20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)
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, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

OR

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF EVENT REQUIRING THIS SHELL COMPANY REPORT

FOR THE TRANSITION PERIOD FROM                 TO                     

Commission file number:  1-14816

TRICOM, S.A.

(Exact name of Registrant as specified in its charter)

Dominican Republic

(Jurisdiction of incorporation or organization)

Avenida Lope de Vega No. 95, Santo Domingo, Dominican Republic

(Address of principal executives offices)

Securities registered pursuant to Section 12(b) of the Act.

None

Securities registered pursuant to Section 12(g) of the Act.

American Depositary Shares
Class A Common Stock, par value RD$10 per share

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

11-3/8% Senior Notes due September 1, 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.

At December 31, 2005, there were 45,458,041 shares of Class A Common Stock and 19,144,544 shares of Class B Stock issued and outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   o       No   x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes   o       No   x

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  o                                         No  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o                Accelerated filer  o                Non-accelerated filer  x

Indicate by check mark which financial statement item the Registrant has elected to follow:

Item 17  o                                              Item 18  x

If this report is an annual, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   o       No   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.	DISCLOSURE CONTROLS AND PROCEDURES
ITEM 16.	[RESERVED]
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT
ITEM 16B.	CODE OF ETHICS
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
PART III.
ITEM 17.	FINANCIAL STATEMENTS*
ITEM 18.	FINANCIAL STATEMENTS
ITEM 19.	EXHIBITS

*We have completed Item 18 in lieu of this Item.

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GENERAL INFORMATION

Forward-Looking Statements

The statements contained in this Annual Report, which are not historical facts, are forward-looking statements that involve risks and uncertainties. Management cautions the reader that these forward-looking statements are only predictions; actual events or results may differ materially as a result of risks facing us. Such risks include, but are not limited to, the following factors:

•Uncertainty in our debt restructuring process;

•Unfavorable Dominican Republic bankruptcy laws;

•Possible acceleration of indebtedness by our creditors;

•Expectations as to the amount of cash required to operate as a going concern;

•Contingencies arising out of our placement of Class A Common Stock in December 2002, the issues raised by the report of the Special Committee and the restatement and amendment of our 2002 financial statements;

•Unfavorable decisions in our various legal proceedings resulting in financial difficulties for us;

•Our ability to generate cash flow from operations to meet our debt service requirements;

•The volatility and depreciation of the Dominican peso against the U.S. dollar;

•Competition in Dominican markets for local, long distance and mobile services with multinational telecommunications providers;

•Reduced revenues due to our business plan of focusing on higher usage customers and disconnecting lower usage or unprofitable customers;

•Customer non-payments;

•Declining rates for international long distance traffic;

•Our reliance in the U.S. long distance markets on resellers, many of which have been adversely affected by intensified competition;

•Customer churn;

•Rapid technological change;

•Our dependence on third parties for television programming;

•Our vulnerability to viruses, hackers and other disruptions;

•The continuation of a favorable political, economic and regulatory environment in the Dominican Republic;

•Inability to enforce claims in the Dominican Republic based on U.S. securities and other laws;

•The likelihood that, as a result of our pending debt restructuring, the holdings of our current shareholders, including holders of our American Depositary Shares (“ADSs”), would be effectively eliminated; and

•Our ADSs no longer being listed on a national securities exchange.

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PART I.

ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3.KEY INFORMATION

Special Note

We are filing this report during October 2007. Although we make reference to certain events and other developments that have occurred since December 31, 2005, the principal purpose of this report is to describe our business, operations, management, results of operations, financial condition, and other matters as at December 31, 2005 and during the historic periods ended on or before that date. For more detailed information on subsequent periods, reference should be made to annual reports and other filings that we expect to make in respect of those subsequent periods.

Key Company Developments

Default on Indebtedness.

Commencing in 2001, a combination of macro-economic factors and circumstances specific to our business contributed to a steady and significant decline in our operating performance, cash flows and financial condition. These factors included, among others, the following:

•A world-wide decline in the telecommunications sector;

•Adverse economic conditions precipitated by the events of September 11, 2001;

•The Dominican Republic banking crisis of 2003 and the resulting currency and economic crisis;

•Continuing volatility and depreciation of the Dominican peso;

•Unprofitable investments we made in certain new business segments; and

•Increased competition in Dominican markets for local, long distance and mobile services triggered by entry of multinational telecommunications providers into the market.

As a consequence of these factors, in September 2003, we announced that we would not be making a scheduled interest payment on our 11-3/8% Senior Notes due September 1, 2004. In October 2003, we suspended principal and interest payments on our unsecured indebtedness and principal payments on our secured indebtedness. Subsequently, on September 1, 2004, we announced that we would not be making the $200 million principal payment on our 11-3/8% Senior Notes due September 1, 2004. As a result, we have defaulted on substantially all of our secured and unsecured indebtedness, which was approximately $447.5 million in principal amount as of December 31, 2005. In addition to our 11-3/8% Senior Notes due 2004, our indebtedness consists of bank and other borrowings, capital leases, commercial paper and telecommunication equipment trade financings.

Financial Restructuring.

We have engaged in discussions with the holders of our indebtedness regarding a restructuring. In April 2006 we announced that we had reached a non-binding agreement in principle with certain of our creditors on a consensual financial restructuring of our balance sheet. These creditors included an Ad Hoc Committee (the “Ad Hoc Committee”) comprised of certain holders of our 11-3/8% Senior Notes due 2004 and other significant

3

creditors, as well as certain affiliates of GFN Corporation Ltd. (“GFN”), our majority shareholder, who are also significant creditors.

Subsequently, we negotiated and entered into a Plan Support and Lock-Up Agreement and related term sheet (collectively, as amended, the “Plan Support Agreement”) with our largest secured creditor and unsecured creditors representing more than 70% by principal amount of our unsecured indebtedness. The Plan Support Agreement was amended in August 2007 to, among other matters, extend certain time deadlines for filing our reorganization case. The Plan Support Agreement provides for the consensual restructuring of our financial obligations, ownership and governance, to be effectuated through court supervised reorganization proceedings in the United States. Subject to certain conditions, the creditors who have signed the Plan Support Agreement (the “Supporting Creditors”) have agreed to vote in favor of, and not to object to or oppose, a plan of reorganization that we are finalizing.

In general, the Plan Support Agreement contemplates an exchange of all of our unsecured borrowed money obligations for a pro rata share of (i) new secured notes to be issued by reorganized Tricom and (ii) all of the equity in a to-be-formed holding company. This will result in a substantial reduction of the amount of our indebtedness. Holders of our existing secured indebtedness will be subject to separate treatment on a case-by-case basis. The interests of the existing holders of our equity, including the American Depository Shares, will be effectively eliminated.

The restructuring contemplated by the Plan Support Agreement is not intended to affect the ordinary course trade obligations of the Company.

Consummation of the proposed restructuring is subject to significant uncertainties. The Plan Support Agreement is subject to termination upon the occurrence of certain events, including failure to meet certain milestones in the restructuring process, and failure to resolve certain contingent liabilities to the satisfaction of the Ad Hoc Committee. It is likely that an extension of time to meet certain of these milestones and to file our reorganization case will be necessary, and the Supporting Creditors may not grant this. Filing of our reorganization case requires the approval of the holders of two thirds of the votes entitled to be cast at a meeting of our shareholders. Creditors that have not signed the Plan Support Agreement may be able to object to or otherwise seek to prevent the consummation of the proposed restructuring. Consummation of the proposed restructuring will be subject to, among other matters, obtaining certain governmental approvals. Accordingly, there can be no assurance that a successful restructuring of our financial obligations, ownership and governance will be effectuated.

Even though these restructuring discussions are continuing, our creditors could, and in some cases have sought to, exercise their rights to collect debt owed to them. They could also take other actions, including the exercise under Dominican law of provisional remedies that could result in, among other things, denying us access to our bank accounts, or creditors attaching or seizing our assets. We do not expect to have any funding sources until the restructuring process is concluded, other than funds generated by operations or from the sale of assets, if any. If we are not successful in restructuring our outstanding indebtedness, we may not be able to continue to operate our business as a going concern. We may be forced into insolvency proceedings which, in the Dominican Republic, could result in our liquidation. Even if our indebtedness is restructured we may not be able to generate the cash required to operate or to obtain the financing necessary to continue funding our business or working capital and capital expenditure requirements.

Change in Independent Auditor.

In March 2005, we announced that Sotomayor & Associates, LLP (“Sotomayor”) had been retained to act as our auditor for the year ended December 31, 2004, succeeding the member firm of KPMG International located in the Dominican Republic (“KPMG”). In December 2005, we announced that Sotomayor would also be retained as our auditor for the years ended December 31, 2002 and 2003, replacing KPMG. Sotomayor is a Public Company Accounting Oversight Board (“PCAOB”) registered independent public accounting firm with its principal offices in Pasadena, California. The firm has acted as independent auditor to Tricom USA, Inc. (“Tricom USA”), our wholly owned subsidiary in the United States, since 1999.

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Executive Officer Resignations.

On June 17, 2005, we announced the resignation of Carl H. Carlson as President and Chief Executive Officer of the Company. Our Board of Directors selected Héctor Castro Noboa, Secretary and Vice-Chairman of the Board of Directors, to succeed Mr. Carlson as our Chief Executive Officer. Héctor Castro Noboa, a member of our Board of Directors since our formation in 1988, will remain on our Board of Directors. On August 13, 2004, we announced the resignation of Ramón Tarragó as Chief Financial Officer. Mr. Tarragó’s duties were assumed by Mr. Erwin Mendez, who was appointed as Vice President of Finance and Administration. Mr. Mendez had previously served as our Controller since November 2002.

Termination of Deposit Facility.

In December 2006, the Bank of New York, the depositary for our ADS facility, notified us and holders of our ADSs, that it was terminating our ADS facility. Upon termination of the ADS facility, most of the depositary’s obligations under the Deposit Agreement also terminated. Holders of our ADSs may obtain delivery of the shares of Class A Common Stock underlying our ADSs, upon payment of certain taxes and processing fees. As a result of the termination, the Bank of New York is no longer obligated to perform any functions in connection with voting the Class A Common Stock underlying our ADSs. With the termination of the ADS facility, our ADSs ceased trading on the “Pink Sheets” service on March 29, 2007.

SELECTED FINANCIAL DATA

The following table provides selected financial and operating data of Tricom for the periods indicated. It has been derived from our consolidated financial statements for the periods in question. For fiscal years ended December 31, 2002, 2003, 2004, and 2005, the information has been derived from our consolidated financial statements which have been audited by our current independent registered public accounting firm, Sotomayor. For the fiscal year ended December 31, 2001, the information has been derived from our consolidated financial statements, which were audited by our former independent auditor, KPMG. We have not, however, obtained the consent of our former independent auditor for use of our audited financial information in respect of that or any other fiscal periods. Accordingly, readers of this Annual Report should treat the Selected Financial Information for the fiscal year ended December 31, 2001, and any other financial information in this Annual Report relating to that or earlier fiscal periods, as if such financial information were unaudited.

Our 2002 financial statements were restated. See our Annual Report on Form 20-F for the fiscal year ended December 31, 2004.

The information in the following tables should be read in conjunction with “Operating and Financial Review and Prospects” and the consolidated financial statements included in this Annual Report.

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	Year ended December 31, (1)
	2001				2002				2003					2004				2005
	Unaudited				Restated
Statement of Operations Data:	(in thousands) (2)
Operating revenues
Long distance	$	81,383			$	80,978			$	92,088				$	72,009			$	70,620
Domestic telephony	87,182				83,721				59,475					64,974				84,071
Mobile	44,721				45,074				29,232					32,124				35,485
Cable (3)	4,736				21,487				13,585					13,651				19,304
Data and internet	8,372				11,007				4,487					5,355				7,953
Other	859				498				121					68				91
Total operating revenues	227,253				242,766				198,988					188,181				217,525
Operating costs and expenses:
Cost of sales and services	73,324				86,519				91,010					89,541				87,696
Selling, general and administrative expenses	67,449				73,923				60,393					56,685				77,654
Restructuring costs (4)	—				—				1,597					8,146				7,803
Depreciation and amortization	54,773				66,517				70,292					75,254				62,041
Expense in lieu of income taxes (5)	12,646				5,897				—					—				—
Asset impairments (6)	—				17,273				191,284					—				—
Other charges and special items (7)	—				—				15,871					—				—
Total operating costs	208,193				250,129				430,447					229,626				235,195
Operating income (loss) from continuing operations	19,060				(7,363			)	(231,459			)		(41,445			)	(17,670			)
Other income (expenses):
Interest expense, net	(39,676			)	(62,313			)	(64,351			)		(63,475			)	(68,863			)
Foreign currency exchange gain (loss)	(260			)	3,067				5,347					(2,674			)	727
Other, net	1,293				(1,502			)	303					5,740				1,614
Other expenses, net	(38,643			)	(60,749			)	(58,701			)		(60,409			)	(66,522			)
Loss before income taxes, minority interest and cumulative effect of accounting change	(19,583			)	(68,111			)	(290,160			)		(101,854			)	(84,192			)
Income taxes (provision) benefit	(511			)	(2,016			)	(1,359			)		(300			)	818
Loss from continuing operations before discontinued operations and cumulative effect of accounting change	(20,095			)	(70,127			)	(291,519			)		(102,154			)	(83,374			)
Discontinued operations:
Loss from discontinued operations (8)	(4,794			)	(9,179			)	(46,651			)		—				—
Minority interest	1,775				1,871				—					—				—
Total Discontinued Operations	(3,019			)	(7,308			)	(46,651			)		—				—
Net loss	$		(23,114	)	$		(77,435	)	$		(338,170	)		$		(102,154	)	$		(83,374	)
Loss per common share-basic and diluted:
Loss from continuing operations before cumulative effect of accounting change	$	(0.83		)	$	(1.62		)	$	(4.51			)	$	(1.58		)	$	(1.29		)
Loss from discontinued operations	—				(0.17			)	(0.72				)	—				—
Net loss – basic and diluted	$	(0.83		)	$	(1.79		)	$	(5.23			)	$	(1.58		)	$	(1.29		)
Average number of common shares outstanding – basic and diluted	27,724				43,400				64,603					64,603				64,603

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	At December 31,
	2001			2002			2003			2004			2005
	Unaudited			Restated
Balance Sheet Data:				(in thousands) (2)
Cash and cash equivalents	$	27,776		$	6,080		$	2,415		$	17,590		$	32,113
Property, plant and equipment, net	685,917			668,120			396,373			332,908			298,439
Total assets	829,415			779,193			438,845			387,683			368,532
Total liabilities	498,155			534,689			532,511			583,503			647,727
Shareholders’ equity (deficit)	253,534			244,504			(93,666		)	(195,820		)	(279,194		)
Other Financial Data:
Capital expenditures (9)	$	85,024		$	53,830		$	10,786		$	13,277		$	28,624
Net cash provided by operating activities	33,624			7,184			7,270			22,211			43,212
Net cash used in investing activities	(176,466		)	(57,918		)	(183		)	(2,972		)	(28,286		)
Net cash provided by (used in) financing activities	137,219			44,239			(10,752		)	(4,064		)	(404)
Other Operating Data:
International minutes (in thousands) (10)	768,394			1,069,130			1,133,973			885,009			877,728
Local access lines in service (at period end)	177,352			150,456			141,856			153,440			167,763
Mobile subscribers (at period end)	364,059			432,058			435,341			345,636			393,991
Cable subscribers (at period end)	64,466			71,726			61,433			59,320			63,878

(1)Beginning in 2003, we changed the presentation of our statement of operations in order to align more accurately our core product and service segments with how management evaluates our consolidated results of operations. Certain amounts previously reported for 2001 and 2002 have been restated to conform to the new presentation. For 2001 and 2002, sales incentives are reclassified as a reduction of long distance revenues in the case of long distance calling cards and as a reduction of cellular revenues in the case of prepaid cellular services, rather than as selling, general and administrative (“SG&A”) expenses. See Notes 2.23 and 2.24 to our consolidated financial statements.

