Dolphin Telecom Announces First Quarter 2001 Results

Business Wire, May 16, 2001

Business Editors

BASINGSTOKE, England and MONTREAL--(BUSINESS WIRE)--May 16, 2001

For the First Quarter Ended March 31, 2001 All Amounts are in US$,

Unless Otherwise Stated

Telesystem International Wireless Inc. (NASDAQ: TIWI) (TSE: TIW.) announces that its subsidiary, Dolphin Telecom plc ("Dolphin" or the "Company"), reported today its results for the first quarter ended March 31, 2001.

HIGHLIGHTS
      For the first quarter ended March 31, 2001 All amounts are in US$,
unless otherwise stated

- As of March 31, 2001, 61,900 ESMR subscribers were connected to
  Dolphin's Enhanced Specialized Mobile Radio (ESMR) networks. As
  previously announced, Dolphin had a lower connection rate than
  expected during the first quarter. Net ESMR subscriber additions in
  the first quarter of 2001 were 10,400. Dolphin expects to increase
  the rate of subscriber additions starting at the end of the second
  quarter of 2001, following the introduction of new generation
  handsets from Nokia and Motorola. In association with the
  availability of the new handsets Dolphin will implement a new
  marketing campaign offering an expanded choice of services and
  tariffs packages to customers.

- Total service revenues were $19.9 million for the three-month period
  ended March 31, 2001, compared to $19.7 million for the
  corresponding period of 2000. Service revenues from the increase in
  ESMR subscribers were to a large extend offset by the anticipated
  decline in the Specialized Mobile Radio (SMR) customer base.
  Equipment revenues stood at $3.9 million for the first quarter of
  2001, compared to $1.9 million for the corresponding period of 2000.
  The increase in revenues reflects the increase in gross additions as
  a result of ESMR promotional activities in the United Kingdom
  (U.K.).

- Operating loss before depreciation, amortization and impairment of
  long-lived assets was $52.4 million for the three-month period ended
  March 31, 2001, while it stood at $38.1 million for the
  corresponding period of 2000. The launch of commercial ESMR services
  in the United Kingdom and in France as well as continued ESMR
  network build-out efforts contributed to the increased operating
  losses.

- In France, following the launch of pilot commercial ESMR services in
  the regions of Nord/Pas-de-Calais and Rhone-Alpes in the fourth
  quarter of 2000, service was launched in the regions of
  Provence/Cote d'Azur and Paris in the first quarter of 2001.

- At the end of the first quarter in 2001, Dolphin announced revised
  business plans to focus efforts and resources on its more mature
  markets of the U.K. and France. The revised business plans are
  designed to reduce costs and will result in delays to operational
  activity in Germany and Belgium and a reduction in the company's
  workforce of up to 600 positions. In the first quarter of 2001, the
  Company recorded a charge of $264.8 million for impairment in
  long-lived assets in countries where ESMR services have not yet been
  launched.

- The net loss in the first quarter of 2001 was $325.0 million,
  compared to a net loss of $81.0 million for the corresponding period
  of 2000. The net loss for the quarter was negatively effected by
  higher financing costs, which were partly offset by a foreign
  exchange gain of $22.6 million. The increase in net loss is mainly
  attributable to an impairment provision of $240 million, net of tax
  effect, taken against certain long-lived assets in countries where
  services were not yet launched.

- During the quarter, Dolphin Corporation Limited (a direct wholly-
  owned subsidiary of Dolphin Telecom plc) borrowed 106.4 million
  pounds sterling ($154.4 million) from its principal shareholder,
  TIW. In December 2000, TIW indicated its intention to provide
  financial assistance of up to $300 million in convertible loans to
  support Dolphin's growth in 2001, based on the achievement of
  technological, operational and financial milestones.

- As previously announced, Dolphin has initiated a process of seeking
  external financing, including by way of strategic partnerships;
  Dolphin does not expect an outcome to this process until the third
  quarter. If Dolphin were unable to obtain additional financing and
  to refinance or amend the terms of its current credit facilities,
  its ability to meet its obligations over the next 12 months would be
  uncertain.

As of March 31, 2001, Dolphin reached 61,900 ESMR (Enhanced Specialized Mobile Radio) subscribers in the United Kingdom and France. During the first quarter, the Company added 10,400 net ESMR subscribers, approximately 4,500 below management's internal expectations at the beginning of the year. As previously announced, connection rates in the first quarter of 2001 have run at a lower level, reflecting the traditional weakness of the first quarter and problems encountered in the supply chain for vehicular adaptors (car kits). Normal volumes and supply have been restored since April and the Company expects second quarter net additions in the United Kingdom of approximately 12,000 subscribers.