15,284</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">116,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">116,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Secured senior notes due 2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,565,895</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"><FONT size="2">782,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,453,824</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"><FONT size="2">1,497,439</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">2,772,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,772,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,574,447</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"><FONT size="2">2,574,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>Note 21 &#150; Segment Information:</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s segment data is prepared in accordance with International
Accounting Standard No.14 (revised). Reportable segments are those that are
based on the Company&#146;s method of internal reporting.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s three reportable segments and their principal activities
are:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular &#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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long distance &#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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other businesses &#151; The Company provides paging, local telephony, microwave
links and data transmission services.
</FONT>

<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tables below present information about reportable segments for the
years ended December&nbsp;31, 2002, 2001 and 2000 under Mexican GAAP measurement:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>Year ended December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Long</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Other</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Reconciling</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Cellular</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>distance</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Businesses</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>segments</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>items (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues &#151; third party</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,221,715</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">270,104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">89,816</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">5,581,635</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,581,635</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues &#150; affiliates</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,166,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">324,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,285,094</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"><FONT size="2">5,776,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,776,419</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,967,917</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"><FONT size="2">123,857</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,124,136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,526</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,121,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(67,228</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(138,243</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(111,458</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(316,929</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(269,323</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EBITDA <SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,900,689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(14,386</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(79,096</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,807,207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">45,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,852,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">18,632,206</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"><FONT size="2">1,381,134</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"><FONT size="2">782,010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,795,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,538,039</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,257,311</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">494,759</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"><FONT size="2">13,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">577,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">577,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>Year ended December 31, 2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Long</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Other</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Reconciling</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Cellular</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>distance</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Businesses</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>segments</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>items (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues &#151; third party</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,216,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">310,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">120,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,647,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,647,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues &#150; affiliates</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,184,173</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">668,920</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"><FONT size="2">1,298,690</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"><FONT size="2">5,151,783</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,151,783</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">2,587,120</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"><FONT size="2">107,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">28,791</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"><FONT size="2">2,723,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,533</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,715,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(400,406</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(124,534</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(219,737</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(744,677</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">695,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49,605</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EBITDA <SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,186,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,809</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(190,946</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,978,959</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"><FONT size="2">686,539</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,665,498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">18,123,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">988,266</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"><FONT size="2">689,895</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"><FONT size="2">19,801,771</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,800,169</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,001,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,629,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">94,582</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"><FONT size="2">18,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,742,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,742,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="23"><FONT size="1"><B>Year ended December 31, 2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="23"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Long</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Other</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Reconciling</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Cellular</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>distance</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Businesses</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>segments</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>items (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues &#151; third party</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,866,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">73,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">119,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,059,659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">3,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,056,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revenues &#150; affiliates</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,931,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">559,371</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">706,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,197,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,197,655</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">2,405,001</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"><FONT size="2">95,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,524,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,180</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,516,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(102,776</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(130,013</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(169,634</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(402,423</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,661</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(411,084</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EBITDA <SUP>(1)</SUP></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,302,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(34,255</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(145,538</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,122,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,841</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,105,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">17,595,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,184,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">941,125</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"><FONT size="2">19,721,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,122,384</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,598,621</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,862,823</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">86,419</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"><FONT size="2">189,169</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"><FONT size="2">2,138,411</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,138,411</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(1)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">EBITDA as used by the Company is operating profit (loss)&nbsp;plus the sum of
depreciation and amortization. The Company&#146;s reconciliation of EBITDA to
consolidated net profit (loss)&nbsp;under Mexican GAAP as of December&nbsp;31, 2002,
2001 and 2000, is as follows:</FONT></TD>
</TR>
</TABLE>


<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>


<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EVITAD</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,852,287</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,665,498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,105,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,121,610</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,715,103</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,516,675</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Integral financing cost</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(671,171</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(132,205</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(163,806</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity participation in net (loss)
profit of associated companies and
net (loss)&nbsp;gain
on sale of equity investments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,741</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,470</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(154,749</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(165,246</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">9,761</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"><FONT size="2">21,874</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"><FONT size="2">17,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,847</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Reconciling items primarily reflect inter-segment eliminations and certain
non-recurring items.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" nowrap><FONT size="2"><B>NOTE 22</B></FONT></TD>
    <TD valign="top" align="center"><FONT size="2">&#150;</FONT></TD>
    <TD align="left" valign="top"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">
<B>SIGNIFICANT DIFFERENCES BETWEEN MEXICAN GAAP AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES</B></FONT></DIV></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;31, 2002, and stockholders&#146; equity as of December
31, 2002 and 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred Income Taxes
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Mexican GAAP, the Company applies revised Bulletin D-4. Under the
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 &#151; temporary differences &#151; as of the date of the
financial statements. 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. The U.S. GAAP
adjustment to deferred income taxes exists as a result of the other U.S. GAAP
adjustments changing the book basis of the Company and as a result impacting
various deferred tax balances and the related valuation allowance.
</FONT>

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

<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pre-Operating Costs
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative Financial Instruments
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As mentioned in Note 21, the Company entered into interest rate collar
agreements to hedge an aggregate notional amount of U.S.$50,000 of its floating
rate debt. Additionally, during 2001 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As mentioned in Note 4e., effective January&nbsp;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
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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;30, 1999 Old Iusacell entered into a foreign currency hedge
utilizing forward-rate contracts, hedging its exchange rate exposure for up to
U.S.$77,000 or approximately 50% of the principal and interest payments coming
due over the period April 2000 to April 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under U.S. GAAP, effective January&nbsp;1, 2001, the Company adopted SFAS 133,
&#147;Accounting for Derivative Instruments and Hedging Activities&#148;, as amended by
SFAS 137 and 138. Under SFAS 133, all derivatives are also recognized on the
balance sheet at their fair value.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;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&#146;s derivatives were considered highly effective.
The Company has no derivative financial instruments at December&nbsp;31, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
expense 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cumulative effect on the adoption of this new accounting pronouncement
amounted to Ps.6,847 as of January&nbsp;1, 2001.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain From The Exchange Of Non-Monetary Assets
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2002 and 2001, the Company entered into certain fiber optic cable
swap agreements to exchange certain long-distance fiber optic cables fair
valued at Ps.121,215 and Ps.150,812, respectively. Under Mexican GAAP, the
Company recorded the transactions as both acquisitions (at the carrying value
of the asset sold) and sales of fixed assets based on the contract amount,
resulting in a gain on the sale of Ps.53,172 and Ps.145,229, for the years
ended December&nbsp;31, 2002 and 2001, respectively. Under U.S. GAAP, because the
assets exchanged are similar productive
</FONT>

<P align="center"><FONT size="2">F-35</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">assets and, on a net basis, no cash was exchanged, the transactions did
not result in the recognition of earnings. Consequently, under U.S. GAAP, the
acquisitions and sales would not have been recorded.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 1998, the Company entered into another similar fiber optic
cable swap agreement with Bestel for Ps.258,609, resulting in a gain on the
sale of Ps.225,208 that was not recorded under U.S. GAAP.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cumulative gains recorded under Mexican GAAP for exchange of
non-monetary assets taking place in 1999, 2001 and 2002 is Ps.423,609 at
December&nbsp;31, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale-Leaseback Transaction With MATC Celular
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As mentioned in Note 8c., during 2002 and 2001 the Company sold and
leased-back 67 and 244, respectively, non strategic towers to MATC Celular.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, &#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.91,608 and Ps.325,436 gains were recognized at
the date of the sale.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under U.S. GAAP, SFAS 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.76,383 and Ps.286,319 of the gains at the
transaction dates. 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 years ended December&nbsp;31, 2002 and 2001 was decreased Ps.60,459 and Ps.276,008, respectively.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized Interest
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Under Mexican GAAP, the Company did not capitalize any
financing costs for each of the years ended December&nbsp;31, 2002, 2001 and 2000.
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill And Indefinite-Lived Intangible Assets
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July 2001, the FASB issued SFAS 141, &#147;Business Combinations,&#148; and No.
142, &#147;Goodwill and Other Intangible Assets.&#148; SFAS 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
142 supercedes APB 17, &#147;Intangible Assets.&#148; 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.
</FONT>

<P align="center"><FONT size="2">F-36</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 141 to the Portatel acquisition and SFAS 142 to the
intangible assets acquired therein.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2002, the Company adopted the provisions of SFAS 142.
Goodwill is no longer amortized but is reviewed for impairment on an annual
basis at the reporting unit level. The impairment test is performed in two
phases. The first step of the goodwill impairment test compares the fair value
of the reporting unit with its carrying value, including goodwill. If the fair
value of the reporting unit exceeds its carrying value, goodwill of the
reporting unit is considered not impaired; however if the carrying value of the
reporting unit exceeds its fair value, an additional procedure must be
performed. The additional procedure compares the implied fair value of the
reporting unit (as defined by SFAS 142) with the carrying amount of that
goodwill. An impairment loss is recorded to the extent that the carrying
amount of goodwill exceeds its implied fair value. Upon adoption of SFAS 142,
goodwill was tested for impairment and no impairment charges were recorded.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Mexican GAAP goodwill continues to be amortized. For U.S. GAAP
purposes, the reversal of goodwill amortization under Mexican GAAP increased
the net income for the year ended December&nbsp;31, 2002 in Ps.168,903.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, the Company defined concessions as intangible assets with
definite life, consequently, under both Mexican GAAP and U.S. GAAP, the
amortization of this intangible asset continues.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The impact of adopting SFAS 142 on net loss and loss per share adjusted to
exclude amortization expense related to goodwill is as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss for the year under U.S. GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">607,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">165,993</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">163,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pro-forma net loss for the year
under U.S. GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">441,587</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">541,431</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect Of Inflation Accounting On U.S. GAAP Adjustments
</FONT>

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

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minority Interest
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision For Consolidation Of Facilities
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 1996, the Company recorded a charge and
related provision for consolidation of facilities related to the pending sale
and anticipated loss on 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, &#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, under U.S. GAAP the charge and related provision recorded by the
Company in 1996 has been reversed.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Income (Loss) And Stockholders&#146; Equity Under U.S. GAAP
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss under Mexican GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pre-operating costs (Note 23b.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,642</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments (Note 23c.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gain from the exchange of non-monetary
assets (Note 23d.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(53,172</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(145,229</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation of the gain from the exchange
of non-monetary assets (Note 23d.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,737</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"><FONT size="2">22,521</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gain on the sale lease-back transaction
(Note 23e.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(60,459</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(276,008</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Capitalized interest (Note 23f.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95,495</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"><FONT size="2">97,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation of capitalized interest (Note 23f.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,711</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of goodwill (Note 23g.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">168,903</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"><FONT size="2">2,102</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest (Note 23i.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,585</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,258</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effect of inflation accounting on U.S. GAAP
adjustments (Note 23h.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">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"><FONT size="2">304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss under U.S. GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">607,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>As of December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,804,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,997,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Pre-operating costs (Note 23b.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(85,640</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(82,998</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments (Note 23c.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(194,357</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gain from the exchange of non-monetary
assets (Note 23d.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(423,609</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(370,437</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated amortization on the gain from
the exchange of non-monetary assets (Note 23d.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47,258</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"><FONT size="2">22,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gain on the sale lease-back transaction
(Note 23e.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(336,467</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(276,008</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Capitalized interest (Note 23f.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">192,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">97,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated depreciation on capitalized
interest (Note 23f.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,711</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortization of goodwill (Note 23g.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">171,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest (Note 23i.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,742</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(125,957</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provision for consolidation of facilities
(Note 23j.)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,387,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,090,745</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provided below is an analysis of changes in stockholders&#146; equity under
U.S. GAAP:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="59%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>As of December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Opening balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,090,745</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,950,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">944,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(607,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Other comprehensive income:</B></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><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inflation effects</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(563</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(304</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">196,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(196,254</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Closing balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,387,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,090,745</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discontinued Operations
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described in Note 18, 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 from discontinued operations amounting to Ps.9,370, for the
year ended December&nbsp;31, 2000. Under U.S. GAAP, the closing of this subsidiary
does not constitute a discontinued operation under APB No.30. Accordingly, the
gain (loss)&nbsp;from discontinued operations is recorded as operating income
(expense).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Mexican GAAP, depreciation is not included in the measure of gross
profit. Under U.S. GAAP, Ps.1,396,445, Ps.1,273,499 and Ps.1,365,798 for the
years ended December&nbsp;31, 2002, 2001 and 2000, respectively, are reclassified to
cost of sales.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment Of Long-Lived Assets
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 2002, the Company adopted SFAS 144,
&#147;Accounting for he Impairment of Long-Lived Assets.&#148; SFAS 144 provides
guidance on the accounting for the impairment or disposal of long-lived assets.
SFAS 144 supercedes SFAS 121 and applies to all long-lived assets (including
discontinued operations) and consequently amends Accounting Principles Board
Opinion No.&nbsp;30 (APB 30), &#147;Reporting Results of Operations Reporting the Effects
of Disposal of a Segment of a Business&#148;. SFAS 144 develops one accounting
model (based on the model in SFAS 121) for long-lived assets that are to be
disposed of by sale, as well as addresses the principal implementation issues.
The adoption of SFAS 144 had no effect on the consolidated financial position
or results of operations of the Company.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplementary U.S. GAAP Disclosures
</FONT>


<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Cash flow information
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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 cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="2"><B>Operating activities:</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000 (*)</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net loss under U.S. GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">607,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,396,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,273,499</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"><FONT size="2">1,365,798</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">541,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,416,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,150,876</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,149</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49,427</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">9,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,687</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,203</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">61,336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">114,613</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"><FONT size="2">99,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">11,213</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"><FONT size="2">69,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">44,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,176</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28,132</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,399</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">8,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">285,951</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(275,991</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(374,774</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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">
    <TD><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 valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">114,562</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(96,375</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">155,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">206,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(45,125</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(86,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(495,244</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">79,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(177,123</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(349,419</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(226,124</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">131,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12,970</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21,874</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"><FONT size="2">38,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(55,015</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,981</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">785,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,628,481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,624,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Financing activities:</B></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">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">127,253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,393</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(786,209</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">944,309</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"><FONT size="2">1,376,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">918,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">717,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Investing activities:</B></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">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(647,880</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,694,225</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,173,190</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,203</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"><FONT size="2">72,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">98,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">378,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="2"><B>Operating activities:</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000 (*)</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(185,210</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(523,553</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(20,930</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(865,899</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,119</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(755,922</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,700,541</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,221,157</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,203</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(29,599</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,783</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net increase (decrease)&nbsp;in cash</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22,129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(182,660</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">94,923</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">126,358</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"><FONT size="2">309,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">214,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">126,358</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"><FONT size="2">309,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">113,542</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">406,685</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">424,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">141,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">120,781</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">148,809</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Capitalization of 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"><FONT size="2">2,320,690</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><SUP>(*)`</SUP></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The assets tax charged to the provision for assets tax for the years
ended December&nbsp;31, 2002, 2001 and 2000 was as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Years ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">111,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">154,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">165,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">8,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">120,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">154,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">165,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Deferred income taxes
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant components of deferred income taxes under U.S. GAAP are as
follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>SFAS 109</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>SFAS 109</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>applied to</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>applied to</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Mexican GAAP</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. GAAP</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Balances</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>adjustments</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Deferred assets:</B></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">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">30,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">30,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,633,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,633,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">3,914</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">120,432</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"><FONT size="2">120,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,405</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"><FONT size="2">27,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">107,669</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"><FONT size="2">107,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Valuation allowance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(480,230</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(196,978</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(677,208</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,188,086</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"><FONT size="2">58,528</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"><FONT size="2">1,246,614</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" 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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>December 31, 2002</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>SFAS 109</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>SFAS 109</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>applied to</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>applied to</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Mexican GAAP</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>U.S. GAAP</B></FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Balances</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>adjustments</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Deferred liabilities:</B></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><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"><FONT size="2">12,020</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">866,193</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">866,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">48,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">48,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">98,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">98,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">58,528</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"><FONT size="2">58,528</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,024,916</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"><FONT size="2">58,528</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"><FONT size="2">1,083,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">163,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">163,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Deferred assets:</B></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><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"><FONT size="2">78,019</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">78,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,293,031</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,293,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">26,346</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">121,771</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"><FONT size="2">121,771</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">29,050</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"><FONT size="2">29,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">68,025</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"><FONT size="2">68,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">96,602</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"><FONT size="2">96,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Valuation allowance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(252,057</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(281,458</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(533,515</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,145,339</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"><FONT size="2">33,990</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"><FONT size="2">1,179,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Deferred liabilities:</B></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><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"><FONT size="2">93,852</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">93,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">690,876</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">690,876</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">64,730</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">64,730</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">114,044</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">114,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,990</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"><FONT size="2">33,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">963,502</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,990</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"><FONT size="2">997,492</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">181,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">181,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. New Accounting Pronouncements
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April of 2002, the FASB issued SFAS 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 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 going forward basis.
</FONT>

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

<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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">years beginning after May&nbsp;15, 2002, and those for SFAS 13 will be
effective for transactions occurring after May&nbsp;15, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July 2002, the FASB issued SFAS 146, &#147;Accounting for Costs Associated
with Exit or Disposal Activities.&#148; The standard requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Previous accounting guidance was provided by Emerging Issue Task Force (EITF)
Issue No.&nbsp;94-3, &#147;Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring).&#148; SFAS 146 replaces Issue No.&nbsp;94-3. SFAS 146 is to be
applied prospectively to exit or disposal activities initiated after December
31, 2002.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FASB Interpretation No.&nbsp;45, &#147;Guarantor&#146;s Accounting and Disclosure
Requirements for Guarantees,&#148; (FIN 45) was issued in November 2002. FIN 45
requires that a liability be recognized at the inception of certain guarantees
for the fair value of the obligation, including the ongoing obligation to stand
ready to perform over the term of the guarantee. Guarantees, as defined in FIN
45, include contracts that contingently require the Company to make payments to
a guaranteed party based on changes in an underlying that is related to an
asset, liability or equity security of the guaranteed party, performance
guarantees, indemnification agreements or indirect guarantees of indebtedness
of others. This new accounting is effective for certain guarantees issued or
modified after December&nbsp;31, 2002. In addition, FIN 45 requires certain
additional disclosures.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SFAS 148, &#147;Accounting for Stock-Based Compensation &#150; Transition and
Disclosure &#150; an amendment of FASB Statement No.&nbsp;123,&#148; was issued on December
31, 2002. SFAS 148 provides alternative methods of transition for a voluntary
change to the fair value-based method of accounting for stock-based employee
compensation. SFAS 148 also amends the disclosure requirements of SFAS 123,
&#147;Accounting for Stock-Based Compensation,&#148; to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January 2003, the FASB issued FASB Interpretation 46 &#147;Consolidation of
Variable Interest Entities, an interpretation of ARB No.&nbsp;51&#148; (FIN 46). FIN 46
provides a new framework for identifying variable interest entities (VIEs) and
determining when a company should include the assets, liabilities,
non-controlling interests and results of activities of a VIE in its
consolidated financial statements. FIN 46 is effective immediately for VIEs
created after January&nbsp;31, 2003 and is effective beginning in the third quarter
of 2003 for VIEs created prior to issuance of the interpretation.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;April 2003, the FASB issued SFAS No.&nbsp;149, &#147;Amendment of Statement 133 on
Derivative Instruments and Hedging Activities&#148;. SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under SFAS 133,
&#147;Accounting for Derivative Instruments and Hedging Activities&#148;. SFAS 149 is
effective prospectively for contracts entered into or modified after June&nbsp;30,
2003 and prospectively for hedging relationships designated after June&nbsp;30,
2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In May 2003, the FASB issued SFAS No.&nbsp;150, &#147;Accounting For Certain
Financial Instruments with Characteristics of Both Liabilities and Equity&#148;.
SFAS 150 improves the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity, and requires that these
instruments be classified as liabilities in statements of financial position.
SFAS 150 is effective prospectively for financial instruments entered into or
modified after May&nbsp;31, 2003 and otherwise is effective at the beginning of the
first interim period beginning after June&nbsp;15, 2003. SFAS 150 shall be
implemented by reporting the cumulative effect of a change in an accounting
principle for financial instruments created before the issuance date of the
Statement and still existing at the beginning of the interim period of
adoption.
</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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is presently evaluating the impact, if any, that these new
standards will have on its consolidated financial statements.
</FONT>


<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;31, the account balances were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Recoverable taxes and other:</B></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">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">72,036</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">93,505</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">92,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">217,726</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">57,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">141,345</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">81,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">229,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">445,996</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"><FONT size="2">564,142</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Taxes and other payables:</B></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><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">232,920</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"><FONT size="2">213,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">76,130</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"><FONT size="2">88,659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">243,404</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"><FONT size="2">557,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">552,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">859,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. A significant portion of our trade receivables is represented by a
small number of distributors. In 2001, our three largest distributors
accounted for 52% and 44% of our net trade accounts receivable as of December
31, 2002 and 2001. 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"><FONT size="2"><B>NOTE 23 &#151; CONDENSED CONSOLIDATED FINANCIAL INFORMATION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As mentioned in Note 10, in July 1997, the Company issued U.S.$150,000 of
senior unsecured notes due 2004 as part of its refinancing program. The Notes
Due 2004 are guaranteed on a senior subordinated, unsecured 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"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presented below is condensed consolidating financial information as of
December&nbsp;31, 2002 and 2001 and for the three years ended December&nbsp;31, 2002 for
i) the parent company; ii) the combined Guarantor Subsidiaries; iii) the
combined non-Guarantor Subsidiaries; iv) eliminations; and v) the Company&#146;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.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>


<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2002
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</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 colspan="3" align="center"><FONT size="2">ASSETS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&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">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Current assets:</B></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><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">113,554</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">34,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accounts receivable:</FONT></DIV></TD>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">3,432</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"><FONT size="2">661,551</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"><FONT size="2">36,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(63,743</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">638,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,391,404</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"><FONT size="2">776,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,107,226</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">60,867</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">8,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">464,675</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"><FONT size="2">333,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(360,525</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">445,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,403,024</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"><FONT size="2">1,902,875</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"><FONT size="2">370,593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,531,494</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,144,998</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,698</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">1,516,578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,972,631</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"><FONT size="2">371,468</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,531,494</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,329,183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">4,227,937</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"><FONT size="2">231,893</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"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,425,419</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,421</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">6,495,270</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"><FONT size="2">978,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,079,715</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(974</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,552,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">390,491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">685,318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">276,351</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"><FONT size="2">109,852</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"><FONT size="2">1,462,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">1,878,797</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,878,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">14,509,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,868,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,727,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,848,035</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,257,311</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Current liabilities:</B></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><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">67,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">194,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,762</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">271,762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,209,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,098,738</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">110,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">315,566</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"><FONT size="2">591,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">245,209</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(599,649</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">552,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">32,983</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,220</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"><FONT size="2">3,502</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">50,705</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">541,706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">799,663</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"><FONT size="2">2,467,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,698,387</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,110,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">4,338,797</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,338,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">4,880,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">802,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,467,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,698,387</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,452,574</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Stockholders&#146; equity:</B></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">
    <TD><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"><FONT size="2">16,000,989</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"><FONT size="2">7,196,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,772,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,947,127</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,023,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earned capital</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,372,419</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,130,805</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,512,556</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,797,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,218,301</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">9,628,570</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"><FONT size="2">3,066,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(740,233</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,149,648</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,804,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,509,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,868,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,727,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,848,035</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,257,311</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Total stockholders&#146; equity</B></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">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">under Mexican GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,628,570</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"><FONT size="2">3,066,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(740,233</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,149,648</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,804,737</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(85,640</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(85,640</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(376,351</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(376,351</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(170,691</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(161,112</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,664</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(336,467</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">182,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">182,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">171,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">171,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,742</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"><FONT size="2">6,742</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">20,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee"><TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,832,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,904,936</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,206,888</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,142,906</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">7,387,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED INCOME STATEMENT<BR>
FOR THE YEAR ENDED DECEMBER 31, 2002
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,628,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,754,468</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">886,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,687,270</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,581,635</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">43,169</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"><FONT size="2">4,489,087</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"><FONT size="2">395,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,890,663</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,037,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,584,929</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,265,381</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"><FONT size="2">490,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,796,607</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,544,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">66,313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,804,644</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"><FONT size="2">561,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,740,236</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,691,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,361,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">613,666</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">140,753</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"><FONT size="2">5,319</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"><FONT size="2">2,121,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">156,744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(152,929</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(211,448</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(61,690</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(269,323</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest (income)&nbsp;expense,
net</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">309,783</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,294</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">83,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,280</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"><FONT size="2">384,657</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">540,461</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"><FONT size="2">21,208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,455</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(50,067</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">507,147</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(197,360</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">82,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(92,813</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12,903</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(220,633</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">652,884</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">93,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13,380</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(61,690</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">671,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">9,741</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">46,133</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"><FONT size="2">66,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,987</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"><FONT size="2">120,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&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">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,761</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,761</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">552,014</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">312,636</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">206,055</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,761</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">552,014</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">312,636</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">206,055</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,761</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,060,944</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,642</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,642</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,642</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,642</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,950</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(41,509</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(60,459</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">85,784</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85,784</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">168,903</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">168,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,585</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,585</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">315,544</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">354,145</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">237,132</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS<BR>
FOR THE YEAR ENDED DECEMBER 31, 2002
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">315,544</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">354,145</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">237,132</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">898,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,192,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">613,666</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">140,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,706</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,937,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">9,741</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12,278</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,871</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,149</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">61,336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">61,336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,213</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,176</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,176</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">342,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">103,651</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(97,268</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(62,970</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">285,951</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">123,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(208,537</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,967</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"><FONT size="2">188,778</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">114,562</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">3,561</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">169,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,190,752</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">506,354</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"><FONT size="2">64,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(495,244</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">165,755</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(151,453</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(33,956</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(329,765</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(349,419</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income Tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,204</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,292</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,250</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12,970</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(54,632</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(212</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(171</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(55,015</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">265,369</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"><FONT size="2">738,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(126,360</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(91,969</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">785,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(745,462</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(221,080</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">213,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">105,298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(647,880</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">31,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">66,870</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">98,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">106,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,205</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(288,794</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(185,210</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">329,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,257,679</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">631,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">275,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(20,930</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(277,886</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,415,094</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">845,089</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">91,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(755,922</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">714,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(714,975</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">714,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(714,975</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,186</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(247</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,203</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(19,703</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">38,325</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22,129</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">133,257</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,632</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">113,554</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">34,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">148,487</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</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 colspan="3" align="center"><FONT size="2">ASSETS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&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">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Current assets:</B></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 colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">133,257</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,632</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">697,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(104,511</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">629,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">368,918</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"><FONT size="2">1,560,279</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,883,696</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">45,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">134,974</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">281,308</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">345,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(197,649</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">564,142</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">503,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,539,304</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"><FONT size="2">381,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,185,856</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,238,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">3,561</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">216,347</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">253,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">640,710</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"><FONT size="2">2,751,384</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"><FONT size="2">412,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,185,856</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,618,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">4,230,161</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"><FONT size="2">228,688</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,422,844</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">7,197,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">764,297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,405,397</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,857</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,365,301</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">781,549</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"><FONT size="2">469,348</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"><FONT size="2">344,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">393,440</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"><FONT size="2">1,988,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,993,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,993,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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"><FONT size="2">14,842,987</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"><FONT size="2">4,213,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,162,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,217,117</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,001,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Current liabilities:</B></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 colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">158,586</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2"> -</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">88,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">     -</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">246,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">170,716</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"><FONT size="2">367,740</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">88,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(45,568</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">581,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,052,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,882,934</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">169,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">149,641</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"><FONT size="2">742,781</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">279,165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(312,244</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">859,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">41,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,444</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"><FONT size="2">10,794</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">60,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">520,130</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"><FONT size="2">1,118,965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,519,222</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,240,746</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,917,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">4,028,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,028,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">54,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">57,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">4,603,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,122,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,519,222</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,240,746</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,003,704</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Stockholders&#146; equity:</B></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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">16,000,535</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"><FONT size="2">6,481,878</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"><FONT size="2">2,510,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,969,665</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,023,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earned capital</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,760,581</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,390,356</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,867,497</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,861,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,157,357</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">132,217</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"><FONT size="2">132,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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"><FONT size="2">10,329,954</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,091,522</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(357,207</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,976,371</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,997,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,842,987</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"><FONT size="2">4,213,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,162,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,217,117</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,001,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,329,954</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,091,522</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(357,207</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,976,371</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,997,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(82,998</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(82,998</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(194,357</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(194,357</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(347,916</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(347,916</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(151,741</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(119,602</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,665</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(276,008</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">97,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">97,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">2,102</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(125,957</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(125,957</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">20,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">10,013,939</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,971,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">792,786</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,102,328</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,090,745</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-48</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED INCOME STATEMENT<BR>
FOR THE YEAR ENDED DECEMBER 31, 2001
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,039,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,242,907</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,399,396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,088,735</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,647,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">80,402</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,973,593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">459,944</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,553,534</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,960,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,013,312</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"><FONT size="2">5,269,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">939,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,535,201</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,686,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(38,564</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,104,387</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">516,265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,560,709</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,021,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">1,299,527</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,285,622</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"><FONT size="2">138,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,534</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,715,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(247,651</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,695</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">284,699</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49,605</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Integral financing results:</B></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">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest (income)&nbsp;expense, net</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206,471</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(77,900</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">275,343</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,978</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"><FONT size="2">407,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(78,112</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(19,045</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,097</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(101,252</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(126,843</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">52,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(96,100</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,969</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(174,435</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(44,468</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">175,146</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"><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"><FONT size="2">132,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,696</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,134</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,941</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,889</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">62,124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">91,982</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"><FONT size="2">7,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,851</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">154,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">6,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(22,075</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(21,874</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(152,075</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">102,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">50,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(152,075</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">102,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">50,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314,643</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(122,708</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(122,708</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(151,741</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(119,603</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,664</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(276,008</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">97,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">97,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">2,102</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,258</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"><FONT size="2">6,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">366,863</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">271,678</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">25,313</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">56,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">607,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS<BR>
FOR THE YEAR ENDED DECEMBER 31, 2001
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Operating activities:</B></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">
    <TD><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">366,863</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">271,678</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">25,313</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">56,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">607,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 valign="bottom">
    <TD><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"><FONT size="2">1,297,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,285,622</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"><FONT size="2">115,968</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,534</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,690,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,890</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,890</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(27,174</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(21,418</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(835</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(49,427</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">114,613</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">114,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Minority interest</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(202</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(27,930</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28,132</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(198,413</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(100,197</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,813</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(275,991</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Changes in operating assets and liabilities:</B></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">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accounts receivable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(108,121</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(32,846</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">43,844</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"><FONT size="2">748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(96,375</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(26,993</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,025</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(904</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(45,125</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">642,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(243,425</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(308,066</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,983</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">79,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">31,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(255,615</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(71,905</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(226,124</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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"><FONT size="2">41,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,488</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,262</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">54,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(354</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(29</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(66,230</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,981</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">1,360,863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">659,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(225,395</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(166,539</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,628,481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Investing activities:</B></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">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,404,085</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">70,394</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(466,435</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">105,901</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,694,225</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">208,326</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"><FONT size="2">164,204</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"><FONT size="2">6,403</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">378,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(519,350</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(519,350</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(720,186</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(903,589</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(491,237</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,249,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(865,899</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,435,295</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(668,991</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(951,269</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,355,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,700,541</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Financing activities:</B></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">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,393</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,393</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">944,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,171,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,171,899</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">944,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">918,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,171,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,171,899</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">918,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12,702</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(226</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(95</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,576</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(29,599</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(168,135</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,665</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,860</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(182,660</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><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"><FONT size="2">301,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,398</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"><FONT size="2">2,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">309,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">133,257</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,632</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">126,358</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED INCOME STATEMENT<BR>
FOR THE YEAR ENDED DECEMBER 31, 2000
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">1,079,796</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">8,380,564</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">796,955</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">4,201,011</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,056,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">67,640</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"><FONT size="2">3,588,505</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">416,415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,148,697</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,923,863</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">1,012,156</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"><FONT size="2">4,792,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">380,540</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,052,314</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,132,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">62,516</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"><FONT size="2">3,647,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">352,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,035,473</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,026,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">1,363,509</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"><FONT size="2">1,049,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">112,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,181</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,516,675</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(413,869</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(84,265</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,660</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(411,084</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Integral financing result:</B></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">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">292,535</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(76,553</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">322,868</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">538,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">13,716</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"><FONT size="2">6,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(342,730</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">102,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(173,527</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(395,722</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(36,479</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">150,034</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"><FONT size="2">17,722</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"><FONT size="2">163,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">307,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(68,515</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(241,427</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">26,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125,067</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"><FONT size="2">14,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">165,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,399</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,399</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,370</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,370</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(248,443</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">241,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(248,443</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">241,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(710,748</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">6,496</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(267</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">248,443</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">241,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><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>

<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="center"><FONT size="2">CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS<BR>
FOR THE YEAR ENDED DECEMBER 31, 2000
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Combined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Parent</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>non-guarantor</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&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">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>subsidiaries</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Eliminations</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Consolidated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Operating activities:</B></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">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">6,629</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">248,443</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">241,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">(Ps.</FONT></TD>
    <TD align="right"><FONT size="2">704,519</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,363,509</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"><FONT size="2">1,049,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">112,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,182</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,516,674</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">307,324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(309,943</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">99,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">99,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">44,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">44,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,399</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,399</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(328,747</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">109,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(172,833</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(374,774</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(55,830</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(654</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">212,375</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"><FONT size="2">155,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,937</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(88,533</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,522</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,196</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(86,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">873,929</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(531,306</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">410,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(929,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(177,123</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(130,988</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">455,801</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"><FONT size="2">42,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(236,208</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">131,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income Tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,541</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(109</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,831</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"><FONT size="2">27,050</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"><FONT size="2">38,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(41</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">1,377,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,090,519</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"><FONT size="2">151,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(994,369</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,624,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Investing activities:</B></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 colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,768,571</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">55,336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(114,122</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(345,833</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,173,190</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(203,277</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47,647</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">227,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">126,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,060,630</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(50,154</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">864,282</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,119</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,845,465</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(957,647</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(164,276</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">746,231</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,221,157</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Financing activities:</B></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">
    <TD colspan="2"><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"><FONT size="2">133,874</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"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,621</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">127,253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(786,209</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(786,209</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">1,376,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(202,289</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">187,206</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"><FONT size="2">1,376,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">724,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(202,289</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">180,585</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"><FONT size="2">717,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><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 nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,269</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,242</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,248</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,783</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net increase (decrease)&nbsp;in cash</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">249,342</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(79,659</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(76,801</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">94,923</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><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"><FONT size="2">52,050</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"><FONT size="2">85,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">76,801</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"><FONT size="2">214,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">301,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">5,398</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">2,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Ps</FONT></TD>

    <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">309,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><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><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><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><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


<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"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>


<P align="left"><FONT size="2"><B>Note 24 &#150; Subsequent Events:</B>
</FONT>


<P align="left"><FONT size="2"><B>Debt restructuring efforts</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A summary of subsequent events relating to the Company&#146;s debt
restructuring efforts are as follows:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technical defaults on amended restated syndicated loan</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;27, 2003, the Company announced that it received notification
from lenders of the occurrence of two technical defaults under the U.S.$265,622
Amended and Restated Syndicated Loan Agreement dated as of March&nbsp;29, 2001 (the
Credit Agreement). The underlying defaults are due to the failure to obtain the
consent of the lenders prior to the closing and opening of certain bank
accounts and the failure to effect the registration of a mortgage on certain
newly acquired assets within the time period specified in the Credit Agreement.
The Company effected the registration of the mortgage and requested, but has
not yet received, the consent of the lenders with respect to the bank accounts.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment and waiver under the Credit Agreement</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;28, 2003, as part of its debt restructuring effort, the Company
received a temporary Amendment and Waiver (the Amendment) of the Debt/EBITDA
leverage ratio and certain other provisions and technical defaults under the
Credit Agreement. The Amendment was scheduled to expire on May&nbsp;22, 2003 and at
its expiration date the Amendment was extended to June&nbsp;13, 2003 and further
extended to June&nbsp;26, 2003. The Amendment expired on June&nbsp;26, 2003, and as a
result, the Company is in default of a financial leverage covenant under the
Credit Agreements that constitutes an event of default under that loan.
Accordingly, the lenders under the Credit Agreement have the right to declare
the indebtedness under their loan immediately due and payable. If the lenders
under the Credit Agreement accelerate loan payment, default would occur under
the indenture governing the Notes due 2004, which would permit the holders of
the Notes due 2004 to accelerate the Company&#146;s repayment obligations. If the
lenders of Credit Agreement and/or the holders of the Senior Notes due 2004
accelerate their loan payments, default would occur under the indenture
governing the Senior Notes due 2006 of New Iusacell for U.S.$350,000 (the Notes
due 2006).
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Extinguishment of Santander refinanced credit facility</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;29, 2003, the Company reached an agreement with Santander to repay
the remaining balance of U.S.$3,000 under a refinanced credit facility. Under
this agreement, the Company and Santander agreed to settle the remaining amount
for U.S.$1,500. The Company recognized the difference as an early
extinguishment of debt under Mexican GAAP and therefore, recognize this amount
as an extraordinary gain in 2003.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New Iusacell suspension of interest payment on Senior Notes due 2006</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;2, 2003, New Iusacell announced that it determined that pending an
agreement with its lenders on a restructuring plan, it would suspended the
payment of U.S.$24,938 interest payment due June&nbsp;1, 2003 on the Notes due 2006.
New Iusacell has a thirty-day cure period to make the interest payment, before
an event of default would occur. If the interest payment is not made within the
thirty-day period an event of default would occur under the indenture governing
the bonds, and the bondholders would have the right to declare those notes
immediately due and payable. The right of such holders to accelerate New
Iusacell&#146;s repayment obligations will cause an event of default under the terms
of the Credit Agreement and under the indentures governing the Notes due 2004,
which would permit the lenders and the holders of the notes to declare their
indebtedness immediately due and payable.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal shareholders of New Iusacell acceptance of tender offer to
sell controlling interest</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;13, 2003, New Iusacell announced that its two largest
shareholders, Verizon and Vodafone, agreed to tender all of their shares,
representing approximately 73.90% of New Iusacell&#146;s outstanding shares, in a
public
<P align="center"><FONT size="2">F-53</FONT>