(2)Except per share, ratios and other operating data.

(3)We acquired our cable television operations on October 26, 2001.

(4)We incurred professional and other costs in connection with negotiation of our restructuring.

(5)On June 4, 2002, a Presidential decree modified the tax system imposed on all telecommunication providers in the Dominican Republic by concession agreements (including by our 1996 concession agreement) in favor of the payment of a tax equal to the greater of 25% of net taxable income or 1.5% of gross revenues, which is the tax applicable to Dominican corporate taxpayers. We began paying income tax on this basis on September 1, 2002. For each of the periods prior to September 1, 2002 presented, we made payments in lieu of income taxes equal to 10% of gross domestic revenues, after deducting charges for access to the local network, plus 10% of net international revenues. We are also required by Dominican law to withhold a percentage (15% during 2005) of interest paid to financial institutions located outside the Dominican Republic and 25% of all other payments outside the Dominican Republic, excluding payments to foreign suppliers for goods and equipment imported to the Dominican Republic. We are required by the terms of various financings with non-Dominican lenders, including our 11-3/8% Senior Notes due 2004, to pay additional amounts so that the net amount received by the lender after any withholding or deduction on account of taxes will not be less than the amount the lender would have received if such taxes had not been withheld or deducted.

(6)During 2003, we performed our annual impairment review and recorded non-cash charges of approximately $191.3 million related to our long-lived assets, goodwill and other intangible assets. The asset impairment charges reflected primarily the impact of the Dominican peso devaluation on our telecommunication business in the Dominican Republic as well as increased competition in the mobile

7

business and cancellation of a contract with the Dominican government for the provision of internet services to public schools. See “Operating and Financial Review and Prospects” and Note 25 of notes to consolidated financial statements.

(7)Includes costs of terminating operating leases, write-off of certificates of deposit and tax penalties.

(8)Loss from discontinued operations relates to the classification of our Central American operations and assets as discontinued operations in 2003. In February 2004, we sold our Central American operations, including our digital trunking network in Panama, and our radio frequency rights in Guatemala and El Salvador. As a result of the difference between the net sale proceeds from the sale and the net book value of our assets in Central America, we recorded a $38.6 million loss from impairment of assets held for sale in 2003. See “Operating and Financial Review and Prospects” and Note 22 of notes to consolidated financial statements.

(9)Includes capital lease obligations entered into in 2001 of $3.3 million. We did not enter into any capital lease obligations after 2001.

(10)Includes both inbound and outbound international long distance minutes.

EXCHANGE RATES

The Federal Reserve Bank of New York does not report a buying rate for Dominican pesos. The following table sets forth the high, low and average official and private market exchange rates for each of the six most recent years, and the high, low and average official and private market exchange rates for each of the six months ended June 30, 2007, as reported by the Central Bank of the Dominican Republic. The average annual rates have been calculated by using the average of the exchange rates on the last day of each month during the period. At June 30, 2007, the average official exchange rate was RD$32.57 per US$1.00 while the average private market rate was RD$32.62 per US$1.00.

	Official Rate
Year Ended December 31,	High	Low	Avg.
	(RD$ per US$)
2001	16.99	16.58	16.69
2002	17.63	16.97	17.45
2003	43.82	17.76	29.37
2004	55.42	27.93	41.93
2005	34.50	28.05	30.28
2006	35.05	32.19	33.30
Month Ended
January 31, 2007	34.51	33.66	33.90
February 28, 2007	33.69	33.43	33.51
March 31, 2007	33.47	32.54	32.96
April 30, 2007	32.65	32.12	32.40
May 31, 2007	32.63	32.02	32.29
June 30, 2007	33.40	32.13	32.57

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	Private Market Rate
Year Ended December 31,	High	Low	Avg.
	(RD$ per US$)
2001	17.06	16.65	16.88
2002	22.83	17.03	18.54
2003	44.06	22.50	30.93
2004	55.72	28.08	42.11
2005	34.85	28.12	30.39
2006	35.52	32.30	33.34
Month Ended
January 31, 2007	33.45	33.74	33.95
February 28, 2007	33.74	33.48	33.56
March 31, 2007	33.47	32.55	33.00
April 30, 2007	32.68	32.22	32.48
May 31, 2007	32.65	32.12	32.33
June 30, 2007	33.44	32.24	32.62

RISK FACTORS

You should carefully consider the risks described below and other information in this Annual Report.

Risks Relating to our Restructuring

We have defaulted on payment of our outstanding indebtedness and are in restructuring discussions with our creditors; certain of our creditors may exercise their remedies against us which could prevent us from continuing as a going concern.

In September 2003, we announced that we would not be making a scheduled interest payment on our 11-3/8% Senior Notes due September 1, 2004. In October 2003, we suspended principal and interest payments on our unsecured indebtedness and principal payments on our secured indebtedness. Subsequently, on September 1, 2004, we announced that we would not be making the $200 million principal payment on our 11-3/8% Senior Notes due September 1, 2004. As a result, our creditors generally have the right to accelerate the maturity of our indebtedness to them and to demand payment of the full amounts payable under their respective debt instruments. We are continuing discussions with our lenders, including the Ad Hoc Committee, which is comprised of certain holders of our 11-3/8% Senior Notes due 2004 and other significant creditors, regarding a restructuring. In 2007, we negotiated and entered into a Plan Support Agreement with our largest secured creditor and unsecured creditors representing more than 70% by principal amount of our unsecured indebtedness, providing for the consensual restructuring of our financial obligations, ownership and governance. Even though these discussions are continuing, our creditors could exercise their rights to collect the debt owed to them or take other actions, including the exercise under Dominican law of provisional remedies that could result in, among other things, denying us access to our bank accounts, or creditors attaching or seizing our assets. If we are not successful in restructuring our outstanding indebtedness, we may not be able to continue to operate our business as a going concern.

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Our debt restructuring process is subject to significant uncertainty and is likely to result in the effective elimination of our current shareholders’ ownership. If the restructuring process is not successful, we may be forced into insolvency proceedings, which, in the Dominican Republic, could result in our liquidation.

The Plan Support Agreement contemplates an exchange of all of our unsecured borrowed money obligations for a pro rata share of new secured notes to be issued by reorganized Tricom and all of the equity in a to-be-formed holding company. This will result in a substantial reduction of the amount of our indebtedness. The interests of the existing holders of our equity, including the American Depository Shares, will be effectively eliminated.

Consummation of the proposed restructuring remains subject to significant uncertainties. Although our goal is to achieve a consensual restructuring, we may not succeed in accomplishing this. It is possible that one or more of our creditors may seek to attach or seize our assets prior to the proposed restructuring. If a claim is filed requesting our bankruptcy by one or more of our creditors, we may seek the assistance of the Dominican or United States courts.

In general, if we are forced into bankruptcy in the Dominican Republic our shareholders and holders of our indebtedness should expect the following three-stage process:

•A conciliation proceeding administered by the Ministry of State for Industry and Commerce (Secretaría de Estado de Industria y Comercio) in which the debtor and its creditors attempt to reach an amicable settlement;

•If no amicable settlement is reached, a bankruptcy proceeding is initiated before the Court of First Instance (Tribunal de Primera Instancia) in which the Court determines whether to issue a bankruptcy order declaring the debtor bankrupt; and

•If a bankruptcy order is issued, the management and/or liquidation of the business of the debtor and the resolution of creditor claims is administered by up to three receivers.

However, a Dominican court may elect not to apply the amicable settlement and bankruptcy laws because no clear precedents on this subject exist and because of the effects of the dual revision judicial system established by the Dominican constitution which provides litigants the right to appeal any decision of the court before a Court of Appeals and later to interpose a certiorari recourse before the Supreme Court. Any bankruptcy proceeding in the Dominican Republic may last for years before a final and irrevocable decision can be obtained.

Dominican Republic bankruptcy laws may not be as favorable to Tricom or its creditors as U.S. insolvency and bankruptcy laws.

If our restructuring efforts are unsuccessful, we may become involved with bankruptcy proceedings in the Dominican Republic. The bankruptcy laws of the Dominican Republic are significantly different from, and are less developed than, those of the United States. There have been very few bankruptcy proceedings in the Dominican Republic and none has involved an entity with operations as significant or a capital structure as complex as ours. Except for an amicable settlement process, Dominican bankruptcy law does not provide for a reorganization process for debtors or for an automatic stay on collection or foreclosure efforts by secured creditors.

Unless creditors’ claims are resolved in an amicable settlement process or in negotiations among creditors and the debtor, Dominican law provides only for the liquidation of a debtor’s business and distribution of the proceeds first to employees, Dominican tax authorities, lawyers, landlords, secured creditors, and finally to unsecured creditors. Amicable settlement and bankruptcy proceedings may be time consuming and subject to significant delays. Our business and market position likely would be adversely and significantly affected by the proceedings and the adverse publicity that would accompany it.

Dominican courts have broad discretion and, in the absence of precedent, we cannot predict how courts or appointed receivers would apply the law or administer a bankruptcy. The ability of our creditors to realize any value

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may be limited, particularly in liquidation, in which case our assets and business units likely would have a significantly diminished value. Our liquidation under Dominican bankruptcy laws could result in creditors receiving distributions from such liquidation in Dominican pesos, including with respect to indebtedness denominated in U.S. dollars, thus subjecting such creditors to the currency risks associated with converting Dominican pesos into U.S. dollars.

Successful completion of a consensual restructuring requires the cooperation of our principal shareholders, GFN and Motorola. Entities affiliated with GFN are also among our major creditors.

Under our Bylaws, the holders of two-thirds of the votes entitled to be cast at a shareholders’ meeting are required to approve the filing of a voluntary bankruptcy petition. Although the holdings of our current shareholders would be effectively eliminated in the restructuring, the consent of our principal shareholders, GFN and Motorola, is necessary in order for any restructuring that involves our filing a voluntary bankruptcy petition to move forward. Entities affiliated with one of our major shareholders, GFN, are among our creditors. It is therefore possible that our major shareholders, in approving our restructuring, may not act in the best interests of our other creditors.

Potential for Duplicate Claims.

A portion of our payment obligations have been subject to one or more assignments or re-documentation both with respect to third parties and our affiliates and former affiliates. We are not currently aware of any claim that has been asserted against us by more than one claimant. However, it is possible that multiple claims relating to the identical underlying liability may be asserted against us arising from, among other circumstances, alleged defects in the assignment documentation, lack of required consents or failure to obtain appropriate approvals. Such risk may exist in connection with certain transfers of debt between our affiliates of the Debtors.

Even if our restructuring process is successfully completed, we may not be able to service new debt or other obligations resulting from the restructuring.

Any plan of reorganization resulting from our restructuring process, whether pursuant to the Plan Support Agreement or otherwise, is likely to involve us issuing or assuming a significant amount of indebtedness. As a result, we will likely be highly leveraged immediately after any restructuring is consummated. The degree to which we are leveraged could have important consequences to us, including the following:

•A substantial portion of our cash flow would need to be used to pay interest on our indebtedness and therefore would not be available for use in our business;

•We may be vulnerable to changes in general economic and industry conditions;

•Our ability to obtain additional financing for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes could be impaired;

•We may have much more indebtedness than our competitors in the Dominican Republic, which may be a competitive disadvantage in our principal market;

•Because some of our borrowings may be short-term or at variable rates of interest, we may be vulnerable to interest rate fluctuations, which could result in our incurring higher interest expenses if interest rates increase;

•Any devaluation of the Dominican peso would cause the cost of our U.S. dollar-denominated debt to increase; and

•Our failure to comply with covenants and restrictions contained in the terms of our borrowings could lead to a default which could cause all or a significant portion of our debt to become immediately payable.

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No trading market may develop in the securities resulting from our restructuring, and trading in such securities may be subject to significant volatility.

It is likely that a combination of debt and equity securities will be issued in connection with the consummation of our restructuring. There is currently no trading market in any securities that may result from our restructuring and, following consummation of the restructuring, an active trading market for those securities may not develop or be sustained. This could adversely affect the liquidity and market price of our securities and holders might not be able to sell them readily.

Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors. If a liquid trading market for our post-restructuring securities does not develop, their price may become more volatile, and it may be more difficult to complete a buy or sell order for such securities.

In addition to our operating results, the trading prices of our post-restructuring securities may fluctuate in response to several extraneous factors, including economic conditions in emerging markets generally, in Latin America, and in our business sector. The market price of our post-restructuring securities may decline below the price set in the restructuring.

Whether or not a restructuring is achieved, certain creditors may be beyond the jurisdiction of the United States courts.

Dominican courts may not recognize the jurisdiction or decisions of the United States courts, including bankruptcy courts, and our Dominican creditors may not be subject to the jurisdiction of the United States courts. In a typical restructuring of an entity organized in the United States, all creditors are subject to the automatic stay provision and are bound by any plan of reorganization resulting from the bankruptcy proceedings. We are organized in the Dominican Republic and certain of our creditors, in particular our Dominican creditors, may not be subject to the jurisdiction of the United States courts. It may therefore be necessary to negotiate separate settlements with such creditors, which may be on terms different from those available to creditors subject to a United States bankruptcy proceeding. We may not reach settlements with all such creditors, who may be able to exercise remedies against us and may not be subject to the automatic stay or other orders of a United States bankruptcy court.

We are involved in various legal proceedings which could result in unfavorable decisions and financial difficulties for us.

We are a defendant in a number of legal proceedings. We cannot be certain that these claims will be resolved in our favor. We may, in the future, be subject to further legal proceedings, including those arising out of the December 2002 private placement and other legal proceedings resulting from our former affiliation with certain banking and other financial services entities that collapsed during 2003. If an unfavorable judgment is obtained against us in any of these matters, we may not be able to satisfy the amount of the judgment without significantly impairing our liquidity. There can be no assurance that any of the litigants in our pending legal proceedings would be amenable to participating in any consensual restructuring. If a judgment creditor exercises its rights to collect a judgment, this could result in, among other things, denial of access to our bank accounts, the attachment or seizure of our assets, or the initiation of bankruptcy proceedings in the United States or the Dominican Republic. A bankruptcy proceeding in the Dominican Republic could result in our liquidation.

Consummation of our restructuring will require the consent of our regulator, Indotel and possibly other government departments in the Dominican Republic.

