Nuevo Grupo Iusacell Reports Record 1999 Cash Flow Driven By Digital Subscriber Growth

NUEVO GRUPO IUSACELL REPORTS RECORD
1999 CASH FLOW DRIVEN BY DIGITAL SUBSCRIBER
GROWTH¹

February 22, 2000

• EBITDA up 64% over fourth quarter 1998, to $387 million
• EBITDA for 1999 increased 62% over 1998, to $1.4 billion
• More than 1.3 million cellular subscribers, 75% increase
  over 1998
• 220,000 digital contract subscribers at year-end 1999

Mexico City,- Nuevo Grupo Iusacell, S.A. de C.V. (Iusacell or the
Company) [BMV: CEL, NYSE: CEL], today announced record
operating cash flow for fourth quarter and full year 1999. Earnings
before interest, taxes, depreciation and amortization (EBITDA)
were $387 million in the fourth quarter of 1999, versus $236 million
in the same period of last year, a 64% increase. EBITDA for full
year 1999 was $1.4 billion compared to $875 million in 1998.

The Company's record performance came as a result of strong
sales including a fourth quarter revenue increase of 45% over
fourth quarter 1998 to $1.2 billion. The increase was mainly driven
by growth in digital contract subscribers. Iusacell ended the quarter
and year with more than 1.3 million cellular customers, including
220,000 digital contract subscribers.

"In 1999 Iusacell put in place the building blocks for future
growth, including a new network with digital coverage everywhere
we provide service, a new customer care and billing platform, a
national single-rate plan, and bundled services that address
corporate and consumer segments," said Tom Bartlett, CEO
of Iusacell and president and CEO of Bell Atlantic International
Wireless. "We're looking forward to the attention that new
competition brings to the communications sector in 2000. It can't
help but draw people to Iusacell's value proposition, including future
data and Internet access services that will capitalize on the growing
sophistication of the Mexican communications market."

Operating Performance

Iusacell's 1999 fourth quarter 45% revenue increase was driven
primarily by growth in digital contract subscribers and contract
Average Revenue Per User (ARPUs). Contract customers
generated over 80% of total cellular revenues.

Fourth quarter 1999 contract customer Minutes of Use (MOUs) and
ARPUs increased 6% and 21%, respectively, compared with fourth
quarter 1998. This increase was primarily driven by growth in digital
subscribers (who use their phones more than the average analog
contract customer), subscription to value-added services and
increased incoming calls due to Calling Party Pays (CPP).

At the end of 1999, the Company had a base of 220,000 digital
contract customers, an increase of 192,000 customers over the
past twelve months. This digital growth includes the accelerated
migration of close to 100,000 analog contract subscribers in 1999.
In the fourth quarter of 1999, digital traffic approached 50% of total
traffic.

"Iusacell will continue to focus on high-margin, value-added
products, and customer care. Our digital network and enhanced
back-office systems are now well positioned to support the
continued rapid growth of our digital subscriber base," stated
Fulvio Del Valle, President and Director General of Iusacell. Mr. Del
Valle added, "As a result of CPP, Iusacell has experienced a
13% increase in traffic. Additionally, our 50,000 one single rate LDI
(Larga Distancia Incluida) customers have increased their usage by
more than 50%".

The Company also experienced substantial growth in the prepaid
segment. The prepaid subscriber base was 970,500 at year-end,
up 23% from the end of the third quarter of 1999 and 103% over
year-end 1998. Approximately 207,000 are "incoming calls
only" subscribers who have not recently purchased a prepaid
calling card, but who are retained rather than deactivated as a
result of the Company's decision to extend the life of its VIVATM
prepay card through April 2000. This strategy has resulted in
additional revenue at minimal cost, although the substantial
majority of "incoming calls only" customers generate
little or no traffic. As the anniversary of CPP approaches, the
Company will review its policy regarding deactivation of subscribers
who have not replenished their card for at least six months.

To foster continued growth in prepay subscribers, the Company
continues to implement marketing programs and product packages
that are easy to buy and competitively priced. In the last 12 months
Iusacell expanded its distribution network by 131% to more than
6,500 points of sale. There are now 1,193 full-service outlets (96
directly owned) and an additional 5,329 points of sale for prepay
cards. This expanded distribution, together with the features of the
VIVATM prepay platform, has helped drive the strong prepay
subscriber growth of more than 380% over the last two years.

To further penetrate the prepaid market the Company recently
launched its "Add a Minute" program which allows
customers to automatically reload prepaid cards at more than 1,000
automated teller machines throughout Mexico. In fourth quarter
1999 Iusacell also launched its one single rate LDI program, with
close to 50,000 customers already subscribed.

Cash operating expenses per subscriber decreased to $686 in the
fourth quarter, a 24% reduction from the $899 recorded in fourth
quarter 1998. Contract subscriber acquisition cost increased from
US$361 in fourth quarter 1998 to US$404 in fourth quarter 1999,
primarily as a result of higher handset subsidies driven by the
Company's strategy for accelerating the growth of its digital
customer base.

Operational expenses in the fourth quarter of 1999 exceeded those
of the same period in 1998 by 51% due to revenue-related
increases in advertising and commissions, as well as non-recurring
charges of $57 million that included Y2K expenses and litigation
reserves. In spite of these charges, EBITDA margin was 32% in
fourth quarter 1999, compared to 28% in fourth quarter 1998.

The Company experienced a $46 million operating loss for the
1999 fourth quarter primarily as a result of increased depreciation
and handset amortization expenses. Depreciation for the fourth
quarter 1999 increased 82% compared to fourth quarter 1998, as a
result of completing the initial phase deployment of the new
network and making additional investments to meet the capacity
and coverage requirements for continued growth. Additionally,
accelerated migrations of contract customers from analog to digital
service and faster growth in digital net additions resulted in 43%
greater amortization expenses that were mainly driven by increased
handset purchases.

Excluding the $57 million of non-recurring charges, EBITDA margin
for the fourth quarter would have been 36% and operating profit
would have been $11 million.

Integral financing cost in fourth quarter 1999 was $170 million, due
mainly to an exchange loss of $174 million and higher interest
expense, that was partially offset by monetary correction gain. This
compares to an integral financing gain of $367 million in the fourth
quarter of 1998, when an exchange gain of $95 million was
recognized.

A net loss of $301 million was recognized in fourth quarter 1999,
reflecting the operating loss and integral financing cost, compared
with net income of $353 million in fourth quarter 1998.

¹Unless otherwise noted, all monetary figures are in Mexican Pesos and restated as of
December 31, 1999 in accordance with Mexican GAAP, except for ARPU (which is in nominal
pesos).

For complete Iusacell release and financial tables, click here.