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


</FONT>


<P align="center"><FONT size="2"><B>GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES<BR>
(subsidiary of Grupo Iusacell, S.A. de C.V.)</B>
</FONT>


<P align="center"><FONT size="2"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Continued)</B>
</FONT>

<P align="left"><FONT size="2">tender offer to be commenced in Mexico and the United States of America
by <I>Movil Access, S.A. de C.V.</I>, a Mexican telecommunications service provider.
Once the National Banking and Securities Commission (<I>Comisi&#243;n Nacional
Bancaria y de Valores</I>) approves the tender offer and Verizon and Vodafone
tender all of their shares, Verizon and Vodafone will lose the ability to
manage New Iusacell and the Company. Verizon and Vodafone will no longer be in
a position to determine New Iusacell&#146;s policies and strategies, provide
personnel to New Iusacell on a secondment or consulting basis, manage New
Iusacell&#146;s operations or provide the technical support, as well as operating
synergies that New Iusacell has historically relied on.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the indentures governing the Notes due 2004, this constitutes a
change of control under which the bondholders have the right to require the
Company, to repurchase such bondholders&#146; notes. This also constitutes a change
of control and would constitute an event of default under the Credit Agreement
so the lenders under the Credit Agreement would have the right to declare all
amounts outstanding under the Credit Agreement immediately due and payable.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company continues to evaluate with the assistance of an external
financial advisor the alternatives for restructuring its debt. The Company&#146;s
ability to operate as a going concern is dependent upon its ability to
successfully negotiate with its bank syndicate and note holders to preclude
acceleration. However, although no assurances can be given, the Company remains
confident that it will be able to continue operating as a going concern.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business, and as such do
not include any adjustments that might result from the outcome of these
uncertainties.
</FONT>


<P align="left"><FONT size="2"><B>10% excise tax on telecommunications services</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;6, 2003, the Company was officially notified that by disposition
of the appeal filed by the Mexican government, Mexico&#146;s Supreme Court affirmed
the ruling by a federal district court in favor of the Company in their
injunction filed against the special telecommunications tax enacted by the
Mexican Congress on January&nbsp;1, 2002 (Note 13g.).
</FONT>

<P align="center"><FONT size="2">F-54</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"><FONT size="2"><B>GRUPO IUSACELL CELULAR</B>
</FONT>


<P align="center"><FONT size="2"><B>SCHEDULE II &#151; VALUATION AND QUALIFYING ACCOUNTS<BR>
Years Ended 2000, 2001 and 2002<BR>
(Amounts expressed in Thousands of Mexican Pesos (Ps.)<BR>
with Purchasing Power as of December&nbsp;31, 2002)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Balance at</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Charged to</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Charged to</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Balance at</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>beginning</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>costs and</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>other</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>end of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>of period</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>expenses</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>accounts</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Deductions</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>period</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">9,430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">45,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">466</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">54,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,255</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"><FONT size="2">69,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">6,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">117,070</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">117,070</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"><FONT size="2">11,213</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"><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"><FONT size="2">25,045</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">103,238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><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>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">179,491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">99,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">45,089</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">Ps.</FONT></TD>
    <TD align="right"><FONT size="2">234,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">234,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">114,614</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"><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"><FONT size="2">126,022</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"><FONT size="2">222,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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"><FONT size="2">222,914</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"><FONT size="2">61,336</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><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"><FONT size="2">190,647</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"><FONT size="2">93,603</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


<P align="center"><FONT size="2">S-II</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"><FONT size="2"><B>EXHIBIT INDEX</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>No.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">1.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By-laws (<I>estatutos</I>) of <I>Grupo Iusacell Celular, S.A. de C.V.</I>
effective April&nbsp;4, 2001 (incorporated by reference to Exhibit&nbsp;1 to
Iusacell Celular&#146;s Annual Report on Form&nbsp;20-F for fiscal year 2000
&#150; File No.&nbsp;033-79254).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">2.1</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 herein by reference
to Exhibit&nbsp;2(a) to Iusacell&#146;s Annual Report on Form&nbsp;20-F for
fiscal year 2000 &#151; File No.&nbsp;001-14938).</FONT></TD>
</TR>

<tr><td>&nbsp;</td></tr><TR valign="bottom">
    <TD valign="top"><FONT size="2">2.2</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 <I>Grupo Iusacell Celular,
S.A. de C.V.</I>, certain subsidiaries of <I>Iusacell Celular, S.A. de
C.V. </I>and First Union National Bank, as trustee (incorporated
herein by reference to Exhibit&nbsp;4.1 to the Registration Statement
F-4 &#151; Registration Number 333-37431).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</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 <I>Grupo
Iusacell Celular, S.A. de C.V.</I>, Lucent Technologies World
Services, Inc. and <I>Lucent Technologies de M&#233;xico, S.A. de C.V.</I>
(incorporated herein by reference to Exhibit&nbsp;A to Iusacell
Celular&#146;s Annual Report on Form&nbsp;20-F for fiscal year 1997).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</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 <I>Grupo Iusacell
Celular, S.A. de C.V. </I>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 <I>BBVA Bancomer S.A.</I>, as Arrangers
(incorporated herein by reference to Exhibit&nbsp;4(b) to Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2000 &#151; File No.
001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Master Lease Agreement (English version),
dated as of May&nbsp;16, 2002, among <I>MATC Celular, S. de R.L. de C.V.</I>,
<I>Grupo Iusacell Celular, S.A. de C.V. </I>and <I>Iusacell Arrendadora,
S.A. de C.V. </I>(incorporated herein by reference to Exhibit&nbsp;4.3 to
Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151; File
No.&nbsp;001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Master Lease Agreement (English version),
dated as of May&nbsp;16, 2002, between <I>MATC Celular, S. de R.L. de C.V.</I>
and <I>Grupo Iusacell Celular, S.A. de C.V.</I>, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit&nbsp;4.4 to Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal
year 2002 &#151; File No.&nbsp;001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Build-to-Suit and Site Development Agreement,
dated as of May&nbsp;16, 2002, between <I>MATC Celular, S. de R.L. de C.V.</I>
and <I>Grupo Iusacell Celular, S.A. de C.V.</I>, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit&nbsp;4.5 to Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal
year 2002 &#151; File No.&nbsp;001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
First Amendment and Waiver, dated as of December&nbsp;7, 2001, to the
Amended and Restated Credit Agreement, dated as of July&nbsp;25, 1997,
as amended and restated as of March&nbsp;29, 2001 among <I>Grupo Iusacell
Celular, S.A. de C.V.</I>, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit&nbsp;4.3 of Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2001 &#151; File No.
001-14938).</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">&nbsp;</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>


<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>No.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Second Amendment and Waiver, dated as of April&nbsp;28, 2003, to the
Amended and Restated Credit Agreement, dated as of July&nbsp;25, 1997,
as amended and restated as of March&nbsp;29, 2001 among <I>Grupo Iusacell
Celular, S.A. de C.V.</I>, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit&nbsp;4.7 of Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151; File No.
001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
First Amendment to the Second Amendment and Waiver, dated as of
April&nbsp;28, 2003, to the Amended and Restated Credit Agreement,
dated as of July&nbsp;25, 1997, as amended and restated as of March&nbsp;29,
2001 among <I>Grupo Iusacell Celular, S.A. de C.V.</I>, the lenders party
thereto, and JP Morgan Chase Bank as Administrative Agent and
Collateral Agent (incorporated herein by reference to Exhibit&nbsp;4.8
of Iusacell&#146;s Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151;
File No.&nbsp;001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Second Amendment, dated as of June&nbsp;10, 2003, to the Second
Amendment and Waiver dated as of April&nbsp;28, 2003, to the Amended
and Restated Credit Agreement, dated as of July&nbsp;25, 1997, as
amended and restated as of March&nbsp;29, 2001 among <I>Grupo Iusacell
Celular, S.A. de C.V.</I>, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit&nbsp;4.8 of Iusacell&#146;s
Annual Report on Form&nbsp;20-F for fiscal year 2002 &#151; File No.
001-14938).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">7.1*</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>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">8.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
List of subsidiaries.</FONT></TD>
</TR><tr><td>&nbsp;</td></tr>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">12.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certification pursuant to 18 U.S.C. Section&nbsp;1350, as adopted
pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Executive Officer).</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">12.2*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certification pursuant to 18 U.S.C. Section&nbsp;1350, as adopted
pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Financial Officer).</FONT></TD>
</TR>
</TABLE>
</CENTER>