Our restructuring will likely involve a change of control, an event that will require the consent of our regulator, Instituto Dominicano de las Telecomunicaciones (“Indotel”). As part of the proceedings to determine whether such consent will be granted, third parties, including our competitors, may object to the transactions constituting the restructuring. In considering our application for consent, Indotel may consult with other government departments and governmental agencies in the Dominican Republic, including the Central Bank of the Dominican Republic, any of which may raise objections based on matters extraneous to our business or the merits of the restructuring. If Indotel decides in favor of these or any other objections, it could invalidate the transfer of our

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telecommunications licenses and other concessions and impose fines on us. It is also possible that Indotel might limit the areas where we can provide services. Any determination by Indotel that is adverse to us could have a material adverse effect both on our ability to consummate our restructuring and on our operations and financial position.

The change of control contemplated by our restructuring will likely require the consent of the Federal Communications Commission in the United States and state telecommunications regulatory agencies in order for Tricom USA to remain in compliance with applicable regulatory requirements.

As our restructuring will likely involve a change of control, such a change affecting carriers authorized by the Federal Communications Commission and state telecommunications regulators in the United States typically requires the approval of the Federal Communications Commission and state telecommunications regulators.  Since our subsidiary Tricom USA is certified by the Federal Communications Commission and several state telecommunications regulatory agencies, prior approval of these governmental entities for the change of control contemplated by the restructuring may be necessary in order for Tricom USA to remain in compliance with applicable regulatory requirements.  As part of the proceedings to determine whether consent will be granted, third parties, including our competitors, may object to the transactions constituting the restructuring.  In considering our application for consent, the Federal Communications Commission may consult with other government departments and governmental agencies in the United States, including the Department of Homeland Security, which has been reviewing certain transactions involving foreign carriers and foreign individuals. Pursuant to the rules of the Federal Communications Commission and most state telecommunications agencies, we would be required to obtain an approval before consummating the restructuring in order for Tricom USA to remain in compliance with applicable regulatory requirements.

Tax issues concerning the restructuring.

The tax authority of the Dominican Republic has authorized us to use significant amounts of accumulated losses to offset potential income arising from the cancellation of our debt that is expected to take place in the context of the restructuring. This authorization is premised on several conditions, in particular, that the ruling only applies for fiscal year 2007. If we do not consummate our restructuring prior to December 31, 2007, we may be subject to significant additional taxes.

In or about 2004, we elected to allocate the interest accrued and to be accrued on the instruments underlying our unsecured indebtedness to Tricom USA, which is a guarantor of certain, but not all, of these obligations. Our tax advisors concluded that such allocation was appropriate and as of April 30, 2007, approximately $111 million of accrued and unpaid interest, plus $17 million in penalty interest has been allocated to Tricom USA. It is possible, however, that the Internal Revenue Service, another U.S. agency, or the Dominican tax authorities would seek to challenge this allocation. To the extent such interest is allocated back to Tricom, S.A., we would be required to pay all requisite withholding taxes on such interest and it is possible, although unlikely, that Tricom, S.A. could incur additional fines and penalties in the Dominican Republic.

Risks Relating to our Corporate Governance

GFN owns stock with a majority of the voting power and will be able to determine many decisions concerning us, including matters in connection with any restructuring that may require shareholder approval.

According to records available to us, Mr. Manuel Arturo Pellerano Peña (“Mr. Pellerano”), together with members of his family, either directly or through GFN or their other wholly-owned subsidiaries, are the beneficial owners of 17,453,874 shares of our Class A Common Stock and 11,486,720 shares of our Class B Common Stock, representing approximately 50.8% of the issued and outstanding shares of our Class A Common Stock (calculated in accordance with U.S. Securities and Exchange Commission (“SEC”) Rule 13d-3) and 60% of the issued and outstanding shares of our Class B Common Stock. Mr. Pellerano, together with members of his family, has the right to appoint a majority of the members of our Board of Directors and, indirectly, the right to control selection of our management. Through this control, Mr. Pellerano is able to significantly influence our strategic direction, our corporate governance and, to the extent that director or shareholder votes are required, the outcome of our restructuring. Entities affiliated with GFN are also among our major creditors. We have entered into, and may in the future enter into, transactions with related entities that are controlled by Mr. Pellerano or members of his family. Such transactions may not in all respects be on arm’s length terms and may not be in the best interests of our other stakeholders, such as creditors and minority shareholders.

Directors’ and others’ duties in the Dominican Republic are different from those in the United States, and the provisions of our Bylaws and Shareholders Agreement may be of limited benefit to interested parties.

We are organized under, and our Bylaws and Shareholders Agreement are governed by, the laws of the Dominican Republic. Under Dominican law, the law concerning fiduciary duties of directors, controlling shareholders and others, is not as well developed as in the United States. As a result, in practice it may be more difficult for creditors, minority shareholders and others to enforce their rights against us or our directors or controlling shareholder than it would be if we were a U.S. company.

Our principal corporate documents consist of our Bylaws and the Shareholders Agreement between our two principal shareholders, GFN and Motorola. See Item 7, Major Shareholders and Related Party Transactions—Shareholders Agreement. While these documents address certain corporate governance issues, one of their principal purposes was to regulate matters as between those two shareholders. Accordingly, the benefit of these documents to other interested parties, such as minority shareholders and creditors, may be limited. Furthermore, it is difficult to

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predict how a court of competent jurisdiction in the Dominican Republic would interpret the provisions of these documents in specified circumstances.

We may have significant liabilities arising out of a private placement that took place in December 2002.

Our consolidated balance sheet as of December 31, 2002 and the related statements of operations, stockholders’ equity (deficit) and comprehensive loss and cash flows for the year then ended were restated to reflect adjustments to the financial information and footnotes previously reported in our Annual Report on Form 20-F for the fiscal year ended December 31, 2002. The adjustments related primarily to the purchase in December 2002 of shares of our Class A Common Stock by a group of investors for an aggregate purchase price of approximately $70 million. See Item 7, Major Shareholders and Related Party Transactions—2002 Private Placement in our Annual Report on Form 20-F for the fiscal year ended December 31, 2004, for a detailed description of the Placement, the report of the Special Committee and the restatement and amendment of our 2002 financial statements.

The report of the Special Committee contained observations to the effect that we may have certain undisclosed actual or contingent liabilities arising out of the Placement and that the disclosure as to the Placement and related transactions contained in our Annual Report on Form 20-F for the fiscal year ended December 31, 2002 may have been deficient and/or not consistent with information presented to the Special Committee. The report also stated that varying conclusions can be reached as to whether we properly accounted for the Placement, based on different hypothetical fact scenarios. As of the filing date of this report, no claims arising out of the events relating to the Placement have been asserted, in any jurisdiction, in any litigation or similar proceedings brought against us or our subsidiaries. Nevertheless, we have received indications that certain parties involved in the Placement believe that they have claims in connection with the Placement, although we are unable at the present time to determine either the probability of such claims being asserted against us, or the validity or amount of such claims if they are asserted. While it is possible that we will in the future need to establish loss contingencies relating to the Placement, our management does not believe that this is necessary at the present time. Claims arising out of the Placement could, in the aggregate, equal or substantially exceed the $70 million amount of the Placement, in particular if the claimants seek rescission of the Placement or certain related transactions.

The report of the Special Committee raised several issues relating to our corporate governance, most of which have not been addressed.

In addition to the possibility of liabilities arising out of the Placement, the Special Committee offered several observations and corrective recommendations for our Board of Directors’ consideration, including, among others, the following:

•The creation of an independent audit committee of the Board of Directors, in accordance with current best corporate governance practices for U.S. public companies;

•Expansion of the scope of review of our internal audit function to cover all related party transactions;

•Strengthening the internal legal function by adoption of more stringent internal policies covering the legal review and sign-off of corporate transactions, and Board of Directors approval of a consistent policy for retention and use of outside legal counsel in connection with any significant corporate transaction;

•Constitution of a formal internal management disclosure committee, comprised of members of our finance/accounting, legal and selected business units, having primary responsibility for creating and reviewing our public disclosures of material events and transactions and other matters;

•Adoption of a comprehensive code of conduct, covering all directors, officers and employees, in a form consistent with best internal governance practices for public companies addressing, among other things, the guidelines for appropriate documentation and independent review and approval of transactions involving our related parties or affiliates;

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•Adoption of a formal records retention policy covering, among other things, a classification of records to be preserved (and for how long), who has access to our files and guidelines for documenting material transactions, etc.

A more detailed description of these recommendations is set forth in our Report on Form 6-K dated December 9, 2005. To date, we have not implemented most of these recommendations. While adoption of these or similar recommendations may not prevent the occurrence of transactions raising issues similar to those raised by the Placement, our failure to implement these recommendations could leave us exposed to further liabilities from transactions that may occur in the future.

We do not have an audit committee and our internal accounting systems and controls may be inadequate to ensure timely and accurate financial reporting.

Our Board of Directors has not appointed an audit committee. For purposes of U.S. securities laws, in the absence of an audit committee, our full Board of Directors fulfills the functions of the audit committee. While our Board of Directors is not currently required to appoint an audit committee, the absence of one is unusual and not in accordance with current best corporate governance practices for U.S. public companies.

During the course of the audit of our consolidated financial statements for the years ended December 31, 2003, 2004 and 2005, our independent registered accounting firm noted several major weaknesses in our financial reporting and related internal controls. Our auditor recommended that our management assess these weaknesses and implement improvements in the monitoring, revision and supervision of our internal controls over financial reporting. While we have implemented many of these recommendations, we are still in the process of addressing these issues. Our internal accounting systems and controls may be inadequate to ensure timely and accurate financial reporting. We may be, and historically may have been, unable to detect or prevent a material misstatement of our consolidated financial statements.

We are not able at the present time to engage an internationally recognized auditing firm.

For the fiscal year ended December 31, 2002 and prior years our auditor was KPMG. This firm performed our audit work for the fiscal year ended December 31, 2003, but withheld its consent to filing our Annual Report on Form 20-F for that year. Since then, KPMG has not performed any further work for us. In March 2005, we announced that Sotomayor had been retained to act as our auditor for the year ended December 31, 2004, and in December 2005, we announced that they would also be retained as auditor for the years ended December 31, 2002 and 2003, replacing KPMG. Sotomayor is a PCAOB registered independent public accounting firm with its principal office in Pasadena, California. The firm has acted as independent auditor to Tricom USA, our wholly owned subsidiary in the United States, since 1999. While our auditor’s PCAOB qualification permits it to act as our independent registered public accounting firm, it is not an internationally recognized firm, and may not have available to it all of the resources necessary to address the more complex audit and accounting issues we face.

Risks Relating to our Capital Structure and Liquidity

Our consolidated financial statements have been prepared on a going concern basis.

Our consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business. However, because of our current financial condition and the effects of the Dominican economy, including the effects of the fluctuation of the Dominican peso on our operating results and other matters, the realization of assets and satisfaction of our liabilities are subject to substantial uncertainty. In the past, we financed our capital expenditure and working capital requirements, to the extent we did not generate sufficient cash flow from operations, with borrowings, principally in Dominican markets. In light of our recent financial results and adverse developments in the Dominican economy, we may not be able to generate the cash flow from operations required to operate as a going concern. At the present time, our only source of liquidity is cash flow from operations and proceeds from asset sales. We do not have access to outside funding sources. Even if we are able to reach agreement with our lenders concerning a financial restructuring, we may not be able to obtain the financing in the future necessary to continue funding our operations or capital needs. The report on our financial statements by our independent

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registered accounting firm contains an explanatory paragraph that states that these factors, among others, create substantial doubt about our ability to continue as a going concern.

We do not generate sufficient cash flow from operations to meet our debt service requirements.

Even if we are able to reach agreement with our lenders concerning a financial restructuring, our ability to pay interest on our indebtedness (even if the principal amount is reduced in a restructuring) and meet our debt service obligations will depend on our future operating performance, including our ability to increase revenues and control expenses, which in turn depends on successful implementation of our strategy and on financial, competitive, regulatory, technical and other factors, many of which are beyond our control. It is likely that any new debt issued in exchange for our existing indebtedness will be payable in U.S. dollars and our ability to pay interest and principal will continue to be affected by and dependent on the performance of the Dominican economy. As a result of these and other factors, we may not be able to meet our debt service obligations even if our current indebtedness is restructured.

The volatility and depreciation of the Dominican peso against the U.S. dollar could reduce the amount of cash we will have to fund our operations or to purchase equipment and cable television programming, and to repay indebtedness, even if our indebtedness is restructured.

For 2004 and 2005, we earned 46.8% and 52.5% respectively, of our operating revenues in Dominican pesos and the remainder of our operating revenues in foreign currency, primarily in U.S. dollars. The percentage of operating revenues in Dominican pesos could increase if we successfully increase our share in Dominican local markets in accordance with our business strategy. From 2004 to 2005, the average annual exchange rate decreased 27.8% representing a weakening of the U.S. dollar against the Dominican peso compared to an increase of 36.1% from 2003 to 2004. Most of our indebtedness is U.S. dollar-denominated and must be paid in U.S. dollars. Our communications equipment vendors and cable programming providers all require that we pay in U.S. dollars. While the Dominican peso strengthened against the U.S. dollar in 2005, a significant increase in the exchange rate in the foreseeable future may again adversely affect our operating results, as well as our ability to purchase U.S. dollars in order to service our debt obligations and pay equipment vendors and cable programming providers. Our purchase of substantial amounts of U.S. dollars in Dominican markets could adversely affect the value of the Dominican peso in relation to the U.S. dollar and make these purchases more costly for us.

Other Tax Issues.

The Dominican government has in the past changed tax rates and created new taxes, as well as modified the system of taxation with some frequency. In addition, it is possible that the Dominican government may impose taxes related to the telecommunications industry that may affect our financial performance.

Risks Related to our Operations

Our principal competitor for the provision of local, mobile and international long distance services in the Dominican Republic, Codetel, has substantially greater market share and resources, which may prevent us from maintaining or increasing our market share.

We compete primarily with Compañía Dominicana de Teléfonos C. por A., or “Codetel” (formerly Verizon Dominicana, which was acquired by América Móvil, S.A. de C.V. in December 2006). Codetel has an established market presence, networks and resources substantially greater than ours. At December 31, 2005, approximately 81% of the Dominican Republic’s local access line customers and approximately 49% of subscribers for mobile services, were customers of Codetel. Codetel’s presence is particularly strong in the market segments that we now are targeting, including consumer and business post-paid subscribers for mobile and local services, which generate greater revenues than pre-paid individual subscribers. The growth of our market share among consumer and corporate post-paid subscribers depends upon our ability to convince Codetel customers to either add, or switch to, the telephony services we offer. If Codetel implements significant price reductions for particular services, we may be forced to reduce our rates in response in order to remain competitive. In addition, Codetel could expend significantly greater amounts of capital than are available to us in order to upgrade its network and/or sustain price

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reductions over a prolonged period. As a result, we may not be able to maintain or increase our market share for local services or in other markets in which we compete with Codetel.

Other entrants in the Dominican markets, particularly for mobile services, have increased competition for our services, and could reduce our market share or increase price competition.

