Grupo Iusacell Announces Equity Infusions by Principal Shareholders

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Grupo Iusacell Announces Equity Infusions by Principal Shareholders


Grupo Iusacell Announces Equity Infusions by Principal Shareholders

Network Enhancements To Meet Growing Customer Demand

December 10, 1998

Media contact:  

Howard F. Zuckerman, Executive VP and CFO
Ian C. Muir, Director of Investor Relations

and CEL.D) announced today plans to obtain approximately US $60 million in equity
infusions from its two major shareholders, Bell Atlantic and the Peralta Group, over the
next several months. This new equity will fund additional analog and CDMA digital
network investments and handset purchases needed to support higher than expected
cellular net additions and growing demand for digital services, and network expansion
to support long distance opportunities.

Fulvio Del Valle, President and Director General of Grupo Iusacell, stated that "The
additional investment by our principal shareholders will provide Iusacell with the
immediate means to strengthen two key areas for revenue growth in 1999 -- long
distance and digital wireless. Future network investments will need to be reconsidered
in the event the Mexican Congress implements the Hacienda's proposed 15% excise tax
on telecommunication services."

The shareholder equity infusions will be effected in two tranches, one in December
1998 and another in the first quarter of 1999, and will be implemented by drawdowns
from Bell Atlantic under the existing US $150 million subordinated convertible
debenture facility. Upon each drawdown, debentures issued to Bell Atlantic will be
converted into Grupo Iusacell Series A Shares at the US $0.70 per share conversion
price established in the facility in November 1996; a total of approximately 86 million
Series A Shares will be issued. In accordance with its August 1998 agreement with Bell
Atlantic, the Peralta Group will be obligated to purchase half of these Series A Shares
from Bell Atlantic at the US $0.70 per share price.

As with the third quarter 1998 US $71.5 million drawdown under this facility, Grupo
Iusacell will extend the economic benefit of the terms of the convertible debenture to the
public shareholders by means of an approximate US $7.2 million rights offer of shares
in its previously announced new holding company at the same US $0.70 per share
conversion price. The total amount of the rights offer by the new holding company will
now be approximately US $15.7 million and, market conditions permitting, will be
effected simultaneously with the previously announced exchange offer.

Howard F. Zuckerman, Grupo Iusacell Executive Vice President and CFO, added,
"With these drawdowns and those taken in the third quarter, for a total of approximately
US $132 million, Iusacell is strengthening its balance sheet and is taking the required
steps to support current growth."

The exchange offer and rights offer will be subject to the receipt of necessary United
States and Mexican government approvals, certain shareholder and third party consents
and approvals, and market conditions. The consummation of the rights offer will also
be subject to successful completion of the exchange offer.

Grupo Iusacell is a leading independent telecommunications company in Mexico. It is
the wireless cellular service provider in four of Mexico's nine regions in the central
portion of Mexico (including Mexico City) covering a total of 67 million POPs,
representing 69% of the country's total population. The auctions won for wireless
services in regions 1 and 4 in northern Mexico will allow the Company to cover an
additional 11 million POPs, or 11% of Mexico's total population. Since February 1997,
the Company has been under the management and operating control of Bell Atlantic
Corporation which owns, through subsidiaries, 47% of the Company's capital stock.

Note: This press release contains statements about expected future events and financial
results that are forward-looking and subject to risks and uncertainties. For those
statements, we claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors
that may affect future results is contained in our filings with the Securities and
Exchange Commission.


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