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<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Filed herewith.</FONT></TD>
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GRUPO IUSACELL CELULAR, S.A. DE C.V.
Table of Contents
UNITED STATES
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
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
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 033-79254
Grupo Iusacell Celular, S.A. de C.V.
(Exact name of Registrant as specified in its charter)
Iusacell Celular Group
(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:
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
x
No
o
Indicate by check mark which financial statement item the registrant has
elected to follow:
Item 17
o
Item 18
x
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
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. CONTROLS AND PROCEDURES
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
ITEM 16B. CODE OF ETHICS
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART III
ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS
ITEM 19. EXHIBITS
SIGNATURES
INDEX
REPORT OF INDEPENDENT ACCOUNTANTS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
LIST OF SUBSIDIARIES
CERTIFICATION
CERTIFICATION
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
1
ITEM 4.
INFORMATION ON THE COMPANY
13
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
41
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
65
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
67
ITEM 8.
FINANCIAL INFORMATION
71
ITEM 9.
THE OFFER AND LISTING
72
ITEM 10.
ADDITIONAL INFORMATION
72
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
82
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
84
PART II
84
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
84
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS
85
ITEM 15.
CONTROLS AND PROCEDURES
85
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
85
ITEM 16B.
CODE OF ETHICS
85
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
85
PART III
86
ITEM 17.
FINANCIAL STATEMENTS
86
ITEM 18.
FINANCIAL STATEMENTS
86
ITEM 19.
EXHIBITS
87
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.
Factors described in this Annual Report under Item 3, "Key Information —
Risk Factors," could cause actual results to differ materially from such
forward-looking statements.
"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" means
Grupo Iusacell, S.A. de C.V.
This company was formerly
known as
Nuevo Grupo Iusacell, S.A. de C.V.
Iusacell owns 100% of the capital
stock of Iusacell Celular
In this Annual Report, "we", "our" or "us" refers to Iusacell Celular and
its subsidiaries, unless the context otherwise requires.
Certain terms are defined the first time they are used in this Annual
Report. The "Glossary of Telecommunications Terms" that begins immediately
following Item 19, "Exhibits" provides definitions of certain technical terms
used herein.
On June 30, 2000, Bell Atlantic Corporation, Iusacell's 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 names of the subsidiaries which hold Iusacell capital
stock directly remained unchanged. 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.
The term "Vodafone" in this Annual Report refers to Vodafone Group Plc or
its subsidiaries, as the context requires.
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", "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, 2002.
Actual amounts may vary from amounts presented in this Annual Report due to
rounding.
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 (not including the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into 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.
ii
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.
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, 2002, 2001, 2000, 1999 and 1998. The financial information
presented for fiscal years ended December 31, 2002, 2001 and 2000 was derived
from our audited consolidated financial statements, 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.
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 National Consumer Price Index (
Indice Nacional de Precios al
Consumidor
), also referred to as 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, 2002. 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 22 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.
1
Table of Contents
As of and for the Year Ended December 31,
1998
1999
2000
2001
2002
2002
(Thousands of constant pesos as of December 31, 2002,
(Thousands of
except operating data)
(1)
U.S. dollars,
except operating
data)
(2)
Income Statement Data:
Mexican GAAP:
Revenues:
Services
3,307,589
4,530,207
5,497,454
6,005,545
4,989,753
478,633
Telephone equipment sales and other
506,844
525,393
558,850
641,737
591,882
56,775
Total revenues
3,814,433
5,055,600
6,056,304
6,647,282
5,581,635
535,408
Cost of sales:
Cost of services
1,035,036
1,291,588
1,547,575
1,560,761
1,549,547
148,638
Cost of telephone equipment sales and
other
271,194
324,031
376,288
399,644
487,826
46,794
Total cost of sales
1,306,230
1,615,619
1,923,863
1,960,405
2,037,373
195,432
Gross profit
2,508,203
3,439,981
4,132,441
4,686,877
3,544,262
339,976
Operating expenses
1,455,532
1,736,851
2,026,850
2,346,815
1,783,583
171,087
Depreciation and amortization
1,073,547
1,712,629
2,516,675
2,715,103
2,121,610
203,512
450 project write-down
1,325,508
0
0
0
0
0
Other operating income
0
0
0
325,436
91,608
8,787
Operating loss
(1,346,384
)
(9,499
)
(411,084
)
(49,605
)
(269,323
)
(25,836
)
Other income (expense), net
179,211
(27,720
)
0
0
0
0
Integral financing cost (gain):
Interest expense, net
301,645
323,092
538,847
407,892
384,657
36,898
Foreign exchange loss (gain), net
1,129,607
(222,244
)
20,681
(101,252
)
507,147
48,647
Gain from monetary position
(916,914
)
(794,935
)
(395,722
)
(174,435
)
(220,633
)
(21,164
)
Total
514,338
(694,087
)
163,806
132,205
671,171
64,381
Equity participation in net profit (loss)
of associated companies
33,573
(57,247
)
2,619
6,889
(9,741
)
(934
)
(Loss) income before assets tax, income
tax, minority interest and extraordinary
item
(1,647,938
)
599,621
(572,271
)
(174,921
)
(950,235
)
(91,151
)
Provisions for:
Asset tax
86,725
159,490
165,246
154,749
111,609
10,706
Income tax
0
488,024
0
0
8,861
850
Total
86,725
647,514
165,246
154,749
120,470
11,556
Loss from continuing operations before
minority interest and extraordinary item
(1,734,663
)
(47,893
)
(737,517
)
(329,670
)
(1,070,705
)
(102,707
)
Minority interest
7,625
21,563
17,399
21,874
9,761
936
Loss from continuing operations before
extraordinary item
(1,727,038
)
(26,330
)
(720,118
)
(307,796
)
(1,060,944
)
(101,771
)
Extraordinary item
(3)
0
488,024
0
0
0
0
Cumulative effect of the adoption of the
new accounting pronouncement
0
0
0
6,847
0
0
(Loss) gain from discontinued
operations
(4)
(24,908
)
(1,847
)
9,370
0
0
0
Net (loss) profit
(1,751,946
)
459,847
(710,748
)
(314,643
)
(1,060,944
)
(101,771
)
U.S. GAAP:
(5) (6)
Total revenues
3,838,776
5,055,600
6,056,303
6,502,054
5,407,248
518,681
Operating (loss) profit
(1,139,268
)
(100,785
)
(401,713
)
(446,219
)
(201,668
)
(19,345
)
Net (loss) profit
(1,740,479
)
345,498
(704,519
)
(607,579
)
(898,645
)
(86,201
)
Balance Sheet Data:
Mexican GAAP:
Working capital
(1,622,973
)
(632,450
)
(1,476,246
)
(298,916
)
218,424
20,952
Property and equipment, net
7,168,516
8,141,460
8,727,500
9,365,301
8,552,898
820,422
Total assets
13,408,186
14,834,482
14,598,623
15,001,603
13,257,311
1,271,685
Total debt
6,014,462
5,521,176
4,561,219
4,144,577
4,464,069
428,208
Total stockholders' equity
4,951,735
7,333,609
8,262,708
8,997,898
7,804,737
748,656
Capital stock
11,660,034
13,604,027
13,604,027
13,604,226
15,924,916
1,527,570
U.S. GAAP:
(5)
Working capital
(1,824,083
)
(877,514
)
(1,763,892
)
(510,063
)
60,305
5,785
Property and equipment, net
6,943,307
7,916,254
8,502,293
9,114,500
8,359,446
801,865
Total assets
13,946,144
15,359,638
15,109,116
15,633,408
14,266,482
1,368,487
Total debt
6,028,962
5,521,176
4,561,219
4,144,577
4,464,069
428,208
Minority interest
1,096
(29,728
)
26,892
125,957
(6,742
)
(647
)
Total stockholders' equity
4,954,609
7,276,518
7,950,375
8,090,745
7,387,791
708,661
2
Table of Contents
As of and for the Year Ended December 31,
1998
1999
2000
2001
2002
2002
(Thousands of constant pesos as of December 31, 2002,
(Thousands of
except operating data)
(1)
U.S. dollars,
except operating
data)
(2)
Other Financial Data:
Mexican GAAP:
EBITDA
(7)
1,052,671
1,703,130
2,105,591
2,665,498
1,852,287
177,677
EBITDA margin
(8)
28
%
34
%
35
%
40
%
33
%
Capital expenditures
(9)
4,371,247
2,057,767
2,138,411
1,742,476
577,420
55,388
Interest expense, net
301,645
323,092
538,847
407,892
384,657
36,898
Ratio of earnings to fixed
charges
(10)
—
2.59
—
—
—
—
Cash Flow Data:
(11)
Mexican GAAP:
Net resources (used) provided by
operating activities
920,314
1,363,956
1,899,653
2,363,563
510,486
48,967
Net resources used in investing activities
(4,655,078
)
(2,945,248
)
(2,428,004
)
(3,074,089
)
(807,849
)
77,492
Net resources provided by financing
activities
3,891,235
1,450,705
623,270
527,866
319,492
30,647
U.S. GAAP:
(5)
Net cash provided by operating activities
2,302,994
2,341,910
1,624,438
1,628,481
785,254
75,324
Net used in investing activities
(4,429,872
)
(2,862,250
)
(2,221,157
)
(2,700,541
)
(755,922
)
(72,510
)
Net cash provided by financing activities
2,283,348
431,431
717,425
918,999
0
0
Operating Data:
Covered POPs
(12)
66,712,645
67,591,791
68,376,034
78,585,938
79,843,313
79,843,313
Subscribers
(13)
Postpaid
277,014
352,289
442,594
403,988
351,782
351,782
Prepaid
478,361
970,509
1,238,625
1,450,709
1,692,511
1,692,511
Total subscribers
755,375
1,322,798
1,681,219
1,854,697
2,044,293
2,044,293
Gross subscriber additions
747,720
788,438
1,092,895
1,050,620
1,080,683
1,080,683
Average subscribers
(14)
742,601
1,290,558
1,637,481
1,721,053
2,073,085
2,073,085
Average monthly postpaid churn
(15)
2.58
%
2.96
%
3.51
%
3.77
%
3.55
%
3.55
%
Penetration
(16)
1.13
%
1.96
%
2.46
%
2.36
%
2.56
%
2.56
%
Average monthly MOUs per subscriber
(17)
87
91
94
117
126
12
Nominal average monthly mobile wireless
revenue per
subscriber
(18)
361
335
322
370
384
37
Nominal cost to acquire a new
subscriber
(19)
3,477
3,277
3,270
2,677
2,419
232
(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, 2002. 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, 2002. The
inflation indices used in this Annual Report are 1.3505 for 1998,
1.2024 for 1999, 1.1036 for 2000 and 1.0570 for 2001.
(2)
Peso amounts were converted to U.S. dollars at the noon buying rate
reported by the Federal Reserve Bank of New York for December 31, 2002,
which was Ps.10.425 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, 2002 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, 2002, which was
Ps.10.439 per U.S.$1.00. The difference between the noon buying rate
reported by the Federal Reserve Bank of New York 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 at December 31, 2002 was U.S.$427.6
million. In preparing the Consolidated Financial Statements, we
multiplied this dollar amount by Ps.10.439 (the
Banco de México
exchange
rate at December 31, 2002) to arrive at Ps.4,464.1 million of total debt.
For
purposes of this Annual Report, we have converted this peso amount to U.S.
dollars for the convenience of the reader
3
Table of Contents
by dividing it by Ps.10.425 (the
noon buying rate reported by the Federal Reserve Bank of New York at
December 31, 2002) to arrive at U.S.$428.2 million of total debt.
As a result of the combined effect of the restatement of the financial
data in constant pesos with purchasing power as of December 31, 2002 and
the 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 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.
(4)
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 subsidiary transferred all of its existing
inventories as of December 31, 1998 to another one of our subsidiaries
and terminated all of its employees during January and February 1999.
See Note 18 to the Consolidated Financial Statements. Under U.S. GAAP,
the closing of this subsidiary does not constitute a discontinued
operation under Accounting Principles Board Opinion ("APB Opinion") No.
30. Accordingly, the gain (loss) from discontinued operations is
recorded as operating income (expense).
(5)
See Note 22 to the Consolidated Financial Statements.
(6)
We have never paid dividends, nor do we contemplate paying dividends
in the foreseeable future. Accordingly, we have not included in these
tables a line item for dividends declared per share.
(7)
EBITDA as used in this Annual Report is operating profit (loss) plus
the sum of depreciation and amortization 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 differs from EBITDA as defined in the
instruments governing Iusacell Celular's 10% senior notes due 2004 and
Iusacell Celular's senior refinancing secured loan (as defined 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 telephones it gives to its
postpaid customers rather than amortized such cost over 12 months, in
accordance with its current practice under Mexican 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.
Our reconciliation of EBITDA to consolidated net profit (loss) under
Mexican GAAP as of December 31, 2002, 2001 and 2000, is as follows:
Years ended December 31,
2002
2001
2000
EBITDA
Ps.
1,852,287
Ps.
2,665,498
Ps.
2,105,591
Depreciation and amortization
(2,121,610
)
(2,715,103
)
(2,516,675
)
Integral financing cost
(671,171
)
(132,205
)
(163,806
)
Equity participation in net (loss)
gain of associated companies and
net (loss) gain
on sale of equity investments
(9,741
)
6,889
2,619
Assets tax and income tax
(120,470
)
(154,749
)
(165,246
)
Minority interest
9,761
21,874
17,399
Profit from discontinued operations
—
—
9,370
Cumulative effect of the adoption of
the new accounting pronouncements
—
(6,847
)
—
Net loss for the year
Ps.
(1,060,944
)
Ps.
(314,643
)
Ps.
(710,748
)
(8)
EBITDA margin is calculated by dividing EBITDA by the total
revenues for the respective period.
(9)
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
4
Table of Contents
Lucent Technologies and, in some cases, the net value of
long distance fiber acquired in swaps for long distance fiber of
Iusatel, S.A. de C.V.
, a subsidiary of Iusacell Celular. 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. 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. See Item 5, "Operating and
Financial Review and Prospects — Liquidity and Capital Resources —
Capital Expenditures."
(10)
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 insufficient to cover fixed charges in 1998, 2000, 2001 and 2002.
The fixed charge coverage deficiency for the years ended December 31,
1998, 2000, 2001 and 2002 amounted to Ps.2,736.0 million (U.S.$262.4
million), Ps.490.3 million (U.S.$47.0 million), Ps.81.7 million
(U.S.$7.8 million) and Ps.1,408.0 million (U.S.$135.1 million),
respectively.
(11)
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 to 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 22 to the
Consolidated Financial Statements.
(12)
Covered POPs is the aggregate number of POPs in the geographic
regions in which we have concessions for wireless services 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
).
(13)
Unless otherwise indicated, subscribers refers to the total number of
cellular customers included in our subscriber base in the geographic
regions we cover at the end of the respective periods. A prepaid
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 —
Prepaid Customers."
(14)
Average subscribers represents the rolling monthly average number of
subscribers for the respective periods.
(15)
Average monthly postpaid churn for a given period is 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. See Item
4, "Information on the Company — Business Overview — Cellular Services —
Postpaid Customers" and Item 5, "Operating and Financial Review and
Prospects — Results of Operations."
(16)
Penetration represents the end-of-period subscribers divided by the
end-of-period population in the geographic regions we cover, expressed
as a percentage.
(17)
Effective January 1, 2000, we changed the methodology by which we
determine average monthly minutes of use (MOUs). Under the current
methodology, average monthly MOUs per subscriber for a given period are
calculated by dividing total MOUs (which includes minutes of use from
incoming calls to postpaid customers, which had previously been
excluded) for the period by the sum of the monthly average number of
subscribers for each of the months in such period. Average monthly MOUs
for 1999, which were 77 under the methodology used in 1998 and 1999,
have been restated under the current methodology. See Item 5,
"Operating and Financial Review and Prospects — Results of Operations."
When reporting average monthly MOUs per subscriber, we include "incoming
calls only" prepaid subscribers and the MOUs they generate.
(18)
Effective January 1, 2000, we changed the methodology by which we
determine nominal average monthly mobile wireless revenue per subscriber
(ARPU). Under the current methodology, ARPU for a given period is
calculated by dividing the sum of the nominal monthly revenues and other
cellular revenues (excluding revenues generated from the sale of
handsets and accessories to postpaid customers) 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 1999, which
was Ps.346.0 under
the methodology effective in 1998, has been restated under the current
methodology. See Item 5, "Operating and Financial Review and Prospects —
Results of Operations." When reporting ARPU, we include "incoming calls
only" prepaid subscribers and the revenue they generate.
5
Table of Contents
(19)
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 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.3,527.0 under the old methodology, has been restated under
the new methodology. Nominal cost to acquire a new subscriber for 1998
has not been restated under the new methodology.
Exchange Rates
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, 2002, the Noon Buying Rate was Ps.10.425 per U.S.$1.00. These
currency conversions should not be construed as representations 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.
The following table sets forth the high, low and average Noon Buying Rates
expressed in nominal pesos per U.S. dollar for each of the years ended December
31, 1998, 1999, 2000, 2001 and 2002. The Noon Buying Rate on June 26, 2003 was
Ps. 10.458 per U.S.$1.00.
Noon Buying Rate
(1)
Year ended December 31,
High
Low
Average(2)
1998
10.630
8.040
9.245
1999
10.600
9.240
9.562
2000
10.087
9.183
9.459
2001
9.972
8.946
9.337
2002
10.425
9.000
9.664
(1)
Source:
Federal Reserve Bank of New York
(2)
Average of month-end rates for annual data.
The following table sets forth the high and low Noon Buying Rates
expressed in nominal pesos per U.S. dollar for each of the previous six months.
Noon Buying Rate
(1)
Month end
High
Low
December 31, 2002
10.425
10.103
January 31, 2003
10.978
10.321
February 28, 2003
11.064
10.774
March 31, 2003
11.235
10.661
April 30, 2003
10.770
10.308
May 31, 2003
10.424
10.113
(1)
Source:
Federal Reserve Bank of New York.
B.
CAPITALIZATION AND INDEBTEDNESS
Not applicable.
6
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C.
REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
D.
RISK FACTORS
Risk Factors Relating to Iusacell Celular
We did not receive an extension of the temporary amendment and waiver
to our senior refinancing secured loan and, as a result, the lenders under
that loan have the right to accelerate our repayment obligations.
During the first half of 2003, we exceeded the permitted leverage ratio
under our U.S.$266.0 million Amended and Restated Senior Secured Credit Loan
Agreement, which we refer to as the senior refinancing secured loan, of 2.50.
On April 28, 2003 we and the lenders entered into a temporary amendment and
waiver to the senior refinancing secured loan, which we refer to as the second
amendment and waiver, to increase the permitted leverage ratio under the senior
refinancing secured loan from 2.50 to 2.70. On May 22, 2003, the second
amendment and waiver was extended until June 13, 2003. On June 12, 2003, the
second amendment and waiver was further extended until June 26, 2003.
The second amendment and waiver has not since been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. As a result,
the lenders under the senior refinancing secured loan have the right to declare
the indebtedness under that loan immediately due and payable. If the lenders
thereunder accelerate the loan, defaults would occur under the Iusacell Celular
indenture governing the 10% senior notes due 2004 issued by us, which would
permit the holders of the Iusacell Celular senior notes to accelerate Iusacell
Celular's repayment obligations thereunder. If the lenders under the senior
refinancing secured loan choose to accelerate the maturity of their debt, we
would not have the cash resources to pay such amounts. See Item 5, "Operating
Financial Review and Prospects — Liquidity and Capital Resources
— Long-Term
Indebtedness — Loan Covenant Waivers and Modifications."
We are unable to service our indebtedness and, as a result, we also
face a substantial risk of Mexican reorganization-related proceedings and
the suspension or termination of all or a portion of our business under our
concessions.
As an event of default under the senior refinancing secured loan currently
exists, the lenders under that loan have the option of taking legal action
against us, including instituting a reorganization proceeding in Mexico.
Further, we may choose to institute a voluntary reorganization proceeding
under Mexican law. If any such proceedings were to be instituted, we could not
predict their duration. We are not aware of any regulated company of our size
that has successfully completed a restructuring under the new Mexican
reorganization law since it was passed in May 2000. A reorganization
proceeding is likely to result in significant changes to our existing
obligations which could include the cancellation or rescheduling of all or part
of those obligations, including the Iusacell Celular senior notes. During the
pendency of any such proceeding, our ability to operate or manage our business,
to retain employees, to maintain existing or create new client relationships,
to continue to collect payments for our services or to obtain any type of
funding or financing would likely be materially adversely affected. Moreover,
in the event of our bankruptcy, our operating concessions which are critical to
our business, may be subject to termination. There can be no assurance that
the holders of the Iusacell Celular senior notes would receive any meaningful
recovery from a bankruptcy proceeding.
7
Table of Contents
Our parent company, Iusacell, is in default of its obligations under
its 141/4% senior notes due 2006 and, after the expiration of the grace
period, the holders of those notes will have the right to accelerate
Iusacell's repayment obligations, which will cause an event of default under
our senior refinancing secured loan.
Our parent company, Iusacell, did not generate sufficient cash flows from
operations to make the June 1, 2003 U.S.$25.0 million interest payment on its
141/4% senior notes due 2006, which we refer to as the Iusacell senior notes.
As a result, Iusacell did not make that payment. Iusacell has a 30-day grace
period to make the payment before an event of default will occur. Since
Iusacell does not anticipate making the June 1, 2003 interest payment within
the grace period, an event of default under the indenture governing the
Iusacell senior notes, which we refer to as the Iusacell indenture, will occur
and the holders of the Iusacell senior notes will have the right to declare
Iusacell's indebtedness under the Iusacell senior notes immediately due and
payable. The right of such holders to accelerate Iusacell's repayment
obligations under the Iusacell senior notes will cause an event of default
under the terms of our senior refinancing secured loan and the lenders would
have the right to declare the indebtedness due thereunder immediately due and
payable. If the lenders under the senior refinancing secured loan decide to
accelerate the indebtedness, this will result in an event of default under the
Iusacell Celular indenture governing the 10% senior notes due 2004 issued by
us, which will permit the holders of such notes to accelerate our repayment
obligations under the Iusacell Celular senior notes. Also, should the
foregoing defaults occur, the cross-default provisions contained in our various
other credit agreements may also be triggered.
In the event that the lenders under the senior refinancing secured loan
choose to accelerate the maturity of their debt, we would not have the cash
resources to repay such amounts. Due to the depressed state of the value of
telecommunication assets, it is unlikely that the value of the assets held by
us will be sufficient to satisfy the claims of our creditors, including the
holders of the Iusacell Celular senior notes, which could lead us to bankruptcy
or reorganization.
There is substantial doubt as to our ability to continue as a going
concern.
In its Report of Independent Accountants dated February 28, 2003 (except
for Note 24 for which the date is June 27, 2003), PricewaterhouseCoopers, S.C.
stated that our event of default under the senior refinancing secured loan and
other possible events of default raise substantial doubt as to our ability to
continue as a going concern. We believe that if we are unable to successfully
negotiate with our creditors to preclude acceleration, we will be unable to
service our debt and operate as a viable company.
Mexican reorganization laws may not be as favorable to the holders of
the Iusacell Celular senior notes as U.S. insolvency and bankruptcy laws.
The current Mexican reorganization law is based on the largely untested
Ley de Concursos Mercantiles
enacted in May 2000 (Law of Commercial
Reorganizations), which we refer to as the LCR, which provides for two
different and separate proceedings: conciliation and bankruptcy. The
conciliation phase lasts up to 185 days, absent protracted litigation. This
initial term is subject to extension for two 90-day periods. The objective of
the conciliation phase is to reach an agreement between the debtor and its
creditors to restructure the indebtedness of the debtor. The bankruptcy phase
does not have a specific term within which it must be concluded. It is
expected that
both proceedings are likely to require significantly more time and be
significantly more unpredictable than a reorganization or bankruptcy proceeding
under U.S. laws. If we were to be declared subject to reorganization under the
LCR, the holders of Iusacell Celular senior notes would have to file a claim in
Spanish against the estate of Iusacell in Federal District Court in Mexico
City, Mexico. Upon the court's recognition of a holder of a Iusacell Celular
senior note, as one of our creditors, that holder's claim would be unsecured
and would rank equally with all other unsecured claims filed against our
estate.
We may be unable to fund our capital expenditure programs, or pursue
business opportunities because we are highly leveraged, have insufficient
cash flow and have limited or no access to additional capital.
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 debt financing,
8
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vendor financing, borrowings and equity contributions from Iusacell and its
principal shareholders to meet such funding needs.
As of December 31, 2002, our total consolidated indebtedness was
Ps.4,464.1 million (U.S.$428.2 million), or approximately 36.4% of our total
capitalization.
For the years ended December 31, 2001 and December 31, 2002, our earnings
were insufficient to cover our fixed charges by Ps.81.7 million (U.S.$7.8
million) and Ps.1,408.0 million (U.S.$135.1 million), respectively.
In order to implement our operating strategy through 2004, we will have to
incur significant capital expenditures. Subject to the outcome of our debt
restructuring efforts, we have preliminarily budgeted a total of approximately
U.S.$382.0 million for capital expenditures for 2003, 2004 and 2005, not
including capitalized interest. We have preliminarily budgeted approximately
U.S.$85.0 million for capital expenditures for 2003, including up to U.S.$62.0
million to expand and develop our cellular network.
We will need additional external funding in 2003 in order to make
additional investments in the central regions and expand the advance data
network capabilities into other key cities. As we make additional investments
in our cellular network and pursue long distance and data opportunities, we
will also need additional external funding in 2004 and beyond. Furthermore,
the investments required to keep pace with technological change, such as
extended coverage on the 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 the capital
markets or bank or vendor financing, on acceptable terms or at all.
Our declining revenues throughout 2002, the degree to which we are
leveraged and our inability to obtain additional capital may adversely affect
our ability to finance future operations, to finance necessary capital
expenditures, 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 in the interest of holders of our
securities.
Depreciation or devaluation of the peso relative to the U.S. dollar may
adversely affect our financial condition and results of operations.
While our sales are almost entirely denominated in pesos, the vast
majority of our obligations are denominated in U.S. dollars. As a result,
unless we enter into hedging arrangements, 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, but depreciated by 13.9% during
2002. In the past, the peso has depreciated substantially against the U.S.
dollar and may depreciate significantly in the future.
Declines in the value of the peso relative to the U.S. dollar could
adversely affect our financial condition and results of operations and 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 in
each region in which we operate from
Radiomóvil Dipsa, S.A. de C.V.
, commonly
known as Telcel. 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 operational resources than those available to us, nationwide cellular
concessions, a nationwide cellular network and the ability to use Telmex's
installed telecommunications systems. Competition in the Mexican cellular
services 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 substantial discounts. 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
Telefónica Móviles
Mexico, S.A. de C.V.
, which we refer to as Telefónica, a subsidiary of
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Telefónica Móviles, S.A.
, a Spanish telecommunications service provider, that
in 2002 concluded the acquisition of
Pegaso Comunicaciones y Sistemas, S.A. de
C.V.
, which we refer to as Pegaso, 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.
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 in certain cities 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,
wireless local telephony and data transmission services. Competition may lead
to increases in advertising and promotional spending, along with increased
demands on access to distribution channels. These factors may lead to smaller
operating margins, greater choices for customers and increasing movement of
customers between competitors, which may make it difficult for us to retain
customers or add new customers.
The Mexican government may grant additional concessions to other companies
to provide services similar to or the same as those that we provide. In
addition to Telcel and Telefónica, other competitors may also have greater
financial, corporate and other resources, which may limit our ability to
compete effectively.
The technology we use may be made obsolete by advancements in
technology.
All companies in the global telecommunications industry must adapt to
rapid and significant changes in technology. The technology that we have
selected in our cellular services business may become obsolete by market demand
for 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.
A significant portion of our accounts receivable is represented by a
small number of distributors.
Our three largest distributors accounted for 52% and 44% of our net trade
accounts receivable as of December 31, 2002 and 2001, respectively. We have
established certain measures to reduce the risk associated with this
concentration, such as certain guarantees and liens. As a result, the absolute
number of accounts to which these receivables are attributable has decreased.
Although we believe that this distributor concentration will be reduced over
time, 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 Parent Company's Shareholders
Verizon and Vodafone, Iusacell's principal shareholders, announced that
they have agreed to sell all of their interest in Iusacell and, as a result,
Verizon will lose management control over our operations and Vodafone will
no longer provide us with other support services.
Since Verizon (formerly known as Bell Atlantic) assumed management control
of Iusacell's Board of Directors and management, Verizon consultants and
Verizon personnel provided on a secondment basis to Iusacell have been
integrally involved in managing our day-to-day operations and defining and
implementing our long-term strategy. Verizon currently has the right and power
to elect a majority of the members of Iusacell's Board of Directors and, with
certain exceptions, to unilaterally determine our policies and strategy.
Vodafone, Iusacell's other principal shareholder, provides us with
management, marketing, legal and other consulting services.
On June 13, 2003,
Movil Access, S.A. de C.V.
(Movil Access), a Mexican
telecommunications service provider and a subsidiary of
Biper, S.A. de C.V.
,
which is a part of
Grupo Salinas
, announced that it would commence a public
tender offer in Mexico and the United States to buy all of Iusacell's
outstanding capital stock. Verizon and
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Vodafone have announced that they have
agreed to tender all of their Iusacell shares to Movil Access. See Item 4,
"Information on the Company — History and Development of the Company."
If the National Banking and Securities Commission (
Comisión Nacional
Bancaria y de Valores
) approves the tender offer and Verizon tenders all of its
Iusacell shares, Verizon will lose its ability to manage us. Verizon will then
no longer be in a position to determine our policies and strategies, provide
personnel to us on a secondment or consulting basis, manage our operations or
provide the technical support, as well as operating synergies that we have
historically relied on. We cannot predict the strategy that we will implement
following any such management change. In addition, if Vodafone tenders all of
its Iusacell shares, Vodafone will no longer provide us with management and
other services.
The sale of Verizon's interest and Vodafone's interest in Iusacell will
constitute a change of control under the Iusacell Celular indenture and, as
a result, each holder of the Iusacell Celular senior notes may require
Iusacell Celular to repurchase all or any part of that holders' Iusacell
Celular senior notes and we may be in default of our obligations under our
senior refinancing secured loan.
The sale of Iusacell's shares by Verizon and Vodafone will constitute a
change of control under the Iusacell Celular indenture governing the Iusacell
Celular senior notes. As a result, each holder of the Iusacell Celular senior
notes may require Iusacell Celular to repurchase, in whole or in part, that
holder's Iusacell Celular senior notes. We cannot assure you that we will have
sufficient funds or the ability to obtain sufficient funds on a timely basis to
pay for any or all of the debt that we may have to repurchase as a result of
this change of control.
In addition, under our senior refinancing secured loan, the sale of
Iusacell's shares by Verizon and Vodafone will constitute a change of control,
which would constitute a default and, unless the default is waived, the lenders
under that loan would have the right to declare all amounts outstanding under
that loan immediately due and payable. If the lenders accelerate amounts due
under that loan, we cannot assure you that we will have sufficient funds or the
ability to obtain sufficient funds on a timely basis to pay for those amounts
due.
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 conditions for renewal, however, are
not fully defined. 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, 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 reduce the value of our
concessions and adversely affect our financial condition and results of
operations.
Our financial statements may not give you the same information as
financial statements prepared under U.S. generally accepted accounting
principles.
We prepare our 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, accounting for
derivative financial instruments, gains from the exchange of non-monetary
assets, the provisioning for the consolidation of facilities and sale-leaseback
transactions. In particular, all such Mexican 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 22 to our Consolidated Financial Statements.
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The general political and economic conditions in Mexico may adversely
affect our business, financial condition and results of operations.
We are a Mexican company, and most of our operations are in Mexico. As a
result, our business, financial condition and results of operations may be
significantly affected by the general condition of the Mexican economy, by
devaluation of the peso, by inflation and high interest rates in Mexico, or by
political or economic developments in Mexico. The Mexican economy contracted
at a rate of 0.3% in 2001 and grew at an annual rate of only 0.9% in 2002.
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 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,
disparity of wealth 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 adversely affect our financial condition and
results of operations.
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
our debt obligations.
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 our debt is brought in
Mexico, Mexican law permits us to pay a resulting judgment in pesos. Under the
Mexican Monetary Law, an obligation payable in 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 our debt:
•
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
, which are denominated in pesos and adjusted
periodically for inflation by the Bank of 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 additional 10% tax on telecommunications services approved by the
Mexican Congress may adversely affect the ability of wireless companies,
including Iusacell Celular, to attract new customers.
On January 1, 2002, the Mexican Congress approved a surcharge that
assesses an additional 10% federal excise tax on certain wireless
telecommunications services. The tax resulted in a 10% increase in the monthly
bills of
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postpaid mobile wireless customers and in the cost of prepaid cards in
denominations of Ps.200.0 (U.S.$19.18) or more for the year 2002. In February
2002, we filed an injunctive action (
amparo
) challenging the Mexican
government's implementation of the tax. In October 2002, we received a
preliminary ruling in its favor by a Federal Judge, and the Mexican government
subsequently filed an appeal. In June 2003, Mexico's Supreme Court rejected
the appeal and affirmed the ruling in favor of us.
In 2003, the Mexican government implemented a modified version of the
additional 10% excise tax on certain wireless telecommunications services,
which was approved by the Mexican Congress. In March 2003, we filed an
injunctive action challenging this implementation. Until this injunctive
action is resolved, we will continue to pay the full modified additional 10%
excise tax to the Finance Ministry. In the prepaid segment, the modified
version of the additional 10% excise tax is being applied to every prepaid plan
with an airtime per-minute rate of more than Ps.3.50 (U.S.$0.34), which differs
from the 2002 initiative that taxed prepaid cards with a face value equal to or
in excess of Ps.200.0 (U.S.$19.18).
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 9.0%, 4.4% and 5.7% in 2000, 2001, 2002, respectively, and was 1.3%
for the three-month period ended March 31, 2003. 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.
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
™ brand name.
Iusacell Celular currently operates primarily in Mexico under Mexican
legislation, including, among others, the 1995 Telecommunications Law (
Ley
Federal de Telecomunicaciones
), the 1993 Foreign Investment Law (
Ley de
Inversión Extranjera
) and the Mexican Companies Law (
Ley General de Sociedades
Mercantiles
), although the sale of our securities in the United States also
makes us subject to certain securities laws of the United States. See
"—
Business Overview — Government Regulation" for a discussion of certain of the
regulations to which we are subject.
Iusacell Celular was formed in 1992 to hold the principal
telecommunications interests of the Peralta Group, which was primarily
comprised of 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, through one of its subsidiaries, 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, an Iusacell
Celular subsidiary received a concession to provide long distance service and
began providing such service in August 1996.
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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 and analog network. Through December 31, 2002, Iusacell
Celular has purchased approximately U.S.$433.1 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. Iusacell completed this offer 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. Iusacell completed this
offer 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 30,000 old Iusacell Celular shares. As a result of
this reverse split, Iusacell now holds 100% of the capital stock of Iusacell
Celular.
On December 29, 1999, Iusacell Celular entered into a series of agreements
with
MATC Celular, S. de R.L. de C.V.
, the Mexican subsidiary of American Tower
Corporation, which we refer to as MATC Celular, with respect to Iusacell
Celular's existing towers and future tower needs. Under these agreements,
which were amended in May 2002, MATC Celular, among other things, is required
to build towers or find space on existing towers, which Iusacell Celular's
subsidiaries lease. The term of the lease is 10 years with two five-year
renewal periods. As of May 30, 2003, Iusacell Celular's subsidiaries lease
from MATC Celular 715 sites, including 320 transfer sites, a number of
built-to-suit sites and co-locations.
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 names of the subsidiaries which hold
Iusacell capital stock directly remained unchanged. In April 2001, Vodafone
acquired the Peralta Group's 34.5% equity interest in Iusacell for U.S.$973.4
million.
On October 19, 2001, Iusacell Celular completed the acquisition of a 78.3%
ownership interest in Portatel for Ps.595.3 million (U.S.$57.1 million).
Iusacell Celular also reached an agreement to acquire the remaining 21.7%
ownership in Portatel for Ps.168.9 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 Yucatan,
Campeche, Quintana Roo, Chiapas and Tabasco in southern Mexico. On November
2001, Iusacell completed a rights offering to holders of its outstanding Series
A and V shares and Series V American Depositary Shares (ADSs) for the aggregate
amount of U.S.$100.0 million. The proceeds were used in part to finance the
acquisition of Region 8.
Over the 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.$460.4 million in capital expenditures, primarily
for our cellular communications network, long distance network and billing,
customer care and administrative systems.
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See Item 5, "Operating and Financial
Review and Prospects — Liquidity and Capital Resources — Capital Expenditures."
During the first quarter of 2003, we invested approximately US$1.0 million
in our cellular regions to expand our coverage. In 2003, subject to the
outcome of our debt restructuring efforts, we have preliminarily budgeted a
total of approximately U.S.$85.0 million for 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. All
of this capital equipment will be deployed in Mexico. We hope to finance our
capital expenditures in 2003 through funds from our operations, vendor and
project financing and the capital markets. See Item 5, "Operating and
Financial Review and Prospects — Liquidity and Capital Resources — Capital
Expenditures."
On June 13, 2003, Movil Access, a Mexican telecommunications service
provider and a subsidiary of
Biper, S.A. de C.V.
, which is a part of
Grupo
Salinas
, announced that it would commence a public tender offer in Mexico and
the United States to buy all of Iusacell's outstanding capital stock, which
includes all of Iusacell's outstanding series A and series V shares (including
all of Iusacell's outstanding American depositary shares representing series V
shares), for U.S.$10.0 million. In Mexico, Movil Access would offer a price of
Ps.0.05712180 (or the U.S. dollar equivalent) per series A share and
Ps.0.05712180 (or the U.S. dollar equivalent) per series V share. In the
United States, Movil Access would offer the U.S. dollar equivalent of
Ps.5.712180 per American depositary share representing series V shares.
Iusacell's two principal shareholders, Verizon (which owns a 39.4% interest in
Iusacell) and Vodafone (which owns a 34.5% interest in Iusacell), have
announced that they have agreed to tender all of their Iusacell shares to Movil
Access. The tender offer is subject to approval by the National Banking and
Securities Commission (
Comisión Nacional Bancaria y de Valores
).
There have not been any public takeover offers by us for the shares of
other companies during 2002 and 2003.
Our principal executive offices are located at Prolongación Paseo de la
Reforma 1236, Colonia Santa Fe, Delegación Cuajimalpa, 05348, Mexico, D.F.,
which is also where we are domiciled. 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 www.iusacell.com. The information on our website is not
incorporated into this Annual Report.
B.     BUSINESS OVERVIEW
We are a wireless telecommunications services provider in Mexico with
nearly 2.1 million mobile wireless customers at December 31, 2002,
approximately 83% of which are prepaid customers. 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, which combined represent approximately 80 million POPs comprising 78%
of Mexico's total population.
Since February 1997, Iusacell Celular has been (whether directly or
indirectly through Iusacell) under the management control of subsidiaries of
Bell Atlantic (which is now Verizon). From late 1993 through February 1997,
Bell Atlantic participated substantially in the financial and technological
operations of Iusacell Celular. Since Bell Atlantic assumed control of our
Board of Directors and management through its ownership interest in Iusacell,
Bell Atlantic consultants and Bell Atlantic personnel provided on a secondment
basis to Iusacell have been integrally involved in managing our day-to-day
operations and defining and implementing our long-term strategy. The
management team is supported by an experienced group of Mexican executives and
other personnel from Verizon and Vodafone. Through December 31, 2002, Verizon
has invested approximately U.S.$1.3 billion for its current 39.4% economic and
voting interest in Iusacell, which holds a 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 2,044,293 subscribers as of December 31, 2002. Of these subscribers,
as of December 31, 2002, 351,782 were postpaid customers who purchase cellular
services pursuant to fixed-term contracts, and the remaining 1,692,511 were
customers who pay for their cellular services in advance primarily through the
purchase of prepaid calling cards. As of December 31, 2002, approximately 69%
of these
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prepaid 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. Our postpaid and prepaid subscribers who can
make outgoing calls and receive incoming calls had an average monthly cellular
revenue per subscriber (ARPU) during 2002 of Ps.384.0 (approximately
U.S.$36.8), with prepaid subscribers in this group having an ARPU of Ps.206.0
(approximately U.S.$19.8) during 2002.
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 January 2003, we launched the
country's first CDMA2000 1XRTT voice and high-speed data network in Mexico
City. With this advanced network, we increased voice capacity and offered
subscribers new data services such as high-speed instant messaging, e-mail and
Internet access at speeds of up to 144 kilobits per second (kbps). We offer
the corporate sector mobile office capabilities and applications designed to
meet the needs of specific mobile users such as field sales and service
personnel. In addition to the 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.
100% of Iusacell Celular's series A shares and series B shares are owned,
directly or indirectly, by Iusacell. Iusacell currently has two principal
shareholders, Verizon and Vodafone. Verizon owns a 39.4% equity interest and
Vodafone owns a 34.5% equity interest in Iusacell. For more information on