In addition to Codetel, we face substantial competition in the mobile market:

•Orange Dominicana, S.A. (“Orange”), a subsidiary of France Telecom Group, offers cellular services and has developed an aggressive marketing strategy based on offering services at discounts. We believe that at December 31, 2005 Orange subscribers represented in excess of 30% of subscribers for mobile services in the Dominican Republic. Orange also employs GSM technology, which is the prevalent technology used in Europe and makes its services compatible with handsets that many tourists use;

•All America Cables and Radio, Inc., or “Centennial Dominicana” (which was acquired by Trilogy International Partners in early 2007), is an integrated telecommunications provider that offers mobile and data services.

As a result of these and other potential new entrants, we expect to face more competition in the Dominican telecommunications market in the future, including from international communications companies with significantly greater resources than ours, which could adversely affect our ability to maintain our market share or require us to lower prices.

Further investment by foreign companies in Dominican telecommunications markets could limit the number of U.S. carriers that would send significant traffic to us, thereby adversely affecting our ability to generate international long distance termination revenues. Due to unfavorable market trends, termination rates for international traffic from the United States and Puerto Rico to the Dominican Republic have declined and could continue to decline, which would further reduce our international revenues and related profit margins.

Our business plan, which now focuses on higher usage customers and includes involuntary disconnections of lower usage or unprofitable customers, may not result in increased revenues or higher average revenue per user from our remaining customers.

Our business plan for our mobile and local services includes disconnecting subscribers who use our service only to receive calls and who do not make many outgoing calls or do not use our other services. During 2003 and 2004, we disconnected a substantial portion of these subscribers. By disconnecting these subscribers, we believe we can better use our networks and concentrate our sales efforts on consumer and business customers that generate greater per subscriber revenues to improve our margins. However, our disconnection of subscribers could result in an overall decrease in revenues. We may not be able to attract new subscribers that generate greater revenues and we may need to incur greater marketing and customer acquisition expenses to do so.

If we experience a significant number of customer non-payments our business and results of operations could be adversely affected.

Our business plan includes increasing our revenues from post-paid services, including mobile telecommunication services and cable television services. Although we have instituted measures to minimize consumer credit risks, these efforts may not be successful as we expand our services in the post-paid area. Moreover, efforts to minimize credit risk may limit the number of our new subscribers. If we experience a significant number of non-payments or are unable to attract new post-paid customers, then our revenues will decrease and our cash position will be weakened.

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Termination rates for international traffic from the United States and Puerto Rico have declined and could continue to decline, which would reduce our international revenues and profit margins from these revenues.

Revenues from our international long distance business represented approximately 46% of our operating revenues in 2003, 38% in 2004 and 32% in 2005. Exchange rate and market trends have caused our average termination rates for traffic between the United States and the Dominican Republic traffic to decline from $0.41 per minute during 1996 to $0.071 per minute in 2005. We believe that competitive and regulatory pressures could continue to push settlement rates lower. Future decreases in termination rates, without a corresponding increase in our international long distance traffic originating in the United States and Puerto Rico, would reduce our international termination revenues and adversely affect the profit margins that we realize from these revenues.

As in the rest of the world, there are changing dynamics in our international business. Modern market technologies such as Voice-over-Internet Protocol (“VoIP”) equipment have created an environment allowing new entrants into this business in the Dominican Republic. These companies may extend their reach to many of our traditional U.S.-based carriers and resellers that terminate significant traffic in the Dominican Republic.

Because we are receiving an increasing portion of our international minutes from U.S.-based resellers, we may experience substantial fluctuation in our international revenues.

Since 1997, we have derived an increasing proportion of international revenues from U.S.-based resellers, which are companies that typically buy long distance minutes in bulk and resell the minutes to other companies or individual end users.  During 2005, resellers originated approximately 53% of our international long distance minutes from the United States to the Dominican Republic.  While we enter into agreements with resellers, they are not required to provide us with any specified amount of traffic.  The volume of minutes and revenues we receive from these resellers has significantly varied throughout the past years because of competition for their business, primarily from Codetel, our main competitor, and because of the uncertain financial condition of many resellers.  The price per minute we charge a reseller is frequently renegotiated and as a result we, together with our competitors, struggle to maintain stable prices. At December 31, 2005, we received traffic from approximately 90 resellers. Intense competition in U.S. markets among international long distance carriers has resulted in bankruptcy filings by many of our reseller clients.

Our net growth in, and revenue derived from, subscribers may be reduced by customer disconnections or churn.

Our results of operations in the past have been, and in the future may be, affected by subscriber disconnections, whether initiated by our customers or by us. In order to realize net growth in subscribers, we must replace disconnected subscribers with new subscribers. Our average monthly disconnection rate, or “churn rate,” was 6.7% for mobile subscribers during 2005 compared to 9.1% during 2004, and 1.8% for local access line subscribers during 2005 compared to 2.0% during 2004. During 2005, our average churn rate for cable television was 1.4% compared to 1.8% during 2004. The sales and marketing costs associated with attracting new subscribers are substantial, relative to the costs of providing service to existing subscribers. If we are unable to maintain our credit policies or otherwise limit churn, we will experience a decline in net growth in subscribers and revenue.

We may not have sufficient resources to keep pace with rapid changes in technologies used to provide telecommunications services which could increase competition or require us to make substantial additional expenditures to maintain and improve our current networks, which could reduce our revenues from subscribers and cash flow.

The services we offer are technology intensive. The development of new technologies could make the technology we use obsolete. We may have to make substantial additional investments in new technologies to remain competitive. New technologies we choose may not prove to be commercially successful. We would require substantial investment to replace or upgrade all or a substantial part of our network. We have chosen to improve our liquidity by reducing our capital expenditures which affects our ability to improve our network. We spent approximately $28.6 million on capital expenditures in 2005. This compares to $13.3 million in 2004 and $10.8 million expended in 2003. If we do not invest in the latest technology, our network may rapidly become obsolete and we may not be able to retain our existing customers or attract new ones.

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If we are unable to continue offering high-quality programming, our cable revenues may decline.

The success of our cable television services depends upon our ability to acquire popular, high-quality programming content. We license a significant portion of our programming from third parties. Our arrangements with these third parties regarding programming may be terminated, or may not be renewed on favorable terms, if at all. These third parties could increase our costs of obtaining programming and we may not be able to pass these costs on to our cable subscribers. As we upgrade the channel capacity of our cable system and add programming to our basic cable service, we may not be able to pass programming costs on to our cable subscribers. If some or all of our programming arrangements are terminated or if we cannot negotiate new agreements on terms favorable to us, we may lose existing subscribers and attract fewer new subscribers, which would reduce our revenues.

Our operations may be vulnerable to hacking, viruses, thefts and other disruptions.

“Hacking” involves efforts to gain unauthorized access to information or systems or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment. In addition, the transmission of computer viruses could expose us to a material risk of loss or litigation and possible liability. Computer viruses, break-ins or other problems could lead to:

•The interruption, delay or cessation of services to our subscribers;

•The compromise of confidential information relating to our subscribers;

•Damage to our reputation and the loss of subscribers; and

•Costly litigation.

The Dominican Republic is highly vulnerable to hurricanes.

Much of our network is above ground, including significant parts of our backbone. A major hurricane could result in significant damage to and disruption of our network. In addition, our network may not be fully insured. Our network is also vulnerable to theft and sabotage.

Risks Relating to our Principal Market, the Dominican Republic

Our results of operations have been, and may continue to be, materially adversely affected by the fluctuation of the peso and the economic conditions currently prevailing in the Dominican Republic.

We realize a substantial portion of our revenues in Dominican pesos and, as a result, the increase in the exchange rate of the Dominican peso to the U.S. dollar has had and may in the future have a material adverse effect on the U.S. dollar value of our operating results and our ability to service our debt which is largely denominated in U.S. dollars. While the average annual exchange rate decreased 27.8% in 2005, the Dominican peso exchange rate against the U.S. dollar increased by approximately 36.1% and 66.4% in 2004 and 2003, respectively, adversely affecting the Dominican economy. The fluctuation of the Dominican peso in the past few years has had a material adverse effect on our financial condition, as our largely Dominican peso-denominated assets have depreciated in value and our indebtedness is largely U.S. dollar denominated. Although the exchange rate recently has improved, in particular following the change in government in 2004, there cannot be any assurance that current exchange rates will be sustained. Any further depreciation of the Dominican peso against the U.S. dollar will correspondingly increase the amount of our debt in Dominican pesos, with further adverse effects on our results of operations and financial condition. Our total indebtedness as of December 31, 2005 was $447.5 million.

It is impossible to predict whether, and to what extent, the value of the Dominican peso may further depreciate against the U.S. dollar and how these uncertainties will affect the Dominican economy and the consumption of telecommunication services. Moreover, we cannot predict whether the Dominican government will modify its monetary policy and, if so, what impact any such changes could have on our financial condition and results of operations.

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Poverty, social unrest and shortages of basic services in the Dominican Republic could affect the use of telecommunications services, which would decrease our revenues.

The Dominican Republic has widespread poverty. From time to time, the country has experienced social unrest partly as a result of price increases and shortages of water and electricity. Any increase in poverty, social unrest or shortage of basic services could adversely affect the use of telecommunications services.

You may not be able to enforce claims in the Dominican Republic based on U.S. laws.

A majority of our directors and all of our officers reside outside of the United States. A substantial portion of our assets and the assets of these persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or these other persons to enforce judgments obtained against us or against them in United States courts predicated upon the civil liability provisions of the United States federal securities laws, other federal laws of the United Sates or laws of the individual states of the United States.

No treaty currently exists between the United States and the Dominican Republic providing for reciprocal enforcement of foreign judgments. We have been advised by our Dominican counsel, that there is doubt as to (1) the ability of a plaintiff to bring an original action in a Dominican court which is predicated solely upon the United States securities laws, other federal laws of the United States or laws of the individual states of the United States and (2) the enforceability in Dominican courts of judgments of United States courts obtained in actions predicated upon civil liability provisions of the United States federal securities laws, other federal laws of the United States or laws of the individual states of the United States.

Our Dominican counsel also has advised us that the enforceability of actions brought in Dominican courts of liabilities predicated on U.S. laws would require compliance with certain procedures, including the validation by Dominican courts of decisions rendered by United States courts. Compliance with such procedures could require a substantial amount of time and expense, and local defendants could assert defenses to enforcement based on noncompliance with such procedures. Foreign plaintiffs bringing original actions in a Dominican court also can, at the request of the defendant, be required to post a litigation bond in an amount established by such court in its discretion.

The Dominican legal system is based upon civil law principles according to which judges decide both the facts and legal issues of a case, and they are not bound by legal precedents. As a result, judges have broader discretion in reaching decisions than do judges in the United States. In the past, the United States Department of Commerce has reported that Dominicans and foreign observers have criticized the Dominican judicial system for what they perceive as an inequitable resolution of business disputes. The Dominican legal system, coupled with the fact that substantially all of our assets are located in the Dominican Republic, may present substantial obstacles to the enforcement of judgments against us, as well as our directors and officers in the Dominican Republic.

Increases in the inflation rate would adversely affect the Dominican Republic’s economy and the demand for our services.

Inflation in the Dominican Republic stabilized in 2005 compared to 2004 and 2003. According to the Central Bank, the annual rate of inflation was 7.4% in 2005, compared to 28.7% in 2004 and 42.7% in 2003. While inflation in 2005 reflected general price increases, the high levels of inflation in 2003 and 2004 were principally due to the depreciation of the Dominican peso against the U.S. dollar, higher fuel prices and growth in public spending. According to the Central Bank, the average annual exchange rate of the Dominican peso to the U.S. dollar increased 36.1% and 66.4% in 2004 and 2003, respectively, compared to a decrease of 27.8% in 2005. Any increase in the value of the U.S. dollar against the Dominican peso directly affects the Dominican Republic’s inflation rate because the Dominican Republic relies heavily on imports from the United States of raw materials and consumer goods. High inflation levels could adversely affect the Dominican Republic’s economy and reduce demand for our services.

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Risks Relating to our Shares and ADSs

Our ADSs have been delisted and are no longer listed on a national securities exchange; our Depositary Agreement has been terminated; our debt restructuring is likely to result in effective elimination of our current shareholders.

On May 11, 2004, the New York Stock Exchange (“NYSE”) determined to suspend trading and pursue delisting of our ADSs, ticker symbol “TDR”. On May 19, 2004, our ADSs began trading on the OTC (over-the-counter) Bulletin Board (“OTCBB”) under the symbol “TRICY.OB”. On July 25, 2004, the OTCBB suspended trading of our ADSs. Thereafter, our ADSs were traded on the “Pink Sheets” service under the symbol “TRICY.PK”. In December 2006, the Bank of New York, as depositary for our ADS facility, notified us and holders of our ADSs that they were terminating the ADS facility. With the termination of the ADS facility, our ADSs ceased trading on the “Pink Sheets” service on March 29, 2007. Upon termination of the ADS facility, most of the depositary’s obligations under the Deposit Agreement also terminate. Holders of our ADSs may obtain delivery of the shares of Class A Common Stock underlying our ADSs, upon payment of certain taxes and processing fees. As a result of the termination, the Bank of New York is no longer obligated to perform any functions in connection with voting the Class A Common Stock underlying our ADSs.

Following consummation of our debt restructuring, the interests of our current shareholders, including holders of our ADSs, are expected to be effectively eliminated.

GFN may act without approval of the ADS holders to release directors and officers from liability.

Under Dominican law, shareholders are asked to vote upon the performance of management at annual shareholders’ meetings. Our vigilance officer delivers a report on our financial performance and other issues related to management’s performance. If the holders of a majority of the votes entitled to be cast approve management’s performance, all shareholders are deemed to have released the directors and officers from liability to us or our shareholders arising out of actions taken or any failure to take actions by any of them on our behalf during the prior fiscal year, with certain exceptions. As a result, shareholders likely will fail in any suit brought in a Dominican court with respect to such acts or omissions. Officers and directors may not be released from any claims or liability for criminal acts, fraud, self-dealing or gross negligence. GFN controls a majority of the votes entitled to be cast at annual shareholders’ meetings and, without the concurrence of other shareholders, is able to approve the performance of management, thereby releasing management from liability to our shareholders, including holders of our ADSs.

ITEM 4.INFORMATION ON THE COMPANY

Tricom, S.A. is incorporated in the Dominican Republic. Our operations are headquartered at Ave. Lope de Vega No. 95, Santo Domingo, Dominican Republic and our telephone number at the above address is 809-476-4000. Our website address is www.tricom.net. Our agent in the United States, appointed for purposes of the indenture governing our 11-3/8% Senior Notes due 2004, is CT Corporation System. This agent can be reached at 111 Eighth Avenue, New York, NY 10011 and at telephone number 800-624-0909.

BUSINESS OVERVIEW

Overview

We are a full service communications services provider in the Dominican Republic. We offer local, long distance, mobile, cable television and broadband data transmission and internet services. Our mobile network covers approximately 90% of the population in the Dominican Republic. Our network providing local service is 100% digital. Telecommunications networks that employ digital technology can transmit higher quality signals at lower cost. We also own interests in undersea fiber optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Fiber optic cable is composed of glass strands and transmits telecommunications signals in the form of light. Through our subsidiary, Tricom USA, Inc., we own telecommunication-switching facilities in New York and Florida. Using these facilities, we originate,

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transport and terminate international long-distance traffic. We believe we are one of the few Latin American-based long distance carriers that is licensed by the U.S. Federal Communications Commission (“FCC”) to own and operate switching facilities in the United States.