Iusacell's principal shareholders, see Item 7, "Major Shareholders and Related
Party Transactions — Major Shareholders."
Movil Access recently announced that it would commence a public tender
offer in Mexico and the United States to buy all of Iusacell's outstanding
capital stock. Verizon and Vodafone announced that they would tender all of
their Iusacell shares to Movil Access. See "— History and Development of the
Company."
Competitive Strengths
Digital Technology Platform
In August 1999, upon completion of the 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. In January 2003, we launched the first CDMA2000 1XRTT
network in Mexico City, providing advanced high-speed data transmission
services and wireless Internet primarily to corporate customers.
For the fourth consecutive year, in 2002, 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
surpassed COFETEL minimum standards for dropped calls, ineffective attempts and
set-up time to place a call by 5%, 4% and 12 seconds, respectively, in the 17
audited cities in our core cellular regions, including Mexico City.
Brand Name
All of the services that we offer use the
Iusacell
(™) brand name to
increase consumer awareness and customer loyalty. We believe that the high
"share of voice" and "top of mind" awareness maintained by the
Iusacell
brand
name has allowed us to make more cost-efficient marketing investments compared
with those of our competitors.
The
Iusacell
(™) brand name is recognized beyond the regions where we
currently 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.
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The Telecommunications Industry in Mexico
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 Rio 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 Rio Colorado in northwestern Sonora).
Hermosillo, Ciudad Obregón, Culiacán and Mazatlán.
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, León, Querétaro,
San Luis Potosí and Zacatecas and 12 municipalities in northeastern
Jalisco.
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, which was then the sole provider of landline local and long distance
service and competing in 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 sale 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.
, which is known as América Móvil.
Telcel holds the Cellular B-band in each of the nine cellular regions and
is Mexico's largest mobile wireless operator. Our subsidiaries hold the
Cellular A-band concession in Regions 5, 6, 7, 8 and 9. Telefónica is a
controlling shareholder in
Baja Celular Mexicana, S.A. de C.V.
,
Movitel del
Noreste, S.A. de C.V., Telefonia Celular de Norte, S.A. de C.V.
, and
Celular de
Telefonia, S.A. de C.V.
, which cumulatively hold the Cellular A-band concession
in Regions 1, 2, 3 and 4.
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Underserved Telecommunications Market
Despite the significant increase in wireline and wireless penetration in
Mexico over the last four years, we believe that there remains 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,
2002, there were approximately 14.6 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 countries, including Latin
American countries and the United States, the number of subscribers of wireless
telephone services per 100 inhabitants as of December 31, 2001 and December 31,
2002:
Selected Wireless Telephony Penetration
Wireless subscribers
per 100 inhabitants (1)
Country
2001
2002
Spain
73.4
82.3
Portugal
77.4
81.9
United States
45.1
48.8
Chile
34.2
42.8
Venezuela
26.4
25.6
Mexico
21.7
25.6
Brazil
16.7
20.1
Argentina
19.3
17.8
Uruguay
15.5
15.5
(1)
Source:
International Telecommunication Union 2003 Website.
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 prepaid segment and
wireless traffic.
Cellular Services
History and Overview
We became the first Mexican provider of cellular telecommunications
services in 1989, when we commenced operations 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 Iusacell Celular serves 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
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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
We offer cellular telecommunications services in a variety of plans, which
are divided into two basic groups: either "postpaid" — where the customer is
billed monthly for the previous month based on a contracted length of service —
or "prepaid" — where the customer pays in advance for a specified volume of use
over a specified period.
Postpaid Customers
As of December 31, 2002, postpaid subscribers totaled 351,782, comprising
17% of our customer base. Average revenue per user (ARPU) in this segment was
Ps.693.0 (U.S.$66.5) as of December 31, 2002.
We also offer a number of value-added services designed specifically to
fulfill the demands of this important group of postpaid subscribers. We offer
value added services such as voicemail, call forwarding, call waiting,
three-way calling, secretarial services and provide English-speaking operators
to serve the English-speaking market in our regions. We also provide financial
news reporting, emergency services, entertainment information, reservations
services and sports reports. Moreover, CDMA digital postpaid customers 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 churn measures both voluntarily and involuntarily disconnected
subscribers. Average monthly postpaid churn for a given period is 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. For more information, see
Item 3, "Key Information – Selected Financial Data."
Voluntarily disconnected subscribers encompass subscribers who choose not
to continue with our postpaid services or choose one of our prepaid options.
Involuntarily disconnected subscribers encompass customers whose service
is terminated after failing to meet our payment requirements.
Average monthly postpaid churn for the 12 months ended December 31, 2002
was 3.6%. Measures taken to reduce churn include retention and loyalty
initiatives such as welcome calls, calls at maturity, anniversary calls,
proactive contract renewal campaigns, reactive retention operations and
periodic calls to customers to ensure satisfaction. In addition, we conduct
outreach calls to customers whose contracts are ending or who choose to
terminate service offering them a range of alternative service plans based on
their profile to encourage contract renewal.
Prepaid Customers
In contrast to postpaid subscribers, prepaid customers typically generate
lower levels of cellular usage, have access to a limited number of value-added
services, may already own a handset, or may choose to purchase a
handset with preloaded minutes, and often are unwilling to make a fixed
financial commitment or do not have the credit profile to purchase postpaid
plan cellular services. In addition to helping customers control costs, our
prepaid programs have no monthly bill and allow customers to prepay for
cellular services in cash, credit cards and electronic means. As of December
31, 2002, prepaid ARPU was Ps.80.0 (US$7.7).
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The prepaid program markets four different prepaid cards, each of which
credits a specific peso denomination worth of air-time usage to an account to
be used for outgoing and long distance incoming calls over a specified period
of times.
A prepaid 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 prepaid card. The
customer's telephone number is then deactivated, and the customer is considered
to have turned over.
Our current prepaid customers who want to continue to have wireless
service after this time must choose to:
•
continue to be prepaid 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 prepaid customers of another wireless service provider.
VIVA prepaid customers normally have 60 days to use an activated prepaid
card (except for prepaid cards in denominations of Ps.450.0, which we refer to
as Ps.450.0 prepaid cards and which provide their holders 90 days to use an
activated card), 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 (or in the case of Ps.450.0 prepaid
cards, 90 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 (or in the case of Ps.450.0 prepaid cards, 275 days). During this
305-day period (or 275-day period, as applicable), 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 (or
275-day period, as applicable), the customer's account automatically returns to
normal status, and a new 60- or 90-day period, as applicable, begins.
Otherwise, once the 305-day period (or 275-day period, as applicable) lapses,
the customer's telephone number is deactivated.
We evaluate alternative methods of determining prepaid customer turnover
on an ongoing basis, as the current method is dependent upon, among other
things, the number of days of use Iusacell Celular permits before deactivating
a telephone number.
In October 1999, in order to evaluate whether we would be able to generate
additional revenues from "incoming calls only" customers for previously
purchased cards, we extended the period of time to use 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" prepaid customers who had reached the 185-day limit without activating a
new prepaid card. In July 2001, we reduced the initial period for spending an
activated prepaid card and activating a new card from 185 days to the current
60 days (or 90 days in the case of Ps.450.0 prepaid cards). As a result, at
the time, approximately 345,000 subscribers were transferred to the "incoming
calls only" prepaid customer status.
Given the higher turnover among our prepaid customers, we pursue plans to
migrate our qualified prepaid customers to postpaid plans, where customer
loyalty and retention rates have historically been better.
At December 31, 2002, Iusacell Celular had approximately 1,162,188
"incoming calls only" customers. The substantial majority of "incoming calls
only" customers generate little or no traffic. Iusacell Celular's prepaid
subscribers had an average monthly revenue per subscriber during 2002 of
Ps.79.0 (approximately U.S.$7.6).
In order to better focus on active prepaid customers and reduce the
potential turnover from prepaid sales through retail distribution channels, we
implemented in 2001 a new policy under which a pre-activated prepaid sale would
be reported only when the end-user places the first outgoing call.
Accordingly, commissions related to this type of prepaid sale are now paid only
after the end-user places the first outgoing call.
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In March 1999, we substantially completed the installation of the VIVA
prepaid operating system. The VIVA platform tracks customer turnover better
than its predecessor system. This operating system, together with initiatives
to increase the number of distribution points for prepaid cards, adjust
commissions to encourage distributors to sell prepaid cards in higher
denominations, improve customer care and otherwise improve the convenience of
the prepaid program, has enhanced our ability to add and retain prepaid
customers and has increased usage. In 2000, we implemented two important tools
for the sale of prepaid airtime: sales through automated teller machines at
banks and sales over the phone by dialing *AIRE. In early 2002, we introduced
a tool to sell prepaid airtime through our website.
Roaming
Through our roaming agreements with other operators, we offer nationwide
roaming service to our prepaid and postpaid cellular subscribers, and
international service only to our postpaid subscribers. Through these
agreements, subscribers can make 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 us.
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 an 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 Celular 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.
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 1.3%, 1.7% and 2.4% of our total revenues during 2000, 2001 and
2002, respectively. Out-roaming charges represented 6.2%, 4.9% and 3.8% of
Iusacell Celular's total revenues during 2000, 2001 and 2002, 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, Codetel in the Dominican Republic, Telus in
Canada and Puerto Rico Telephone Company as well as AT&T Wireless, Sprint 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. In the first half of 2003, we launched the
international short message services ("SMS") with the main carriers in the U.S.
and Canada enabling our customers to send messages.
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, S.A. de C.V.
(Iusatel) in October 1995 and was modified in
December 1997. Our competitors in
long distance include 9 other companies operating under concessions,
including Telmex, the former long distance monopoly. In the long distance
market, we face increasing competition from alternative providers, as well as
from new technologies such as Short Message Service (SMS) and internet
Telephony. As a result of these factors, our long distance line of business
has contributed less to our total revenues than we expected. We believe that
competition in the Mexican long distance market has stimulated growth in demand
for long distance service.
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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 other carriers. At December 31, 2002, we
provided long distance service in 52 cities to 2,096,049 customers, 2,088,241
of which were existing customers of 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 are entitled to obtain exemptions annually from the presubscription
obligation for our cellular customers. We cannot ensure that we will receive
this exemption in the future. Revenues related to long distance services
represented 10.4% and 8.2% of our total revenues for 2001 and 2002,
respectively, not including dark fiber optic cable sales.
We 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 allowed us to acquire fibers in the long distance fiber optic
networks built by Marcatel and Bestel in central and northern Mexico in
exchange for fibers in the long distance fiber optic network we completed in
central Mexico. As a result, we obtained redundancy in central Mexico and
access to the United States border at minimal cost. We consummated the
agreement with Marcatel in July 2002. The transaction generated an
extraordinary gain of approximately Ps.53.0 million (U.S.$5.1 million) in the
third quarter of 2002.
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.
(which we refer
to as Telereunion), an affiliate of Telescape International, Inc. Upon the
execution 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 whereby Telereunion transferred dark fiber optic assets
in the amount of U.S.$7.4 million to Iusatel in exchange for full settlement of
the past notes receivable in the same amount. In 2001, we also entered into a
fiber optic cable swap agreement valued at Ps.142.7 million (U.S.$13.7 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. In March 2002, the United
States Federal Communications Commission granted to Iusatel USA Inc., a
subsidiary of Iusatel, Iusacell Celular's long distance services provider, a
Section 214 authorization that allows Iusacell to provide global or limited
global facilities-based and resale telecommunications services within the U.S.,
except those states in which Verizon has not yet received Section 271
authorization and permissible international points. Iusatel USA Inc. has
international termination traffic contracts with several U.S. carriers
including Verizon affiliates.
Other Services
Paging
On December 14, 1995, Iusacell Celular and
Infomin, S.A. de C.V.
, which we
refer to as Infomin, formed
Infotelecom, S.A. de C.V.
(Infotelecom) as a joint
venture to market national and international paging services. Iusacell Celular
owns 49% of Infotelecom. See "— Government Regulation — Paging."
Infotelecom began marketing paging services in August 1996 and, at
December 31, 2002, provided service in 34 cities including Mexico City,
Guadalajara, Monterrey, Puebla, Cuernavaca, Toluca, Querétaro, León, and Ciudad
Juárez. As of December 31, 2002, Infotelecom had 8,315 paging customers. Our
revenues from paging services represented less than 0.5% of total revenues for
each of 2001 and 2002.
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Public and Rural Telephony and Local Fixed Wireless
We operate public and rural telephony programs, using 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 uses our cellular network to provide
telecommunications coverage in areas with little or no basic service. As of
December 31, 2002, we had 48,885 cellular telephones in service under our
public and rural telephony programs, representing a 28.7% increase compared to
37,972 cellular phones in service as of December 31, 2001.
As of December 31, 2002, we were providing, on a trial basis pending
approval from Mexico's Ministry of Communications and Transport (
Secretaría de
Comunicaciones y Transportes
), which we refer to as the SCT, local wireless
service in the 450 MHz frequency band to 7,041 customers in selected markets in
Region 9. We do not charge our local wireless customers fees for incoming
calls.
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, we reached an agreement with SCT
agreed on a process according to which we 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 all
nine geographic regions 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 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.
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 2003.
In January 1997,
Iusatelecomunicaciones, S.A. de C.V.
(Iusatelecomunicaciones), Iusacell Celular'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 to 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 began providing fixed data transmission
services. We offer three types of services through our fiber optic network
calling: (i) private lines such as E-1, E3/DS3 and STM1 directly to carriers
and large corporate customers; (ii) Internet access to carriers and ISP
providers; and (iii) digital multiservices connection to the customer's private
branch exchange (PBX) to reduce costs for cellular and long distance calls to
carriers and corporate customers.
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In January 2003, we launched Mexico's first CDMA2000 1XRTT voice and
high-speed mobile data network in Mexico City. With this advanced network, we
have increased our voice capacity and offer subscribers new data services such
as high-speed access for internet, intranet, e-mail, instant messaging,
multiple download for multimedia applications and M2M solutions at speeds of up
to 144 kilobits per second (kbps). Our targeted customers are primarily
Mexican-based carriers and corporations.
Microwave Transmission
In December 1998, the SCT issued three 20-year concessions to
Punto-a-Punto Iusacell, S.A. de C.V.
(Punto-a-Punto Iusacell), 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.45.0 million (U.S.$4.3 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
capacity in these frequencies to other users to enable them to install their
own microwave links.
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 installed
links in those frequencies.
Seasonality
Taken as a whole, our business is not materially affected by seasonality.
Sources of Revenues
For a breakdown of our total revenues by source for the years ended
December 31, 2001 and 2002, see Item 5, "Operating and Financial Review and
Prospects — Operating Results — Year Ended December 31, 2002 Compared to Year
Ended December 31, 2001."
Sales and Marketing
Our marketing strategy is directed to achieve profitable growth,
particularly in our mobile wireless business. We have focused our sales and
marketing strategy on the high-value digital customer, defined as the person
who utilizes and depends on cellular communications on a daily basis. We seek
to increase our average monthly revenue per subscriber, control and sustain our
churn rates, decrease the cost of acquiring additional postpaid and prepaid
subscribers and grow our mobile wireless subscriber base profitably.
During the second half of 2002, we performed a deeper segmentation in our
subscriber base. Our mobile wireless subscribers are now cataloged according
to four different usage profiles. We are implementing distribution,
advertising, customer service support and pricing plans targeted to each
specific customer segment and to increase airtime usage. Our customer
relationship management initiatives have included a variety of tools that
manage the relationship cycle from sales, to support and billing.
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 corporate 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,
2002, Iusacell Celular had 57,513 points of distribution, as compared to
45,985, 20,762, 6,522 and 2,280 at December 31, 2001, 2000, 1999 and 1998,
respectively. As of December 31, 2002 these points of sale comprised 128
customer sales and service centers owned and operated by Iusacell Celular,
1,152 points of sale operated by independent distributors and national
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retailers who offer all of our products, and 55,837 points of sale for
distribution only of VIVA prepaid 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 continuous training, a basic salary and monetary incentives so
that the sales force is encouraged to activate profitable and loyal accounts,
cross-sell the full complement 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
accessories. Walk-in customers can subscribe to cellular service postpaid
plans, purchase prepaid cards, sign up for long distance service and purchase
equipment such as handsets and accessories. In an effort to maximize customer
loyalty, reduce postpaid churn and prepaid 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 key
distribution channels.
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 8 new customer sales and service
centers. In 2002, we opened 1 new customer sales and service center. We now
have a total of 128 customer sales and service centers throughout our cellular
regions. In the second half of 2002, we decided to perform a series of
revisions to our service centers, including performance and location
assessments. As a result, in 2003 and 2004, we will perform the re-location
and remodeling of all of the owned stores, and we will continue opening stores
in high-traffic areas and shopping centers nationwide.
In 2001 face-to-face customer service was integrated into certain of our
owned stores in an effort to further personalize the service. In 2003, we
expect to include a customer service representative in all of the stores we
own.
Corporate Sales Force
To service the needs of our corporate customers, we have created a direct
sales force, which, at December 31, 2002, included 79 full-time sales
representatives. This group of trained representatives seeks to increase sales
by:
•
aggressively pursuing sales opportunities in the corporate segment;
•
"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.
Independent Distributors
In order to broaden our market, we maintain relationships with a broad
network of exclusive distributors and national retailers that, at December 31,
2002, sold all of our products at 1,548 points of sale in Mexico. With the
intention of relying to a lesser extent on certain large distributors, in 2002
we began to directly contract with key
distribution channels that had previously been served via third party
distributors. In addition, VIVA prepaid cards were distributed at an
additional 55,837 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.
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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 us,
working out of their own premises to better target their customers. These
agents provide additional distribution outlets with minimal support from us.
We used to retain commission agents as a flexible sales force throughout our
regions with management from our customer sales and service centers. This
channel was redeployed in early 2003.
Telemarketing
From time to time, Iusacell Celular engages telemarketing service
providers as a direct marketing mechanism or to follow up on targeted outbound
calls and receive calls through an 800 number.
Electronic Means
We have implemented three important electronic tools for the sale of
prepaid airtime: sales through automated teller machines at banks, sales over
the phone by dialing *AIRE and sales through our website –www.iusacell.com.
Sales at ATM machines are charged against our customer's bank account by using
a personal identification number. We have implemented ATM sales at
Banamex-Citibank, BBVA Bancomer, Bital and Bancrecer. In first half of 2003,
we entered into additional ATM distribution agreements for the sale of prepaid
airtime. Sales using *AIRE and our website are charged to our customer's
credit card.
Advertising
In 2002, Iusacell Celular launched an integrated media plan, including a
repositioning campaign, also emphasizing the benefits of our products. The
effort is supported by the
Iusacell
™ brand image. All product offerings
have been marketed under the single,
Iusacell
™ brand name which was
reinaugurated as
Iusacell Valora tu Espacio
in 2002, as part of the
repositioning campaign launched in the later part of the year. This
customer-oriented campaign was focused on customer satisfaction and supported
by higher value 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 and Iusacell Celular, with an emphasis on customer care and to target
potential subscribers through a coordinated print, radio, television and fixed
and moving outdoor advertising campaigns. 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.
Customer Service
We view superior customer service as essential in order to distinguish
ourselves in the competitive Mexican wireless telecommunications market.
Postpaid customers can access dedicated support by dialing *611, where trained
customer service representatives are equipped to answer questions regarding
services and products 24 hours a day. 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 post-sales support, is
essential to developing brand loyalty and supports the efforts of our sales
force to cross-sell our services and products. Prepaid customers can access
support by dialing *VIVA.
The VIVA prepaid operating 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
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with real-time data and a full customer profile
in hand. 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
Celular's services and products. We completed the process of upgrading our
Automatic Call Distribution (ACD) system in the second half of 2002. At the
same time, we also completed the process of upgrading our monitoring and
workforce management systems.
In 1998, we opened two call centers that provide more automated and
efficient service to customers. In 2002, we consolidated these facilities into
one center that manages all customer care operations for all of our concession
areas. In order to accelerate the problem resolution process at both the call
centers and in our company owned stores, we implemented the Customer Attention
Support Team (CAST) program, which has been extended to all of 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
addition, we are in the process of dedicating a customer support function in
each company-owned store.
In 2003, we redesigned the compensation plan for customer care
representatives. Whereas our customer care representatives previously received
a fixed salary under our compensation plan, the compensation plan today is
designed to motivate the customer service force by compensating customer care
representatives based on performance as measured according to various service
indicators. This plan provides continuous training and certification and basic
salary and monetary incentives designed to encourage resolution of customer
problems, subscriber retention, loyalty, precision and quality.
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 Celular's customer care process. Our most
recent quality audit was conducted in mid-2002; however, we did not seek
re-certification. At year-end 2002, we began the certification review process
for Customer Operations Performance Center (COPC) accreditation, which
certifies customer contact operations according to international best
practices.
Pricing
General
. Iusacell Celular offers a variety of flexible pricing options
for our mobile wireless service. The primary components of the postpaid
pricing plans include monthly fees, additional per-minute usage charges and a
number of free minutes per month. The prepaid program markets cards which
credit peso amounts to a customer's account. The cards can be used for
outgoing and long distance incoming calls over a period of 60 days (or in the
case of Ps.450.0 prepaid cards, 90 days). See Item 4, "Information on the
Company — Business Overview — Cellular Services — Prepaid Customers." Most of
the postpaid plans include a selection of free cellular handsets. The prepaid
plans do not provide free cellular handsets.
We continually review market pricing in order to maintain a competitive
offer and attract customers from our target market. As a result, 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."
Postpaid Plans
. The 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 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
minutes included, a less expensive handset and higher per minute airtime
charges than those options chosen by high-usage customers.
In March 2003, we launched a new set of postpaid value plans aimed to
position us as the best alternative for the targeted high-value market segment.
These new postpaid plans were designed according to the needs of targeted
consumer segments and are supported by advertising and marketing campaigns that
anchor the effort.
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The three new postpaid value plans include a NAFTA plan, in which local
calls, as well as calls within Mexico, the U.S. and Canada, are all priced at
the same per minute rate; an unlimited nights and weekends designed to increase
cellular traffic leveraging non-peak utilization hours; and a basic plan with
affordable rates designed to compete directly with competitors' plans by
incorporating higher baseline minutes. Furthermore, we offer multi-line plans
designed to fit the communication needs of small groups of users. Finally, in
Region 8, the region we have entered most recently, we offer local plans with
competitive per minute pricing.
We offer to our corporate customers either a flexible combination of our
various service packages at a volume rate or a large pool of minutes that can
be shared among all users at a competitive per minute price.
Prepaid Plans
. In contrast to postpaid subscribers, prepaid customers
typically generate lower 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. In addition to helping
customers control costs, our prepaid programs have no monthly bill and allow
customers to prepay for cellular services in cash.
In September 1997, we introduced our VIVA prepaid service. VIVA provides
for automated reactivation and value-added services such as voice-messaging.
As of December 31, 2002, VIVA prepaid cards were available in denominations of
Ps.100.0, Ps.150.0, Ps.250.0 and Ps.450.0. In February 2003, new prepaid cards
with aggressive prices per minute were launched in an effort to increase
airtime recharges and to respond to the new tax initiatives implemented by the
Mexican government in January 2003. See Item 3, "Key Information — Risk
Factors — Risk Factors Relating to Doing Business in Mexico."
Hybrid Plans
. In 2000, we launched a hybrid plan which features elements
of postpaid and prepaid plans targeted at high school and university-aged
youths who want the status of a cellular phone but want to control their usage.
In March 2003, we decided to discontinue the hybrid plans because of the high
level of churn experienced.
Activation, Billing and Collection Procedures
We can activate a phone within 15 minutes or less for any prepaid and
postpaid customers through the use of new technologies such as Over The Air
Service Provisioning. For postpaid customers who intend to pay their monthly
charges either with a credit card or in cash there is an automatic credit
scoring process prior to the delivery and activation of a cellular telephone.
Depending on the risk profile resulting from the credit scoring, the deposit
requirements are determined automatically.
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
Schlumberger
Distribution Mexico, S.A. de C.V.
(SchlumbergerSema) 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 a half-an-hour basis for processing by our billing systems. We
have measures in place that enable us to recover billing information that may
be lost as a result of disasters.
We invoice our postpaid customers at the end of each month for the
previous month's service. All customers have 21 credit days, after which they
receive an overdue balance notification, except for a select number of postpaid
customers distinguished by volume, which customers are allowed 36 credit days.
Our payment policy stipulates that after 60 days of non-payment, lines are
suspended, and after 120 days of nonpayment, these lines are disconnected and
considered as delinquent accounts.
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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 performing an automatic credit scoring and depending on the risk
profile, we may require our customers to prepay a certain number of
monthly fees;
•
by requiring payment to be made by credit card;
•
by establishing credit limits and portfolio segmentation, according to customers' credit quality; and
•
by offering prepaid services, which eliminate all credit risk.
For 2000 and 2001, we reserved approximately 1.6% and 1.7% of our cellular
revenues in each year for doubtful accounts. For 2002, we reserved
approximately 1.1% of our revenues for doubtful accounts.
In addition, we also record a revenue provision for those postpaid
customers who have fallen behind on 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 monthly fees upon suspension, in hopes 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, Equipment and IT
Cellular Services
After a thorough analysis that we conducted in coordination with Bell
Atlantic in 1996, we elected to deploy CDMA digital technology instead of
TDMA/GSM technology. Currently, all Verizon affiliates are successfully using
CDMA technology, including those operating in the U.S. markets. CDMA offers
significantly greater call-carrying capacity, superior voice quality, longer
telephone battery life and greater fraud protection than TDMA. In addition,
CDMA is easier to upgrade than TDMA. CDMA data capabilities are superior to
any GSM/GPRS network.
In December 1997, Iusacell Celular signed an agreement with subsidiaries
of Lucent Technologies for the replacement of Iusacell Celular'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.
As of December 31, 2002, our integrated mobile wireless network was
comprised of 6 cellular switches, 582 cellular cell sites, 31 microwave
repeaters, covering 43 million inhabitants or 50% of Mexico's total population
in our concessioned regions. During 2002, we added 45 new cellular cell sites.
Currently, we have 678 microwave links, all of which are owned by us, with
either SDH or PDH technology. Additionally, we have leased lines located mainly
in Region 8. In 1996, we launched long distance services, supported by 3
switches and fiber optic links. Currently, we have 5,176 kilometers of fiber
optic backbone network, in both metropolitan and long distance segments, using
SDH (STM16 capacity in the backbone) and two LD switches operating. In 2001,
we introduced the new Dense Wavelength Division Multiplexing (DWDM) technology
in several high-traffic segments of our fiber optic network to increase
capacity. In 2002, we expanded this technology to three existing links of the
fiber optic network.
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We have a network operations and control center (NOCC) in Mexico City
which oversees, administers and provides technical support to all our cellular
regions. During 2000, we implemented a new network administration system that
provides better surveillance and administration of network performance. In
2002, we installed another center for network operations in Toluca that
provides an alternative monitoring capability for the network in the event an
emergency occurs at the NOCC in Mexico City.
In 2002, we started providing two-way Short Message Service (SMS) and
since January 2003, we have been providing Packet Switched Data (PSD) services
using 3G-1XRTT standard. Currently, we provide 1XRTT services in Mexico City,
Toluca, Cuernavaca and Valle de Bravo and expect to expand our coverage by the
end of 2003.
Our strategy for the future is to improve our coverage, to focus on our
target market (according to our marketing strategy) and to maintain superior
performance and voice quality standards. We will continue to maintain
transmitting equipment to serve both analog and digital equipment. Currently,
we are marketing tri-mode cellular telephones capable of sending and receiving
both analog and digital transmissions in order to support roaming service
between our cellular regions. We will increase coverage and optimize
technology such as the 1XRTT network in order to support the latest data
applications, the Over the Air Service Provisioning Technology and transitions
to the next-generation technology for long distance communications services.
IT
We currently uses the JD Edwards World Software for Enterprise Resource
Planning (ERP), working mainly with various accounting and administrative
modules. We implemented this system in 1994 and have been basically using the
same version of the JD Edwards World Software since implementation. However,
in recognition of the need to upgrade our technology, to improve financial
processes and to take steps to comply with the Sarbanes-Oxley Act of 2002, we
intend on implementing a new release of the JD Edwards World Software in 2003.
To improve the flow of information within the company, we intend on
implementing a corporate data warehouse system in 2003. This repository system
will contain all data related to business processes and will be updated on a
regular basis to ensure that available data will be preserved.
Competition
Wireless mobile communication 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 such rates are set on the basis
of cost. The offering of wireless mobile communication services in Mexico is
highly competitive with one operator, Telcel, commanding a significant share of
the market.
Iusacell Celular faces competition from Telcel, which is the largest
wireless communications provider. Telcel holds the Cellular B-band concession.
Telefónica Móviles, S.A.
also operates its Cellular Band A concessions in the
northern part of Mexico through its Mexican subsidiary. In May 2002,
Telefónica announced an aggressive expansion program with over U.S.$1.5 billion
in capital expenditures planned through 2005 to expand capacity, integrate
their concession areas and overlay a GSM network on their existing
infrastructure. 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 10
additional cities in Mexico.
We also face competition from companies providing mobile wireless
telecommunications services using alternative existing technologies.
Nextel de
México, S.A. de C.V.
began marketing its enhanced specialized mobile radio
services in 1998 and covers 15 cities in Mexico.
In providing long distance telephone service, we face competition from 9
other concession holders, including Telmex and
Alestra S.A. de C.V.
and
Avantel
S.A. de C.V.
, joint venture companies in which AT&T and MCI WorldCom,
respectively, 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
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and 1999. We chose not
to commit significant marketing resources to the balloting process and fared
poorly in the initial balloting results.
In providing data transmission services, we compete for customers with
Telmex, state-owned
Telecomunicaciones de México
and operational long distance
companies to form a highly competitive market with more than 20 participants.
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, local telephony, mobile and other telecommunications
services 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 2001 and 2002, 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 cannot ensure that the initiative will
be presented to Congress for approval in 2003.
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 us and our subisidiaries, 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:
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•     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;
•
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 1993 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). There are no foreign investment participation restrictions with
respect to 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 to 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;
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•
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 Mexican government has 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 Mexican
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. We are 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.
, which 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 equal
to 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 radio
communications 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.
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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 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. 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 continue 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:
Subsidiary
Percent of Gross Revenues Payable To 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.
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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 venture so long as Verizon continued to control the
management of Iusacell 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 expect the transfer of the concession to be
implemented in 2003. The financial statements of Infotelecom are consolidated
with the financial statements of Iusacell Celular. 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 using 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 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.
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These regulations classified radiocommunications services on the basis of
the networks used to provide such services rather than on 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.
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, we have reached an agreement with the SCT on a technical process
by which we can provide local wireless service in the 450 MHz frequency band in
some of the existing service regions and has received a right of first refusal
to acquire the concessions to provide local wireless service in such regions.
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.
In November 1998, Mr. Elizondo agreed to subscribe 5.1% of the capital
stock of Iusatelecomunicaciones, 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.
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.
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.
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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
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, Iusacell 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. Iusacell retained 49% of the voting shares of these
subsidiaries, representing 4.9% of their capital. Iusacell also holds 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,
Iusacell holds a 94.9% equity interest in these two subsidiaries, whose
financial results it consolidates.
To participate in the auctions for concessions for microwave frequencies
concluded in September 1997, we formed Punto-a-Punto Iusacell, 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 us. As a result, Iusacell currently holds only 49% of this
entity, complying with the condition precedent necessary to allow Iusacell's
other partner, Infomin, a Mexican controlled company, to transfer its paging
concession to Infotelecom, as previously agreed.
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 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,
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Table of Contents
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 negotiated with Telmex to obtain similar
terms for both our long distance business and local cellular interconnection
rate and these terms have been maintained until 2003.
United States Regulation
In 1982, Bell Atlantic, like other regional Bell operating companies, was
subject to a consent decree which we refer to as 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 (hereinafter referred to as the "1996
Act"), which became effective on February 8, 1996, includes provisions that
open local telephony markets to competition and permitted regional Bell
operating companies, such as the local operating telephone companies of the
former Bell Atlantic, to provide interLATA services (long distance), video
programming and to engage in manufacturing, under certain conditions. 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 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 cable
systems and satellite 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
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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.
Other laws of the United States may restrict activities of Iusacell 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
100% of our shares are owned by
Grupo Iusacell, S.A. de C.V.
The
following table shows our direct and indirect subsidiaries, their principal
lines of business, their countries of incorporation and the percentages of our
ownership interest and voting power as of December 31, 2002.
% direct and
% direct and
indirect
indirect
Country of
economic
voting
Subsidiary
Line of Business
Incorporation
interest
interest
SOS Telecomunicaciones, S.A. de C.V.
Region 9 cellular
Mexico
100.0
100.0
Comunicaciones Celulares de Occidente,
S.A. de C.V.
(1)
Region 5 cellular
Mexico
100.0
100.0
Sistemas Telefónicos Portátiles
Celulares, S.A. de C.V.
Region 6 cellular
Mexico
100.0
100.0
Telecomunicaciones del Golfo,
S.A. de C.V.
Region 7 cellular
Mexico
100.0
100.0
Iusacell, S.A. de C.V.
Sales and marketing
Mexico
100.0
100.0
Sistecel, S.A. de C.V
Administrative services
Mexico
100.0
100.0
Iusatel, S.A. de C.V.
Long distance
Mexico
94.9
49.0
Iusatel USA, Inc.
(2)
Long distance U.S
United States
94.9
49.0
Iusatelecomunicaciones, S.A. de C.V.
Local wireless
Mexico
94.9
49.0
Grupo Iusacell Nicaragua, S.A.
Inactive
Nicaragua
100.0
100.0
Punto-a-Punto Iusacell, S.A. de C.V.
Microwave transmission
Mexico
94.9
49.0
Infotelecom, S.A. de C.V.
Paging
Mexico
49.0
49.0
Inmobiliaria Montes Urales 460,
S.A. de C.V.
Real estate
Mexico
100.0
100.0
Iusanet, S.A. de C.V.
Services
Mexico
100.0
100.0
Editorial Celular, S.A. de C.V.
Publishing
Mexico
40.0
40.0
Grupo Portatel, S.A. de C.V.
Region 8 cellular
Mexico
100.0
100.0
Portatel del Sureste, S.A. de
C.V.
(3)
Region 8 cellular
Mexico
100.0
100.0
Mexican Cellular Investment, Inc.
Holding company for
Comunicaciones Celulares de Occidente, S.A. de
C.V.
United States
100.0
100.0
(1)
Held through Mexican Cellular Investment, Inc.
(2)
Held through
Iusatel, S.A. de C.V.
(3)
Held through
Grupo Portatel, S.A. de C.V.
All of the above companies, including those in which we own directly or
indirectly a minority voting interest, except for
Editorial Celular, S.A. de
C.V.
, 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, 2002, we operated in our service regions a total of 128
customer sales and service centers, 582 cellular cell sites, 123 repeaters, 31
cellular 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, Guanajuato,
Puebla, Monterrey, Mérida, Tijuana and Ciudad Juárez. We generally own our
cellular network equipment, subject to liens.
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On December 29, 1999, we entered into a series of agreements, which
agreements were amended in May 2002, with MATC Celular with respect to our
existing towers and future tower needs. As of May 30, 2003, our subsidiaries
lease from MATC Celular 715 sites, including 320 transfer sites, a number of
built-to-suit sites and co-locations.
As of December 31, 2002, the book value of our property and equipment,
before accumulated depreciation of Ps.6,894.2 million (U.S.$661.3 million),
consisted of the following:
Value
(in thousands of constant pesos
as of December 31, 2002
and millions of U.S. dollars)
Property and Equipment
Buildings and facilities
Ps.
1,725.4
U.S.$
165.5
Communications equipment
10,762.2
1,032.3
Furniture and fixtures
379.3
36.4
Transportation equipment
61.9
5.9
Computer equipment
1,759.9
168.8
Cellular rental telephones
10.4
1.0
Land
68.9
6.6
Construction in progress
678.0
65.0
Advances to suppliers
1.1
0.1
See Item 5, "Operating and Financial Review and Prospects — Liquidity and
Capital Resources — Capital Expenditures" for a discussion of our planned
capital expenditures and existing encumbrances on our property and equipment.
See also Notes 4 and 8 to the Consolidated Financial Statements.
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, 2002. The
U.S. dollar translations provided in this Annual Report are, unless otherwise
indicated, calculated at the Noon Buying Rate at December 31, 2002, which was
Ps.10.425 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 assess the significant changes and trends in the historical results of
operations and financial condition of Iusacell Celular and its subsidiaries and
the 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 22 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. Note 22 to the Consolidated Financial Statements also
provides a reconciliation to U.S. GAAP of Iusacell Celular's net income (loss)
for the years ended December 31, 2000, 2001 and 2002 and of stockholders'
equity as of December 31, 2001 and 2002.
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 in comparable monetary units. Bulletin B-10 requires us to
restate non-monetary assets, non-monetary liabilities and the
41
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components of
stockholders' equity using the INPC. We have not eliminated the effects of
these inflation accounting principles in the reconciliation to U.S. GAAP. See
Note 22 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, 2002, 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 2000, 2001 and 2002, the
rates of inflation in Mexico, as measured by changes in the INPC, were 9.0%,
4.4% and 5.7%, respectively. The inflation indices used are 1.1036 for 2000
figures and 1.0570 for 2001 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 required to repay the specified amount of the foreign currency liability.
We incurred a foreign exchange loss in 2000 and 2002 on our U.S. dollar
denominated debt as the peso depreciated against 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 required to repay the specified amount of the
foreign currency liability. In 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 2000, 2001 and 2002, 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
in recent years, depreciating by 1.5% and 13.7% against the U.S. dollar in 2000
and 2002, respectively, 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, 4.4% in 2001 and 5.7% in
2002.
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.
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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; and
•
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.
See "— Liquidity and Capital Resources — Certain Hedging Activities" and
Item 11, "Quantitative and Qualitative Disclosures about Market Risk" for a
description of contracts we have used to hedge against the devaluation of the
peso and inflation.
Tower Monetization
In December 1999, we entered into a series of agreements with MATC
Celular. These agreements, which were amended in May 2002, among other things,
gave MATC Celular the right to acquire approximately 350 of our existing
non-strategic towers. We sold and leased back a total of 67 non-strategic
towers to MATC Celular for approximately Ps.91.6 million in net gains in 2002.
During 2001 and 2002, we sold and leased back a total of 311 non-strategic
cellular towers to MATC Celular and fulfilled our contractual obligation under
the existing agreements. We have no further commitment with MATC Cellular to
sell additional towers. We are leasing back these towers from MATC Celular and
subleasing them to our 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 2002, we recorded an
expense reduction under Mexican GAAP of Ps.91.6 million in connection with our
sale of 67 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 2002. Under U.S. GAAP, the gain was deferred and recognized on
a pro-rata basis over the life of the lease. See Note 22 to the Consolidated
Financial Statements for a further discussion.
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Table of Contents
Results of Operations
The following table presents results of operations data for the years
ended December 31, 2001 and 2002.
Year Ended December 31,
2001
2002
Change
Ps.
Ps.
%
(In millions of constant
December 31, 2002 pesos except
percentages)
Total revenues
6,647.3
5,581.6
(16.0
)
Cost of sales
1,960.4
2,037.4
3.9
Operating expenses
2,346.8
1,783.6
(24.0
)
Depreciation and amortization
2,715.1
2,121.6
(21.9
)
Other operating income
325.4
91.6
(71.9
)
Operating loss
(49.6
)
(269.3
)
(442.9
)
Integral financing gain (loss)
132.2
671.2
(407.7
)
Net (loss) profit
(314.6
)
(1,060.9
)
(237.2
)
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. Our cellular service
revenues also include revenues attributable to in-roaming and long distance
service revenue generated by our mobile wireless subscribers, revenues from the
provision of telecommunication services in Mexico other than mobile wireless
telephone service, including long distance service revenues from non-mobile
subscribers and revenues from the provision of data transmission, fixed local
wireless and paging services. Our service revenues 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 the 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.
Year Ended December 31, 2002 Compared to Year Ended December 31, 2001
The following table presents the sources of our revenues for the years
ended December 31, 2001 and 2002:
Year Ended December 31,
2001
2002
Change
Ps.
%
Ps.
%
%
(In millions of constant pesos as of December 31, 2002, except percentages)
Service revenues
6,005.6
90.3
4,989.7
89.4
(16.9
)
Telephone equipment
and other revenues
641.7
9.7
591.9
10.6
(7.8
)
Total revenues
6,647.3
100.0
5,581.6
100.0
(16.0
)
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The table below presents service revenues by source for the years ended
December 31, 2001 and 2002:
Year Ended December 31,
2001
(1)
2002
(1)
Change
Ps.
%
Ps.
%
%
(In millions of constant pesos as of December 31, 2002, except percentages)
Airtime
(2)
3,002.7
50.0
1,517.7
30.4
(49.5
)
Monthly fees
1,842.4
30.7
2,631.4
52.7
(42.8
)
Long Distance
686.4
11.4
436.2
8.7
(36.5
)
Value-added services and
in-roaming
(3)
474.1
7.9
338.1
6.8
(28.7
)
Other
(4)
—
—
66.3
1.4
—
Total service revenues
6,005.6
100.0
4,989.7
100.0
(16.9
)
(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 for and prepaid outgoing minutes net
of unbilled minutes. Incoming and outgoing airtime is charged on a
per-minute basis.
(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 magazines, as well as in-roaming service revenue. Does not
include charges for related airtime. Customers using SMS value-added
services such as news, weather, sports and entertainment reports are
charged only for airtime. These revenues are therefore included in
airtime.
(4)
Includes administrative revenues from our parent company, Iusacell.
The customer base increased 10.2% in 2002, growing from 1,854,697
customers in 2001 to 2,044,293 in 2002. The 2002 growth occurred primarily
during the first half of the year as management focused on increasing the
prepaid customer base. During the second half of the year, both gross and net
additions declined comparatively, reflecting the new emphasis on high-value
customers. Year over year subscriber growth was negatively impacted by this
change in strategy. A high churn rate, particularly in the prepaid and
"incoming calls only" base, combined with continued economic pressures on
Mexican consumption contributed to the decline.
Prepaid customers increased 16.7% in 2002, from 1,450,709 customers in
2001 to 1,692,511 in 2002. The increase in 2002 reflects our efforts at that
time to expand that segment. "Incoming calls only" prepaid customers, the
substantially majority of whom generate little traffic, grew by 51.3% in 2002,
from 768,076 customers in 2001 to 1,162,188 in 2002. Revenues from these
customers do not have certain costs associated with them which we incur in
connection with postpaid customers, such as sales commissions, advertising and
bad debt expenses. A prepaid customer is included as a customer if the
customer's telephone number remains activated at the end of the reporting
period. During the third quarter 2001, we reduced the initial period for using
an activated prepaid card from 185 days to 60 days effective July 1, 2001. If
a customer has not activated a new card or recharged the airtime in its account
at the end of 60 days, the balance of the customer's account becomes zero, and
the customer loses the ability to make outgoing calls for an additional period
of 305 days. During the third quarter 2001, we began to turn over "incoming
calls only" prepaid customers who had reached the end of the additional 305-day
period without activating a new card or otherwise recharging the airtime in
their accounts. In February 2003, in coordination with the launch of
promotional prepaid cards, we extended the initial period for using an
activated Ps.450.0 prepaid card from 60 days to 90 days.
In 2002, postpaid customers declined 12.9% to 351,782 or 17.2% of total
subscribers, due to lower gross additions and increased disconnections of
customers. The December 31, 2002 postpaid subscriber data includes
approximately 48,885 public telephony customers who are considered postpaid
customers due to the contractual nature of their service.
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Gross additions for 2002 totaled 1,080,683 customers, which represents a
2.9% increase over 2001. These additions were mainly derived from the
strategic focus on prepaid additions during the first half of 2002. During the
second half of 2002, however, we implemented a strategic shift, which triggered
sales of higher-value products through changes in the commission structure, but
actually resulted in a decrease in gross additions during the second half of
2002, particularly in the low and ultra-low value prepaid segments.
Average monthly churn for the year declined from 3.9% in 2001 to 3.4% in
2002, although churn increased during the second half of the year as we
actively sought to remove non- or low-revenue producing prepaid customers.
Postpaid subscriber churn decreased from an average monthly level of 3.8% in
2001 to 3.6% in 2002. We have adopted strict collection procedures to reduce
bad debt expense and have implemented new activation policies and retention
programs.
As a result of higher gross additions and lower average churn, net
additions increased 9.0%, from 173,947 customers in 2001 to 189,596 in 2002.
This includes the extraordinary removal during the third quarter of 2002 of
44,506 customers who were determined to be inactive prepaid users and were not
taken into consideration in the blended churn rate for the year.
Total service revenues decreased by 16.9% to Ps.4,989.8 million in 2002,
from Ps.6,005.6 million in 2001, representing 89.4% and 90.3% of total revenues
in 2002 and 2001, respectively. Service revenues decreased as a result of
fewer postpaid customers and lower nominal average monthly cellular revenue per
customer (ARPU).
Monthly fees from postpaid subscribers decreased 42.8% in 2002 from
Ps.2,631.4 million in 2001 to Ps.1,842.4 million in 2002. Monthly fees
decreased primarily due to fewer postpaid customers and an increase in the
number of hybrid subscribers as a proportion of the total postpaid base,
particularly during the first half of 2002. Airtime revenues decreased 49.5%
from Ps.3,002.6 million in 2001 to Ps.1,517.7 million in 2002, primarily as a
result of fewer postpaid subscribers. Long distance cellular revenue decreased
by 36.5% from Ps.686.3 million in 2001 to Ps.436.4 million in 2002. This
decrease is the result of fewer postpaid subscribers and a higher proportion of
incoming only subscribers in the prepaid subscriber base.
Blended average monthly minutes of use (MOUs) for 2002 decreased 25.0%,
from 84 minutes to 63 minutes, primarily due to a higher proportion of prepaid
customers in our subscriber base and reduced consumption. Among postpaid
customers, average monthly MOUs decreased 14.4%, from 250 minutes in 2001 to
214 minutes in 2002, mainly due to the increased proportion of hybrid customers
who have lower consumption patterns than the remainder of the postpaid customer
base. Average MOUs increased 3.6% among prepaid customers, from 28 minutes in
2001 to 29 minutes in 2002, primarily due to promotions aimed at increasing use
by higher value customers in the prepaid customer base.
ARPU decreased 28.5% from Ps.267.0 in 2001 to Ps.191.0 in 2002, as a
result of lower average MOUs and the higher proportion of prepaid customers in
our customer base. Postpaid ARPU decreased 13.2% from Ps.798.0 in 2001 to
Ps.693.0 in 2002, primarily as a result of a higher proportion of hybrid
customers in our customer base. Prepaid ARPU declined 11.1% from Ps.90.0 in
2001 to Ps.80.0 in 2002, due to a higher proportion of lower revenue generating
customers in the customer base during the first half of the year.
Telephone Equipment and Other Revenues
. Telephone equipment and other
revenues decreased 7.8% in 2002, from Ps.641.7 million in 2001 to Ps.591.9
million in 2002. This decrease was primarily due to lower postpaid gross sales
and lower revenues from out-roaming in 2002.
Cost of Sales.
Our cost of sales includes cost of services, cost of
telephone equipment and other costs. Total cost of sales remained relatively
flat in 2002 at Ps.2,037.4 million. As a percentage of total revenues, cost of
sales increased to 36.5% compared to 29.5% in 2001.
Cost of Services.
Cost of services includes taxes and fees on revenues
payable to the Mexican government, interconnection costs, and 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 increased to 27.8% in 2002 from 23.5% in 2001,
although in absolute peso terms, Iusacell Celular's cost of services declined
0.7% to
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Ps.1,549.5 million in 2002 as compared to Ps.1,560.8 million in 2001.
This decrease resulted from stringent financial controls we implemented in
2002, despite higher lease costs associated with an increased number of
non-strategic towers sold to and leased back from MATC Celular during the year.
See "— Tower Monetization."
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 of telephone equipment and other
increased 22.1% in 2002 from Ps.399.6 million in 2001 to Ps.487.8 million
primarily due to partial subsidizing of telephones sold to prepaid customers
and higher cost of dark fiber optic sales. As a percentage of revenues, other
costs increased from 6.0% in 2001 to 8.7% in 2002. As a percentage of the
telephone equipment and other revenues, the cost of telephone equipment and
other increased to 82.4% in 2002 from 62.3% in 2001. The cost of a cellular
handset given to a postpaid customer is amortized over 12 months, the average
length of our cellular contract, instead of being immediately expensed in the
period in which the customer receives the telephone.
Operating Expenses
Operating expenses decreased 24.0% from Ps.2,346.8 million in 2001 to
Ps.1,783.6 million in 2002. As a percentage of total revenues, operating
expenses decreased from 35.3% in 2001 to 32.0% in 2002.
As a percentage of total revenues, sales and advertising expenses
decreased to 24.4% in 2002 from 26.3% in 2001. In peso terms, sales and
advertising expenses decreased 21.9% from Ps.1,747.6 million in 2001, to
Ps.1,364.6 million in 2002, 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 decreased 30.1% from Ps.599.2 million
in 2001 to Ps.419.0 million in 2002, due to stringent cost controls, lower
headcount and restructured compensation plans. As a percentage of total
revenues, general and administrative expenses declined to 7.5% in 2002 from
9.0% in 2001.
Other Operating Income
We had other income of Ps.91.6 million in 2002 mainly as a result of the
sale of 67 towers to MATC Celular. The same towers were leased back from MATC
Celular by our subsidiary
Iusacell Arrendadora, S.A. de C.V.
See "— Tower
Monetization." In 2001, we had other income of Ps.325.4 million from the sale
of 244 towers.
Depreciation and Amortization
Depreciation and amortization expenses decreased 21.9% from Ps.2,715.1
million in 2001 to Ps.2,121.6 million in 2002, primarily due to a reduced level
of capital expenditures during the period, lower handset amortization expenses
attributable to lower postpaid gross additions, more cost-effective handset
purchases and better targeted handset subsidies for high-value customers.
Operating Loss
We reported an operating loss of Ps.269.3 million in 2002, as compared to
a loss of Ps.49.6 million in 2001. Excluding the benefit of tower sales and
the impact of fiber optic inventory sales in both years, we would have reported
operating losses of Ps.360.9 million and Ps.375.0 million in 2002 and 2001,
respectively.
Integral Financing Results
We recorded an integral financing cost of Ps.671.2 million in 2002,
compared to a cost of Ps.132.2 million in 2001. This difference was primarily
driven by a Ps.507.1 million foreign exchange loss resulting from the 13.8%
depreciation of the peso against the US dollar during the year, compared to a
4.8% appreciation recorded in 2001 resulting in an exchange gain that year. As
a result of a higher inflation rate in 2002 of 5.7% compared to a 4.4%
inflation rate in 2001, gains from monetary position increased 26.5%.
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Net Loss
We generated a net loss of Ps.1,060.9 million in 2002 compared to a loss
of Ps.314.6 million in 2001. This result was due primarily to the larger
operating loss and increased integral financing cost. Excluding the tower and
fiber optic-related benefits, we would have reported a net loss of Ps.1,152.6
million in 2002 and Ps.640.1 million in 2001.
Year Ended December 31, 2001 Compared to Year Ended December 31, 2000
Revenues
The following table presents the sources of our revenues for the years
ended December 31, 2000 and 2001:
Year Ended December 31,
(In millions of constant pesos as of December 31, 2002, except percentages)
2000
2001
Change
Ps.
%
Ps.
%
%
Service revenues
5,497.5
90.8
6,005.6
90.3
9.2
Telephone equipment
and other revenues
558.8
9.2
641.7
9.7
14.8
Total revenues
6,056.3
100.0
6,647.3
100.0
9.8
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)
Change
Ps.
%
Ps.
%
%
(In millions of constant pesos as of December 31, 2002, except percentages)
Airtime
(2)
2,677.7
48.7
3,002.7
50.0
12.1
Monthly fees
1,808.2
32.9
1,842.3
30.7
1.9
Long Distance
562.8
10.2
686.4
11.4
22.0
Value-added services and
in-roaming
(3)
448.8
8.2
474.2
7.9
5.7
Total service revenues
5,497.5
100.0
6,005.6
100.0
9.2
(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 for and prepaid outgoing minutes net
of unbilled minutes. Incoming and outgoing airtime is charged on a
per-minute basis.
(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 magazines, as well as in-roaming service revenue. 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.
Prepaid 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 prepaid
subscribers in Region 8 in southern Mexico as a result of our acquisition of
Portatel which represent 6.8% of the total prepaid subscriber base at December
2001. "Incoming calls only" prepaid customers, the substantial 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
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postpaid customers, such as sales commissions, advertising or bad debt
expenses. A prepaid 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
prepaid card from 185 days to 60 days effective July 1, 2001. If a customer
has not activated a new card or recharged the airtime in its account at the end
of 60 days, the balance of the customer's account becomes zero, and the
customer loses the ability to make outgoing calls for an additional period of
305 days. During the third quarter 2001, we began to turn over "incoming calls
only" prepaid customers who had reached the end of the additional 305-day
period 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. The December 31, 2001 postpaid subscriber data includes
approximately 37,972 public telephony numbers that have been considered
postpaid customers since January 1, 2000.
Total service revenues increased by 9.2% to Ps.6,005.6 million (U.S.$576.1
million) in 2001 from Ps.5,497.5 million (U.S.$527.3 million) in 2000 and
represented 90.3% and 90.8% of total revenues in 2001 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.1,808.2
million (U.S.$173.4 million) in 2000 to Ps.1,842.3 million (U.S.$176.7 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.2,677.7
million (U.S.$256.9 million) in 2000 to Ps.3,002.7 million (U.S.$288.0 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.686.4 million (U.S.$65.8 million) in 2001 from
Ps.562.8 million (U.S.$54.0 million) in 2000. This growth is the result of
higher usage by the subscriber base.
Average monthly MOUs for all subscribers for 2001 (excluding "incoming
calls only" prepaid customers) were 117, an increase of 24.5% as compared to
the average monthly MOUs of 94 in 2000. MOUs among postpaid customers
increased by 1.6% from 246 in 2000 to 250 in 2001. MOUs among prepaid customers
also increased by 40.6% from 32 in 2000 to 45 in 2001. This increase in MOUs
was driven by increased traffic growth and greater usage by the total prepaid
subscriber base and the reduction of the period within which to use the prepaid
card from 180 days to 60 days.
Nominal average monthly cellular revenue per subscriber for all
subscribers (excluding "incoming calls only" prepaid customers) increased 15.0%
to Ps.391 (U.S.$37.5) in 2001 from Ps.340 (U.S.$32.6) in 2000. The increase
was driven mainly by higher usage by the subscriber base, increased traffic
growth and the reduction of the period within which to use the prepaid 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 adopted 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.641.7 million (U.S.$61.6 million) in 2001 from Ps.558.8
million (U.S.$53.6 million) in 2000. The 14.8% increase in revenues resulted
mainly from increased out-roaming fees.
Cost of Sales
Total cost of sales increased 1.9% to Ps.1,960.4 million (U.S.$188.0
million) in 2001 from Ps.1,923.9 million (U.S.$184.6 million) in 2000. As a
percentage of total revenues, cost of sales decreased to 29.5% in 2001 from
31.8% in 2000.
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Cost of Services
. 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.1,560.8 million (U.S.$149.7 million) in 2001 from
Ps.1,547.6 million (U.S.$148.4 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 " — Tower Monetization". 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 increased 6.2% to Ps.399.6 million (U.S.$38.3 million) in 2001 from
Ps.376.3 million (U.S.$36.1 million) in 2000 primarily due to the three-month
consolidation of Portatel, partial subsidization of telephones sold to prepaid
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 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.2,346.8 million (U.S.$225.1
million) in 2001 from Ps.2,026.8 million (U.S.$194.4 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 increased to 25.6% in 2001 from 24.6% in 2000. In peso terms, sales
and advertising expenses increased 14.9%, to Ps.1,704.1 million (U.S.$163.5
million) from Ps.1,483.2 million (U.S.$142.3 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.642.6
million (U.S.$61.6 million) in 2001, from Ps.543.6 million (U.S.$52.1 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.325.4 million (U.S.$31.2 million) in 2001 mainly
as a result of the sale of 244 towers to MATC Celular. The same towers were
leased back from MATC Celular by Iusacell's subsidiary,
Iusacell Arrendadora,
S.A de C.V
. See "— 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.2,715.1 million (U.S.$260.4 million)
in 2001, from Ps.2,516.7 million (U.S.$241.4 million) in 2000 primarily due to
the higher postpaid handset amortization expense in 2001.
Operating Loss
We reported an operating loss of Ps.49.6 million (U.S.$4.8 million) in our
Consolidated Financial Statements in 2001, compared to an operating loss of
Ps.411.1 million (U.S.$39.4 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.375.0 million
(U.S.$36.0 million).
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Integral Financing Results
We recorded an integral financing cost of Ps.132.2 million (U.S.$12.7
million) in 2001 compared to an integral financing cost of Ps.163.8 million
(U.S.$15.7 million) in 2000. The lower cost was attributable to several
factors. Net interest expense decreased by 24.3% from Ps.538.8 million
(U.S.$51.7 million) in 2000 to Ps.407.9 million (U.S.$39.1 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.101.3
million (U.S.$9.7 million) in 2001 compared to a foreign exchange loss of
Ps.20.7 million (U.S.$2.0 million) in 2000. We also posted a lower gain in
monetary position of Ps.174.4 million (U.S.$16.7 million) in 2001 compared to a
gain of Ps.395.7 million (U.S.$38.0 million) in 2000 due to the effect on our
net peso liability position of the lower period-over-period inflation rate of
4.4% in 2001 compared to 8.9% in 2000.
Net Loss
As a result of the factors described above, our net loss was Ps.314.6
million (U.S.$30.2 million) in 2001 compared to a net loss of Ps.710.7 million
(U.S.$68.2 million) in 2000.
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 annual consolidated income 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.
In December 2000, the Mexican Finance Ministry (
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 Finance Ministry ruled that
Iusacell Celular's net operating loss carryforwards could 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.165.2 million, Ps.154.7 million and
Ps.111.6 million as
asset tax for 2000, 2001 and 2002 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 2002 and paid the asset taxes
specified above. In 2000, as a result of the new tax consolidation rules, we
paid Ps.47.4 million in income taxes as well as the asset tax specified above,
even though Iusacell recorded a net loss on a fully consolidated basis. In
2002, due to the change in the statutory income tax rate which became effective
annually in 2003, Iusacell and its subsidiaries reduced the deferred tax asset
in 2002, resulting in a provision of deferred asset tax of 163.1 million.
See Note 12 to the Consolidated Financial Statements for a discussion of our
tax loss carryforwards.
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
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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 for 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
were required to be applied beginning on January 1, 2003, although early
adoption was 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 can be classified as development costs.
Bulletin C-8 requires that intangible assets with finite useful lives should be
amortized over their useful lives and those with an indefinite life should no
longer be amortized. The provisions of Bulletin C-8 are required to be applied
beginning on January 1, 2003.
Management is currently evaluating the impact that the adoption of these
bulletins will have on our financial statements.
U.S. GAAP Reconciliation
The principal differences between Mexican GAAP and U.S. GAAP as they
relate to Iusacell Celular 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,
capitalized interest, goodwill and indefinite-lived intangible assets
amortization and sale-leaseback transactions. See Note 22 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 June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143 "Accounting for Obligations Associated with the Retirement of
Long-Lived Assets." The objectives of SFAS 143 are to establish accounting
standards for the recognition and measurement of tangible long-lived asset
retirement obligations and their associated asset retirement costs. SFAS 143
is effective for fiscal years beginning after June 30, 2002.
In April 2002, the FASB issued SFAS No. 145 "Rescission of SFAS No. 4, 44,
and 64, Amendment of SFAS 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 No. 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.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit on Activity (Including Certain Costs incurred in Restructuring)".
EITF Issue No. 94-3 required accrual of liabilities related to exit and
disposal activities at a plan (commitment) date. SFAS 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. The provisions of this statement are effective
for exit or disposal activities that are initiated after December 31, 2002.
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FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees", (FIN 45) was issued on November 2002. FIN 45
requires that a liability be recognized at the inception of certain guarantees
for the fair value of the obligation, including the ongoing obligation to stand
ready to perform over the term of the guarantee. Guarantees, as defined in FIN
45, include contracts that contingently require us to make payments to a
guaranteed party based on changes in an underlying that is related to an asset,
liability or equity security of the guaranteed party, performance guarantees,
indemnification agreements or indirect guarantees of indebtedness of others.
This new accounting is effective for certain guarantees issued or modifies
after December 31,2002. In addition, FIN 45 requires certain additional
disclosures.
SFAS 148, "Accounting for Stock-Based Compensation — Transition and
Disclosure — an amendment of SFAS No. 123", was issued on December 31, 2002.
SFAS 148 provides alternative methods of transition for a voluntary change to
the fair value-based method of accounting for stock-based employee
compensation. SFAS 148 also amends the disclosure requirements of SFAS 123,
"Accounting for Stock-Based Compensation", to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results.
In January 2003, the FASB issued Interpretation 46 "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51" (FIN 46). FIN 46
provides a new framework for identifying variable interest entities (VIEs) and
determining when a company should include the assets, liabilities,
non-controlling interests and results of activities of a VIEs created after
January 31, 2003 and is effective beginning in the third quarter of 2003 for
VIEs created prior to issuance of the interpretation. We are presently
evaluating the impact, if any, that this new standard will have on its
financial position or results of operations.
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities." This statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
133, "Accounting for Derivative Instruments and Hedging Activities." This
statement is effective prospectively for contracts entered into or modified
after June 30, 2003 and prospectively for hedging relationships designated
after June 30, 2003.
In May 2003, the FASB issued SFAS No. 150, "Accounting For Certain
Financial Instruments with Characteristics of Both Liabilities and Equity."
This statement improves the accounting for certain financial instruments that,
under previous guidance, issuers could account for as equity, and requires that
these instruments be classified as liabilities in statements of financial
position. This statement is effective prospectively for financial instruments
entered into or modified after May 31, 2003 and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. This
statement shall be implemented by reporting the cumulative effect of a change
in an accounting principle for financial instruments created before the
issuance date of the statement and still existing at the beginning of the
interim period of adoption.
We are presently evaluating the impact, if any, that these new standards
will have on our consolidated financial statements.
Critical Accounting Policies and Estimates
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 that require management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. We base our estimates on historical
experience, where applicable, and other assumptions that we believe are
reasonable under the circumstances. Actual results may differ from our
estimates under different assumptions or conditions. In the opinion of our
management, our most critical accounting policies under both Mexican GAAP and
U.S. GAAP are those that require management to make estimates and assumptions
that affect the reported amounts related to the accounting for revenue
recognition, allowance for doubtful accounts, the evaluation of long-lived
assets, property plant and equipment, goodwill, and deferred taxes. For a full
description of all of our accounting policies, see Notes 4 and 22 to the
Consolidated Financial Statements included in this Annual Report.
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There are certain critical estimates that we believe require significant
judgment in the preparation of our consolidated financial statements. We
consider an accounting estimate to be critical if:
•
It requires us to make assumptions because information was not
available at the time or it included matters that were highly uncertain
at the time we were making the estimate, and
•
Changes in the estimate or different estimates that we could have
selected would have had a material impact on our financial condition or
results of operations.
Revenue Recognition
Cellular airtime is recorded as revenue as service is provided. Until
December 31, 2001, revenue from the sale of prepaid cards was recognized at the
date of sale. We had recognized the revenue on the sale of prepaid cards at
the date of sale rather than on a deferred basis because the length of the
average consumption period for such prepaid cards was not significant, i.e.,
approximately one to one-and-a-half months, and it was not material to results
of operations for 2001 and 2000. Starting January 1, 2002, we started to
recognize revenue from the sale of the prepaid cards as service is provided
because the increasing length of the average consumption period for such
prepaid cards. Revenues from the sale of prepaid cards associated with
services that have not been provided are deferred until the services are
provided and are included in the line item "taxes and other payables" in the
accompanying consolidated balance sheets. 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 recognized when
the services are provided. Other revenues, mainly from paging and long
distance services, are recognized when the related services are provided.
Allowance for Doubtful Accounts
The allowance for doubtful accounts represents our estimate of losses
resulting from the failure or inability of our customers to make required
payments. 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 undiscounted cash flows to be generated by the assets and
the possible impact that inflation may have on our ability to generate cash
flow since, with inflation accounting, the carrying value is restated for
inflation prior to performing an impairment analysis. Key assumptions we
evaluate in preparing an undiscounted cash flow analysis include inflation,
currency fluctuations and future revenue growth. The use of different
estimates or assumptions within our undiscounted cash flow model could result
in undiscounted cash flows lower than the current carrying value of our assets,
therefore requiring the need to compare the carrying values to their fair
values. Our estimates and assumptions take into consideration all relevant
business and market factors which are known to us at the time, some of which
may change in future periods due to factors outside of our control (including
shareholder strategic decisions). Should these factors adversely change in
future periods, we would be required to reevaluate the carrying value of our
long-lived assets and cash flow impairment calculations could possibly change.
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Property, Plant and Equipment
We depreciate property, plant and equipment and other intangible assets
with a definite life using straight-line methods over the period of time we
estimate we will benefit from each asset.
Upon adoption of Statement of Financial Accounting Standards (SFAS) No.
142, "Goodwill and Other Intangible Assets", we were required to reassess the
useful lives of our other intangible assets, which consist primarily of Mexican
government telecommunications concessions ("Concessions"). Although
Concessions are issued with a stated term, the renewal of specific Concessions
is a routine matter involving a nominal fee and we have determined that
regulatory, competitive, and economic, factors currently exist that limit the
useful life of our Concessions. Prospectively, we will continue to
periodically re-evaluate our determination of an indefinite useful life with
regard to Concessions.
The cost of mobile wireless telephones given to customers under exclusive
service contracts is amortized on a straight-line basis. During 2001, we
reduced the amortization period of mobile wireless telephones from an 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.
During the second quarter of 2001, we 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 reduction of approximately Ps.477,764.0 in depreciation expense for 2001.
The average annual rates of depreciation used by us are as follows:
2002
2001
(%)
(%)
Buildings and facilities
4
4
Communications equipment
10
10
Furniture and fixtures
10
10
Transportation equipment
17
17
Computer equipment
29
29
Cellular rental telephones
25
25
We do 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, 2002,
2001 and 2000, we did not capitalize integral financing cost.
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.
Goodwill
Under Mexican GAAP, we amortize goodwill on a straight-line basis over a
period of 20 years. For a discussion of goodwill under U.S. GAAP, see Note
22g. to the Consolidated Financial Statements.
Deferred Taxes
We have recorded a net deferred tax asset mainly reflecting the benefit of
tax loss carry forwards, which expire in varying amounts in the future.
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 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 tax
loss carry forwards, given the fact that we've experienced significant losses,
a valuation allowance for a majority of the asset has been recognized. Our
estimates and assumptions take into
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consideration all relevant business and
market factors which are known to us at the time, some of which may change in
future periods due to factors outside of our control (including shareholder
strategic decisions). Should these factors adversely change in future periods,
we would be required to reevaluate the recoverability of the net deferred tax
assets.
Our estimate of future taxable income is based primarily on and supported
by (i) additional increases in revenues generated by the CPP feature with an
important taxable operating margin, (ii) 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 (iii) 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, which was 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.
Funds will not be sufficient to meet our debt service and principal
amortization requirements, working capital requirements and capital expenditure
needs for our existing businesses through 2003. Iusacell and Iusacell Celular
have engaged Morgan Stanley as our financial advisor to assist us in developing
a comprehensive debt restructuring plan. We are still in the process of
developing such a plan and have not yet presented a restructuring plan to our
creditors.
Our future operating performance and ability to service and repay our
indebtedness will be subject to many factors, including a successful debt
restructuring, future economic and competitive conditions and to financial,
business and other factors, many of which are beyond our control.
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 years ended
December 31, 2001 and 2002, our earnings were insufficient to cover our fixed
charges by Ps.81.7 million (U.S.$7.8 million) and Ps.1,408.0 million
(U.S.$135.1 million), respectively.
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.4,464.1
million (U.S.$428.2 million) outstanding at December 31, 2002, 4.4% higher in
pesos than the total debt of Ps.4,275.1 million (U.S.$410.1 million)
outstanding at December 31, 2001. At December 31, 2002, Iusacell Celular's
average cost of outstanding bank debt was approximately 6.3%, with a remaining
average maturity of approximately 2.0 years. At December 31, 2001, Iusacell
Celular's average cost of outstanding bank debt was
approximately 6.9%, with a remaining average maturity of approximately 2.9
years. At December 31, 2002, Iusacell Celular's ratio of debt to total
capitalization was 36.4% compared to 32.2% at December 31, 2001.
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Cash Flows From Operating Activities
We generated positive cash flows from operating activities in the year
ended December 31, 2001 and the year ended December 31, 2002. Net cash
generated by operating activities was Ps.510.5 million (U.S.$49.0 million) for
2002 compared to Ps.2,363.6 million (U.S.$226.7 million) generated in 2001.
The decrease in 2002 resulted primarily from a Ps.775.3 million (U.S.$74.4
million) larger loss from continuing operations than in 2001, caused primarily
by a Ps.539.0 million (U.S.$51.7 million) increased integral financing cost and
by a Ps.219.7 million (U.S.$21.1 million) increased operating loss, net of a
decrease in depreciation and amortization expense of Ps.593.5 million
(U.S.$56.9 million), and a decrease in resources used in working capital of
Ps.559.0 million (U.S.$53.6 million). We generated positive cash flows from
operating activities in the year ended December 31, 2000, of Ps.1,899.7 million
(U.S.$182.2 million).
Cash Flows from Financing Activities
For the year ended December 31, 2002, net cash provided by financing
activities amounted to Ps.319.5 million (U.S.$30.6 million) compared to
Ps.527.9 million (U.S.$50.6 million) for the year ended December 31, 2001. The
decrease was mainly attributable to a decrease in the principal payments on
long-term debt of Ps.2,980.1 million (U.S.$285.9 million), a decrease in the
proceeds received from long-term debt of Ps.2,263.9 million (U.S.$217.2
million) and a decrease of Ps.944.3 million (U.S.$90.6 million) from
contributions from our parent company, Iusacell. Both figures, payments and
proceeds, were materially affected by a significant foreign exchange loss in
2002. Net cash provided by financing activities in 2000 was Ps.623.3 million
(U.S.$59.8 million). The decrease in 2001 from 2000 was mainly due to a
decrease in the principal payments on long term debt of Ps.2,007.1 million
(U.S.$192.5 million), a decrease in the contribution for future capital stock
increases of Ps.432.1 million (U.S.$41.4 million) and a decrease in the
accumulated effect of deferred taxes of Ps.206.8 million (U.S.$19.8 million),
partially offset by an increase in the proceeds received from long-term debt of
Ps.2,574.4 million (U.S.$246.9 million).
Cash Flows Used for Investing Activities
Net cash used in investing activities was Ps.807.8 million (U.S.$77.5
million) in 2002. We purchased Ps.599.1 million (U.S.$57.5 million) of
property and equipment in 2002. Net cash used in investing activities was
Ps.3,074.1 million (U.S.$294.9 million) in 2001 and was primarily attributable
to purchases of property and equipment of Ps.1,688.8 million (U.S.$162.0
million), the acquisition of Portatel of Ps.523.6 million (U.S.$50.2 million)
and other assets of Ps.861.7 million (U.S.$82.7 million).
Net cash used in investing activities in 2000 was Ps.2,428.0 million
(U.S.$232.9 million). In 2000, we made investments in an aggregate amount of
Ps.3,323.4 million (U.S.$318.8 million). Substantially all of these
expenditures were for the purchase of property, equipment and other assets,
partially offset by the sale of other assets of Ps.823.2 million (U.S.$79.0
million).
Tax Loss Carryforwards
As of December 31, 2002, we had recorded a net deferred tax asset of
Ps.163.9 million (U.S.$15.7 million) mainly reflecting the benefit of tax loss
carryforwards, which expire in varying amounts between 2005 and 2012.
Realization is dependent on generating sufficient taxable income prior to the
expiration of the tax 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, 2002 will be realized based on our business
plan estimate of future taxable income over the next five years in an amount
sufficient to utilize such net deferred tax losses.
Our estimate of future taxable income is based primarily on and supported
by (i) additional increase in revenues generated by the CPP feature with an
important taxable operating margin, (ii) 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 (iii) an increase in 2003
of the potential effects of additional cost cutting.
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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, 2002, we had a valuation allowance of Ps.903.6 million
(U.S.$86.7 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, 2002, we had net operating losses for income tax purposes
that may be carried forward and applied against future taxable earnings of
Ps.4,695.3 million (U.S.$450.4 million) expiring in various amounts from 2005
through 2012. See Note 12 to the Consolidated Financial Statements.
Capital Expenditures
In 2003 and 2004, subject to the outcome of our debt restructuring
efforts, we have preliminarily budgeted amounts for capital expenditures to
expand our network infrastructure, expand our cellular and long distance
networks, enhance our billing and customer care systems, and support existing
operations and new business opportunities. The degree and timing of capital
expenditures will remain strongly dependent on the nature, timing and success
of our debt restructuring efforts, the competitive environment and economic
developments in Mexico, including inflation and exchange rates, the timing of
regulatory actions and on the availability of new funding from 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.
Subject to the outcome of our debt restructuring efforts, we have
preliminarily budgeted a total of approximately U.S.$248.0 million for capital
expenditures for 2003 and 2004, not including amounts in respect of capitalized
interest. We have preliminarily budgeted approximately U.S.$85.0 million for
capital expenditures for 2003, including up to U.S.$62.0 million to expand and
develop our cellular network.
During the first quarter of 2003, we invested approximately U.S.$1.0
million in our cellular regions to expand our coverage. We have preliminarily
budgeted the remaining U.S.$22.0 million for system and quality upgrades.
Total capital expenditures in 2002 were U.S.$63.4 million. From this
amount, approximately U.S.$58.2 million was used primarily for the development
of the wireless network in central regions and to construct new and remodel
existing customer sales and service centers. The balance of U.S.$5.2 million
was primarily used to develop and increase the quality of the wireless network
in the recently acquired Region 8 in southern Mexico.
Total capital expenditures in 2001 were U.S.$193.0 million of which
approximately U.S.$189.8 million was used primarily for the development of our
wireless network and to construct new and remodel existing customer sales and
service centers. Approximately U.S.$175.0 million of this amount was used for
the development of the Iusacell Celular wireless network.
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 our obligations for payments under its
indebtedness, including notes payable to suppliers and operating leases for the
periods indicated using balances as of December 31, 2002.
As described in Item 3, "Key Information — Risk Factors — Risk Factors
Relating to Iusacell Celular —
We did not receive an extension of the temporary
amendment and waiver to our senior refinancing secured loan and, as a result,
the lenders under that loan have the right to accelerate our repayment
obligations
", the second amendment
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and waiver has not been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. The lenders
under the senior refinancing secured loan have the right to declare the
indebtedness under that loan immediately due and payable. See also
"—
Long-Term Indebtedness — Loan Covenant Waivers and Modifications."
In addition, Iusacell did not generate sufficient cash flows from its
operations to make the June 1, 2003 U.S.$25.0 million interest payment on the
Iusacell senior notes. Iusacell has a 30-day grace period to make the payment
before an event of default will occur. If Iusacell does not make such payment
within that grace period, the holders of such notes will have the right to
accelerate Iusacell's obligations thereunder, which will cause an event of
default under the terms of our senior refinancing secured loan. As a result,
the lenders under that loan will have the right to accelerate the loan, and if
such lenders accelerate, an event of default under the Iusacell Celular senior
notes will occur, permitting the holders of such notes to accelerate our
repayment obligations under the Iusacell Celular senior notes.
The following table does not reflect as current the effects of our default
under the senior refinancing secured loan, as the senior refinancing secured
loan has not yet been declared immediately due and payable. Depending on
subsequent events and the progress of our restructuring efforts, we expect our
payment obligations to change. See Note 24 to the Consolidated Financial
Statements.
Payments due by Period
(Figures in thousands of U.S. Dollars as of December 31, 2002)
Iusacell Celular Indebtedness
(1)
2003
2004
2005
2006
2007
Thereafter
Total
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
(2)
–
–
–
–
–
12,000
(2)
Total indebtedness
12,000
(2)
249,608
132,811
33,203