Through our subsidiary, TCN Dominicana, S.A. (“TCN”), we are the largest cable television operator in Santo Domingo and one of the largest cable television operators in the Dominican Republic.

Service Offerings

Our service offerings include:

•International long distance;

•Domestic telephony;

•Mobile;

•Cable television; and

•Data transmission and internet.

International Long Distance.

In the Dominican Republic, we provide international long distance services to our local access line and mobile customers. In addition, we offer a prepaid calling card for international long distance, the Bla Bla Bla® card that can be used from any telephone in the Dominican Republic. We operate telephone centers that provide access to telephone services to individual customers who either do not have telephone services in their own homes or who are attracted by the competitive pricing of the telephone centers. The centers offer a wide range of telephone services, including bill payments and service of sales in addition to long distance calls.

In the United States, our subsidiary Tricom USA provides international carrier services primarily to resellers, which account for an increasing share of international long distance traffic between the United States and the Dominican Republic. During 2005, resellers originated approximately 53.0% of the international long distance minutes from the United States to the Dominican Republic that we received. Minutes delivered by resellers may fluctuate significantly. Through our telecommunications switching facilities in the United States, we have been able to provide resellers with an alternate channel for sending international long distance traffic. In addition, by having facilities that can originate, transport and terminate international long distance traffic between the United States and the Dominican Republic, we believe that we are able to send and receive such traffic at a lower cost to us than by exchanging traffic with traditional international carriers.

Since 1997, Tricom USA has offered international long distance calling services to the Hispanic community in the United States, targeting primarily Dominican communities. Our prepaid calling cards were distributed through wholesalers from our New Jersey office and through retailers from our New York location. Our cards were sold primarily in small retail stores including groceries, drugstores and newsstands. They were advertised through special promotions during Hispanic events and by radio, television and newspapers that target Dominican and other ethnic communities, particularly in the New York metropolitan area. Our advertising emphasized savings, voice quality and patriotic themes. At the beginning of 2007, we discontinued our prepaid calling card business in the United States.

In addition to prepaid calling cards, Tricom USA offers national and international long distance services in New York, New Jersey and Florida, through carrier identification code (“CIC”) services. A CIC is a four-digit number used by end-user customers to reach the services of inter-exchange carriers through equal access arrangements. Major users of this service are calling centers. This service is offered through a combination of our own and independent sales agents.

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In addition to its interstate and international authorization, Tricom USA is currently certified to provide telecommunications services in California, Delaware, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Washington DC, and Wisconsin, as well as Puerto Rico, the U.S. Virgin Islands and Canada.

Domestic Telephony.

We are a competitive local exchange carrier in the Dominican Republic and at December 31, 2005 we had 167,763 local access lines in service compared to 153,440 lines at December 31, 2004. According to Indotel, there were approximately 896,252 local access lines in service in the Dominican Republic at December 31, 2005. Tricom had approximately 18.7% of the local access line market at the end of that period. Our local access network covers areas with approximately 65% of the population of the Dominican Republic. We previously deployed a wireless local loop but intend, to the extent economically feasible, to convert most wireless local loop subscribers to wireline over the next several years.

All of our basic telephone service customers have access to a range of value-added services, including call forwarding, three-way calling, call waiting, caller ID and voicemail applications. In addition to local service, we provide international and domestic long distance services and internet access to our consumer and business customers.

We offer our customers broad flexibility in assembling customized packages of services, which provide our customers with cost savings and enhanced control over their consumption of telephone services. Customers may choose from a menu of services, including domestic and international long distance services, local service and value-added services. They also may bundle their local access service with cellular or PCS, paging, cable television and internet services. Service packages permit customers to preset their monthly bills based upon, for example, local service minutes or long distance minutes. Customers are responsible for paying for usage levels in excess of preset package amounts, at regular per minute rates. We believe that providing customers with such budgeting capability increases consumer confidence in using telecommunications services, consequently allowing for increased service penetration, higher levels of customer satisfaction and lower incidence of delinquent payments.

Using wireline connections, we can also offer data transmission and other value added services attractive to the businesses and higher usage consumer subscribers that we are targeting. We also sell fully integrated systems and components for both turnkey systems and private telephone networks used within enterprises. We are a distributor of leading manufacturers of private branch exchanges and key telephone systems and a leading provider of computer telephony integration systems in the Dominican Republic.

Mobile.

Our mobile network covers approximately 90% of the Dominican Republic’s population. We offer both analog cellular and PCS mobile services. According to Indotel, there were approximately 3,623,289 analog and PCS cellular subscribers in the Dominican Republic at December 31, 2005. At December 31, 2005, we had 393,991 mobile subscribers compared to 345,636 mobile subscribers at December 31, 2004. Our market share declined from 13.6% to 10.9% during 2005. We attribute this decline to intense competitive pressures during the period, coupled with our limited ability to make capital expenditures, low investment in marketing and low equipment subsidies, as compared to our competitors.

Our prepaid card program offers both analog cellular and PCS mobile services to individuals who would not satisfy our credit policies for postpaid services. These cards also appeal to customers who prefer to budget their mobile telephone spending. At December 31, 2005, we had 370,854 prepaid mobile subscribers, approximately 94% of our total mobile subscribers in the Dominican Republic.

We have offered PCS mobile services since April 1999. This technology provides for added security and privacy compared with traditional analog systems, and it also offers greater capacity. PCS customers are able to receive benefits related to digital service, including digital messaging, caller ID and voicemail. We offer a dual-band service, allowing customers to use seamlessly their mobile phones nationwide over both digital and analog networks.

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For large corporate, medium and small businesses, with multiple mobile phones included as part of one service contract, we offer a range of unique mobile fleet management services, specifically designed to help our business customers manage their fleet communication needs. We offer our business customers broad flexibility in assembling customized mobile fleet service plans, which provide for cost savings and enhanced control over their consumption of mobile communication services. Our mobile fleet management service offers cost reductions for “on-net” calls, flat rates for calls to wireline and mobile phones, and cost control for “off-net” calls through a comprehensive on-line reporting suite, among other benefits.

We offer domestic as well as international roaming services to participating subscribers. Subscribers who pay the roaming rates gain access to our nationwide mobile network, while subscribers paying the international roaming fees are able to roam outside of the Dominican Republic, using the networks of cellular service providers with which Tricom has entered into roaming agreements.

Cable Television.

We are the largest provider of cable television services in Santo Domingo and one of the largest in the Dominican Republic. At December 31, 2005, our cable network served 63,878 subscribers, including 49,199 basic programming subscribers, 11,083 occupied hotel and other commercial rooms (based on our internal calculations) and 3,596 subscribers for cable modem and digital music. In addition to publicly available programming, we license or otherwise acquire programming from various programming providers for broadcast on our cable television network. We also produce a limited amount of programming ourselves intended for exclusive broadcast on our network. We currently offer 105 basic and expanded programming channels including HBO, Cinecanal, Moviecity, Disney, ESPN, Fox Sports and CNN. We also sell our own advertising time, replacing international commercials with local advertisements.

Basic Programming Packages. Our basic programming packages provide access to a maximum of 78 local and foreign content channels. Subscribers pay a one time, refundable deposit for each analog set top box and a monthly fee for this service. Subscribers do not need a digital decoder to receive the basic service package.

Expanded Programming Packages. Our expanded programming packages include all of the channels included in our basic programming package, with an additional choice of premium packages, including movies and adult programming packages. Expanded programming subscribers pay the basic service package monthly fee plus the additional cost of the expanded programming. An analog or digital decoder set-top box is required for these services, providing a maximum of 105 channels. We are currently focusing on marketing our various expanded programming packages to our existing basic subscribers with a view to increase our overall revenues per subscriber.

Digital Cable and Cable Modem Service. We offer digital cable television and high-speed internet access over coaxial cable via cable modem, under the brand name Internet Tornado®. Digital cable television provides movie-quality pictures, digital-quality sound, broadcast services and certain programming not available through our basic or expanded programming packages. Our digital cable television offering includes an on-screen interactive program guide, 17 pay-per view channels, 2 video music channels and 50 channels of commercial free CD-quality music. A digital decoder set-top box is required for these services.

Digital Music Services. We offer digital audio programming provided by DMX Music International through our hybrid fiber coaxial network. Customers choose from 50 exclusive music channels that play 24 hours a day, seven days a week. Subscribers for this service are primarily hotels.

Data Transmission and Internet.

In the Dominican Republic, we are the second largest internet service provider. According to Indotel, there were approximately 145,568 data and internet subscribers in the Dominican Republic at December 31, 2005. Comparatively, we had 19,771 subscribers or 13.6% of the data and internet market share. We provide internet connectivity to the consumer and business markets through traditional dial-up connections, digital subscriber lines, or xDSLs, dedicated lines and cable modems. Our cellular PCS services are now fully integrated with our internet

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service, offering e-mail and digital messaging through our website, www.tricom.net. In addition, we offer our residential customers internet access bundled together with local, wireless and other services.

We provide broadband data transmission services to large business customers in the Dominican Republic through several means of delivery including fiber optic cable and digital wireless point-to-point radio links. In addition, we provide these large customers with data circuits, internet access, private networks and frame relay services. We also offer computer network security services such as firewalls for xDSL and lease lines, bandwidth control and auto-bandwidth, filtering, captive portal, content, and virtual private networks.

Marketing and Sales

Our advertising and promotional materials in the Dominican Republic emphasize that we are a full-service provider of local access, long distance, mobile, cable television, and broadband data transmission and internet services and that customers can realize significant savings from our service packaging. Our advertising also emphasizes reliability, performance, quality of service and the multiple advantages that users can obtain from our different products and services. Seasonal promotions are also made for specific target markets at different points throughout the year. Our sales force is oriented to develop close relationships with business customers to assess their needs and offer customized solutions.

Local Access and Mobile Service.

We use telemarketing, mass media, the internet, direct sales and database marketing to promote and sell our local access and mobile services in the Dominican Republic. We use product differentiation, pricing and promotions to target consumer and business customers. Our advertising strategy for PCS services focuses on our nationwide coverage, quality of service and competitive prices.

Our sales and marketing approach for offering local access and mobile services to large business customers is to offer comprehensive and customized telecommunications solutions for individual business customers needs. Our sales staff works closely with each customer to gain a better understanding of its particular operations and to develop customized local and mobile service solutions. Many of our sales executives in this market segment have engineering backgrounds or receive periodical training sessions in which they learn the fundamentals of our industry as well as thorough information on our line of products. Our product development and customer service departments also offer them continuous support.

Calling Cards.

In addition to our Dominican local access and mobile services, we have marketed our prepaid calling cards to individual customers both in the Dominican Republic and the United States. In the Dominican market, we have unified all of our calling card products into a single brand called the Bla Bla Bla® card, allowing our customers to use the card for domestic and international long distance calling as well as prepaid mobile services.

We feature our prepaid card in our basic services advertisements, as well as advertising that is specific to the prepaid card. Our advertising emphasizes the accuracy and reliability of our billing as well as savings. Our prepaid card is distributed at our commercial offices, call centers and through wholesalers and retailers. We have four wholesale distributors in the Dominican Republic as well as an internal sales force targeting smaller retailers.

Cable Television.

We use a variety of methods to attract new subscribers. We generally advertise on our cable broadcasts as well as on television and radio broadcasts, magazines, newspapers and billboards. Our direct marketing includes flyers and

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promotional materials. Our telemarketing staff focuses on both attracting new subscribers, as well as upgrading our existing basic subscribers to one of our expanded programming packages. We market our cable services under the brand name TelecableÔ.

Our current marketing strategy is intended to promote subscriber loyalty and timely payments, reinforce our market position by offering better programming content, increase our subscriber base by increasing the penetration levels in our coverage areas, and convert users that pirate our cable services to legitimate subscribers.

Data Transmission and Internet.

For data transmission services, we target large Dominican businesses, which require more sophisticated technology and demand specialized service and support. We developed a sales force focused on this sector, which includes multi-national corporations, local business conglomerates, local and international banks and large hotels. We also have a specialized sales force targeting medium and small businesses with products that fit their needs such as virtual private networks, dial up and broadband internet, among others. Our advertising campaign is focused on promoting the speed and accuracy of our data transmission services.

Customer Service

In the Dominican Republic, we provide customer care for all of our services through five service centers and 10 commercial offices. At these offices and centers, our customers may subscribe for services, pay and obtain information about monthly bills and inquire about billing adjustments. We also provide payment services for our customers through several other businesses including supermarkets, banks and other commonly frequented businesses. At December 31, 2005, there were approximately 275 such stations, all of which are linked to our central billing and collection system.

We maintain a call center to respond to incoming calls from existing or potential subscribers. The call center staff is trained to respond to questions concerning our extensive product and service offerings, as well as to contact potential subscribers, market our services and receive payment for our services by credit card.

We use a customer relationship management system, integrating our information systems and our customer relationship management software. This system allows customer service representatives to access all billing, service order and other client specific information. This enables us to offer speedier service and more efficient follow through and to monitor every step of the customer service relationship.

We provide a 24-hour interactive voice response service through which customers can register problems and make billing inquiries. In addition, customers may access their account information online 24 hours a day, seven days a week, on our website, www.tricom.net. Our website provides information about our services and can be used to purchase products including prepaid cards, mobile phones and accessories.

We provide installation and repair services to our customers and have established service benchmarks for, among other things, network availability, and installation and repair intervals. We research other companies’ response times and client promises in order to establish our own policies and ensure our competitive advantage.

Our customer service department gathers information from our customers, which we then use to tailor our products and services to meet customer needs. We regularly survey our customers to determine their satisfaction with our services and to improve services based upon the explanations offered by customers who voluntarily cancel their services. Furthermore, we have a customer retention department that works to determine the cause for customer churn and also to develop appropriate retention strategies to target this segment.

Billing and Credit Policies

We have developed an integrated billing system for local access, long distance, mobile, internet, paging and value-added services. The integrated billing system enables our customers to obtain a single bill, providing detailed information about charges for all services rendered, other than cable television for which customers receive a

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separate bill. Our subscribers can call our center and speak with a customer care representative and obtain account and statement information. Our customers also can access information over the telephone through an interactive voice response system that enables customers to review recent calling activity and account balances.

Cash payments may be made at walk-in commercial offices, centers and bank branches, or funds may be debited from credit cards or bank accounts. Our customers may also pay their bills at any one of our payment stations, which are located in neighborhood gas stations, grocery stores and other retail outlets.

Each residential basic telephone service and mobile subscriber is assigned a preset credit limit, which varies depending upon the individual’s monthly usage and payment history. We use credit bureaus to check the credit history of new clients. We require all individuals wishing to subscribe for mobile services to have a credit card or prepay for services. We contact any customers exceeding their pre-set credit limit and request that they pay all or part of the outstanding bill.