–
–
427,622
Operating
Leases
(3)
2003
2004
2005
2006
2007
Thereafter
Total
MATC Celular
10,398
10,302
10,074
10,054
10,054
29,126
80,008
Buildings and others
11,174
9,264
8,003
7,136
6,229
16,638
58,444
Total operating
leases
21,571
19,566
18,078
17,190
16,282
45,764
138,452
(1)
These amounts include principal payments.
(2)
As of June 27, 2003, this amount has been paid in full.
(3)
These amounts include the minimum lease payments.
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 (the "Iusacell Celular senior notes"), under an indenture dated
as of July 25, 1997 among Iusacell Celular, the subsidiaries of Iusacell
Celular guaranteeing the Iusacell Celular senior notes and First Union National
Bank (now Wachovia Bank National Association), 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 we also refer to as the Iusacell Celular senior notes and 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.
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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 amounts due under the Iusacell
Celular senior notes by a second priority lien on its cellular concessions and
certain equipment.
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, the
proceeds of which were 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, the proceeds of
which were 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 were 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.
Loan
Covenant Waivers and Modifications
On December 7, 2001, Iusacell Celular and the lenders entered into an
amendment and waiver to the senior refinancing secured loan, which we refer to
as the first amendment and waiver, to permit 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 related
tax gross-up amount) and principal payments 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 exceeding U.S.$5.0 million to discharge other
liabilities of Iusacell incurred in the ordinary course of business, so long as
an event of default has not occurred under the senior refinancing secured loan.
During the first half of 2003, Iusacell Celular exceeded the permitted
leverage ratio (as defined in the senior refinancing secured loan) of 2.50.
In March 2003, Iusacell Celular received notice from the lenders of the
occurrence of two defaults under the senior refinancing secured loan. One
default occurred as a result of Iusacell Celular's failure to notify the
lenders that Iusacell Celular had opened and closed several bank accounts
related to its telecommunications business. The other default occurred as a
result of Iusacell Celular's failure to notify the lenders that Iusacell
Celular had failed to
register a mortgage on certain assets of Portatel with the
Telecommunications Registry, which is maintained by the SCT. Iusacell Celular
has since registered the mortgage and requested, but has not yet received, the
consent of the lenders with respect to the opening and closing of those bank
accounts.
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On April 28, 2003, Iusacell Celular and the lenders entered into a
temporary amendment and waiver to the senior refinancing secured loan, which we
refer to as the second amendment and waiver, to increase the permitted leverage
ratio under the senior refinancing secured loan from 2.50 to 2.70. Under the
second amendment and waiver, Iusacell Celular temporarily agreed not to make
any restricted payment, loan or advance to, or repay any loan or advance from
any affiliate, provided that if Iusacell Celular or any of its subsidiaries
makes any payment on the principal of any indebtedness (as defined in the
senior refinancing secured loan), Iusacell Celular or the relevant subsidiary
will simultaneously prepay a pro rata amount outstanding under the senior
refinancing secured loan. On May 22, 2003, the second amendment and waiver was
extended until June 13, 2003. On June 12, 2003, the second amendment and
waiver was further extended until June 26, 2003.
The second amendment and waiver has not since been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. The lenders
under the senior refinancing secured loan have the right to declare the
indebtedness under that loan immediately due and payable.
Credit Ratings
Our credit ratings were lowered several times during 2002 by major credit
rating agencies. On August 26, 2002, Moody's Investors Service Inc. (Moody's)
downgraded Iusacell Celular's senior unsecured rating from Ba2 to B3, all with
a negative outlook. On November 15, 2002, Moody's downgraded Iusacell
Celular's senior unsecured rating from B3 to Ca.
Most recently, on May 27, 2003, Standard & Poor's Ratings Services
(Standard and Poor's) announced that it had lowered Iusacell Celular's senior
secured rating from CCC+ to CC and Iusacell Celular's unsecured debt rating
from CCC- to C. On June 3, 2003, Standard & Poor's affirmed Iusacell Celular's
senior secured rating at CC and Iusacell Celular's senior unsecured debt rating
at C. Subsequently, Standard & Poor's withdrew all the ratings assigned to
Iusacell Celular and its debt instruments.
As a result of these actions, our ability to obtain short-term and
long-term financing and the cost of such financing have been adversely
affected.
Certain Hedging 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 using
forward rate contracts for U.S.$15.0 million to hedge the interest payments on
the Iusacell Celular senior notes coming due over the period from July 2001 to
January 2002. 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 of its indebtedness coming due
over the period from November 2001 to November 2002. This transaction resulted
in a U.S.$0.1 million loss.
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.$150.0 million and interest of U.S.$34.5 million on the Iusacell
Celular senior notes. 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 would become due between July 2002 and July 2004. In October 2002,
Iusacell Celular in order to improve liquidity by eliminating cash collateral
requirements took advantage of a temporary weakness in the Mexican peso and
opted to terminate the hedge transaction resulting in a U.S.$1.7 million loss.
As of December 31, 2002, we did not have any forward rate contracts in
place.
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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.$35.0 million until July 30, 2002. The
collar agreement limited the maximum effective LIBOR cost to 6.12% if six-month
LIBOR was lower than 7.12%, and 7.12% if LIBOR equaled or exceeded 7.12%.
Iusacell Celular could 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 30, 2002. This collar
agreement limited the maximum effective LIBOR cost to 5.82% if six-month LIBOR
was lower than 6.82%, and 6.82% if LIBOR equaled or exceeded 6.82%. Iusacell
Celular could participate in a decline in LIBOR to 4.75%.
For the year ended December 31, 2002, due to the significant decrease in
the LIBOR interest rates, Iusacell Celular recognized additional interest
expense of U.S.$1.0 million for the interest rate collars, which was offset by
the lower interest expense on its floating rate debt.
Debt Restructuring
In December 2002, Iusacell and Iusacell Celular engaged Morgan Stanley as
our financial advisor to assist us in developing a comprehensive debt
restructuring plan. Iusacell and Iusacell Celular are still in the process of
developing such a plan and have not yet presented a restructuring plan to our
creditors.
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 of Iusacell's principal shareholders, Verizon or Vodafone,
have any obligation to contribute equity to Iusacell Celular.
Tower Monetization
In December 1999, we entered into a series of agreements with MATC
Celular. These agreements, which were amended in May 2002, among other things,
gave MATC Celular the right to acquire approximately 350 of our existing
non-strategic towers. We sold and leased back a total of 67 non-strategic
towers to MATC Celular for approximately Ps.91.6 million in net gains in 2002.
During 2001 and 2002, we sold and leased back a total of 311 non-strategic
cellular towers to MATC Celular and fulfilled our contractual obligation under
the existing agreements. We have no further commitment with MATC Celular to
sell additional towers. We are leasing back these towers from MATC Celular and
subleasing them to its operating subsidiaries.
Dividend Policy
We have never paid dividends, 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.
C.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Iusacell Celular does not undertake research and development activities.
D.
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:
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Price Increases and Rollbacks
We have attempted, and continue to attempt, to exercise price leadership
in the Mexican cellular market, with a strategy of increasing our prices to
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 prepaid
customers. Our competitors also increased their prices.
In mid-April 2001, after not having raised our fees 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 our competitors have not increased their prices. Our revenues
will be adversely affected to the extent that our price increases cannot keep
pace with inflation.
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 2003 which may have a material effect on Iusacell
Celular'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 negotiated with Telmex to obtain similar
terms for both our long distance business and local cellular interconnection
rates and these terms have been maintained until 2003.
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, which provides that the wireline or fixed wireless party that
makes a local call to a cellular telephone, 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.
The interconnection rate is frozen at Ps.1.90 per minute or fraction of a
minute. The price which Telmex may charge its customers is 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.
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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 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.$200.0 million in Iusacell capital expenditure requirements from 1998 to
2000.
On January 1, 2001, Telmex, Avantel and Alestra announced a preliminary
agreement under which 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
voluntarily determined to compensate our subscribers in Region 9 in light of
perceived quality problems during 1999 due to network digitalization and rapid
traffic growth. As of December 31, 1999, our postpaid subscribers each
received 20% more included minutes in each of their postpaid packages in April
and May 2000 and our prepaid customers, each received five free minutes. The
financial impact of this voluntary compensation program was not material.
Iusacell met COFETEL's quality standards, that in 2001 were as follows:
•
Drop calls 6%
•
Ineffective attempts 5%
Portatel significantly increased its quality standards in the fourth
quarter of 2001, the rate of ineffective attempts improved to 0.7% after
initial audits in the city of Mérida indicated a 14.9% rate in July 2001.
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
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The 2002 quality tests began June 3, 2002 and ended December 13, 2002, and
covered 19 of our largest cities in terms of number of wireless mobile users.
The verification covered 70% of the total wireless mobile users in Mexico. The
results of the test indicated that Iusacell met COFETEL quality standards.
Other Developments
Distributor Defection
In June 2001,
SAGO Interamericana, S.A. de C.V.
(SAGO), a distributor that
represented at that time slightly less than 10% of our monthly gross postpaid
additions and approximately 2% of our monthly gross prepaid 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 (U.S.$4.2 million) in
net receivables owed to us by SAGO.
E. OFF-BALANCE SHEET ARRANGEMENTS
We currently do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
For tabular disclosure of our contractual obligations, please see "—
Liquidity and Capital Resources — Contractual Obligations."
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. 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, 2003, Iusacell Celular elected new directors. The following
table presents information with respect to our directors at April 30, 2003:
Name
Age
Position(s)
Carlos Espinal G
53
Chairman of the Board and Series A Director
Russell A. Olson
44
Series A Director
Anthony Llompart
40
Series A Director
Richard Harman
53
Series B Director
Javier Martinez del Campo
43
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. Espinal, Olson or Llompart, Ignacio Gomez Morin for
Mr. Martinez del Campo, and Jack Lester for Mr. Harman.
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Biographies
Carlos Espinal G.
has been a member of the Board of Directors of Iusacell
Celular since April 2003. Mr. Espinal has also been a member of the Board of
Directors of Iusacell since April 2002 and has served as Senior Group
Vice-President, International — Americas for Verizon Communications, Inc. since
April 2002. Before being appointed the Senior Group Vice-President, since
April 2000 Mr. Espinal served as Chairman and Chief Executive Officer of CTI
Movil, a leading wireless carrier in Argentina, of which Verizon was a
significant shareholder. Before joining CTI Movil, Mr. Espinal served as
General Manager and then as President and Chief Executive Officer of CODETEL.
Prior to joining GTE/Verizon, Mr. Espinal served as Chairman and/or Chief
Executive Officer of various large multinational firms in the industrial sector
in Mexico, Venezuela and Thailand, and was the Managing Director of Hondutel
(the Honduran telephone company). He has been a member of several professional
and industry associations throughout Latin America. After graduating with
honors in electronic engineering from the Universidad Javeriana in Colombia,
Mr. Espinal enrolled in a graduate program in telecommunications engineering at
NTT in Japan. Later, he obtained a master's degree in industrial engineering
and management from the Asian Institute of Technology in Thailand and completed
the Program for Management Development at Harvard Business School.
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.
Anthony Llompart
has been a member of the Board of Directors of Iusacell
Celular since April 2003. Mr. Llompart is also Vice-President of Sales &
Distribution for Iusacell since April 29, 2002. Mr. Llompart served 3 years as
Director Channel Management for Verizon International and has held a variety of
sales and marketing positions for Verizon and its predecessor company, GTE, for
over 8 years. These positions include sales management, product management,
distribution, and customer support. Mr. Llompart has over 12 years experience
in the wireless industry. He holds a bachelor's degree in business management
from the University of Phoenix.
Richard Harman
has been a principal member of the Board of Directors of
Iusacell Celular since April 30, 2003 and an alternate member of the Board of
Directors of Iusacell Celular since April, 2001. Mr. Harman is also an
alternate member of the Board of Directors of Iusacell. Mr. Harman is the
Managing Director, Operations Development for the Vodafone Americas Region.
Mr. Harman has been in the wireless telecommunications business for the last 23
years and during this time, he has held various positions in Pacific Bell,
AirTouch and Vodafone. Mr. Harman has worked in multiple countries from Europe
and South America. Previously, he served as the Chief Operating Officer of
Vodafone Poland, and Chief Operating Officer of Globalstar Brazil. Mr. Harman
holds a bachelors and master's degree from the San Diego State University in
California.
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 2002 to all directors and executive
officers as a group was Ps.62.0 million (U.S.$5.9 million), compared to Ps.84.8
million (U.S.$8.1 million) in 2001. 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
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provide executive
officers with use of an automobile. In addition, we provide our executive
officers and other employees with food stamps (up to Ps.1,264.0 per month), gas
stamps (up to 200 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, 2002, Iusacell Celular and our subsidiaries had an
aggregate of 1,685 full-time and part-time employees, 96 temporary employees
and 5 full time Verizon seconded employees or consultants. Approximately 33.6%
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.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
MAJOR SHAREHOLDERS
Iusacell owns, directly and indirectly, 100% of our outstanding 27,967
Series A shares and 100% of our outstanding 26,865 Series B shares. Iusacell
has two principal shareholders. The first, Verizon, holds its interest in us
through its subsidiaries. Since February 1997, we have been under management
control of subsidiaries of Bell Atlantic, which is now Verizon. Our second
principal shareholder is a subsidiary of Vodafone Group Plc.
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, 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.$67.6 billion and U.S.$4.0 billion, respectively,
for the fiscal year ended December 31, 2002, and total assets of approximately
U.S.$167.5 billion at such date.
In the United States, Verizon Communications is the largest provider of
wireline and wireless telephone service in 29 states and the District of
Columbia, with 135.8 million access lines and employing 229,500 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 32.5 million subscribers. Verizon Wireless
has a presence in 49 of the top 50 U.S. markets and it covers nearly 90% of the
United States population.
Verizon has wireline and/or wireless operations in 32 countries and
territories in the Americas, Europe, Asia and the Pacific, with 3.2 million
attributable access lines and 8.7 million attributable wireless customers as of
December 31, 2002. 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 with the Commission by Verizon, Bell Atlantic and GTE 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.
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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 mobile
operations network company in the world, with more than 112.5 million
subscribers, calculated based on Vodafone's percentage interest in the relevant
wireless companies, and a presence in 28 countries. Vodafone also owns
interests in wireless carriers in Europe, the United States, the Asia/Pacific
region, the Middle East and Africa. Vodafone companies are among 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 acquisition of
Mannesmann AG in 2001 and is expanding its wireless data services.
No other shareholder owns more than 5% of any class of Iusacell's shares.
At April 30, 2003, based on the information made available to us, Iusacell's
shareholders' ownership interests 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.
Iusacell's directors and officers as a group own, in the aggregate, less
than 1.0% of Iusacell's shares.
Of Iusacell's series V shares outstanding at May 30, 2003, 116,038,100
series V shares were held in the form of American Depositary Shares (ADS) by 35
holders of record based on information made available to us and provided by our
depositary, The Bank of New York. Assuming that the holders of ADSs are
located in the United States, then 23.9% of the series V shares (which includes
all of the series V shares which are held in the form of ADSs except for the
1,400,000 series V shares held by Verizon which are held in the form of ADSs)
are held in the United States. In May 2003, we completed a reverse split/ADS
ratio change by modifying the ratio of shares of common stock of Iusacell per
ADS, from ten (10) shares per ADS to one hundred (100) shares per ADS. The
ratio change did not affect holders of Iusacell's ordinary shares and was
effected without charge to investors.
In August 1999, Iusacell completed a reorganization. The reorganization
included U.S.$132.5 million in borrowings from its principal shareholders
between August 1998 and March 1999 that were immediately converted into 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 Iusacell's 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, we then held 99.9%
of the outstanding Iusacell Celular shares. See Item 4, "Information on the
Company — History and Development of the Company." This second exchange offer
diluted both Verizon and the Peralta Group's ownership interests by placing
additional series V shares with public shareholders.
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
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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 purchased 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, Iusacell's 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.$100.0 million. The subscription period began on October
5, 2001 and ended on November 1, 2001. Iusacell's principal shareholders,
Verizon and Vodafone, purchased their pro rata portion of series A and series V
shares. Sixty-seven percent (67%) of the non-Verizon and Vodafone series V
shareholders exercised their rights to purchase additional shares. In
addition, Verizon's subscription included all of the series V shares offered
to, but not subscribed for by public shareholders.
As of April 30, 2003, Verizon held a 39.4% interest in Iusacell and
Vodafone held a 34.5% interest in Iusacell.
On June 13, 2003, Movil Access, a Mexican telecommunications service
provider and a subsidiary of
Biper, S.A. de C.V.
, which is a part of
Grupo
Salinas
, announced that it would commence a public tender offer in Mexico and
the United States to buy all of Iusacell's outstanding capital stock. Verizon
and Vodafone have announced that they have agreed to tender all of their
Iusacell shares to Movil Access. See Item 4, "Information on the Company –
History and Development of the Company."
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 its
shareholders will be valid when approved by shareholders representing a
majority of our outstanding shares, including a majority of the outstanding
Series A shares and Series B shares.
The following transactions are subject to a supermajority vote by our Board of Directors or our shareholders:
•
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;
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•
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.
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 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 entered into a similar agreement with Iusacell
applicable to Iusacell Celular.
With respect to consulting services and seconded employees provided in
2002, Iusacell Celular has been credited by Verizon for a total of U.S.$7.2
million to adjust for 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 Iusacell a total
of U.S.$219,216.0 for consulting fees and secondment agreements in 2001.
In March 2001, Verizon and Iusacell 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 with respect to consulting services and seconded
employees and a credit against any and all future such charges until the sum of
all canceled charges equals U.S.$15.0 million.
With respect to consulting services for 2003, Iusacell and Verizon have
reached an agreement in which Iusacell Celular will pay a fixed fee of U.S.$1.8
million plus any applicable tax gross-up amount.
We cannot predict whether these consulting and secondment agreements will
continue to remain in place, as Verizon and Vodafone have announced that they
would tender all of their Iusacell shares to Movil Access. See Item 4,
"Information on the Company – History and Development of the Company."
Roaming Agreements
GTE Telecommunications Services, Inc., which we refer to as TSI, provides
clearinghouse services for roaming arrangements. In 2002, TSI paid us
U.S.$134,821.0 for such services. In October 2001, we entered into an
inter-carrier roaming agreement with Verizon Wireless in the United States.
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Interests of Directors
Mr. Javier Martínez del Campo, a director of Iusacell Celular since
February 1997, and Mr. Ignacio Gómez Morin, an alternate director of Iusacell
Celular since February 1997, are members of the law firm of
De Ovando y
Martínez del Campo, S.C.
, which, in 2002, provided legal services to Iusacell
and Iusacell Celular in the amount of approximately Ps.1.1 million
(U.S.$105,516.0).
C.
INTERESTS OF EXPERTS AND COUNSEL
Not Applicable.
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
Celular.
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 prepaid 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 us seeking
compensatory damages. We are now in the process of submitting evidence to the
judge. Compensatory damages, if any, shall be determined by the judge at the
end of the process.
Ingran Lawsuit
In May 2003,
Comercializadora Ingran, S.A. de C.V.
filed a lawsuit against
us, seeking compensatory and consequential damages. We recently filed before
the court an answer to the lawsuit and the period for submission of evidence to
the judge will begin in the near future. Compensatory damages, if any, will be
determined by the judge at the end of the period.
Injunctive action against additional 10% excise tax
On January 1, 2002, the Mexican Congress approved a surcharge that
assesses an additional 10% federal excise tax on certain wireless
telecommunications services. The tax resulted in a 10% increase in the monthly
bills of postpaid mobile wireless customers and in the cost of prepaid cards in
denominations of Ps.200.0 (U.S.$19.18) or more for the year 2002. In February
2002, we filed an injunctive action (amparo) challenging the Mexican
government's implementation of the tax. In October 2002, we received a
preliminary ruling in favor of us by a Federal Judge, and the Mexican
government subsequently filed an appeal. In June 2003, Mexico's Supreme Court
rejected the appeal and affirmed the ruling in favor of us.
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In 2003, the Mexican government implemented a modified version of the
additional 10% excise tax on certain wireless telecommunications services,
which was approved by the Mexican Congress. In March 2003, we filed an
injunctive action (amparo) challenging this implementation. Until this
injunctive action is resolved, we will continue to pay the full modified
additional 10% excise tax to the Finance Ministry.
Dividend Policy
We currently do not pay any dividends nor do we contemplate paying
dividends in the foreseeable future.
B.
SIGNIFICANT CHANGES
No significant change has occurred since the date of the financial statements filed under Item 18.
ITEM 9. THE OFFER AND LISTING
A.       OFFER AND LISTING DETAILS
Iusacell Celular does not currently have, and does not currently intend to
apply to have, any securities listed on any stock exchange or other regulated
markets.
Iusacell Celular's series D and L shares had been listed on the Mexican
Stock Exchange until their delisting on February 29, 2000. ADSs representing
10 Iusacell Celular series D shares had been listed on the New York Stock
Exchange from June 21, 1994 until their delisting on August 10, 1999 and traded
under the symbol CEL.d. ADSs representing 10 Iusacell Celular series L shares
had been listed on the New York Stock Exchange from June 21, 1994 until their
delisting February 29, 2000 and traded under the symbol CEL until August 4,
1999 and thereafter, until February 29, 2000 under the symbol CEL.y.
B.
PLAN OF DISTRIBUTION
Not applicable.
C.
MARKETS
Iusacell Celular does not currently have, and does not currently intend to
apply to have, any securities listed on any stock exchange or other regulated
markets. See "— Offer and Listing Details."
D.
SELLING SHAREHOLDERS
Not applicable.
E.
DILUTION
Not applicable.
F.
EXPENSES OF THE ISSUE
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A.
SHARE CAPITAL
Not applicable.
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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 of Iusacell.
Iusacell Celular's corporate purpose is found under Article Two of its
by-laws. Iusacell Celular'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 thereof 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 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 or
category of holders 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.
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
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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 a
majority of each 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 series A and series
B shares present is required.
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 of Directors 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 than 15% of the outstanding shares of Iusacell Celular
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 Celular and not only to the individual shareholders' 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.
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 Celular'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
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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.
Iusacell Celular has outstanding debt obligations which limits the amount of
dividends that can be paid in any given year or prohibit dividends entirely.
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 of
shares 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 of the shareholders 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, 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
credit 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
investments in up to 100% of the capital stock of Mexican companies, except for
those engaged in specified restricted industries, such as basic telephone
service, where foreign investments are limited to 49% of the voting capital
stock. Foreign investors may, however, participate in excess of 49% of the
voting capital stock of a Mexican corporation engaged in the cellular telephone
business with the prior 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 Mexican companies, including Iusacell.
C.
MATERIAL CONTRACTS
On December 29, 1999, Iusacell Celular entered into a series of agreements
with MATC Celular, the Mexican subsidiary of American Tower Corporation, with
respect to Iusacell Celular's existing towers and future tower needs. Under
these agreements, which were amended in May 2002, MATC Celular, among other
things, is required to build towers or find space on existing towers, which
Iusacell Celular's subsidiaries lease. The term of the lease is 10 years with
two five-year renewal periods. As of May 30, 2003, Iusacell Celular's
subsidiaries lease from MATC Celular 715 sites, including 320 transfer sites, a
number of built-to-suit sites and co-locations.
See also, Item 5, "Operating and Financial Review and Prospects—Liquidity
and Capital Resources," 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 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.
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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 the 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 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
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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 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.
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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 (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 in Mexico.
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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 or 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 has 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 files each quarter of the calendar
year with the Mexican Ministry of Finance and Public Credit information
representing that no "party related" to Iusacell Celular, 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: (1) shareholders
of Iusacell Celular 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, or (2) corporations if more than 20% of their stock is owned
directly or indirectly, individually or collectively by related persons of
Iusacell Celular.
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 2003, 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, 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. Otherwise, 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 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 indentures 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.
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Taxation of the Sale and other Disposition of the Notes
Under the Income Tax Law gains resulting from a Foreign Holder's sale or
other disposition of Notes are considered interest.
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.
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.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Iusacell Celular's earnings are affected by changes in interest rates as a
result of long-term borrowings. For a description of Iusacell Celular's
long-term borrowings, see Item 5, "Operating and Financial Review and Prospects
— Liquidity and Capital Resources — Long-Term Indebtedness."
Iusacell Celular has fixed rate debt under its Iusacell Celular senior
notes and a Banco Santander credit facility. Iusacell Celular also had, as of
December 31, 2002, variable debt under the senior refinancing secured loan.
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 limited the maximum effective LIBOR cost to 6.12% if six-month
LIBOR was lower than 7.12% and 7.12% if LIBOR equaled or exceeded 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,
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Iusacell Celular's maximum effective
LIBOR cost was limited to 5.82% if six-month LIBOR was lower than 6.82% and, if
six-month LIBOR equalled or exceeded 6.82%, then Iusacell Celular's maximum
effective LIBOR cost would be limited to 6.82%. These interest rate collar
agreements expired on July 30, 2002.
The following table summarizes the debt obligations and derivative
instruments that are sensitive to changes in interest rates held by Iusacell
Celular as of December 31, 2002. With respect to the debt, the tables present
principal payment obligations that exist by maturity date and the related
average interest rate. 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 published by
Banco de México
at
December 31, 2002, which was U.S.$1.00 = Ps.10.4393. The
following table does not reflect as current the effects of our
default under the senior refinancing secured loan, as the senior
refinancing secured loan has not yet been declared immediately due
and payable. Depending on subsequent events and the progress of our
restructuring efforts, we expect our payment obligations to change.
See Note 24 to the Consolidated Financial Statements.
As of December 31, 2002 — Expected Maturity Date
2003
2004
2005
2006
2007
Thereafter
Total
Fair Value
in millions of Mexican pesos (U.S. dollars)
Fixed Rate Debt
U. S. Dollar denominated
125.3
1,565.9
–
–
–
–
1,691.2
935.7
Weighted-average interest rate
9.3
%
5.4
%
–
–
–
–
–
–
Mexican Peso denominated
–
–
–
–
–
–
–
–
Weighted average interest rate
–
–
–
–
–
–
–
–
Variable Rate Debt
U. S. Dollar denominated
–
1,039.8
1,386.5
346.5
–
–
2,772.8
2,772.8
Weighted-average interest rate
3.6
%
4.1
%
4.5
%
4.5
%
–
–
–
–
Mexican Peso denominated
–
–
–
–
–
–
–
–
Weighted-average interest rate
–
–
–
–
–
–
–
–
Interest Rate Derivatives
Interest Rate Collars
Average Cap Rate
–
–
–
–
–
–
–
–
Average Floor Rate
–
–
–
–
–
–
–
–
Note: To determine the weighted-average interest rate for variable rate
debt, LIBOR interest rate was forecasted by CIEMEX-WEFA assuming 1.33% for
2003, 1.84% for 2004, 2.24% for 2005, 2.4% for 2006 and 3.15% for 2007.
Foreign Currency Risk
Our primary foreign currency exposure relates to our foreign currency
denominated debt. Our debt obligations are denominated in U.S. dollars while
we generate revenues in Mexican pesos. Therefore, we are 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, we 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, we 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 and October 2001, we hedged using
forward rate contracts 100% of the principal U.S.$150.0 million and U.S.$34.5
million of associated interest of the Iusacell Celular senior notes. In
October 2002, we opted to unwind the full foreign exchange hedge contracted in
2001; however, we will continue to look for opportunities to enter into cost
efficient, foreign exchange hedging positions when appropriate.
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The following table summarizes our debt that is sensitive to changes in
foreign currency exchange rates as of December 31, 2002. With respect to the
debt, the tables present principal payment obligations that exist by maturity
date and the related average interest rate. 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
published by
Banco de México
at December 31, 2002, which was U.S.$1.00 =
Ps.10.4393. The
following table does not reflect as current the effects of our
default under the senior refinancing secured loan, as the senior
refinancing secured loan has not yet been declared immediately due
and payable. Depending on subsequent events and the progress of our
restructuring efforts, we expect our payment obligations to change.
See Note 24 to the Consolidated Financial Statements.
As of December 31, 2002 — Expected Maturity Date
2003
2004
2005
2006
2007
Thereafter
Total
Fair Value
In millions of Mexican Pesos (U.S. dollars)
Fixed Rate Debt
U. S. Dollar denominated
125.3
1,565.9
–
–
–
–
1,691.2
935.7
Weighted-average interest rate
9.3
%
5.4
%
–
–
–
–
–
–
Variable Rate Debt
U. S. Dollar denominated
–
1,039.8
1,386.5
346.5
–
–
2,772.8
2,772.8
Weighted-average interest rate
3.6
%
4.1
%
4.5
%
4.5
%
–
–
–
–
Forward Exchange Derivatives
Receive Mexican Pesos/Pay
U.S.Dollars
–
–
–
–
–
–
–
–
Average exchange rate
–
–
–
–
–
–
–
–
Receive U.S. Dollars/Pay Mexican
Pesos
–
–
–
–
–
–
–
–
Average exchange rate
–
–
–
–
–
–
–
–
Note: To determine the weighted-average interest rate for variable rate
debt, LIBOR interest rate was forecasted by CIEMEX-WEFA assuming 1.33%. for
2003, 1.84% for 2004, 2.24% for 2005, 2.4% for 2006 and 3.15% for 2007.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
During the first half of 2003, we exceeded the permitted leverage ratio
(as defined in the senior refinancing secured loan) of 2.50. On April 28,
2003, we and the lenders entered into the second amendment and waiver to
increase the permitted leverage ratio under the senior refinancing secured loan
from 2.50 to 2.70. Under the second amendment and waiver, we temporarily
agreed not to make any restricted payment, loan or advance to, or repay any
loan or advance from any affiliate, provided that if we or any of our
subsidiaries make any payment on the principal of any indebtedness (as defined
in the senior refinancing secured loan), we or the relevant subsidiary will
simultaneously prepay a pro rata amount outstanding under the senior
refinancing secured loan. On May 22, 2003, the second amendment and waiver was
extended until June 13, 2003. On June 12, 2003, the second amendment and
waiver was further extended until June 26, 2003.
The second amendment and waiver has not since been extended and, as a
result, we are in default of a financial ratio covenant under the senior
refinancing secured loan, which constitutes an event of default under that loan
as if the second amendment and waiver had never been executed. See Item 5,
"Operating and Financial Review and Prospects — Liquidity and Capital Resources
— Long-Term Indebtedness — Loan Covenant Waivers and Modifications."
On June 1, 2003, Iusacell failed to make a U.S.$25.0 million interest
payment which was due on the Iusacell senior notes. While Iusacell has a
30-day grace period to make the payment before an event of default will occur,
Iusacell does not expect to make the June 1, 2003 interest payment within that
grace period. As a result, an event of default under the indenture governing
the Iusacell senior notes will occur and the holders of those notes will have
the right to declare those notes immediately due and payable. The right of the
holders of the Iusacell senior notes to accelerate Iusacell's repayment
obligations under those notes will cause an event of default under the terms of
our
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senior refinancing secured loan and the lenders will have the right to
declare that loan immediately due and payable. If the lenders under the senior
refinancing secured loan accelerate the loan, an event of default will also
occur under the Iusacell Celular indenture, in which case the holders of the
Iusacell Celular senior notes will have the right to accelerate our repayment
obligations under the Iusacell Celular senior notes.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
The person performing
similar functions of a principal executive officer and the person performing
similar functions of a principal financial officer of Iusacell Celular have
evaluated the effectiveness of Iusacell Celular's disclosure controls and
procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the
Exchange Act) as of a date within 90 days prior to the filing date of this
Annual Report (the "Evaluation Date"). Based on such evaluation, such persons
have concluded that, as of the Evaluation Date, Iusacell Celular's disclosure
controls and procedures are effective in alerting them on a timely basis to
material information relating to Iusacell Celular (including its consolidated
subsidiaries) required to be included in Iusacell Celular's reports filed or
submitted under the Exchange Act.
Changes in Internal Controls.
Since the Evaluation Date, there have not
been any significant changes in Iusacell Celular's internal controls or in
other factors that could significantly affect such controls. No significant
deficiencies and material weaknesses were identified that required corrective
actions.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable. Applies to fiscal years ending on or after July 15, 2003.
ITEM 16B. CODE OF ETHICS
In May, 2002 we adopted a code of ethics. Our code of ethics applies to
all of our employees, including the principal executive officer, principal
financial officer, principal accounting officer and controller and persons
performing similar functions. During 2002, we implemented training courses in
the code of ethics to all our employees. Every new employee is provided also
with training and a copy of our code of ethics. Our code of ethics, together
with an English translation, is also posted on our internet website:
www.iusacell.com.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PricewaterhouseCoopers, which has been appointed by Iusacell's Board of
Directors, has served as the independent public accountants for Iusacell and
its subsidiaries for each of the fiscal years in the three-year period ended
December 31, 2002. Each year, the Audit Committee submits a recommendation to
Iusacell's Board of Directors to ratify the re-appointment of Iusacell's
independent public accountants.
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The following table presents the aggregate fees for professional audit
services and other services rendered by PricewaterhouseCoopers to Iusacell
Celular in 2002.
Fees Paid to PricewaterhouseCoopers
2002
Thousands of pesos
Audit Fees
(1)
8,762
Audit-related Fees
(2)
3,351
Tax Fees
(3)
1,135
All Other Fees
(4)
1,044
Total
14,292
(1)
Audit fees include services performed by the independent accountant
to comply with generally accepted accounting standards in Mexico and the
United States. Audit fees also include fees for services provided by
the independent accountants in connection with statutory and regulatory
filings or engagements, comfort letters, statutory audits, attest
services, consents and assistance with and review of documents filed
with the SEC.
(2)
Audit-related fees include employee benefit plan audits, accounting
consultations and audits in connection with internal control reviews,
attest services that are not required by statute or regulation and
consultation concerning financial accounting and reporting standards.
(3)
Tax fees include fees for tax compliance, tax planning and tax
advice. Tax compliance generally involves preparation of original and
amended tax returns, claims for refund and tax payment-planning
services. Tax planning and tax advice encompass assistance with tax
audits and appeals, employee benefit plans and requests for rulings or
technical advice from taxing authorities.
(4)
All other fees include mainly services related to the purchasing
information system implementation and design.
PART III
ITEM 17. FINANCIAL STATEMENTS
We have responded to Item 18 in lieu of responding to this Item 17.
ITEM 18. FINANCIAL STATEMENTS
See
pages F-1 to F-54.
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ITEM 19. EXHIBITS
Documents filed as exhibits to this Annual Report.
Exhibit
No.
Exhibit
1.1
By-laws (
estatutos
) of
Grupo Iusacell Celular, S.A. de C.V.
effective April 4, 2001 (incorporated by reference to Exhibit 1 to
Iusacell Celular's Annual Report on Form 20-F for fiscal year 2000
– File No. 033-79254).
2.1
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 herein by reference
to Exhibit 2(a) to Iusacell's Annual Report on Form 20-F for
fiscal year 2000 — File No. 001-14938).
2.2
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 to the Registration Statement
F-4 — Registration Number 333-37431).
4.1
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.
(incorporated herein by reference to Exhibit A to Iusacell
Celular's Annual Report on Form 20-F for fiscal year 1997).
4.2
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
(incorporated herein by reference to Exhibit 4(b) to Iusacell's
Annual Report on Form 20-F for fiscal year 2000 — File No.
001-14938).
4.3
Amended and Restated Master Lease Agreement (English version),
dated as of May 16, 2002, among
MATC Celular, S. de R.L. de C.V.
,
Grupo Iusacell Celular, S.A. de C.V.
and
Iusacell Arrendadora,
S.A. de C.V.
(incorporated herein by reference to Exhibit 4.3 to
Iusacell's Annual Report on Form 20-F for fiscal year 2002 — File
No. 001-14938).
4.4
Amended and Restated Master Lease Agreement (English version),
dated as of May 16, 2002, between
MATC Celular, S. de R.L. de C.V.
and
Grupo Iusacell Celular, S.A. de C.V.
, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit 4.4 to Iusacell's Annual Report on Form 20-F for fiscal
year 2002 — File No. 001-14938).
4.5
Amended and Restated Build-to-Suit and Site Development Agreement,
dated as of May 16, 2002, between
MATC Celular, S. de R.L. de C.V.
and
Grupo Iusacell Celular, S.A. de C.V.
, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit 4.5 to Iusacell's Annual Report on Form 20-F for fiscal
year 2002 — File No. 001-14938).
4.6
First Amendment and Waiver, dated as of December 7, 2001, to the
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.
, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit 4.3 of Iusacell's
Annual Report on Form 20-F for fiscal year 2001 — File No.
001-14938).
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Table of Contents
Exhibit
No.
Exhibit
4.7
Second Amendment and Waiver, dated as of April 28, 2003, to the
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.
, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit 4.7 of Iusacell's
Annual Report on Form 20-F for fiscal year 2002 — File No.
001-14938).
4.8
First Amendment to the Second Amendment and Waiver, dated as of
April 28, 2003, to the 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.
, the lenders party
thereto, and JP Morgan Chase Bank as Administrative Agent and
Collateral Agent (incorporated herein by reference to Exhibit 4.8
of Iusacell's Annual Report on Form 20-F for fiscal year 2002 —
File No. 001-14938).
4.9
Second Amendment, dated as of June 10, 2003, to the Second
Amendment and Waiver dated as of April 28, 2003, to the 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.
, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit 4.8 of Iusacell's
Annual Report on Form 20-F for fiscal year 2002 — File No.
001-14938).
7.1*
Computation of ratio of earnings to fixed charges.
8.1*
List of subsidiaries.
12.1*
Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Executive Officer).
12.2*
Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Financial Officer).
*
Filed herewith.
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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.
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.
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Table of Contents
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 2002 have been
calculated by applying the forecast annual population growth rate for 2002 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, 2002. 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.
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/ CARLOS ESPINAL G.
Carlos Espinal G.
Chairman of the Board and Series A Director and Attorney-in-Fact
By: /s/ RUSSELL A. OLSON
Russell A. Olson
Series A Director and Attorney-in-Fact
Date: June 30, 2003
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CERTIFICATIONS
I, Carlos Espinal G., certify that:
1.
I have reviewed this annual report on Form 20-F of
Grupo Iusacell Celular,
S.A. de C.V.
;
2.
Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3.
Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;
4.
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a.
designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
b.
evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date");
c.
and presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a.
all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and
b.
any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6.
The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: June 30, 2003
By:
/s/ Carlos Espinal G.
Carlos Espinal G.
Chairman of the Board and Series A Director (principal
executive officer)
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CERTIFICATIONS
I, Russell A. Olson, certify that:
1.
I have reviewed this annual report on Form 20-F of
Grupo Iusacell Celular,
S.A. de C.V.
;
2.
Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3.
Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual
report;
4.
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a.
designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
b.
evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date");
c.
and presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5.
The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a.
all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and
b.
any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6.
The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: June 30, 2003
By:
/s/ Russell A. Olson
Russell A. Olson
Series A Director (principal financial officer)
93
Table of Contents
GRUPO IUSACELL CELULAR, S.A. DE C.V. AND SUBSIDIARIES
(subsidiary of Grupo Iusacell, S.A. de C.V.)
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000
INDEX
CONTENTS
PAGE
Report of Independent Accountants
F-2
Consolidated Balance Sheets — December 31, 2002 and
2001
F-4
Consolidated Income Statements — Fiscal Years Ended
December 31, 2002, 2001 and 2000
F-5
Consolidated Statements of Changes in Stockholders'
Equity — Fiscal Years Ended December 31, 2002, 2001 and
2000
F-6
Consolidated Statements of Changes in Financial
Position — Fiscal Years Ended December 31, 2002, 2001
and 2000
F-7
Notes to the Consolidated Financial Statements
F-8
Schedule
II — Valuation and Qualifying Accounts
S-II
F-1
Table of Contents
REPORT OF INDEPENDENT ACCOUNTANTS
Mexico City, February 28, 2003, except for Note 24 for which the date is June
27, 2003.
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, 2002 and 2001, 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, 2002 and the financial
statement schedule included in this Form 20-F. These financial statements and
the 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, 2002 and 2001, 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,
2002, 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 and as allowed by Item 18 to Form 20-F. 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, 2002 expressed in
Mexican Pesos and the determination of consolidated stockholders' equity at
December 31, 2002 and 2001 also expressed in Mexican Pesos to the extent
summarized in Note 22 to the consolidated financial statements.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As mentioned in
Note 24 to the consolidated financial statements, the Company has incurred a
technical default and violated a financial leverage covenant under its Amended
and Restated Syndicated Loan. The Company obtained an amendment that expired on
June 26, 2003, and as a result, the Company is in default of a financial
leverage covenant under the Amended and Restated Syndicated Loan, which
constitutes an event of default under that loan. Accordingly, the lenders under
the Amended and Restated Syndicated Loan have the right to declare the
indebtedness under their loan immediately due and payable. If the lenders under
the Amended and Restated Syndicated Loan accelerate loan payment, default would
occur under the indenture governing the Senior Notes due 2004, which give the
right to the holders of the Senior Notes due 2004 to accelerate the Company's
repayment obligations. If the lenders of the Amended and Restated Syndicated
Loan and/or the holders of the Senior Notes due 2004 accelerate their loan
payments, defaults would occur under the indenture governing the Senior Notes
due 2006 of the Company's parent company, Grupo Iusacell, S.A. de C.V. (Grupo
Iusacell).
Additionally, as mentioned in Note 24 to the consolidated financial
statements, on June 1, 2003, Company's parent company, Grupo Iusacell, S.A. de
C.V. (Grupo Iusacell) failed to make its scheduled interest payment on its
Senior Notes due 2006. This will constitute an event of default if Grupo
Iusacell does not make such interest payment within a thirty-day cure period.
If an event of default occurs, it would permit the holders of the notes to
accelerate their payment. The right of such holders to accelerate Grupo
Iusacell's repayment obligations will cause an event of default under the terms
of the Amended and Restated Syndicated Loan and under the indentures
F-2
Table of Contents
governing the Senior Notes due 2004, which would permit the lenders and
the holders of the notes to declare their indebtedness immediately due and
payable.
Additionally, as discussed in Note 24 to the consolidated financial
statements, Grupo Iusacell announced that its two largest shareholders have
recently agreed to tender all of their shares, representing 73.90% of Grupo
Iusacell's outstanding shares to an unrelated party. This event, if
consummated, will transfer control of Grupo Iusacell and of the Company to a
new unrelated party. Under the indentures governing the Senior Notes due 2004,
this constitutes a change of control under which the holders of the notes have
the right to require the Company to repurchase such holders' notes. This also
constitutes a change of control and would constitute an event of default under
the Amended and Restated Syndicated Loan so the lenders under the Amended and
Restated Syndicated Loan would have the right to declare all amounts
outstanding under the Amended and Restated Syndicated Loan immediately due and
payable.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These matters and management's plans are more
fully discussed in Note 24 to the consolidated financial statements. The
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
PRICEWATERHOUSECOOPERS
/s/ José S. Oropeza de la Cruz
José S. Oropeza de la Cruz
Audit Partner
F-3
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, 2002
December 31,
2002
2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 4c.)
Ps.
148,487
Ps.
126,358
Accounts receivable:
Trade, net of Ps. 93,603 and Ps. 222,912 of
allowance for doubtful accounts in 2002 and 2001,
respectively (Note 4e.)
638,135
629,217
Due from related parties (Note 5)
60,867
45,501
Recoverable taxes and other
445,996
564,142
1,144,998
1,238,860
Inventories — Net (Note 6)
35,698
253,437
Total current assets
1,329,183
1,618,655
Investments (Note 7)
34,421
36,005
Property and equipment — Net (Note 8)
8,552,898
9,365,301
Other assets — Net (Note 9)
1,462,012
1,988,538
Excess of cost of investments in subsidiaries over
book value — Net of accumulated amortization of
Ps. 960,022 in 2002 and Ps. 838,784 in 2001 (Note
4j.)
1,878,797
1,993,103
Total assets
Ps.
13,257,311
Ps.
15,001,602
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable (Note 10d.)
Ps.
125,272
Ps.
116,306
Trade accounts payable
271,762
581,291
Notes payable to suppliers, short-term (Note 11)
—
130,541
Due to related parties (Note 5)
110,566
169,665
Taxes and other payables
552,454
859,343
Income tax (Note 12)
50,705
57,604
Employee profit sharing (Note 12)
—
2,821
Total current liabilities
1,110,759
1,917,571
Long-term debt (Note 10)
4,338,797
4,028,271
Other accounts payable, long-term (Notes 4d. and 4m.)
3,018
57,862
Total liabilities
5,452,574
6,003,704
Commitments and contingencies (Note 13)
—
—
STOCKHOLDERS' EQUITY:
Contributed capital (Notes 14 and 15):
Capital stock
15,924,916
13,604,226
Capital contributed
98,122
98,122
16,023,038
13,702,348
Contributions for future capital stock increases
—
2,320,690
Earned capital (Note 15):
Accumulated (losses) profits:
Legal reserve
28,357
28,357
For prior years
(6,483,076
)
(6,168,433
)
For the year
(1,060,944
)
(314,643
)
(7,515,663
)
(6,454,719
)
Accumulated other comprehensive income
(702,638
)
(702,638
)
Total majority stockholders' equity
7,804,737
8,865,681
Minority interest
—
132,217
Total stockholders' equity
7,804,737
8,997,898
Total liabilities and stockholders' equity
Ps.
13,257,311
Ps.
15,001,602
The accompanying twenty-four 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 INCOME STATEMENTS
(Notes 1, 2, 3 and 4)
Expressed in thousands of
constant Mexican pesos as of December 31, 2002
Years ended December 31,
2002
2001
2000
Revenues:
Services
Ps.
4,989,753
Ps.
6,005,545
Ps.
5,497,454
Telephone equipment sales and other
591,882
641,737
558,850
5,581,635
6,647,282
6,056,304
Cost of sales:
Cost of services
1,549,547
1,560,761
1,547,575
Cost of telephone equipment sales and other
487,826
399,644
376,288
2,037,373
1,960,405
1,923,863
Gross profit
3,544,262
4,686,877
4,132,441
Operating expenses
1,783,583
2,346,815
2,026,850
Depreciation and amortization
2,121,610
2,715,103
2,516,675
Other operating income (Note 8)
91,608
325,436
—
Operating loss
(269,323
)
(49,605
)
(411,084
)
Integral financing cost (gain):
Interest
expense — Net
384,657
407,892
538,847
Foreign exchange (gain) loss  — Net
507,147
(101,252
)
20,681
Gain from monetary position
(220,633
)
(174,435
)
(395,722
)
671,171
132,205
163,806
Equity participation in net loss (profit) of associated
companies and net loss (gain) on sale of equity
investments (Notes 2 and 7)
9,741
(6,889
)
(2,619
)
Loss from continuing operations before assets tax,
income tax and minority interest
(950,235
)
(174,921
)
(572,271
)
Provisions for:
Assets tax
111,609
154,749
165,246
Income tax
8,861
—
—
120,470
154,749
165,246
Loss from continuing operations before minority interest
(1,070,705
)
(329,670
)
(737,517
)
Minority interest
9,761
21,874
17,399
Loss from continuing operations
(1,060,944
)
(307,796
)
(720,118
)
Profit from discontinued operations (net of income tax)
(Note 18)
—
—
(9,370
)
Loss after discontinued operations
(1,060,944
)
(307,796
)
(710,748
)
Cumulative effect of the adoption of the new accounting
pronouncement
(Note 4d.)
—
6,847
—
Net loss for the year
(Ps.
1,060,944
)
(Ps.
314,643
)
(Ps.
710,748
)
The accompanying twenty-four 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 STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
(Notes 1, 2, 3 and 4)
Expressed in thousands of constant Mexican pesos
as of December 31, 2002
Contributions
for future
Accumulated profits (losses)
Capital stock
Capital
stock
subscribed
contributions
increase
Legal reserve
Prior years
For the year
Balance at
December 31, 1999
Ps.
13,604,027
Ps.
98,122
Ps.
5,365
Ps.
5,894,540
Ps.
459,847
Application of
1999 net profit
22,992
436,855
(459,847
)
Contributions
for future
stock
increase
Ps.
1,376,381
Increase in minority
interest
Comprehensive loss
for the year
(710,748
)
Balance at
December 31, 2000
13,604,027
98,122
1,376,381
28,357
(5,457,685
)
(710,748
)
Application of 2000
net loss
(710,748
)
710,748
Increase in capital
stock from the
capitalization of
stockholders' debt
116
Decrease in capital
stock from the
effects of the
reverse stock split
(256
)
Increase in capital
stock
339
Contribution for
future capital
stock increases
944,309
Increase in
minority interest
Comprehensive loss
for the year
(314,643
)
Balance at December
31, 2001
13,604,226
98,122
2,320,690
28,357
(6,168,433
)
(314,643
)
Application of 2001
net loss
(314,643
)
Capitalization of
contributions for
future capital
stock increases
2,320,690
(2,320,690
)
Decrease in
minority interest
Comprehensive loss
for the year
(1,060,944
)
Balance at December
31, 2002
Ps.
15,924,916
Ps.
98,122
Ps.
—
Ps.
28,357
(Ps.
6,483,076
)
(Ps.
1,060,944
)
[Additional columns below]
[Continued from above table, first column(s) repeated]
Accumulated
other
Total
comprehensive
Minority
stockholders
income
interest
equity
1
Balance at
December 31, 1999
(Ps.
909,484
)
Ps.
29,728
Ps.
7,333,609
Application of
1999 net profit
—
Contributions
for future
stock
increase
1,376,381
Increase in minority
interest
56,620
56,620
Comprehensive loss
for the year
206,846
(503,902
)
Balance at
December 31, 2000
(702,638
)
26,892
8,262,708
Application of 2000
net loss
—
Increase in capital
stock from the
capitalization of
stockholders' debt
116
Decrease in capital
stock from the
effects of the
reverse stock split
(256
)
Increase in capital
stock
339
Contribution for
future capital
stock increases
944,309
Increase in
minority interest
105,325
105,325
Comprehensive loss
for the year
(314,643
)
Balance at December
31, 2001
(702,638
)
132,217
8,997,898
Application of 2001
net loss
314,643
—
Capitalization of
contributions for
future capital
stock increases
—
Decrease in
minority interest
(132,217
)
(132,217
)
Comprehensive loss
for the year
(1,060,944
)
Balance at December
31, 2002
(Ps.
702,638
)
Ps.
—
Ps.
7,804,737
The accompanying twenty-four 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
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Notes 1, 2, 3 and 4)
Expressed in thousands of constant Mexican pesos
as of December 31, 2002
Year ended December 31,
2002
2001
2000
Operating Activities:
Loss from continuing operations
(Ps.
1,060,944
)
(Ps.
307,796
)
(Ps.
720,118
)
Items not requiring the use of resources:
Depreciation and amortization
2,121,610
2,715,103
2,516,675
Equity participation in net loss (gain) of associated
companies and net loss (gain) on sale of equity
investments
9,741
(6,890
)
(2,619
)
Deferred income tax
8,861
—
—
Minority interest
(9,761
)
(21,874
)
(17,399
)
1,069,507
2,378,544
1,776,539
Resources (used for) provided by operating activities:
Trade accounts receivable
(8,918
)
72,221
177,792
Related parties, net
(74,465
)
13,412
27,915
Recoverable taxes and other
118,146
(2,085
)
179,470
Inventories
217,739
35,782
(41,969
)
Trade accounts payable
(440,070
)
65,642
(249,424
)
Taxes and other payables
(306,889
)
(267,048
)
(19,030
)
Income tax
(6,899
)
16,878
38,680
Employee profit sharing
(2,821
)
2,816
(450
)
Other
(54,844
)
54,248
763
Resources (used for) provided by operating
activities before discontinued operations, extraordinary item
and cumulative effect of the adoption of the new accounting
pronouncement
510,486
2,370,410
1,890,286
Cumulative effect of the adoption of the new accounting
pronouncement
—
(6,847
)
—
Profit from discontinued operations
—
—
9,370
Resources (used for) provided by operating activities
(510,486
)
2,363,563
1,899,656
Financing activities:
Proceeds from long-term debt
310,526
2,574,447
—
Principal payments on long-term debt
—
(3,980,142
)
(973,000
)
Increase (decrease) in notes payable
8,966
(10,947
)
13,043
Contribution for future capital stock increases
—
944,309
1,376,381
Increase in capital stock
—
339
—
Decrease in capital stock
—
(256
)
—
Accumulated effect of deferred taxes
—
—
206,846
Increase in capital stock from the capitalization of
stockholders' debt
—
116
—
Resources provided by financing activities
319,492
527,866
623,270
Investing activities:
Purchase of property and equipment
(599,067
)
(1,688,841
)
(2,173,190
)
(Purchase) sale of common stock of associated companies
(185,210
)
4,203
72,152
Acquisition of Portatel, net of cash
—
(523,553
)
—
Increase in telephones to be amortized
—
(551,524
)
(1,150,163
)
(Purchase) disposal of other assets
(23,572
)
(314,374
)
823,197
Resources used for investing activities
(807,849
)
(3,074,089
)
(2,428,004
)
Net increase (decrease) in cash and cash equivalents
22,129
(182,660
)
94,922
Cash and cash equivalents at the beginning of the year
126,358
309,018
214,096
Cash and cash equivalents at the end of the year
Ps.
148,487
Ps.
126,358
Ps.
309,018
The accompanying twenty-four notes are an integral part of these consolidated financial statements.
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
AS OF DECEMBER 31, 2002, 2001 AND 2000
Except as otherwise noted, expressed
in thousands of constant Mexican pesos as of December 31, 2002.
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.
is a holding company incorporated on
October 6, 1992, and as mentioned in the following paragraph, starting August
4, 1999, is subsidiary of
Grupo Iusacell, S.A. de C.V.
(New Iusacell). 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
Grupo
Iusacell, S.A. de C.V.
, a new holding company, New Iusacell 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 99.50% of Old Iusacell shares when the offer expired on August 10,
1999.
Old Iusacell and its subsidiaries are referred collectively herein as the
Company.
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 100.00% (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 hold concessions to 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
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)
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.
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 34.50%
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:
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. Iusatel USA, Inc.
started operations in December 2002.
On March 22, 2001, the Company sold its 65.00% equity interest in
Satelitrón, S.A. de C.V.
As a result of the sale, the Company recorded a gain
of Ps. 4,203 (U.S.$429) before taxes.
During 2002,
Inflight Phone de México, S.A. de C.V.
and
Promotora Celular,
S.A. de C.V.
, were merged into
Iusacell, S.A. de C.V.
The merger was recorded
as of July 31, 2002.
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. 552,317 (U.S.$56,588). The Company also reached an agreement to acquire
the remaining 21.66% ownership in Portatel for Ps. 157,630 (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 the Region 8, which covers
the Mexican states of Yucatan, 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.
696,534
Liabilities assumed
(206,210
)
Goodwill (amortized by the straight-line method over the
remaining life of the concession)
Ps.
219,623
Purchase price
Ps.
709,947
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)
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
Jose Ramon 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
94.90% of the economic interest and 49.00% 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 would own 5.10% of the economic
interest and 51.00% of the voting shares of these companies.
The Mexican National does not have the unilateral right to approve actions
at the shareholder or board level of the Non-Cellular Subsidiaries. Under each
company's by-laws, all shareholder or board action 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, 2002, Infotelecom is owned
49.00%, 49.00% and 2.00%, 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 Old Iusacell, which are included in the consolidated
financial statements, are as follows:
Economic interest
(direct or indirect,
as of December 31)
Subsidiary
2002
2001
(%)
(%)
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
Inmobiliaria Montes Urales 460, S.A. de C.V.
100
100
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)
Economic interest
(direct or indirect,
as of December 31)
Subsidiary
2002
2001
(%)
(%)
Mexican Cellular Investments, Inc.
100
100
Iusanet, S.A. de C.V.
100
100
Promotora Celular, S.A. de C.V.
—
100
Iusatelecomunicaciones, S.A. de C.V.
95
95
Grupo Iusacell Nicaragua, S.A.
100
100
Infotelecom, S.A. de C.V.
49
49
Punto a Punto Iusacell, S.A. de C.V.
95
95
Grupo Portatel, S.A. de C.V.
and subsidiary (Region 8)
100
78
Iusatel, S.A. de C.V.
95
95
Iusatel USA, Inc.
95
95
Note 3 — Basis of Presentation:
a. Basis of presentation
The Company's consolidated financial statements have been prepared in
conformity with Accounting Principles Generally Accepted in Mexico (Mexican
GAAP). The consolidated financial statements have been presented in thousands
of constant Mexican pesos as of December 31, 2002 as required by Bulletin B-10,
"Recognition of the Effects of Inflation on Financial Information", as amended,
issued by the Mexican Institute of Public Accountants (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.
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.
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)
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, 2001 presented
in the consolidated financial statements have been restated to
constant Mexican pesos as of December 31, 2002 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, 2002 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 reduction of approximately
Ps. 477,764 in depreciation expense for 2001. The average annual rates of
depreciation used by the Company are as follows:
2002
2001
(%)
(%)
Buildings and facilities
4
4
Communications equipment
10
10
Furniture and fixtures
10
10
Transportation equipment
17
17
Computer equipment
29
29
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, 2002,
2001 and 2000, the Company did not capitalize integral financing cost.
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)
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, 2002.
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
Cash and cash equivalents consist primarily of bank deposits. The Company
invests its excess cash in deposits with major banks.
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.
Until October 2002, the Company used 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.
On October 7 and 10, 2002, the Company early terminated the derivative
financial instruments used for hedging purposes (Note 20).
The carrying amounts of the Company's financial instruments, as reflected
in the balance sheet, approximate their fair value as of December 31, 2002 and
2001, except for long-term debt which has a quoted market value and
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)
for the foreign currency and interest rate hedge contracts, which as of
January 1, 2001, were valued using the same valuation criteria used to value
the hedged asset or liability (Note 20).
As a result of the adoption of this new accounting pronouncement, the
Company recognized a cumulative loss on derivative financial instruments of
Ps.6,847 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.190,645 and Ps.126,021 in 2002 and 2001, respectively. The charge to income
for the year for the allowance for doubtful accounts amounted to Ps.61,336,
Ps.114,613 and Ps.99,919 in 2002, 2001 and 2000, respectively.
f.
Investment in associated companies
The Company carries under the equity method long-term investments in
associated companies in which it owns between 20.00% and 50.00% 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 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 increase of approximately Ps.194,855 in amortization expense for
2001. Until December 31, 2001, the cost of such telephones was included in
other assets, net of accumulated amortization. Starting January 1, 2002, it is
included in Recoverable taxes and other. Such cost 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, 2002, 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.
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)
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.280,151, Ps.455,560 and Ps.369,792
for 2002, 2001 and 2000, 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.168,903, Ps.168,095 and Ps.163,088 in 2002, 2001
and 2000, 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
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 (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, 2002, 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.
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)
The Company has no employee pension plans and does not provide for
post-retirement benefits.
n.
Revenue recognition
Cellular air time is recorded as revenue as service is provided. Until
December 31, 2001, revenue from the sale of prepaid cards was recognized at the
date of sale. The Company had recognized the revenue on the sale of prepaid
cards at the date of sale rather than on a deferred basis because the length of
the average consumption period for such prepaid cards was not significant,
i.e., approximately one to one-and-a-half months, and it was not material to
results of operations for 2001 and 2000. Starting January 1, 2002, the Company
started to recognize revenue from the sale of the prepaid cards as service is
provided because the increasing length of the average consumption period for
such prepaid cards. Revenues from the sale of prepaid cards associated with
services that have not been provided are deferred until the services are
provided and are included in taxes and other payable in the accompanying
consolidated balance sheet. 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 recognized when the services
are provided. Other revenues, mainly from paging and long distance services,
are recognized when the related services are provided.
o.
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.
p.
Comprehensive income (loss)
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 19).
q.
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 and that indefinite life intangibles
no longer be amortized. The provisions of Bulletin C-8 are required to be
applied beginning on January 1, 2003, although early adoption is recommended.
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)
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:
A summary of related party accounts and notes receivable, including
interest, as of December 31, is as follows:
2002
2001
Iusacell PCS
Ps.
14,220
Ps.
44,092
New Iusacell
46,647
—
Other
—
1,409
Total
Ps.
60,867
Ps.
45,501
Accounts receivable result from the financing of related parties'
operations.
Accounts and notes payable to related parties, including interest, as of
December 31, are as follows:
2002
2001
Verizon
Ps.
79,122
Ps.
61,384
Vodafone
2,989
2,122
New Iusacell
—
36,773
Iusacell Arrendadora, S.A. de C.V.
20,695
12,129
Iusacell Infraestructura, S.A. de C.V.
5,669
48,131
Iusacell Infraestructura de México, S.A.
de C.V.
2,091
9,126
Total
Ps.
110,566
Ps.
169,665
Accounts payable result from services rendered by the seconded employees
assigned by Verizon and operating lease contracts for certain communications
equipment.
The following is an analysis of the related party transactions described
above:
Years ended December 31,
2002
2001
2000
Service revenue
Ps.
99,587
Ps.
55,639
Ps.
12,777
Cellular telephones repair expense
Ps.
16,509
Ps.
18,332
Technical expense
Ps.
21,163
62,715
94,030
Lease expense
197,391
62,237
8,185
Interest expense
15,710
2,773
—
Total expenses
Ps.
234,264
Ps.
247,234
Ps.
120,547
Acquisition of handsets
Ps.
28,917
Ps.
—
Ps.
—
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:
2002
2001
Cellular telephones and accessories
Ps.
138,936
Ps.
362,900
Less: Allowance for obsolete and
slow-moving inventories
(103,238
)
(117,069
)
35,698
245,831
Goods in transit
—
6,893
Advances to suppliers
—
713
Ps.
35,698
Ps.
253,437
Note 7 – Investments:
As of December 31, the Company's investments were as follows:
2002
2001
Entity
Ownership
Investment
Ownership
Investment
Editorial Celular, S.A. de C.V.
40.00
%
Ps.
13,874
40.00
%
Ps.
17,026
AMCEL
—
15,526
—
15,526
Other
—
5,021
—
3,453
Ps.
34,421
Ps.
36,005
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, 2002, the Company's
share of net (losses) earnings of
Editorial Celular, S.A. de C.V.
was of
(Ps.9,741), Ps.2,686 and Ps.2,619, respectively.
For the year ended December 31, 2001, the gain on sale of equity
investments was of Ps.4,203.
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:
2002
2001
Buildings and facilities
Ps.
1,725,404
Ps.
1,715,913
Communications equipment
10,762,211
10,379,961
Furniture and fixtures
379,281
206,103
Transportation equipment
61,925
84,005
Computer equipment
1,759,935
1,528,885
Cellular rental telephones
10,423
9,658
14,699,179
13,924,525
Accumulated depreciation
(6,894,181
)
(5,924,166
)
7,804,998
8,000,359
Land
68,860
69,613
Construction in progress
677,957
1,295,329
Advances to suppliers
1,083
—
Ps.
8,552,898
Ps.
9,365,301
b.     Depreciation expense was Ps.1,411,470, Ps.1,296,019 and Ps.1,365,798
for 2002, 2001 and 2000, 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 2002 and 2001, Old Iusacell and some of its
subsidiaries sold 67 and 244 non-strategic towers to MATC Celular,
respectively, for Ps.98,098 (U.S.$10,050) and Ps.368,633 (U.S.$36,600),
respectively, generating a gain on the sale, before taxes, of Ps.91,608 and
Ps.325,436, respectively. 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.91,608 and Ps.325,436 gains were recognized at the
date of the sale and have been recorded as other operating income in the
consolidated income statements for the years ended December 31, 2002 and 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, Net:
a.     At December 31, other assets consisted of the following:
2002
2001
Concessions
Ps.
852,154
Ps.
852,146
Cellular telephones to be amortized (Note 4g.)
—
3,512,320
Prepaid expenses
332,795
371,106
Advance payments
459,479
395,917
Pre-operating expenses
25,506
22,864
Other
104,270
274,436
Deferred income taxes, net (Note 12)
163,170
181,837
1,937,374
5,610,626
Accumulated amortization
(475,362
)
(3,622,088
)
Ps.
1,462,012
Ps.
1,988,538
b.     Concessions and cellular telephone amortization expense was Ps.541,237,
Ps.1,250,989 and Ps.987,789 in 2002, 2001 and 2000, respectively. In January
2002, cellular telephones were reclassified to current assets (Note 4g.).
Note 10 – Notes Payable and Long-Term Debt:
As of December 31, 2002 and 2001, the long-term debt of the Company
consisted of the following:
U.S. Dollars
2002
2002
2001
Secured senior notes due 2004
U.S.$
150,000
Ps.
1,565,895
Ps.
1,453,824
Amended and restated syndicated loan
265,622
2,772,902
2,574,447
U.S.$
415,622
Ps.
4,338,797
Ps.
4,028,271
a.
Secured senior notes due 2004
On July 25, 1997, Old Iusacell completed an offering of long-term, secured
senior notes due July 15, 2004 for U.S.$150,000, accruing interest at a fixed
rate of 10.00%, 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 105.00% of principal amount plus accrued interest, if any, declining
to 102.50% after July 15, 2002, and finally to 100.00% after July 15, 2003.
The Notes Due 2004 may also be redeemed at a price equal to 100.00% 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.
b.
Amended and restated syndicated loan, as amended
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:
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)
(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, depending on Old Iusacell's leverage ratio, from 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.
On December 7, 2001 the amended and restated syndicated loan was amended,
and a waiver and consent were granted by the lenders allowing 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 rates of interest; (ii) make loans or
advances to New Iusacell in lieu of paying dividends at such times and in such
amounts as 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 to the Notes Due 2006 and (iii) make loans or advances to
New Iusacell in lieu of paying dividends in an amount not to exceed U.S.$5,000,
so long as an event of default has not occurred, to discharge other liabilities
of New Iusacell incurred in the ordinary course of business.
c.
Covenants and collateral
The Amended and Restated Syndicated loan and the Notes Due 2004 contain
certain restrictive covenants, including the maintenance of certain financial
ratios, restrictions on incurring additional debt, limitations on capital
expenditures and restrictions on the sale or lease of Old Iusacell's assets.
As of December 31, 2002 and 2001, Old Iusacell had complied with such
covenants.
Old Iusacell's obligations under the amended and restated syndicated loan
are unconditionally guaranteed, jointly and severally, by the principal
operating and concession-holding subsidiaries of Old Iusacell and are secured
by the pledge of substantially all capital stock and equity interests held by
Old Iusacell and by all cellular concessions, and by a first lien on
substantially all assets used in connection with or related to such
concessions.
At December 31, 2002, the Company's debt matures as follows:
Years ended December 31,
U.S. Dollars
Mexican pesos
2004
U.S.$
249,608
Ps.
2,605,727
2005
132,811
1,386,454
2006
33,203
346,616
Total
U.S.$
415,622
Ps.
4,338,797
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)
d.
Notes payable
As of December 31, notes payable consisted of the following:
U.S. Dollars
2002
2002
2001
Handset facility
U.S.$
12,000
Ps.
125,272
Handset facility
—
—
Ps.
116,306
Total
U.S.$
12,000
Ps.
125,272
Ps.
116,306
On February 25, 2002, Old Iusacell obtained a handset acquisition
financing facility from
Banco Santander Mexicano, S.A.
(Santander), which
consisted of a one-year unsecured credit facility in a principal amount of
U.S.$12,000. Loans outstanding under this facility provided for interest at an
annual variable rate of LIBOR plus a spread of 1.00%. Interest was paid
quarterly. At the maturity date of this facility, February 25, 2003, Old
Iusacell reached an agreement with Santander to refinance a portion of this
facility under which Old Iusacell paid Santander U.S.$7,000 plus accrued
interest, and refinance the remaining U.S.$5,000. The refinanced facility
consists of an unsecured five-months credit facility in a principal amount of
U.S.$5,000. This loan provides for interest at an annual fixed rate of 3.84%.
Interest and principal will be paid in five equal monthly installments starting
March 25, 2003.
This facility contains certain restrictive covenants. As of December 31,
2002, Old Iusacell had complied with such covenants.
In February 2001, Old Iusacell obtained a handset acquisition financing
facility from Santander, which consisted of a one-year 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 was paid
quarterly and the principal was paid on February 19, 2002.
Note 11 – Notes Payable to Suppliers:
As of December 31, notes payable to suppliers consisted of the following:
2002
2001
Short-term:
The Motorola Facility
Ps.
—
Ps.
88,261
The TV Azteca Facility
—
42,280
Total short-term
Ps.
—
Ps.
130,541
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
available for one year. Loans outstanding under the Motorola Facility accrue
interest at a variable annual rate of six-month LIBOR plus 6.00%. 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. This facility was repaid on April 2002.
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)
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 1.50. Principal and interest are payable in six monthly
installments starting January 31, 2002. This facility was repaid during 2002.
Note 12 – Income Tax, Net Assets Tax and Employee Profit Sharing
For the year ended December 31, 2002, the provision for income taxes
consisted of current income tax and assets tax of Ps.111,609 and deferred
income tax of Ps.8,861.
As of December 31, 2001 and 2000, the provision for income taxes consisted
of current income tax and assets tax of Ps.154,749 and Ps.165,246,
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 reduced the deferred tax
asset in 2002. For the year ended December 31, 2002, the Company generated a
tax loss Ps.1,323,319. For the year ended December 31, 2001, the Company
generated a tax profit of Ps.124,463, which was totally offset by the
application of tax loss carry forwards.
At December 31, 2002 and 2001, the main temporary differences the Company
recognizes for the calculation of deferred income taxes were as follows:
2002
2001
Allowance for doubtful accounts
Ps.
93,603
Ps.
222,912
Liability accruals
32,887
75,273
Income tax losses carry forwards and tax credits
5,104,701
3,694,374
Inventories
(35,698
)
(268,149
)
Property and equipment
(2,706,854
)
(1,973,932
)
Telephones to be amortized
(141,345
)
(184,941
)
Concessions
(308,268
)
(325,840
)
Temporary differences
2,039,026
1,239,697
Income tax rate
35
%
35
%
713,659
433,894
Valuation allowance
(541,628
)
(252,057
)
Deferred income tax asset
172,031
181,837
Income tax rate change
(8,861
)
—
Net deferred income tax asset
Ps.
163,170
Ps.
181,837
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)
The Company has recorded a net deferred tax asset of Ps.163,170
reflecting, mainly, the benefit of tax loss carry forwards, which expire in
varying amounts between 2005 and 2012. 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, 2002 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, 2002.
The Company's estimate of future taxable income is based primarily on and
supported by (i) additional increase in revenues generated by the Calling Party
Pays feature with an important taxable operating margin, (ii) 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 (iii) an increase in 2003 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, 2002 and 2001, the Company had a valuation allowance of
Ps.541,628 and Ps.252,057, 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.
At December 31, 2002, the Company had the following net operating losses
for income tax purposes that may be carried forward and applied against future
taxable earnings:
Year of
Amount
Expiration
loss
of loss
year
1995
Ps.
809,831
2005
1996
17,931
2006
1997
571,918
2007
1998
484,766
2008
2000
474,885
2010
2002
1,323,319
2012
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 2002. 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.1,008,088, relating to one of its subsidiaries,
Iusatelecomunicaciones, and may not be able to apply these losses against other
subsidiaries' profits in 2003 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, 2002, net assets
tax available as a carry forward was Ps.497,718 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, 2002 and 2001, the
Company did not generate any taxable income for profit sharing purposes.
The effective rate reconciliation as of December 31, was as follows:
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)
2002
2001
2000
Loss on continuing operations before taxes
(Ps.
950,235
)
(Ps.
174,921
)
(Ps.
572,271
)
Statutory income tax rate
35
%
35
%
35
%
Income tax (benefit) expense at statutory rate
(332,582
)
(61,222
)
(200,295
)
Add (deduct):
Inventory purchases less cost of sales
(210,000
)
(1,591
)
(14,689
)
Depreciation and amortization
(290,542
)
(242,821
)
(129,722
)
Differences between interest and inflationary
gains or losses
167,927
80,219
84,980
Provision for doubtful accounts
19,662
(3,993
)
19,191
Telephones to be amortized
133,366
205,940
(43,857
)
Goodwill amortization
59,116
62,828
61,040
Income tax rate change
3,101
—
—
Other
(10,109
)
4,202
(41,857
)
Income tax (benefit) expense for the year
(Ps.
460,061
)
(Ps.
43,562
)
(Ps.
265,209
)
Effective rate
48
%
25
%
46
%
Net assets tax
Ps.
111,609
Ps.
154,749
165,246
Note 13 – Commitments and Contingencies:
As of December 31, 2002, 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
Iusacell Arrendadora, S.A. de C.V.
(an
affiliated company) 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.382,842, Ps.166,117 and Ps.173,426 for the years
ended December 31, 2002, 2001 and 2000, respectively.
Future annual minimum rental payments under existing leases as of December
31, 2002 are as follows:
2003
Ps.
419,157
2004
393,990
2005
376,278
2006
367,750
2007
349,494
Thereafter
1,155,209
Ps.
3,061,878
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.
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. During 2002, the liens have been
removed.
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)
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 their distribution agreement. In the same act,
such distributor also sued
Iusacell, S.A. de C.V.
The decision of the Court in
the first instance has been not to set a favorable opinion to any of the parts.
Both parties have appealed the Court's decision.
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. The Company has obtained a
favorable resolution against this 10% excise tax and the Mexican government has
filed an appeal.
In February 2003, the Company has filed an injunction action to challenge
the Mexican government regarding the same excise tax for the year 2003.
h.     A supplier of the Company has sued
Iusacell, S.A. de C.V.
for the
improper termination of their agreement. The Company has obtained a favorable
resolution in the first instance. The supplier has filed an appeal.
i.     A client of the Company has sued
SOS Telecomunicaciones, S.A. de C.V.
,
a subsidiary of the Company. The process is in a preliminary stage.
j.     As discussed in Note 10, the Company has important borrowings, which
require, among other things, compliance with certain financial ratios,
specifically a debt/EBITDA ratio on a quarterly basis. If the Company incurs
operating losses during the first quarter of 2003 and/or the debt has a
substantial increase due to the Mexican peso devaluation relative to the U.S.
dollar, the Company might not be in compliance with the financial covenant
ratio under the Amended and Restated Syndicated loan agreement.
If the Company breaches the financial covenant ratio and does not obtain a
waiver, this could result in the acceleration of the Amended and Restated
Syndicated loan, and because of cross-defaults, the Notes due 2004, the Notes
due 2006 of New Iusacell for U.S.$350,000 and BNP financings of affiliated
companies for U.S.$26,648, could become due and payable. Based upon current
projections, the Company believes it is probable that it does not comply with
the existing financial covenant ratio unless it is modified or waived. The
Company plans to request an amendment to the debt/EBTIDA covenant ratio,
increasing it to 3.5x from 2.5x.
The Company has started to explore, together with external financial and
legal advisors, the possibility of entering into a debt restructuring process.
Although no assurances can be given, the Company expects to successfully
conclude such restructuring during 2003.
The Company's ability to fulfill its long-term financial commitments
depends on the results of these negotiations.
Note 14 – Contributed Capital:
During the years ended December 31, 2002, 2001 and 2000, the following
transactions took place:
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)
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.116. 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.256 in capital stock.
On August 24, 2001, 3 series A shares were subscribed by the Company's
stockholders for an amount of Ps.339.
During 2001 and 2000, New Iusacell made contributions to the Company for
future capital stock increases in an aggregate amount of Ps.2,320,690.
On May 31, 2002, Company's stockholders' approved an increase of the fixed
and variable portions of the capital stock. This increase was made as follows:
a.     The increase of the fixed portion of the capital stock amounted to
Ps.39,187, which were subscribed by the Company's stockholders at their
ownership proportion at the date of the increase. No new shares were issued on
this subscription.
b.     The increase of the variable portion of the capital stock was
subscribed through the issuance of 20,266 shares, of which 10,335 were series A
shares and the remaining 9,931 were series B shares. This portion increase
amounted to Ps.2,281,503.
This increase was made through the capitalization of contributions for
future capital stock increases.
The changes in the number of shares of common stock for the period January
1, 2001 through December 31, 2002 are analyzed as follows:
Number of shares
January 1, 2000
54,828
March 30, 2001 – issuance of common stock through
the capitalization of stockholders' debt
1
August 24, 2001 – issuance of common stock
3
Balance as of December 31, 2001
54,832
May 31, 2002 – issuance of common stock through
the capitalization of contributions for future
capital stock increases
20,266
December 31, 2001 balance
75,098
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)
At December 31, 2002 and 2001, the issued and outstanding shares of common
stock of the Company, without par value, are as follows:
2001
2000
series A
38,302
27,967
series B
36,796
26,865
Total
75,098
54,832
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 — 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 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, 2002, the balance on the CUFIN is approximately
Ps.147,157.
The contributed capital and earned capital accounts consist of the
following:
December 31, 2002
Accumulated
Historical
Adjustments for
Value
Inflation
Total
Capital stock subscribed
Ps.
7,880,528
Ps.
8,044,388
Ps.
15,924,916
Capital contributions
18,655
79,467
98,122
Legal reserve
(11,411
)
39,768
28,357
Accumulated losses from prior years
(4,145,958
)
(2,337,118
)
(6,483,076
)
Net loss for the year
(730,023
)
(330,921
)
(1,060,944
)
Accumulated other comprehensive income
172,031
(874,669
)
(702,638
)
Total
Ps.
3,183,822
Ps.
4,620,915
Ps.
7,804,737
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)
December 31, 2002
Accumulated
Historical
Adjustments for
Value
Inflation
Total
Capital stock subscribed
Ps.
5,748,813
Ps.
7,855,413
Ps.
13,604,226
Capital contributions
18,655
79,467
98,122
Contribution for future capital stock increases
2,131,715
188,975
2,320,690
Legal reserve
(11,411
)
39,768
28,357
Accumulated losses from prior years
(4,140,737
)
(2,027,696
)
(6,168,433
)
Net loss for the year
(5,221
)
(309,422
)
(314,643
)
Accumulated other comprehensive income
172,031
(874,669
)
(702,638
)
Total
Ps.
3,913,845
Ps.
4,951,836
Ps.
8,865,681
Note 16 — Foreign Currency Position:
The balance sheet as of December 31 includes assets and liabilities
denominated in U.S. Dollars, as follows:
2002
2001
Monetary assets
U.S.$
13,925
U.S.$
163,715
Monetary liabilities
463,386
477,105
Net monetary liability position in U.S. Dollars
U.S.$
449,461
U.S.$
313,390
Equivalent in nominal Mexican pesos
Ps.
4,692,058
Ps.
2,873,630
As of December 31, 2002 and 2001, most of the communications equipment and
inventories of cellular telephones and accessories are of foreign origin (Notes
6 and 8).
During 2002, 2001 and 2000, interest income and interest expense on assets
and liabilities denominated in U.S. Dollars were as follows:
2002
2001
2000
Interest income
U.S.$
917
U.S.$
1,587
U.S.$
491
Interest expense
28,952
35,675
24,891
Net interest expense
U.S.$
28,035
U.S.$
34,088
U.S.$
24,400
Equivalent in nominal Mexican pesos
Ps.
292,666
Ps.
312,570
Ps.
234,479
Operating results for the years ended December 31, 2002, 2001 and 2000
include depreciation and amortization expenses, related to fixed assets and
inventories of foreign origin.
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)
The exchange rates as of December 31, 2002 and 2001 were Ps.10.4393 and
Ps.9.1695, per U.S. dollar, respectively. At the issuance date of these
financial statements, February 28, 2003, the exchange rate in effect was
Ps.11.03 per U.S. Dollar.
Note 17 — Project 450:
A subsidiary was established to provide fixed wireless local telephony
services using the 450 MHz frequency band (Project 450). At December 31, 2002
and 2001, Old Iusacell's investment in Project 450 amounted to Ps.29,014 and
Ps.32,852, 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 18 — 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 year
ended December 31, 2000, was as follows:
Current assets
Ps.
2,188
Total assets
2,188
Total liabilities
446
Revenues
—
Gross profit
—
Loss from operations before income taxes
—
Provision for income taxes
—
Profit on disposal
(9,370
)
Net profit
(Ps.
9,370
)
Note 19 — Comprehensive Income:
For the years ended December 31, 2002, 2001 and 2000, comprehensive income
consisted of the following:
2002
2001
2000
Net loss for the year
(Ps.
1,060,944
)
(Ps.
314,643
)
(Ps.
710,748
)
Other comprehensive income:
Accumulated effect of deferred taxes
—
—
206,846
Total other comprehensive income
—
—
206,846
Total comprehensive income
(Ps.
1,060,944
)
(Ps.
314,643
)
(Ps.
503,902
)
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 — 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 purchased 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 Notes due 2004 for U.S.$150,000 and its interest
payments of U.S.$34,500. Until its early termination, these derivatives were
highly effective since a foreign currency rate change on the forward contract
was offset by a corresponding change in the value of the hedged loan.
In October 2002, the Company early terminated its foreign-currency
exchange forward contracts hedging its exchange rate exposure on the Notes due
2004, paying a termination fee of U.S.$1,687.
As of December 31, 2002, the Company does not have any foreign-currency
exchange contracts.
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 30, 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%.
These interest rate collars expired during 2002.
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)
At December 31, the fair values of financial instruments were as follows:
2002
2001
Carrying
Fair
Carrying
Fair
value
value
value
value
Cash and cash equivalents
Ps.
148,487
Ps.
148,487
Ps.
126,358
Ps.
126,358
Accounts receivable
1,144,998
1,144,998
1,238,860
1,238,860
Accounts payable
988,505
988,505
1,859,127
1,859,127
Foreign currency hedge
contracts
—
—
—
(179,073
)
Interest rate collar
—
—
—
(15,284
)
Notes payable
125,272
125,272
116,306
116,306
Long-term debt:
Secured senior notes due 2004
1,565,895
782,947
1,453,824
1,497,439
Amended and restated
syndicated loan
2,772,902
2,772,902
2,574,447
2,574,447
Note 21 – 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.
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)
The tables below present information about reportable segments for the