Our policy is to suspend service for all post-paid subscribers if payment is not received within 45 days after a bill is issued and to terminate service 45 days after the suspension date. Pre-paid services are suspended when the prepayment balance is exhausted or the pre-paid card has expired. Upon suspension, both pre-paid and post-paid service customers may continue to receive incoming calls for the next 15 days. Service to post-paid subscribers is also suspended when a customer’s credit limit is reached. In order to reinstate service after termination, post-paid subscribers must pay a reinstallation fee, except for internet services for which no reinstallation fee is required after termination.

We had an average monthly churn rate for mobile subscribers of 6.7% in 2005, 9.1% in 2004, and 4.0% in 2003. We had an average monthly churn rate for local access line subscribers of 1.8% in 2005, 2.0% in 2004, and 2.7% in 2003. We had an average monthly churn rate for cable subscribers of 1.4% in 2005, 1.8% in 2004, and 3.9% in 2003. We calculate average monthly churn by dividing the number of subscribers disconnected during the year by the sum of subscribers at the beginning of each month during the year.

Tricom USA distributed its prepaid cards through wholesale distributors. Depending on their credit history and the length of their relationship with Tricom USA, wholesalers were required to pay in full for calling cards upon delivery or were extended credit for up to 15 days. Distributors of prepaid cards in the Dominican Republic are extended credit for up to 15 days, depending on their business volumes and payment histories.

Tricom USA requires that new and smaller reseller customers pay on a weekly basis for long distance services. Some customers that have a previous relationship with Tricom USA are extended credit for 15 to 30 days on average, depending on proven reliable financial condition. Traditional long distance carriers generally pay Tricom USA for traffic within 60 to 90 days.

Management Information Systems

Our business applications are designed to generate accurate information in real time for our employees and to provide our customers with direct access to pertinent information from our computer network. For this reason, we have designed a fully integrated, open architecture network.

We use Oracle as our unified database and software application development tool set. We use Oracle Financials as our enterprise resource planning system, which includes the following modules: accounts payable, accounts receivable, general ledger, purchase orders, inventory control and fixed asset accounting. We have also developed an integrated billing and customer care system that runs on the Oracle platform.

Network Infrastructure

International Long Distance Network.

We have our own switching facilities in the New York metropolitan area and Florida, which allow us to provide multiple international signaling protocols. By having our own switching facilities, we can provide termination of

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international long distance traffic at very competitive rates to several countries in addition to the Dominican Republic.

By purchasing and leasing international traffic capacity from various systems, we have acquired diverse options to route our international traffic. This capacity is fully connected to the international network. We have purchased capacity in 11 international submarine fiber optic cables that have been built to send and receive international traffic or connect with other cables that provide service to Latin America, the Caribbean and Europe. We own capacity in the Antillas-1 and Arcos-I submarine cables, which connect the Dominican Republic to the United States via other submarine cable systems. In addition, for redundancy purposes, we maintain two earth stations, which connect to satellite systems serving the Atlantic region, Africa and Europe. The use of these satellite facilities also allows us to route international traffic between the Dominican Republic and most other countries in the world.

Local Access and Mobile Network.

The core of our network is composed of gateway switches, possessing special features such as ultra-high-speed and port-to-port call switching. Our switch time-of-day capability allows us to distribute our telecommunications traffic efficiently and provide, as a result, competitive pricing. Our switches also provide statistical call distribution information, which allows us to control our flow of traffic. Without such capabilities, we would have to conduct these monitoring tasks manually. The switches also handle common channel signaling protocols, optimizing the channels available for voice transmission. Without this capability, a network must use each of its channels to signal the origination and termination for each call, which often results in uncompleted calls and poor circuit utilization.

During 2005, our intra-city wireline local access network was comprised of approximately 450 route miles of fiber optic cable and approximately 2,800 miles of copper cable in more than seven cities. The network is composed of central office switches, remote switching centers and digital loop carriers.

We use digital loop carrier technology, which is a multi-service access platform connected to the central office through fiber optic cables. This network layout minimizes the copper plant and employs digital network transmission equipment used to provide multiple phone conversations. Our central office switches are connected by fiber optic cable to various digital loop carriers located throughout the three largest cities in the Dominican Republic.

We transmit our domestic traffic through a digital wireless point-to-point backbone system, which provides both intra-city and inter-city telecommunications services. A point-to-point backbone system is a dedicated connection between two endpoints of a communications network. The backbone system and the intra-city access networks reach approximately 90% of the country’s population, including major cities and certain key tourist and rural areas. The wireless point-to-point system serves the areas that have high telecommunications usage, including large industrial and commercial areas.

To oversee and monitor the activities of our network infrastructure, we have installed a network management system. This system allows us to manage our central office switches and remotely monitor all network components. The management system provides continuous information regarding our equipment, any equipment failure, and network security. In addition, it allows the central office to send commands and to test our network.

Our mobile network in the Dominican Republic uses analog technology in the 800 MHz band and our PCS network uses CDMA or digital protocol, in the 800 and 1900 MHz bands. Our analog mobile network enables us to provide mobile coverage to those regions of the Dominican Republic not covered by our competitor’s digital networks. During 2005, we provided PCS service in 24 cities and offered continuous coverage on the main highway routes of the country.

Cable Television Network.

Our cable television network uses a broadband network employing radio frequency transmission over coaxial and/or fiber optic cable to transmit multiple channels carrying images, sound and data between a central facility and a subscriber television set. Coaxial cable is a type of cable used for broadband data and cable systems. This type of

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cable has high-quality broadband frequency characteristics, noise immunity and physical durability. Fiber optic cable is a communications medium that uses hair-thin glass fibers to transmit signals over long distances with less signal loss or distortion than coaxial cable.

Our existing cable network consists of four major portions: a master head-end, a fiber trunk network, coaxial distribution and nodes. At our master head-end, programming signals are received, processed, amplified and then sent through our distribution network, which consists of fiber optic and coaxial cables connected to nodes. A node, which is typically shared by a number of subscribers within the same area, is a single connection to any of our distribution network’s main fiber optic cables that receives and transmits signals. During 2005, one node in our existing network typically served an average of 700 homes passed. Programming signals then travel, via coaxial cable, from nodes into subscribers’ homes. As part of our plan for the expansion and upgrade of our network, we plan to redesign our distribution network by installing hubs and additional nodes to improve the quality and redundancy of our services. Hubs receive signals from the head-end and retransmit signals to the nodes, increasing the quality and reliability of the signals.

At December 31, 2005, our cable network consisted of approximately 204 miles of fiber optic cable, 729 miles of coaxial cable and 228 nodes. Approximately 98% of our network is constructed above ground, with a small percentage of the fiber optic cable constructed underground.

The complete channel package signal delivered to our customers in Santo Domingo is encoded, using analog and digital descrambler systems. This allows us to reduce, but not eliminate, theft or piracy of our cable entertainment services, as well as giving us the opportunity to offer compressed packages to reach low-income subscribers living in marginal areas, and increase penetration levels.

The expansion and upgrade of our network involves the conversion of our existing cable network into a broadband bi-directional network which results in increased bandwidth capacity. A broadband bi-directional network allows subscribers to transmit as well as receive signals. This allows us to offer internet connection, video and games on demand. A broadband bi-directional network combines the use of fiber optic cable, which can carry hundreds of video, data and voice channels over long distances, with coaxial cable, which requires more extensive signal amplification in order to obtain the desired transmission levels for delivering programming signals and nodes. At December 31, 2005, 40% of our network had bi-directional capacity.

Data Transmission and Internet Network.

Data communications services are primarily targeted to the business community and provided at a variety of speeds. Our data communications network consists of data multiplexing nodes, which are network connection points that allow for the transmission of two or more signals over a single channel, linked to a fiber optic ring and digital wireless point-to-point radio links. The “last mile” to the customer is provided through fiber optic cable and/or digital wireless point-to-point radio links. Our data network has the capability to monitor the communications link all the way to the customer’s desktop and to support multiple data protocols such as ATM and frame relay.

Our technology infrastructure is built and maintained to assure reliability, security and flexibility, and is monitored by our technical staff. Each of our servers can function separately, and multiple redundant machines serve key components of our server architecture.

We maintain our central production servers at our headquarters data center. Our operations depend on the ability of the network operating centers to protect their systems against damage from fire, hurricanes, power loss, telecommunications failure, break-ins and other disruptive events.

Our local and mobile networks employ monitoring software developed by us and by others to monitor access to our production and development servers. Our reporting and tracking systems generate daily traffic, demographic and advertising reports, which are copied to backup tapes each night.

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Competition

The following table sets forth information about our market share in several of our markets based upon information published by Indotel, at December 31, 2005, and information that we generate internally about our operations:

Service	Approximate Market Share (%)		Rank		Number of Providers
Local Access	18.7	%	2		2
Mobile	10.9	%	3/4		4
Cable Television	52.1	%	1(1	)	Multiple
Data and Internet	13.6	%	2		3

International Long Distance.

The international telecommunications industry is intensely competitive and subject to rapid change precipitated by changes in the regulatory environment and advances in technology. Our success depends upon our ability to compete with a variety of other telecommunications providers in the United States and in each of our international markets. Our competitors include large facilities-based multinational carriers and smaller facilities- based wholesale long distance service providers in the United States and overseas that have emerged as a result of deregulation, as well as switched-based resellers of international long distance services. Competition primarily is based on price, although reliability, quality of transmission, routing capacity and customer service also are competitive factors.

Tricom and Codetel are the two principal Dominican carriers terminating Dominican-bound international long distance traffic. Centennial Dominicana also offers long distance calls at very low rates to the United States from the Dominican Republic. However, neither Indotel nor the FCC publishes current information about traffic exchanged. International long distance traffic has expanded in the last five years as the price per minute charged to consumers has declined.

Local, Mobile, Data and Internet.

In the local access and data and internet markets, our main competitor is Codetel. Codetel is an integrated communications service provider, which, at December 31, 2005, had approximately 81% of the local access lines and subscribers for local services and approximately 86% of the data and internet subscribers in the Dominican Republic. In 2002, Centennial Dominicana, using wireless technology, began offering to businesses local access service and broadband internet access but we believe that it has not obtained a significant percentage of the market for those services.

In mobile service, in addition to Codetel, we compete with Orange and Centennial Dominicana. Orange operates a GSM 1900 MHz network in the main cities of the country. Orange has an aggressive expansion strategy based on low prices for mobile equipment, a strong distribution network with dealers, and a large marketing budget. Centennial Dominicana offers PCS mobile services.

As of December 31, 2005, the Dominican government had also granted eight concessions to other telecommunications companies, which had not yet commenced operations or had minimal operations. Each of these concessions allows for the provision of some or all of the telecommunications services that we provide.

Cable Television.

We are the largest cable television operator in Santo Domingo and one of the largest in the Dominican Republic as of December 31, 2005. Indotel has indicated that there are more than 100 cable operators in the Dominican

(1) In Santo Domingo. Statistics for the country as a whole are unavailable.

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Republic, including illegal cable television providers. However, in our principal markets, Santo Domingo and its surrounding areas and La Romana, we face little competition from other cable television operators.

We also face competition from pirate direct broadcast satellite or DBS transmission. There is no legal DBS service offered in the Dominican Republic. For several years, the Dominican pay television market has been harmed by the persistent violation of copyright laws or “piracy.” We have deployed encoding technology to aid in reducing piracy from our network.

All pay television service providers, including cable television systems, direct to home satellite services and multi-point, multi-channel distribution system operators, face substantial competition from other signal delivery methods, including television broadcasters and the Internet. The ability of potential subscribers to directly receive traditional public over-the-air television signals from television broadcasters may hinder our ability to obtain additional subscribers.

Regulation

General.

The legal framework of the telecommunications sector in the Dominican Republic consists of General Telecommunications Law No. 153-98, enacted on May 27, 1998, resolutions and regulations issued by Indotel and the concession agreements entered into by the Dominican government or the regulator with individual service providers.

In addition to the industry-specific legal framework, the Constitution of the Dominican Republic affects the telecommunications sector. Among other individual and social rights, the Dominican Constitution guarantees Dominican citizens the freedom of trade. The Constitution specifically provides that monopolies can be established only by law and only for the benefit of the Dominican government. None of the existing concession agreements grants a monopoly in any sector of the telecommunications industry to any carrier, and the Dominican government has announced a policy of encouraging growth through competition in the telecommunications industry.

In 1930, Codetel was granted a concession to operate telecommunications services in the Dominican Republic. Over the years, while other service providers entered the Dominican telecommunications market, none was successful in becoming a full-service telephone company able to compete with Codetel because Codetel was not required to allow other service providers to interconnect their services with its physical infrastructure. To provide services, a company would have to install its own wireline telecommunications network. The economics of this requirement hindered competition. As a result, Codetel held a de facto monopoly for more than 60 years.

To increase substantially the number of Dominican citizens with access to a telephone and to allow for the establishment and growth of other modern telecommunications services, the Dominican government adopted a policy of liberalization of the telecommunications sector beginning in the late 1980s. In 1990, the Dominican government granted us a concession to provide a full range of telecommunications services within, from and to the country. Additionally, advances in wireless technologies made it more cost-effective for companies to penetrate the market even without being able to interconnect to Codetel’s network. However, interconnection remained important for full-service competition. In 1994, the Dominican government enacted a series of interconnection resolutions requiring all service providers in the Dominican Republic to interconnect with all other service providers pursuant to contracts between them. The guidelines for those contracts are set forth in those resolutions. In May 1994, we entered into an interconnection agreement with Codetel which became effective in November 1994. This agreement allowed us to become the second full-service telecommunications provider in the Dominican Republic.

General Telecommunications Law No. 153-98 of 1998.

Former Telecommunications Law No. 118 of February 1, 1966 was repealed by Law No. 153-98 of May 27, 1998. Law No. 153-98 is the result of a joint government and industry project conducted with the assistance of the International Telecommunication Union (“ITU”), which studied the telecommunications sector in the Dominican Republic. As part of this process, the ITU drafted a proposed telecommunications law and various regulations, including interconnection and tariff regulations, in consultation with Dominican telecommunications carriers. The

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project was requested by the Technical Secretariat of the Dominican Presidency and the country’s telecommunications carriers, and was funded by the carriers.

Law No. 153-98 established a basic framework to regulate the installation, maintenance and operation of telecommunications networks and the provision of telecommunications services and equipment. The law adopted the “Universal Service Principle,” by seeking to ensure access to telecommunications services at affordable prices in low-income rural and urban areas. The law creates a fund for the development of the telecommunications sector that is supported by a 2% contribution payable by customers and collected by telecommunications providers based on billings to customers for telecommunications services.

In addition, the law created an independent regulator with strong regulatory powers, Indotel, and established the regulator’s responsibilities, authorities and procedures. The regulator is headed by a five-member council, the members of which serve a four-year term, and includes a representative from the telecommunications industry. Among other responsibilities, Indotel is charged with implementing telecommunications development projects to satisfy the requirements of the Universal Service Principle. Law No. 153-98 grants Indotel control over all frequency bands and channels of radio transmission and communications within the country and over its jurisdictional waters.

Law No. 153-98 seeks to encourage competition by, among other things, imposing the obligation to interconnect with existing participants and prohibiting and punishing different types of monopolistic behavior. The law requires that interconnection charges be cost based and eliminates cross subsidies. Pursuant to the law, a rate rebalancing process was completed on December 31, 2000 which eliminated cross subsidies and allowed for rates for services to reflect actual costs. Currently, market participants are free to establish the rates for the services that they offer.

Recent Regulatory Initiatives.

Interconnection Regulations.

On June 22, 2002, Indotel issued interconnection regulations including rules on co-location, network unbundling, open network architecture and equal access. The regulations required that interconnection agreements had to be modified and established a deadline extended by Indotel on several occasions for filing conforming contracts with Indotel. A dispute arose from the lack of agreement on interconnection terms and, after several hearings on the case, on April 11, 2003 the case was settled with the execution of a new two-year interconnection agreement for the Dominican market.

This agreement, entered into by and between all current local carriers (Codetel, Centennial Dominicana, Orange and Tricom), provided for full interconnection between the respective networks interconnected for all types of telecommunications traffic. Further, the agreement included the following access charges per minute of traffic: local traffic, US$0.02; national transportation traffic, US$0.01; national traffic, US$0.03; international transportation traffic, US$0.015; incoming international traffic, US$0.035 terminating into fixed networks and US$0.09 terminating into mobile networks; mobile or cellular traffic, US$0.075. These charges are translated into Dominican pesos and adjusted every six months.

The interconnection agreement was renewed on substantially similar terms in 2005 and a new interconnection agreement has been in the process of renegotiation during the second half of 2007. The exact terms of this interconnection agreement are not known at the date of this filing. Also in 2005, Indotel issued a statement mandating the convergence of interconnection rates by September 30, 2007 for local access and for incoming minutes to the Dominican Republic from abroad. As of October 1, 2007, the interconnection rates were adjusted to eliminate the 1.5 cent difference between interconnection rates for local access and interconnection rates for incoming international minutes. As a result, it is possible that our operations and financial position will be adversely affected.

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Proposed Telecommunications Regulations.

On August 30, 2006, Indotel approved resolution 156-06 titled “General Rule on Number Portability” which states that in the Dominican Republic telecommunications market, customers will be able to move their service from one telecommunications provider to another without losing their telephone numbers. In order to implement this law, telecommunications carriers will have to update their networks before July 1, 2009.

Number portability will apply to customers changing from one mobile service provider to another and from one fixed line company to another within the same region. It will not allow number portability from a mobile network to a fixed line service or vice versa or between fixed line regions.

Our Concession Agreements.

Tricom Concession Agreement.

In accordance with former Law No. 118, we entered into a concession agreement with the Dominican government in 1990 under which we were issued a non-exclusive license to establish, maintain and operate a system of telecommunications services throughout the Dominican Republic, as well as between the Dominican Republic and international points. The services which we were permitted to provide under the 1990 concession agreement included telegraphy, radio communications, paging, cellular and local, domestic and international telephone services.

In February 1996, we entered into a new concession agreement with the Dominican government which superseded the 1990 concession agreement. Under the 1996 concession agreement, we were granted the same non-exclusive license as provided in the 1990 concession agreement to establish, maintain and operate a telecommunications system throughout the Dominican Republic until June 30, 2010. Under its original provisions, the 1996 concession agreement and the license granted under it were renewable automatically for 20-year periods unless, at least three years prior to the end of the then existing term, the Dominican government advised us of its intention not to renew.

Law No. 153-98, which was enacted in 1998, established a new regulatory framework for telecommunications services in the Dominican Republic.  Pursuant to Law No. 153-98, where necessary, we were required to adjust our concession agreement to conform to the new legislation.  Law No. 153-98 required such adjustments to be made within one year of its enactment and were to be executed through procedures established thereunder.  However, to date, Indotel has neither fully established nor implemented these procedures within the term initially established.

Pursuant to Law No. 153-98, Indotel has the discretion to determine the extent to which any existing concession requires adjustments to comply with the new legislation.  However, until the adjustments are complete, Law No. 153-98 provides that concessions granted prior to its enactment remain in full force and effect.  Law No. 153-98 provides that the adjustment procedures should be implemented in a manner that will maintain the rights granted to the holder of the original concession with respect to the scope of services covered by the concession, while guarantying equality among concession holders.  Furthermore, under Law No. 153-98, a concession may only be cancelled for the reasons expressly established in the concession and for the specific causes described in Law 153-98.

Once the procedures for adjusting the concessions and bringing them into compliance with Law No. 153-98 are established and fully implemented, concessions in the Dominican Republic will have terms ranging from five (5) to twenty (20) years based on the term originally provided for in such concession.  For concessions granted under Law No.118 that did not have a fixed term, Law No. 153-98 establishes that the new term is automatically 20 years.  The term of such amended concessions will commence on the date they are approved by a resolution enacted by Indotel’s board.

As of the date of this filing, we have received an adjustment from Indotel's board and Indotel’s Executive Director is authorized to amend our concession agreement.  Our amended concession agreement will automatically have a term of 20 years.  Our concession agreement, once amended, will be renewable for successive 20-year periods.  However, if the holder of a concession fails to comply with the provisions of Law No.153-98, Indotel is entitled to deny the request for a renewal of the concession.

TCN Concession Agreement.

In 1982, TCN (then Telecable Nacional) entered into a concession agreement with the Dominican government pursuant which TCN was granted a license to provide close circuit cable television services within the Dominican Republic. Originally, this concession was for an unlimited term; however, in 1998 when Law No. 153-98 was enacted, concessions and licenses in the telecommunications industry became limited to a maximum 20 year term, renewable for successive 20-year periods. Accordingly, when amended to conform to Law No. 153-98, TCN's concession agreement will have a term of 20 years and will be renewable for successive 20-year periods.

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U.S. Telecommunications Regulation

The following summarizes certain aspects of United States federal and state telecommunications regulation as it applies to Tricom USA. We do not purport to summarize all present, pending or proposed regulation, any of which could change the impact of regulations on U.S. telecommunications carriers such as Tricom USA.

Federal Regulation.

In 1995, the FCC authorized Tricom USA (then Domtel Communications, Inc.), pursuant to Section 214 of the Communications Act of 1934, to be a domestic and international facilities-based carrier and an international resale carrier of voice, data and private line services between the Unites States and international points, including the Dominican Republic. The FCC classified Tricom USA as a non-dominant carrier on all routes, including to the Dominican Republic.

Tricom USA’s domestic and international Section 214 authority permits it to provide, respectively, inter-exchange (long distance) service between the states within the United States and service to and from destinations outside the United States, for which it has entered into international settlement or call termination agreements with other carriers. These agreements and the services of Tricom USA are subject to certain regulatory obligations. These include, but are not limited to, the obligation to offer services at just and reasonable rates, to pay certain regulatory fees, to file certain regulatory reports with the FCC, to contribute to certain federal funds such as the universal service fund, not to unjustly or unreasonably discriminate in charges, practices or other areas, to obtain FCC approval for a transfer of control under certain circumstances, to post its rates, terms and conditions on its website instead of filing them with the FCC, to obtain FCC approval to reduce or discontinue service, and other obligations. Failure to comply with any regulatory requirements may subject Tricom USA to penalties including, but not limited to, a fine, regulatory restrictions, license sanctions or revocation.

Tricom USA’s core source of revenue is its international service. As a result of increased international competition in the global telecommunications market, the FCC relaxed its former International Settlements Policy (“ISP”), in general, and in particular to destinations qualifying for elimination of the International Settlement Policy, pursuant to a Report and Order dated March 30, 2004. The Dominican Republic is one such destination. Thus, Tricom USA is no longer required to file international agreements with the FCC for Dominican service or service to countries on the FCC’s list of ISP-exempt destinations. The Report and Order dated March 30, 2004 did not address international terminations into cellular networks, which is a growing destination for Tricom USA, and for which access charges are higher than those for fixed line terminations in most countries outside the United States including the Dominican Republic, making the cost of terminating higher. Instead, the FCC issued a Notice of Inquiry on October 26, 2004. It cannot be predicted if or how the FCC will rule on this matter or, if it rules, what impact, if any, that ruling will have on Tricom USA’s business.

State Regulation.

The public utility commission of each state individually regulates the provision of telecommunications services within its state. This typically requires certification by the state public service commission as well as corporate registration with the state’s corporate department, filing of annual or semi-annual reports and, where appropriate, the payment of taxes. Tricom USA provides relatively little intra-state service, and it has obtained local exchange (central office code) numbers in, and has a point of presence in, several states. Tricom USA is certified in the following states: California, Delaware, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Washington, D.C. and Wisconsin; as well as Puerto Rico, the U.S. Virgin Islands and Canada.

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Property, Plant and Equipment

Our principal properties consist of our fiber optic network, satellite earth stations, nodes and real estate. At December 31, 2005, the net book value of our real estate and equipment was approximately $298.4 million. Our real estate holdings are strategically located throughout the Dominican Republic, providing the infrastructure for the telecommunications network and sales facilities. Most of our properties are related directly to our telecommunications operations and are used for network equipment of various types, such as telephone exchanges, transmission stations, wireless point-to-point radio equipment and digital switching nodes. Our current headquarters are located in downtown Santo Domingo in a building that we own.

ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Our consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business. However, because of recurring operating losses, a continuing working capital deficit and the recent fluctuation of the Dominican peso, the realization of assets and satisfaction of liabilities are subject to uncertainty.

In September 2003 we announced that we would not be making a scheduled interest payment on our 11-3/8% Senior Notes due September 1, 2004. In October 2003 we suspended principal and interest payments on our unsecured indebtedness and principal payments on our secured indebtedness. Subsequently, on September 1, 2004, we announced that we would not be making the $200 million principal payment on our 11-3/8% Senior Notes due September 1, 2004. We have engaged in discussions with certain holders of our Senior Notes and other lenders to formulate a restructuring plan. See “Liquidity and Capital Resources–Restructuring Overview”.

We have financed our capital expenditure and working capital requirements, including expenses related to our proposed restructuring, with cash flow from operations and, during 2004, from net proceeds from the sale of our Central American trunking operations and other assets. We do not expect to have any other funding sources until our restructuring is completed. Even if a restructuring is achieved, we may not be able to generate the cash required to operate or to obtain the financing necessary to continue funding our business.

Presentation of Certain Financial Information

We prepare our consolidated financial statements in conformity with generally accepted accounting principles in the United States. We adopted the United States dollar as our functional currency effective January 1, 1997 and maintain our books and records in U.S. dollars.

In this Annual Report references to “$”, “US$” or “U.S. dollars” are to United States dollars, and references to “Dominican pesos” or “RD$” are to Dominican Republic pesos. For purposes of our financial statements, foreign currency balances are translated into U.S. dollars at differing rates depending on the item in question. See Note 2.3 of notes to consolidated financial statements. For most balance sheet purposes, the exchange rates we used to translate Dominican peso-denominated amounts as of December 31, 2004 and 2005, were RD$31.07 and RD$34.85 per U.S. dollar, respectively. For most revenue and expense purposes, the exchange rates we used were the average annual private market rates which were RD$30.93, RD$42.11 and RD$30.93 during the years ended December 31, 2003, 2004 and 2005, respectively. These translations should not be construed as representations that the Dominican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. The Federal Reserve Bank of New York does not report a buying rate for Dominican pesos. To the extent information relates to the Dominican Republic government or Dominican Republic macroeconomic data, the information in this Annual Report has been extracted from publications issued by Indotel at www.indotel.org.do and the Central Bank at www.bancentral.gov.do.

Overview

We derive our operating revenues primarily from long distance, domestic telephony, mobile, cable television, and data and Internet services. The components of each of these services are as follows:

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Long distance revenues represent amounts recognized for the termination of traffic from foreign telecommunications carriers to the Dominican Republic, including revenues derived from our U.S.-based international long distance wholesale and prepaid calling card operations, as well as outbound international and domestic long distance calls generated by our retail call centers and prepaid cards sold within the Dominican Republic.

Domestic telephony revenues consist of fees received for local exchange services in the Dominican Republic, including monthly fees, measured local service and measured local charges for value-added services, outbound international and domestic long distance calls generated by our residential and business customers within the Dominican Republic, sale of customer premises equipment, installation and activation fees, and interconnection revenues received from other service providers for calls that terminate in our local network.

Mobile revenues consist of fees received for cellular and PCS services, including fixed monthly fees, per minute usage charges and additional charges for value-added services, outbound international long distance charges, as well as paging services, installation and activation fees, equipment sales, and interconnection charges received from other service providers for incoming calls that terminate in our mobile network.

Cable television revenues consist of monthly fees derived from basic programming, expanded basic programming, expanded basic services, digital music services, internet access via cable modem, installation fees and revenues from advertising sales to national advertisers on non-broadcast channels we carry over our cable communications systems. Cable television revenues, including installation fees, are recognized when the service is provided.

Data and internet revenues consist of fixed monthly fees received from our consumer and business customers for high speed broadband data transmission and internet connectivity services, including traditional dial-up connections, dedicated lines, private networks, frame relay, digital subscriber lines, or xDSLs, that provide high-bandwidth transmission of voice and data over regular telephone lines.

Other revenues consist of revenues that are not generated from our core businesses, including commissions received for providing package handling services for a courier and commissions received for collection services for utility companies.

Our operating costs and expenses consist primarily of cost of sales and services, selling, general and administrative expenses (“SG&A”), depreciation and amortization charges, as well as asset impairment and other non-operating charges and special items. Major components of our operating costs and expenses are as follows.

Cost of sales and services consist of amounts paid to foreign carriers for our use of their networks for termination of outbound traffic and interconnection costs, which are access charges paid to other providers in the Dominican Republic, and payments for international satellite circuit leases; amounts paid to programming providers for licenses to broadcast on our cable television network; cost of equipment and prepaid cards sold; and telephone installation costs.

Selling, general and administrative expenses include salaries and other compensation to personnel, building occupancy and maintenance expenses, marketing expenses, bad debt expenses, commissions and other related costs.

Depreciation and amortization expenses reflect the decline in the value of our fixed assets, due to general wear and tear or obsolescence, other intangible assets and deferred charges.

The following table sets forth the percentage contribution of each category of revenues to total operating revenues for the period indicated:

	Year Ended December 31,
	2003		2004		2005
Long distance	46.3	%	38.3	%	32.5	%
Domestic telephony	29.9	%	34.5	%	38.6	%
Mobile	14.7	%	17.1	%	16.3	%
Cable	6.8	%	7.3	%	8.9	%
Data and internet	2.3	%	2.8	%	3.7	%
Other	0.1	%	0.0	%	0.0	%
Total operating revenues	100	%	100	%	100	%

Note: Percentages may not add up to 100% due to rounding.