years ended December 31, 2002, 2001 and 2000 under Mexican GAAP measurement:
Year ended December 31, 2002
Long
Other
Total
Reconciling
Total
Cellular
distance
Businesses
segments
items (2)
consolidated
Revenues — third party
Ps.
5,221,715
Ps.
270,104
Ps.
89,816
Ps
5,581,635
Ps.
5,581,635
Revenues – affiliates
4,166,390
324,935
1,285,094
5,776,419
(Ps.
5,776,419
)
—
Depreciation and
amortization
1,967,917
123,857
32,362
2,124,136
(2,526
)
2,121,610
Operating loss
(67,228
)
(138,243
)
(111,458
)
(316,929
)
47,606
(269,323
)
EBITDA
(1)
1,900,689
(14,386
)
(79,096
)
1,807,207
45,080
1,852,287
Total assets
18,632,206
1,381,134
782,010
20,795,350
(7,538,039
)
13,257,311
Capital expenditures
494,759
13,306
69,355
577,420
—
577,420
Year ended December 31, 2001
Long
Other
Total
Reconciling
Total
Cellular
distance
Businesses
segments
items (2)
consolidated
Revenues — third party
Ps.
6,216,388
Ps.
310,206
Ps.
120,688
Ps.
6,647,282
Ps.
6,647,282
Revenues – affiliates
3,184,173
668,920
1,298,690
5,151,783
(Ps.
5,151,783
)
—
Depreciation and
amortization
2,587,120
107,725
28,791
2,723,636
(8,533
)
2,715,103
Operating loss
(400,406
)
(124,534
)
(219,737
)
(744,677
)
695,072
(49,605
)
EBITDA
(1)
2,186,714
(16,809
)
(190,946
)
1,978,959
686,539
2,665,498
Total assets
18,123,610
988,266
689,895
19,801,771
(4,800,169
)
15,001,602
Capital expenditures
1,629,171
94,582
18,723
1,742,476
—
1,742,476
Year ended December 31, 2000
Long
Other
Total
Reconciling
Total
Cellular
distance
Businesses
segments
items (2)
consolidated
Revenues — third party
Ps.
5,866,914
Ps.
73,531
Ps.
119,214
Ps.
6,059,659
(Ps.
3,355
)
Ps.
6,056,304
Revenues – affiliates
2,931,679
559,371
706,605
4,197,655
(4,197,655
)
—
Depreciation and
amortization
2,405,001
95,758
24,096
2,524,855
(8,180
)
2,516,675
Operating loss
(102,776
)
(130,013
)
(169,634
)
(402,423
)
(8,661
)
(411,084
)
EBITDA
(1)
2,302,225
(34,255
)
(145,538
)
2,122,432
(16,841
)
2,105,591
Total assets
17,595,679
1,184,201
941,125
19,721,005
(5,122,384
)
14,598,621
Capital expenditures
1,862,823
86,419
189,169
2,138,411
—
2,138,411
(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, 2002,
2001 and 2000, is as follows:
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)
Years ended December 31,
2002
2001
2000
EVITAD
Ps.
1,852,287
Ps.
2,665,498
Ps.
2,105,591
Depreciation and amortization
(2,121,610
)
(2,715,103
)
(2,516,675
)
Integral financing cost
(671,171
)
(132,205
)
(163,806
)
Equity participation in net (loss)
profit of associated companies and
net (loss) gain
on sale of equity investments
(9,741
)
6,889
2,619
Income tax and assets tax
(120,470
)
(154,749
)
(165,246
)
Minority interest
9,761
21,874
17,399
Profit from discontinued operations
—
—
9,370
Cumulative effect of the adoption of
the new accounting principle
—
(6,847
)
—
Net loss for the year
(Ps.
1,060,944
)
(Ps.
314,643
)
(Ps.
710,748
)
(2)
Reconciling items primarily reflect inter-segment eliminations and certain
non-recurring items.
NOTE 22
–
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, 2002, and stockholders' equity as of December
31, 2002 and 2001.
a.     Deferred Income Taxes
Under Mexican GAAP, the Company applies revised Bulletin D-4. Under the
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. 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. The U.S. GAAP
adjustment to deferred income taxes exists as a result of the other U.S. GAAP
adjustments changing the book basis of the Company and as a result impacting
various deferred tax balances and the related valuation allowance.
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.
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)
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 entered into interest rate collar
agreements to hedge an aggregate notional amount of U.S.$50,000 of its floating
rate debt. Additionally, during 2001 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
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 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.
On December 30, 1999 Old Iusacell entered into a foreign currency hedge
utilizing forward-rate contracts, hedging its exchange rate exposure for up to
U.S.$77,000 or approximately 50% of the principal and interest payments coming
due over the period April 2000 to April 2001.
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 SFAS 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 Company has no derivative financial instruments at December 31, 2002.
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
expense 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.6,847 as of January 1, 2001.
d.     Gain From The Exchange Of Non-Monetary Assets
During 2002 and 2001, the Company entered into certain fiber optic cable
swap agreements to exchange certain long-distance fiber optic cables fair
valued at Ps.121,215 and Ps.150,812, respectively. Under Mexican GAAP, the
Company recorded the transactions as both acquisitions (at the carrying value
of the asset sold) and sales of fixed assets based on the contract amount,
resulting in a gain on the sale of Ps.53,172 and Ps.145,229, for the years
ended December 31, 2002 and 2001, respectively. Under U.S. GAAP, because the
assets exchanged are similar productive
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)
assets and, on a net basis, no cash was exchanged, the transactions did
not result in the recognition of earnings. Consequently, under U.S. GAAP, the
acquisitions and sales would not have been recorded.
In December 1998, the Company entered into another similar fiber optic
cable swap agreement with Bestel for Ps.258,609, resulting in a gain on the
sale of Ps.225,208 that was not recorded under U.S. GAAP.
The cumulative gains recorded under Mexican GAAP for exchange of
non-monetary assets taking place in 1999, 2001 and 2002 is Ps.423,609 at
December 31, 2002.
e.     Sale-Leaseback Transaction With MATC Celular
As mentioned in Note 8c., during 2002 and 2001 the Company sold and
leased-back 67 and 244, respectively, 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.91,608 and Ps.325,436 gains were recognized at
the date of the sale.
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.76,383 and Ps.286,319 of the gains at the
transaction dates. 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 years ended December 31, 2002 and 2001 was decreased Ps.60,459 and Ps.276,008, respectively.
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. Under Mexican GAAP, the Company did not capitalize any
financing costs for each of the years ended December 31, 2002, 2001 and 2000.
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.     Goodwill And Indefinite-Lived Intangible Assets
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.
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)
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.
Effective January 1, 2002, the Company adopted the provisions of SFAS 142.
Goodwill is no longer amortized but is reviewed for impairment on an annual
basis at the reporting unit level. The impairment test is performed in two
phases. The first step of the goodwill impairment test compares the fair value
of the reporting unit with its carrying value, including goodwill. If the fair
value of the reporting unit exceeds its carrying value, goodwill of the
reporting unit is considered not impaired; however if the carrying value of the
reporting unit exceeds its fair value, an additional procedure must be
performed. The additional procedure compares the implied fair value of the
reporting unit (as defined by SFAS 142) with the carrying amount of that
goodwill. An impairment loss is recorded to the extent that the carrying
amount of goodwill exceeds its implied fair value. Upon adoption of SFAS 142,
goodwill was tested for impairment and no impairment charges were recorded.
Under Mexican GAAP goodwill continues to be amortized. For U.S. GAAP
purposes, the reversal of goodwill amortization under Mexican GAAP increased
the net income for the year ended December 31, 2002 in Ps.168,903.
Additionally, the Company defined concessions as intangible assets with
definite life, consequently, under both Mexican GAAP and U.S. GAAP, the
amortization of this intangible asset continues.
The impact of adopting SFAS 142 on net loss and loss per share adjusted to
exclude amortization expense related to goodwill is as follows:
Years ended December 31,
2002
2001
2000
Net loss for the year under U.S. GAAP
(Ps.
898,645
)
(Ps.
607,580
)
(Ps.
704,519
)
Amortization of goodwill
—
165,993
163,088
Pro-forma net loss for the year
under U.S. GAAP
(Ps.
898,645
)
(Ps.
441,587
)
(Ps.
541,431
)
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.
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 charge and
related provision for consolidation of facilities related to the pending sale
and anticipated loss on 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, under U.S. GAAP the charge and related provision recorded by the
Company in 1996 has been reversed.
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)
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,
2002
2001
2000
Net loss under Mexican GAAP
(Ps.
1,060,944
)
(Ps.
314,643
)
(Ps.
710,748
)
Pre-operating costs (Note 23b.)
(2,642
)
—
—
Derivative financial instruments (Note 23c.)
170
—
6,496
Gain from the exchange of non-monetary
assets (Note 23d.)
(53,172
)
(145,229
)
—
Depreciation of the gain from the exchange
of non-monetary assets (Note 23d.)
24,737
22,521
—
Gain on the sale lease-back transaction
(Note 23e.)
(60,459
)
(276,008
)
—
Capitalized interest (Note 23f.)
95,495
97,115
—
Depreciation of capitalized interest (Note 23f.)
(9,711
)
—
—
Amortization of goodwill (Note 23g.)
168,903
2,102
—
Minority interest (Note 23i.)
(1,585
)
6,258
—
Effect of inflation accounting on U.S. GAAP
adjustments (Note 23h.)
563
304
(267
)
Net loss under U.S. GAAP
(Ps.
898,645
)
(Ps.
607,580
)
(Ps.
704,519
)
As of December 31,
2002
2001
Stockholders' equity under Mexican GAAP
Ps.
7,804,737
Ps.
8,997,898
Pre-operating costs (Note 23b.)
(85,640
)
(82,998
)
Derivative financial instruments (Note 23c.)
—
(194,357
)
Gain from the exchange of non-monetary
assets (Note 23d.)
(423,609
)
(370,437
)
Accumulated amortization on the gain from
the exchange of non-monetary assets (Note 23d.)
47,258
22,521
Gain on the sale lease-back transaction
(Note 23e.)
(336,467
)
(276,008
)
Capitalized interest (Note 23f.)
192,610
97,115
Accumulated depreciation on capitalized
interest (Note 23f.)
(9,711
)
—
Amortization of goodwill (Note 23g.)
171,005
2,102
Minority interest (Note 23i.)
6,742
(125,957
)
Provision for consolidation of facilities
(Note 23j.)
20,866
20,866
Stockholders' equity under U.S. GAAP
Ps.
7,387,791
Ps.
8,090,745
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)
Provided below is an analysis of changes in stockholders' equity under
U.S. GAAP:
As of December 31,
2002
2001
Opening balance
Ps.
8,090,745
Ps.
7,950,375
Increase in capital stock and contributions
for future capital stock increases
—
944,508
Net loss for the year
(898,645
)
(607,580
)
Other comprehensive income:
Inflation effects
(563
)
(304
)
Derivative financial instruments
196,254
(196,254
)
Closing balance
Ps.
7,387,791
Ps.
8,090,745
l.     Discontinued Operations
As described in Note 18, 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 from discontinued operations amounting to Ps.9,370, for the
year ended December 31, 2000. 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.     Depreciation
Under Mexican GAAP, depreciation is not included in the measure of gross
profit. Under U.S. GAAP, Ps.1,396,445, Ps.1,273,499 and Ps.1,365,798 for the
years ended December 31, 2002, 2001 and 2000, respectively, are reclassified to
cost of sales.
n.     Impairment Of Long-Lived Assets
During the year ended December 31, 2002, the Company adopted SFAS 144,
"Accounting for he Impairment of Long-Lived Assets." SFAS 144 provides
guidance on the accounting for the impairment or disposal of long-lived assets.
SFAS 144 supercedes SFAS 121 and applies to all long-lived assets (including
discontinued operations) and consequently amends Accounting Principles Board
Opinion No. 30 (APB 30), "Reporting Results of Operations Reporting the Effects
of Disposal of a Segment of a Business". SFAS 144 develops one accounting
model (based on the model in SFAS 121) for long-lived assets that are to be
disposed of by sale, as well as addresses the principal implementation issues.
The adoption of SFAS 144 had no effect on the consolidated financial position
or results of operations of the Company.
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,
Operating activities:
2002
2001
2000 (*)
Net loss under U.S. GAAP
(Ps.
898,645
)
(Ps.
607,580
)
(Ps.
704,519
)
Adjustments to reconcile net loss to cash
(used in) provided by operating activities:
Depreciation
1,396,445
1,273,499
1,365,798
Amortization
541,237
1,416,981
1,150,876
Gain on the sale of towers
(31,149
)
(49,427
)
—
Equity in (profit) loss of associated companies
9,741
(2,687
)
(2,619
)
Gain on sale of equity investments
—
(4,203
)
—
Increase in allowance for doubtful accounts
61,336
114,613
99,919
Increase in allowance for obsolete and
slow-moving inventories
11,213
69,777
44,825
Minority interest
(8,176
)
(28,132
)
(17,399
)
Deferred income taxes and employee
profit sharing
8,861
—
—
Gain on net monetary position and foreign
exchange losses
285,951
(275,991
)
(374,774
)
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable
114,562
(96,375
)
155,891
Inventories
206,526
(45,125
)
(86,796
)
Increase (decrease) in:
Trade accounts payable and related parties
(495,244
)
79,362
(177,123
)
Taxes and other payable
(349,419
)
(226,124
)
131,364
Income tax
(12,970
)
21,874
38,231
Other
(55,015
)
(11,981
)
764
Net cash provided by operating activities
Ps.
785,254
Ps.
1,628,481
Ps.
1,624,438
Financing activities:
Proceeds from notes payable and long-term debt
—
—
127,253
Payments of notes payable and long-term debt
—
(25,393
)
(786,209
)
Contributions for future capital stock increases
—
944,309
1,376,381
Capital stock increases
—
83
—
Net cash provided by financing activities
Ps.
—
Ps.
918,999
Ps.
717,425
Investing activities:
Purchase of property and equipment, net
(647,880
)
(1,694,225
)
(2,173,190
)
Proceeds from sales of investments in
associated companies
—
4,203
72,152
Proceeds from the sale of the towers
98,098
378,933
—
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,
Operating activities:
2002
2001
2000 (*)
Acquisition of Portatel, net of cash
(185,210
)
(523,553
)
—
Purchase of other assets
(20,930
)
(865,899
)
(120,119
)
Net cash used in investing activities
(755,922
)
(2,700,541
)
(2,221,157
)
Translation and inflation effects in cash
(7,203
)
(29,599
)
(25,783
)
Net increase (decrease) in cash
22,129
(182,660
)
94,923
Cash at beginning of year
126,358
309,018
214,095
Cash at the end of year
148,487
126,358
309,018
Interest paid
113,542
406,685
424,579
Income tax paid
141,847
120,781
148,809
Supplemental disclosures of non-cash activities:
Conversion of debt to equity
—
116
—
Capitalization of contributions for future
capital stock increases
2,320,690
—
—
(*)`
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, 2002, 2001 and 2000 was as follows:
Years ended December 31,
2002
2001
2000
Asset tax not offset by current taxes
Ps.
111,609
Ps.
154,749
Ps.
165,246
Deferred tax
8,861
—
—
Provision for taxes
Ps.
120,470
Ps.
154,749
Ps.
165,246
3. Deferred income taxes
Significant components of deferred income taxes under U.S. GAAP are as
follows:
December 31, 2002
SFAS 109
SFAS 109
applied to
applied to
Mexican GAAP
U.S. GAAP
Balances
adjustments
Total
Deferred assets:
Allowance for doubtful accounts
Ps.
30,898
Ps.
—
Ps.
30,898
Net operating loss carryforwards and tax credits
1,633,504
—
1,633,504
Reorganization reserve
3,914
—
3,914
Gain from the exchange of non-monetary assets
—
120,432
120,432
Pre-operating costs
—
27,405
27,405
Gain on the sale lease-back transaction
—
107,669
107,669
Valuation allowance
(480,230
)
(196,978
)
(677,208
)
Deferred tax assets
1,188,086
58,528
1,246,614
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)
December 31, 2002
SFAS 109
SFAS 109
applied to
applied to
Mexican GAAP
U.S. GAAP
Balances
adjustments
Total
Deferred liabilities:
Inventories
12,020
—
12,020
Property and equipment
866,193
—
866,193
Cellular telephones to be amortized
48,057
—
48,057
Concessions
98,646
—
98,646
Capitalized interest
—
58,528
58,528
Deferred tax liabilities
1,024,916
58,528
1,083,444
Net deferred tax assets
Ps.
163,170
Ps.
—
Ps.
163,170
Deferred assets:
Allowance for doubtful accounts
78,019
—
78,019
Net operating loss carryforwards and tax credits
1,293,031
—
1,293,031
Reorganization reserve
26,346
—
26,346
Gain from the exchange of non-monetary assets
—
121,771
121,771
Pre-operating costs
—
29,050
29,050
Derivative financial instruments
—
68,025
68,025
Gain on the sale lease-back transaction
—
96,602
96,602
Valuation allowance
(252,057
)
(281,458
)
(533,515
)
Deferred tax assets
1,145,339
33,990
1,179,329
Deferred liabilities:
Inventories
93,852
—
93,852
Property and equipment
690,876
—
690,876
Cellular telephones to be amortized
64,730
—
64,730
Concessions
114,044
—
114,044
Derivative financial instruments
—
33,990
33,990
Deferred tax liabilities
963,502
33,990
997,492
Net deferred tax assets
Ps.
181,837
Ps.
—
Ps.
181,837
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 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 going 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
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)
years beginning after May 15, 2002, and those for SFAS 13 will be
effective for transactions occurring after May 15, 2002.
In July 2002, the FASB issued SFAS 146, "Accounting for Costs Associated
with Exit or Disposal Activities." The standard requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Previous accounting guidance was provided by Emerging Issue Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring)." SFAS 146 replaces Issue No. 94-3. SFAS 146 is to be
applied prospectively to exit or disposal activities initiated after December
31, 2002.
FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees," (FIN 45) was issued in November 2002. FIN 45
requires that a liability be recognized at the inception of certain guarantees
for the fair value of the obligation, including the ongoing obligation to stand
ready to perform over the term of the guarantee. Guarantees, as defined in FIN
45, include contracts that contingently require the Company to make payments to
a guaranteed party based on changes in an underlying that is related to an
asset, liability or equity security of the guaranteed party, performance
guarantees, indemnification agreements or indirect guarantees of indebtedness
of others. This new accounting is effective for certain guarantees issued or
modified after December 31, 2002. In addition, FIN 45 requires certain
additional disclosures.
SFAS 148, "Accounting for Stock-Based Compensation – Transition and
Disclosure – an amendment of FASB Statement No. 123," was issued on December
31, 2002. SFAS 148 provides alternative methods of transition for a voluntary
change to the fair value-based method of accounting for stock-based employee
compensation. SFAS 148 also amends the disclosure requirements of SFAS 123,
"Accounting for Stock-Based Compensation," to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results
In January 2003, the FASB issued FASB Interpretation 46 "Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51" (FIN 46). FIN 46
provides a new framework for identifying variable interest entities (VIEs) and
determining when a company should include the assets, liabilities,
non-controlling interests and results of activities of a VIE in its
consolidated financial statements. FIN 46 is effective immediately for VIEs
created after January 31, 2003 and is effective beginning in the third quarter
of 2003 for VIEs created prior to issuance of the interpretation.
April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". SFAS 149 amends and clarifies
financial accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS 149 is
effective prospectively for contracts entered into or modified after June 30,
2003 and prospectively for hedging relationships designated after June 30,
2003.
In May 2003, the FASB issued SFAS No. 150, "Accounting For Certain
Financial Instruments with Characteristics of Both Liabilities and Equity".
SFAS 150 improves the accounting for certain financial instruments that, under
previous guidance, issuers could account for as equity, and requires that these
instruments be classified as liabilities in statements of financial position.
SFAS 150 is effective prospectively for financial instruments entered into or
modified after May 31, 2003 and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. SFAS 150 shall be
implemented by reporting the cumulative effect of a change in an accounting
principle for financial instruments created before the issuance date of the
Statement and still existing at the beginning of the interim period of
adoption.
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:
2002
2001
Recoverable taxes and other:
Interconnection fees
Ps.
72,036
Ps.
93,505
Recoverable VAT
92,867
217,726
Other taxes
57,887
23,352
Telephones to be amortized
141,345
—
Other
81,861
229,559
445,996
564,142
Taxes and other payables:
Taxes and rights payable
232,920
213,441
Interest payable
76,130
88,659
Other
243,404
557,243
Ps.
552,454
Ps.
859,343
6. A significant portion of our trade receivables is represented by a
small number of distributors. In 2001, our three largest distributors
accounted for 52% and 44% of our net trade accounts receivable as of December
31, 2002 and 2001. 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 23 — CONDENSED CONSOLIDATED FINANCIAL INFORMATION
As mentioned in Note 10, in July 1997, the Company issued U.S.$150,000 of
senior unsecured notes due 2004 as part of its refinancing program. The Notes
Due 2004 are guaranteed on a senior subordinated, unsecured 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, 2002 and 2001 and for the three years ended December 31, 2002 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, 2002
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
ASSETS
Current assets:
Cash and short-term investments
Ps.
113,554
Ps.
34,058
Ps.
875
Ps.
—
Ps.
148,487
Accounts receivable:
Trade, net
3,432
661,551
36,895
(63,743
)
638,135
Related parties
1,391,404
776,649
40
(2,107,226
)
60,867
Recoverable taxes and other
8,188
464,675
333,658
(360,525
)
445,996
1,403,024
1,902,875
370,593
(2,531,494
)
1,144,998
Inventories, net
—
35,698
—
—
35,698
Total current assets
1,516,578
1,972,631
371,468
(2,531,494
)
1,329,183
Investment in associated companies
4,227,937
231,893
10
(4,425,419
)
34,421
Property and equipment, net
6,495,270
978,887
1,079,715
(974
)
8,552,898
Other assets, net
390,491
685,318
276,351
109,852
1,462,012
Excess of investment cost over
book value, net
1,878,797
—
—
—
1,878,797
Total assets
Ps.
14,509,073
3,868,729
1,727,544
(6,848,035
)
13,257,311
Current liabilities:
Notes payable and notes payable
to suppliers
125,272
—
—
—
125,272
Trade accounts payable
67,885
194,115
9,762
—
271,762
Related parties
—
—
2,209,304
(2,098,738
)
110,566
Taxes and other payable
315,566
591,328
245,209
(599,649
)
552,454
Income tax
32,983
14,220
3,502
—
50,705
Total current liabilities
541,706
799,663
2,467,777
(2,698,387
)
1,110,759
Long-term debt
4,338,797
—
—
—
4,338,797
Notes payable to suppliers
—
3,018
—
—
3,018
Total liabilities
4,880,503
802,681
2,467,777
(2,698,387
)
5,452,574
Commitments and contingencies
—
—
—
—
—
Stockholders' equity:
Capital contributions
16,000,989
7,196,853
1,772,323
(8,947,127
)
16,023,038
Earned capital
(6,372,419
)
(4,130,805
)
(2,512,556
)
4,797,479
(8,218,301
)
Minority interest
—
—
—
—
—
Total stockholders' equity
9,628,570
3,066,048
(740,233
)
(4,149,648
)
7,804,737
Total liabilities and
stockholders' equity
14,509,073
3,868,729
1,727,544
(6,848,035
)
13,257,311
Total stockholders' equity
under Mexican GAAP
9,628,570
3,066,048
(740,233
)
(4,149,648
)
7,804,737
Pre-operating costs
—
—
(85,640
)
—
(85,640
)
Derivative financial instruments
—
—
—
—
—
Gain from exchange of non-monetary
assets
—
—
(376,351
)
—
(376,351
)
Gain on the sale lease-back transaction
(170,691
)
(161,112
)
(4,664
)
—
(336,467
)
Capitalized interest
182,899
—
—
—
182,899
Amortization of goodwill
171,005
—
—
—
171,005
Minority interest
—
—
—
6,742
6,742
Provision for consolidation of facilities
20,866
—
—
—
20,866
Total stockholders' equity
under U.S. GAAP
Ps.
9,832,649
Ps.
2,904,936
(Ps.
1,206,888
)
(Ps.
4,142,906
)
Ps.
7,387,791
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, 2002
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
Total revenues
Ps.
1,628,098
Ps.
8,754,468
Ps.
886,339
(Ps.
5,687,270
)
Ps.
5,581,635
Total cost of sales
43,169
4,489,087
395,780
(2,890,663
)
2,037,373
Gross profit
1,584,929
4,265,381
490,559
(2,796,607
)
3,544,262
Operating expenses
66,313
3,804,644
561,254
(2,740,236
)
1,691,975
Depreciation and amortization
1,361,872
613,666
140,753
5,319
2,121,610
Operating (loss) profit
156,744
(152,929
)
(211,448
)
(61,690
)
(269,323
)
Integral financing results
Interest (income) expense,
net
309,783
(10,294
)
83,888
1,280
384,657
Foreign exchange (gain) loss, net
540,461
21,208
(4,455
)
(50,067
)
507,147
(Gain) loss from monetary position
(197,360
)
82,443
(92,813
)
(12,903
)
(220,633
)
652,884
93,357
(13,380
)
(61,690
)
671,171
Equity participation in net (gain)
loss of associated companies
9,741
—
—
—
9,741
Provision for assets tax
46,133
66,350
7,987
120,470
Minority interest
—
—
—
(9,761
)
(9,761
)
Net loss for the year
(Ps.
552,014
)
(Ps.
312,636
)
(Ps.
206,055
)
Ps.
9,761
(Ps.
1,060,944
)
Net loss for the year under
Mexican GAAP
(Ps.
552,014
)
(Ps.
312,636
)
(Ps.
206,055
)
Ps.
9,761
(Ps.
1,060,944
)
Pre-operating costs
—
—
(2,642
)
—
(2,642
)
Derivative financial instruments
170
—
—
—
170
Gain from the exchange of
non-monetary assets
—
—
(2,642
)
—
(2,642
)
Gain on the sale lease-back
transaction
(18,950
)
(41,509
)
—
—
(60,459
)
Capitalized interest
85,784
—
—
—
85,784
Amortization of goodwill
168,903
—
—
—
168,903
Minority interest
—
—
—
(1,585
)
(1,585
)
Effects of inflation on
US GAAP adjustments
563
—
—
—
563
Net (loss) profit for the
year under US GAAP
(Ps.
315,544
)
(Ps.
354,145
)
(Ps.
237,132
)
Ps.
8,176
(Ps.
898,645
)
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, 2002
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
Operating activities:
Net (loss) profit for the year
(Ps.
315,544
)
(Ps.
354,145
)
(Ps.
237,132
)
Ps.
8,176
(Ps.
898,645
)
Adjustments to reconcile net
loss to cash provided by
(used in) operating activities:
Depreciation and amortization
1,192,969
613,666
140,753
(9,706
)
1,937,682
Equity in net loss (earnings) of
associated companies and net
gain on sale of equity
investments
9,741
—
—
—
9,741
Gain on the sale of the towers
(12,278
)
(18,871
)
—
—
(31,149
)
Increase in allowance for
doubtful accounts
—
61,336
—
—
61,336
Increase in allowance for obsolete
and slow-moving inventories
—
11,213
—
—
11,213
Minority interest
—
—
—
(8,176
)
(8,176
)
Gain on net monetary position and
foreign exchange losses
342,538
103,651
(97,268
)
(62,970
)
285,951
Changes in operating assets and
liabilities:
Accounts receivable
123,354
(208,537
)
10,967
188,778
114,562
Inventories
3,561
169,436
33,529
—
206,526
Trade accounts payable and related
parties
(1,190,752
)
506,354
64,039
125,115
(495,244
)
Taxes and other payable
165,755
(151,453
)
(33,956
)
(329,765
)
(349,419
)
Income Tax
(8,204
)
5,776
(7,292
)
(3,250
)
(12,970
)
Other
(54,632
)
(212
)
—
(171
)
(55,015
)
Net cash provided by (used in)
operating activities
265,369
738,214
(126,360
)
(91,969
)
785,254
Investing activities:
Purchase of property and equipment,
net
(745,462
)
(221,080
)
213,364
105,298
(647,880
)
Proceeds from the sale of the towers
31,228
66,870
—
—
98,098
Investment in associated companies, net
of cash acquired
106,789
(3,205
)
—
(288,794
)
(185,210
)
Purchase of other assets
329,559
(1,257,679
)
631,725
275,465
(20,930
)
Net cash (used in) provided by investing
activities
(277,886
)
(1,415,094
)
845,089
91,969
(755,922
)
Financing activities:
Payments of notes payable and
long-term debt
—
—
—
—
—
Capital stock increases and
contributions for future capital stock
increases
—
714,975
(714,975
)
—
—
Net cash provided by (used in)
financing activities
—
714,975
(714,975
)
—
—
Translation and inflation effects in cash
(7,186
)
230
(247
)
—
(7,203
)
Net decrease in cash
(19,703
)
38,325
3,507
—
22,129
Cash at beginning of year
133,257
(4,267
)
(2,632
)
—
126,358
Cash at the end of year
Ps.
113,554
Ps.
34,058
Ps.
875
Ps.
—
Ps.
148,487
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, 2001
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
ASSETS
Current assets:
Cash and short-term investments
Ps.
133,257
(Ps.
4,267
)
(Ps.
2,632
)
Ps.
—
Ps.
126,358
Accounts receivable:
Trade, net
—
697,717
36,011
(104,511
)
629,217
Related parties
368,918
1,560,279
—
(1,883,696
)
45,501
Recoverable taxes and other
134,974
281,308
345,509
(197,649
)
564,142
503,892
2,539,304
381,520
(2,185,856
)
1,238,860
Inventories, net
3,561
216,347
33,529
—
253,437
Total current assets
640,710
2,751,384
412,417
(2,185,856
)
1,618,655
Investment in associated companies
4,230,161
228,688
—
(4,422,844
)
36,005
Property and equipment, net
7,197,464
764,297
1,405,397
(1,857
)
9,365,301
Other assets, net
781,549
469,348
344,201
393,440
1,988,538
Excess of investment cost over
book value, net
1,993,103
—
—
—
1,993,103
Total assets
14,842,987
4,213,717
2,162,015
(6,217,117
)
15,001,602
Current liabilities:
Notes payable and notes payable
to suppliers
Ps.
158,586
Ps.
-
Ps.
88,261
Ps.
-
Ps.
246,847
Trade accounts payable
170,716
367,740
88,403
(45,568
)
581,291
Related parties
—
—
2,052,599
(1,882,934
)
169,665
Taxes and other payable
149,641
742,781
279,165
(312,244
)
859,343
Income tax
41,187
8,444
10,794
—
60,425
Total current liabilities
520,130
1,118,965
2,519,222
(2,240,746
)
1,917,571
Long-term debt
4,028,271
—
—
—
4,028,271
Notes payable to suppliers
54,632
3,230
—
—
57,862
Total liabilities
4,603,033
1,122,195
2,519,222
(2,240,746
)
6,003,704
Commitments and contingencies
—
—
—
—
—
Stockholders' equity:
Capital contributions
16,000,535
6,481,878
2,510,290
(8,969,665
)
16,023,038
Earned capital
(5,760,581
)
(3,390,356
)
(2,867,497
)
4,861,077
(7,157,357
)
Minority interest
—
—
—
132,217
132,217
Total stockholders' equity
10,329,954
3,091,522
(357,207
)
(3,976,371
)
8,997,898
Total liabilities and stockholders' equity
14,842,987
4,213,717
2,162,015
(6,217,117
)
15,001,602
Total stockholders' equity under Mexican GAAP
10,329,954
3,091,522
(357,207
)
(3,976,371
)
8,997,898
Pre-operating costs
—
—
(82,998
)
—
(82,998
)
Derivative financial instruments
(194,357
)
—
—
—
(194,357
)
Gain from exchange of non-monetary assets
—
—
(347,916
)
—
(347,916
)
Gain on the sale lease-back transaction
(151,741
)
(119,602
)
(4,665
)
—
(276,008
)
Capitalized interest
97,115
—
—
—
97,115
Amortization of goodwill
2,102
—
—
—
2,102
Minority interest
—
—
—
(125,957
)
(125,957
)
Provision for consolidation of facilities
20,866
—
—
—
20,866
Total stockholders' equity under U.S. GAAP
Ps.
10,013,939
Ps.
2,971,920
(Ps.
792,786
)
(Ps.
4,102,328
)
Ps.
8,090,745
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, 2001
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
Total revenues
Ps.
1,039,714
Ps.
9,242,907
Ps.
1,399,396
(Ps.
5,088,735
)
Ps.
6,647,282
Total cost of sales
80,402
3,973,593
459,944
(2,553,534
)
1,960,405
Gross profit
1,013,312
5,269,314
939,452
(2,535,201
)
4,686,877
Operating expenses
(38,564
)
4,104,387
516,265
(2,560,709
)
2,021,379
Depreciation and amortization
1,299,527
1,285,622
138,488
(8,534
)
2,715,103
Operating (loss) profit
(247,651
)
(120,695
)
284,699
34,042
(49,605
)
Integral financing results:
Interest (income) expense, net
206,471
(77,900
)
275,343
3,978
407,892
Foreign exchange (gain) loss, net
(78,112
)
(19,045
)
(4,097
)
2
(101,252
)
(Gain) loss from monetary position
(126,843
)
52,477
(96,100
)
(3,969
)
(174,435
)
1,516
(44,468
)
175,146
11
132,205
Equity participation in net (gain)
loss of associated companies
(3,696
)
(16,134
)
—
12,941
(6,889
)
Provision for assets tax
62,124
91,982
7,494
(6,851
)
154,749
Cumulative effect of the adoption of
the new accounting principle
6,847
—
—
—
6,847
Minority interest
201
—
—
(22,075
)
(21,874
)
Net loss for the year
(314,643
)
(152,075
)
102,059
50,016
(314,643
)
Net loss for the year under
Mexican GAAP
(314,643
)
(152,075
)
102,059
50,016
(314,643
)
Gain from the exchange of
non-monetary assets
—
—
(122,708
)
—
(122,708
)
Gain on the sale lease-back transaction
(151,741
)
(119,603
)
(4,664
)
—
(276,008
)
Capitalized interest
97,115
—
—
—
97,115
Amortization of goodwill
2,102
—
—
—
2,102
Minority interest
—
—
—
6,258
6,258
Effects of inflation on US GAAP
adjustments
304
—
—
—
304
Net (loss) profit for the year under
US GAAP
(Ps.
366,863
)
(Ps.
271,678
)
(Ps.
25,313
)
Ps.
56,274
(Ps.
607,580
)
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, 2001
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
Operating activities:
Net (loss) profit for the year
(Ps.
366,863
)
(Ps.
271,678
)
(Ps.
25,313
)
Ps.
56,274
(Ps.
607,580
)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Depreciation and amortization
1,297,424
1,285,622
115,968
(8,534
)
2,690,480
Equity in net loss (earnings) of associated
companies and net gain on sale of equity
investments
(6,890
)
—
—
—
(6,890
)
Gain on the sale of the towers
(27,174
)
(21,418
)
(835
)
—
(49,427
)
Increase in allowance for
doubtful accounts
—
114,613
—
—
114,613
Increase in allowance for obsolete
and slow-moving inventories
—
69,777
—
—
69,777
Minority interest
(202
)
—
—
(27,930
)
(28,132
)
Gain on net monetary position
and foreign exchange losses
(198,413
)
33,432
(100,197
)
(10,813
)
(275,991
)
Changes in operating assets and liabilities:
Accounts receivable
(108,121
)
(32,846
)
43,844
748
(96,375
)
Inventories
797
(26,993
)
(18,025
)
(904
)
(45,125
)
Trade accounts payable and related parties
642,836
(243,425
)
(308,066
)
(11,983
)
79,362
Taxes and other payable
31,650
(255,615
)
69,746
(71,905
)
(226,124
)
Income Tax
41,187
8,437
(2,488
)
(25,262
)
21,874
Other
54,632
(354
)
(29
)
(66,230
)
(11,981
)
Net cash provided by (used in)
operating activities
1,360,863
659,552
(225,395
)
(166,539
)
1,628,481
Investing activities:
Purchase of property and equipment,
net
(1,404,085
)
70,394
(466,435
)
105,901
(1,694,225
)
Proceeds from the sale of the towers
208,326
164,204
6,403
—
378,933
Investment in associated companies,
net of cash acquired
(519,350
)
—
—
—
(519,350
)
Purchase of other assets
(720,186
)
(903,589
)
(491,237
)
1,249,113
(865,899
)
Net cash (used in) provided by
investing activities
(2,435,295
)
(668,991
)
(951,269
)
1,355,014
(2,700,541
)
Financing activities:
Payments of notes payable and
long-term debt
(25,393
)
—
—
—
(25,393
)
Capital stock increases and contributions
for future capital stock increases
944,392
—
1,171,899
(1,171,899
)
944,392
Net cash provided by (used in)
financing activities
918,999
—
1,171,899
(1,171,899
)
918,999
Translation and inflation effects in cash
(12,702
)
(226
)
(95
)
(16,576
)
(29,599
)
Net decrease in cash
(168,135
)
(9,665
)
(4,860
)
—
(182,660
)
Cash at beginning of year
301,392
5,398
2,228
—
309,018
Cash at the end of year
Ps.
133,257
(Ps.
4,267
)
(Ps.
2,632
)
Ps.
—
Ps.
126,358
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, 2000
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
Total revenues
Ps.
1,079,796
Ps.
8,380,564
Ps.
796,955
(Ps.
4,201,011
)
Ps.
6,056,304
Total cost of sales
67,640
3,588,505
416,415
(2,148,697
)
1,923,863
Gross profit
1,012,156
4,792,059
380,540
(2,052,314
)
4,132,441
Operating expenses
62,516
3,647,113
352,694
(2,035,473
)
2,026,850
Depreciation and amortization
1,363,509
1,049,236
112,111
(8,181
)
2,516,675
Operating (loss) profit
(413,869
)
95,710
(84,265
)
(8,660
)
(411,084
)
Integral financing result:
Interest expense (income), net
292,535
(76,553
)
322,868
(3
)
538,847
Foreign exchange loss (gain), net
13,716
6,272
693
—
20,681
(Gain) loss from monetary position
(342,730
)
102,810
(173,527
)
17,725
(395,722
)
(36,479
)
32,529
150,034
17,722
163,806
Equity participation in net (gain)
loss of associated companies
307,323
(68,515
)
—
(241,427
)
(2,619
)
Provision for assets tax
26,035
125,067
14,144
—
165,246
Minority interest
—
—
—
(17,399
)
(17,399
)
Profit from discontinued operations
—
—
—
(9,370
)
(9,370
)
Net loss for the year
(710,748
)
6,629
(248,443
)
241,814
(710,748
)
Net loss for the year under
Mexican GAAP
(710,748
)
6,629
(248,443
)
241,814
(710,748
)
Derivative financial statements
6,496
—
—
—
6,496
Effects of inflation on US GAAP
adjustments
(267
)
—
—
—
(267
)
Net (loss) profit for the year under
US GAAP
(Ps.
704,519
)
Ps.
6,629
(Ps.
248,443
)
Ps.
241,814
(Ps.
704,519
)
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, 2000
Combined
Combined
Parent
guarantor
non-guarantor
company
subsidiaries
subsidiaries
Eliminations
Consolidated
Operating activities:
Net (loss) profit for the year
(Ps.
704,519
)
Ps.
6,629
(Ps.
248,443
)
Ps.
241,814
(Ps.
704,519
)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Depreciation and amortization
1,363,509
1,049,236
112,111
(8,182
)
2,516,674
Equity in net loss (earnings) of associated
companies and net gain on sale of equity
investments
307,324
—
—
(309,943
)
(2,619
)
Increase in allowance for doubtful accounts
—
99,919
—
—
99,919
Increase in allowance for obsolete and
slow-moving inventories
—
44,825
—
—
44,825
Minority interest
—
—
—
(17,399
)
(17,399
)
Gain on net monetary position and
foreign exchange losses
(328,747
)
109,082
(172,833
)
17,724
(374,774
)
Changes in operating assets and
liabilities:
Accounts receivable
—
(55,830
)
(654
)
212,375
155,891
Inventories
(1,937
)
(88,533
)
(4,522
)
8,196
(86,796
)
Trade accounts payable and related parties
873,929
(531,306
)
410,050
(929,796
)
(177,123
)
Taxes and other payable
(130,988
)
455,801
42,759
(236,208
)
131,364
Income Tax
(1,541
)
(109
)
12,831
27,050
38,231
Other
—
805
(41
)
—
764
Net cash provided by (used in)
operating activities
1,377,030
1,090,519
151,258
(994,369
)
1,624,438
Investing activities:
Purchase of property and equipment,
net
(1,768,571
)
55,336
(114,122
)
(345,833
)
(2,173,190
)
Investment in associated companies,
net cash acquired
(203,277
)
47,647
—
227,782
72,152
Purchase of other assets
126,383
(1,060,630
)
(50,154
)
864,282
(120,119
)
Net cash (used in) provided by
investing activities
(1,845,465
)
(957,647
)
(164,276
)
746,231
(2,221,157
)
Financing activities:
Proceeds from notes payable and
long-term debt
133,874
—
—
(6,621
)
127,253
Payments of notes payable and
long-term debt
(786,209
)
—
—
—
(786,209
)
Contributions for future capital
Stock increases
1,376,381
(202,289
)
15,083
187,206
1,376,381
Net cash provided by (used in)
financing activities
724,046
(202,289
)
15,083
180,585
717,425
Translation and inflation effects in cash
(6,269
)
(10,242
)
(24
)
(9,248
)
(25,783
)
Net increase (decrease) in cash
249,342
(79,659
)
2,041
(76,801
)
94,923
Cash at beginning of year
52,050
85,057
187
76,801
214,095
Cash at the end of year
Ps.
301,392
Ps.
5,398
Ps.
2,228
Ps
—
Ps.
309,018
F-52
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 24 – Subsequent Events:
Debt restructuring efforts
A summary of subsequent events relating to the Company's debt
restructuring efforts are as follows:
a.     Technical defaults on amended restated syndicated loan
On March 27, 2003, the Company announced that it received notification
from lenders of the occurrence of two technical defaults under the U.S.$265,622
Amended and Restated Syndicated Loan Agreement dated as of March 29, 2001 (the
Credit Agreement). The underlying defaults are due to the failure to obtain the
consent of the lenders prior to the closing and opening of certain bank
accounts and the failure to effect the registration of a mortgage on certain
newly acquired assets within the time period specified in the Credit Agreement.
The Company effected the registration of the mortgage and requested, but has
not yet received, the consent of the lenders with respect to the bank accounts.
b.     Amendment and waiver under the Credit Agreement
On April 28, 2003, as part of its debt restructuring effort, the Company
received a temporary Amendment and Waiver (the Amendment) of the Debt/EBITDA
leverage ratio and certain other provisions and technical defaults under the
Credit Agreement. The Amendment was scheduled to expire on May 22, 2003 and at
its expiration date the Amendment was extended to June 13, 2003 and further
extended to June 26, 2003. The Amendment expired on June 26, 2003, and as a
result, the Company is in default of a financial leverage covenant under the
Credit Agreements that constitutes an event of default under that loan.
Accordingly, the lenders under the Credit Agreement have the right to declare
the indebtedness under their loan immediately due and payable. If the lenders
under the Credit Agreement accelerate loan payment, default would occur under
the indenture governing the Notes due 2004, which would permit the holders of
the Notes due 2004 to accelerate the Company's repayment obligations. If the
lenders of Credit Agreement and/or the holders of the Senior Notes due 2004
accelerate their loan payments, default would occur under the indenture
governing the Senior Notes due 2006 of New Iusacell for U.S.$350,000 (the Notes
due 2006).
c.     Extinguishment of Santander refinanced credit facility
On May 29, 2003, the Company reached an agreement with Santander to repay
the remaining balance of U.S.$3,000 under a refinanced credit facility. Under
this agreement, the Company and Santander agreed to settle the remaining amount
for U.S.$1,500. The Company recognized the difference as an early
extinguishment of debt under Mexican GAAP and therefore, recognize this amount
as an extraordinary gain in 2003.
d.     New Iusacell suspension of interest payment on Senior Notes due 2006
On June 2, 2003, New Iusacell announced that it determined that pending an
agreement with its lenders on a restructuring plan, it would suspended the
payment of U.S.$24,938 interest payment due June 1, 2003 on the Notes due 2006.
New Iusacell has a thirty-day cure period to make the interest payment, before
an event of default would occur. If the interest payment is not made within the
thirty-day period an event of default would occur under the indenture governing
the bonds, and the bondholders would have the right to declare those notes
immediately due and payable. The right of such holders to accelerate New
Iusacell's repayment obligations will cause an event of default under the terms
of the Credit Agreement and under the indentures governing the Notes due 2004,
which would permit the lenders and the holders of the notes to declare their
indebtedness immediately due and payable.
e.     Principal shareholders of New Iusacell acceptance of tender offer to
sell controlling interest
On June 13, 2003, New Iusacell announced that its two largest
shareholders, Verizon and Vodafone, agreed to tender all of their shares,
representing approximately 73.90% of New Iusacell's outstanding shares, in a
public
F-53
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)
tender offer to be commenced in Mexico and the United States of America
by
Movil Access, S.A. de C.V.
, a Mexican telecommunications service provider.
Once the National Banking and Securities Commission (
Comisión Nacional
Bancaria y de Valores
) approves the tender offer and Verizon and Vodafone
tender all of their shares, Verizon and Vodafone will lose the ability to
manage New Iusacell and the Company. Verizon and Vodafone will no longer be in
a position to determine New Iusacell's policies and strategies, provide
personnel to New Iusacell on a secondment or consulting basis, manage New
Iusacell's operations or provide the technical support, as well as operating
synergies that New Iusacell has historically relied on.
Under the indentures governing the Notes due 2004, this constitutes a
change of control under which the bondholders have the right to require the
Company, to repurchase such bondholders' notes. This also constitutes a change
of control and would constitute an event of default under the Credit Agreement
so the lenders under the Credit Agreement would have the right to declare all
amounts outstanding under the Credit Agreement immediately due and payable.
The Company continues to evaluate with the assistance of an external
financial advisor the alternatives for restructuring its debt. The Company's
ability to operate as a going concern is dependent upon its ability to
successfully negotiate with its bank syndicate and note holders to preclude
acceleration. However, although no assurances can be given, the Company remains
confident that it will be able to continue operating as a going concern.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business, and as such do
not include any adjustments that might result from the outcome of these
uncertainties.
10% excise tax on telecommunications services
On June 6, 2003, the Company was officially notified that by disposition
of the appeal filed by the Mexican government, Mexico's Supreme Court affirmed
the ruling by a federal district court in favor of the Company in their
injunction filed against the special telecommunications tax enacted by the
Mexican Congress on January 1, 2002 (Note 13g.).
F-54
Table of Contents
GRUPO IUSACELL CELULAR
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
Years Ended 2000, 2001 and 2002
(Amounts expressed in Thousands of Mexican Pesos (Ps.)
with Purchasing Power as of December 31, 2002)
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
2000
Ps.
9,430
Ps.
45,291
Ps.
0
Ps.
466
Ps.
54,255
2001
54,255
69,777
0
6,962
117,070
2002
117,070
11,213
0
25,045
103,238
Allowance for doubtful
accounts
2000
Ps.
179,491
Ps.
99,920
Ps.
0
Ps.
45,089
Ps.
234,322
2001
234,322
114,614
0
126,022
222,914
2002
222,914
61,336
0
190,647
93,603
S-II
Table of Contents
EXHIBIT INDEX
Exhibit
No.
Exhibit
1.1
By-laws (
estatutos
) of
Grupo Iusacell Celular, S.A. de C.V.
effective April 4, 2001 (incorporated by reference to Exhibit 1 to
Iusacell Celular's Annual Report on Form 20-F for fiscal year 2000
– File No. 033-79254).
2.1
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 herein by reference
to Exhibit 2(a) to Iusacell's Annual Report on Form 20-F for
fiscal year 2000 — File No. 001-14938).
2.2
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 to the Registration Statement
F-4 — Registration Number 333-37431).
4.1
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.
(incorporated herein by reference to Exhibit A to Iusacell
Celular's Annual Report on Form 20-F for fiscal year 1997).
4.2
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
(incorporated herein by reference to Exhibit 4(b) to Iusacell's
Annual Report on Form 20-F for fiscal year 2000 — File No.
001-14938).
4.3
Amended and Restated Master Lease Agreement (English version),
dated as of May 16, 2002, among
MATC Celular, S. de R.L. de C.V.
,
Grupo Iusacell Celular, S.A. de C.V.
and
Iusacell Arrendadora,
S.A. de C.V.
(incorporated herein by reference to Exhibit 4.3 to
Iusacell's Annual Report on Form 20-F for fiscal year 2002 — File
No. 001-14938).
4.4
Amended and Restated Master Lease Agreement (English version),
dated as of May 16, 2002, between
MATC Celular, S. de R.L. de C.V.
and
Grupo Iusacell Celular, S.A. de C.V.
, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit 4.4 to Iusacell's Annual Report on Form 20-F for fiscal
year 2002 — File No. 001-14938).
4.5
Amended and Restated Build-to-Suit and Site Development Agreement,
dated as of May 16, 2002, between
MATC Celular, S. de R.L. de C.V.
and
Grupo Iusacell Celular, S.A. de C.V.
, for and on behalf of
itself and its affiliates (incorporated herein by reference to
Exhibit 4.5 to Iusacell's Annual Report on Form 20-F for fiscal
year 2002 — File No. 001-14938).
4.6
First Amendment and Waiver, dated as of December 7, 2001, to the
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.
, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit 4.3 of Iusacell's
Annual Report on Form 20-F for fiscal year 2001 — File No.
001-14938).
Table of Contents
Exhibit
No.
Exhibit
4.7
Second Amendment and Waiver, dated as of April 28, 2003, to the
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.
, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit 4.7 of Iusacell's
Annual Report on Form 20-F for fiscal year 2002 — File No.
001-14938).
4.8
First Amendment to the Second Amendment and Waiver, dated as of
April 28, 2003, to the 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.
, the lenders party
thereto, and JP Morgan Chase Bank as Administrative Agent and
Collateral Agent (incorporated herein by reference to Exhibit 4.8
of Iusacell's Annual Report on Form 20-F for fiscal year 2002 —
File No. 001-14938).
4.9
Second Amendment, dated as of June 10, 2003, to the Second
Amendment and Waiver dated as of April 28, 2003, to the 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.
, the lenders party thereto, and JP Morgan
Chase Bank as Administrative Agent and Collateral Agent
(incorporated herein by reference to Exhibit 4.8 of Iusacell's
Annual Report on Form 20-F for fiscal year 2002 — File No.
001-14938).
7.1*
Computation of ratio of earnings to fixed charges.
8.1*
List of subsidiaries.
12.1*
Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Executive Officer).
12.2*
Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (by the
equivalent of Chief Financial Officer).
*
Filed herewith.