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The following table sets forth certain items in the statements of operations expressed as a percentage of total operating revenues for the period indicated:

	Year Ended December 31,
	2003		2004		2005
Operating Costs	216.3	%	122.0	%	108.1	%
Operating loss	(116.3	)%	(22.0	)%	(8.1	)%
Interest expense, net	(32.3	)%	(33.7	)%	(31.7	)%
Other income (expenses), net	(29.5	)%	(32.1	)%	(30.6	)%
Loss before income taxes, discontinued operations and minority interest	(145.8	)%	(54.1	)%	(38.7	)%
Net loss	(169.9	)%	(54.3	)%	(38.3	)%

Results of Operations

2005 Compared to 2004

Foreign Exchange Rate. The average annual foreign exchange rate decreased 27.8% to RD$30.39 per US$1.00 during 2005 from RD$42.11 per US$1.00 during 2004. This represents a 27.8% weakening of the U.S. dollar against the Dominican peso from 2004 to 2005 or a corresponding strengthening of the Dominican peso. This foreign exchange fluctuation significantly affected our overall financial performance and results of operations during this period.

Operating Revenues. Our total operating revenues increased 15.6% to $217.5 million during 2005 from $188.2 million in 2004 primarily due to the appreciation of the Dominican peso compared to the U.S. dollar and an increased number of subscribers in all business segments.

The following is a discussion of our consolidated revenues for each of the revenue line items in our financial statements.

Long Distance. Long distance revenues decreased 1.9% to $70.6 million during 2005 from $72.0 million in 2004. This decrease resulted primarily from lower international revenues generated in the United States and a reduction in the number of minutes generated from prepaid calling cards and calling centers.

International long distance revenues decreased 1.8% or $1.2 million to $64.4 million in 2005 from $65.6 million in 2004 primarily due to lower international traffic revenues derived from minutes generated in the United States that terminated in countries other than the Dominican Republic. This was the result of a strategy to reduce minutes to other destinations which generate a gross margin under 5%. Average international long distance termination rates to the Dominican Republic increased to $0.071 per minute during 2005 compared to $0.069 per minute during 2004, and inbound minutes terminating in the Dominican Republic increased by 0.8% to 824 million minutes during 2005 from 817.6 million minutes during 2004. However, the average international long distance rate (which includes all destinations) decreased to $0.085 per minute during 2005 compared to $0.088 during 2004 as a result of a decrease in other destination total minutes.

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Long distance domestic revenues generated by our prepaid cards and calling centers in the Dominican Republic decreased 3.1% to $6.3 million in 2005 from $6.5 million in 2004. This decrease in prepaid cards and calling centers was primarily due to a 20.6% decrease in total minutes to 53.6 million in 2005 from 67.5 million minutes in 2004. This was the result of declining usage of our calling centers because of increased wireless service penetration in the Dominican Republic and a greater usage of VoIP telephony by small calling center operators in order to reduce their access charge costs.

Domestic Telephony. Domestic telephony revenues increased 29.4% to $84.1 million during 2005 from $65.0 million in 2004, primarily as a result of a higher average number of lines in service during 2005 and due to the 27.8% exchange rate decrease mentioned above, which increased our total revenues in U.S. dollars because these revenues are generated in Dominican pesos. At December 31, 2005, we had 167,763 lines in service compared to 153,440 lines in service at December 31, 2004, a 9.3% increase.

Monthly service fees, measured local service charges, and outbound international and domestic long distance revenues accounted for the majority of our domestic telephony revenues in 2005. Revenues from monthly fees increased 47.0% to $41.6 million in 2005 from $28.3 million in 2004. Measured local service revenues increased 7.5% to $21.4 million in 2005 from $19.9 million in 2004 due to increased inbound minutes and higher prices. Outbound international and domestic long distance revenues, including interconnection charges, generated by our residential and business customers increased 4.1% to $10.2 million in 2005 from $9.8 million in 2004 for similar reasons.

Mobile. Mobile revenues increased 10.6% to $35.5 million during 2005 from $32.1 million in 2004. The increase in mobile revenues was attributable primarily to a higher number of subscribers and to the 27.8% exchange rate decrease mentioned above, which improved our total revenues in U.S. dollars.

Airtime revenues, including interconnection charges, increased 12.7% to $23.1 million in 2005 from $20.5 million in 2004 due to increased prices in U.S. dollars generated by the exchange rate decrease. Revenues from monthly rent increased 27.6% to $3.7 million from $2.9 million in 2004 due to the exchange rate decrease and a higher number of customers. Outbound international long distance revenues, including interconnection charges, generated by the mobile subscriber base decreased 7.2% to $7.7 million in 2005 from $8.3 million in 2004 due to an overall decrease in international minutes.

At December 31, 2005, we had 393,991 mobile subscribers compared to 345,636 at December 31, 2004. The 14% increase in subscribers resulted primarily from our new activation commission structure for external distributors and increased marketing investment.

Cable. Revenues from cable television services increased 40.9% during 2005 to $19.3 million from $13.7 million in 2004. Revenues were positively affected by a price increase, an increased number of cable subscribers and the exchange rate decrease mentioned above, which benefited the translation of cable revenues generated in Dominican pesos.

Cable programming revenues, including monthly basic and expanded basic programming service fees, increased 54.5% to $15.3 million during 2005 from $9.9 million during 2004. Revenues from advertising sales and channel rental charges increased 8.7% to $2.5 million in 2005 from $2.3 million in 2004.

At December 31, 2005, we had 63,878 cable subscribers compared to 59,320 at December 31, 2004. The increase of 7.7% in the number of cable subscribers during 2005 reflects a more aggressive strategy in terms of sales and advertising.

The number of cable subscribers at December 31, 2005 includes 49,199 basic and expanded basic programming subscribers, 11,083 commercial rooms, which include commercial establishments (for example, hotels) and multiple dwelling units (for example, apartment buildings and hospitals), for which we receive a bulk rate for our basic cable service, and 3,596 subscribers for cable modem, digital audio programming and other services.

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Data and Internet. Data and internet service revenues increased 48.1% to $8.0 million in 2005 from $5.4 million in 2004, primarily due to conversion of dial-up customers to broadband services and growth in our data and internet subscriber base.

The number of our data and internet subscribers increased 31.3% to 19,771 at December 31, 2005 from 15,053 at December 31, 2004.

Other. Other non-core business revenues increased 32.2% to $90,557 in 2005 from $68,487 in 2004.

Operating Costs and Expenses. Our operating costs and expenses increased 2.4% to $235.2 million in 2005 from $229.6 million in 2004. This increase was mainly due to an increase in SG&A expenses due to the exchange rate decrease mentioned above, which increased our total expenses in U.S. dollars because most of our expenses are incurred in Dominican pesos.

The following is a discussion of our operating costs and expenses for each of the line items in our financial statements.

Cost of Sales and Services. Cost of sales and services decreased 2.0% to $87.7 million in 2005 from $89.5 million in 2004, which was primarily attributable to lower transport and access charges which decreased due to a reduction in the international business related to other destination traffic.

Cost of equipment sales, prepaid cards, and line installations, totaled $5.3 million in 2005 compared to $4.9 million in 2004. This increase of 8.2% was the result of increased gross sales in local access lines and mobile, which generated more installations and higher equipment costs.

Transport and access charges decreased 2.9% to $76.9 million in 2005 from $79.2 million in 2004, primarily as a result of the reduction of minutes terminating in countries other than the Dominican Republic as part of the strategy discussed above.

Selling, General and Administrative. SG&A expenses increased 36.9% to $77.6 million during 2005 from $56.7 million during 2004. This increase was primarily driven by the exchange rate decrease mentioned above, which increased our total expenses converted to U.S. dollars because 77% of these expenses were generated in Dominican pesos.

Salaries and other compensation to personnel increased 49.7% to $23.2 million in 2005 from $15.5 million in 2004 mainly due to an extraordinary expense of $1.5 million related to executive severance and the impact of the exchange rate decrease mentioned above, given that salaries are paid in Dominican pesos. At December 31, 2005, we had 1,671 employees compared to 1,615 employees at December 31, 2004. Building occupancy increased 47.6% to $12.4 million in 2005 from $8.4 million in 2004 as a result of new cell sites built in new geographic areas to increase our wireless coverage and the exchange rate effect. Marketing expenses increased 80.8% to $4.7 million in 2005 from $2.6 million in 2004 because of a strategy to improve our brand positioning and to increase our product sales. Other expenses were basically affected by the exchange rate decrease.

Depreciation and Amortization. Depreciation and amortization decreased 17.7% to $62.0 million during 2005 from $75.3 million during 2004, primarily due to a decrease in the depreciable asset base.

Operating Loss. Operating loss decreased by 57.2% totaling $17.7 million in 2005 from $41.4 million in 2004. The decrease in operating loss was attributable to a margin improvement.

Other Expenses. Other expenses increased to $66.5 million in 2005 from $60.4 million in 2004, primarily as net interest expense increased to $69.6 million in 2005 from $63.7 million in 2004.

Income Taxes. Income taxes were negative (a benefit) $817,848 in 2005 compared to $300,182 (an expense) in 2004 as a result of the recalculation of deferred taxes at December 31, 2005.

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Net Loss. Net loss totaled $83.4 million, or $1.29 per share in 2005 compared to a net loss of $102.2 million, or $1.58 per share in 2004. The decrease in net loss during 2005 is attributable to revenues growing faster than costs and expenses.

2004 Compared to 2003

Foreign Exchange Rate. The average annual foreign exchange rate increased 36.1% to RD$42.11 per US$1.00 during 2004 from RD$30.93 per US$1.00 during 2003. This represents a 36.1% strengthening of the U.S. dollar against the Dominican peso from 2003 to 2004 or a corresponding weakening of the Dominican peso. This foreign exchange fluctuation significantly affected our overall financial performance and results of operations during this period.

Operating Revenues. Our total operating revenues decreased 5.4% to $188.2 million during 2004 from $199.0 million in 2003 primarily due to lower international long distance and other revenues coupled with the declining value of the Dominican peso compared to the U.S. dollar, which affects the translation into U.S. dollars of our revenues generated in Dominican pesos.

The following is a discussion of our consolidated revenues for each of the revenue line items in our financial statements.

Long Distance. Long distance revenues decreased 21.8% to $72.0 million during 2004 from $92.1 million in 2003. This decrease resulted primarily from lower international traffic volume derived from our U.S.-based wholesale and retail operations, as well as lower average termination rates to the Dominican Republic. The decrease was partially offset by an increase in outbound international and domestic long distance revenues generated by our Dominican Republic operations.

International long distance revenues decreased 24.1% to $65.6 million in 2004 from $86.4 million in 2003 primarily due to lower traffic volume of minutes to the Dominican Republic. Inbound minutes decreased by 24.0% to 818 million minutes during 2004 from 1,075 million minutes during 2003. Average international long distance termination rates to the Dominican Republic also decreased to $0.069 per minute during 2004 compared to $0.073 per minute during 2003. The decrease in inbound minutes was the result of our strategy to mitigate the effects of volatile exchange rates, which for a period in late 2004 made it difficult to operate this business line profitably.

Long distance domestic revenues generated by our prepaid cards and calling centers in the Dominican Republic increased 14.0% to $6.5 million in 2004 from $5.7 million in 2003. This increase in prepaid cards and calling centers was primarily due to a 15.0% increase in domestic long distance minutes to 67.4 million minutes in 2004 from 58.6 million minutes in 2003 primarily due to higher sales of prepaid cards.

Domestic Telephony. Domestic telephony revenues increased 9.2% to $65.0 million during 2004 from $59.5 million in 2003, primarily as a result of a higher average number of lines in service during 2004. At December 31, 2004, we had 153,440 lines in service compared to 141,856 lines in service at the comparable date in 2003, an 8.2% increase.

Monthly service fees, measured local service charges and outbound international and domestic long distance revenues accounted for the majority of our domestic telephony revenues in 2004. Revenues from monthly fees decreased 1.0% to $28.3 million in 2004 from $28.6 million in 2003. Measured local service revenues increased 29.2% to $19.9 million in 2004 from $15.4 million in 2003 due to increased inbound minutes and interconnection rates. Outbound international and domestic long distance revenues, including interconnection charges, generated by our residential and business customers increased 22.5% to $9.8 million in 2004 from $8.0 million in 2003 for similar reasons.

Mobile. Mobile revenues increased 9.9% to $32.1 million during 2004 from $29.2 million in 2003. The increase in mobile revenues was attributable primarily to an increase in incoming minute rates which accounted for 38.1% of total mobile revenues in 2004 and 27.0% in 2003.

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Airtime revenues, including interconnection charges, increased 8.5% to $20.5 million in 2004 from $18.9 million in 2003 due to increased inbound minutes and interconnection rates. Outbound international long distance revenues, including interconnection charges, generated by the mobile subscriber base increased 38.3% to $8.3 million in 2004 from $6.0 million in 2003 for similar reasons.

At December 31, 2004, we had 345,636 mobile subscribers compared to 435,341 at December 31, 2003. The decline in subscribers resulted primarily because we initiated disconnections of approximately 200,000 low-usage subscribers (incoming-calls only) in the first half of 2004. Hence, our average monthly churn rate for mobile subscribers increased to 9.1% in 2004 from 3.9% in 2003.

Cable. Revenues from cable television services demonstrated negligible variation during 2004, increasing to $13.7 million from $13.6 million in 2003. Revenues were negatively affected by the decline in the value of the Dominican peso compared to the U.S. dollar, which affected the translation of cable revenues generated in Dominican pesos, and a lower average cable subscriber base during 2004. These factors were offset by significant rate increases.

Cable programming revenues, including monthly basic and expanded basic programming service fees, decreased 2.0% to $9.9 million during 2004 from $10.1 million during 2003. Revenues from advertising sales and channel rental charges decreased 25.8% to $2.3 million from $3.1 million in 2003.

At December 31, 2004, we had 59,320 cable subscribers compared to 61,433 at December 31, 2003. The decrease in the number of cable subscribers during 2004 reflects declining economic conditions in the Dominican Republic, as well as our investment priorities.

The number of cable subscribers at December 31, 2004 includes 46,700 basic and expanded basic programming subscribers, 9,961 commercial rooms, which include commercial establishments (for example, hotels) and multiple dwelling units (for example, apartment buildings and hospitals), for which we receive a bulk rate for our basic cable service, and 2,669 subscribers for cable modem, digital audio programming and other services.

Data and Internet. Data and internet service increased 17.8% to $5.3 million in 2004 from $4.5 million in 2003, primarily due to growth in our data and internet subscriber base.

The number of our data and internet subscribers increased 10.8% to 15,503 at December 31, 2004 from 13,998 at December 31, 2003.

Other. Other non-core business revenues decreased 43.6% to $68,486 in 2004 from $121,448 in 2003, primarily due to the devaluation of the Dominican peso.

Operating Costs and Expenses. Our operating costs and expenses decreased 46.7% to $229.6 million in 2004 from $430.4 million in 2003. This decrease was mainly due to the effects of an asset impairment charge of $191.2 million in 2003, whereas in 2004, we did not have any asset impairment charges. The decrease in operating costs and expenses is also attributable to lower SG&A expenses.

The following is a discussion of our operating costs and expenses for each of the line items in our financial statements.

Cost of Sales and Services. Cost of sales and services decreased 1.6% to $89.5 million in 2004 from $91.0 million in 2003, which was primarily attributable to lower costs for equipment, prepaid cards, line installations and cable programming, offset by slightly higher transport and access charges.

Cost of equipment sales, prepaid cards, and line installations, decreased 27.9% to $4.9 million in 2004 from $6.8 million in 2003. In 2004 there was a reduction in the cost of line installations because the effects of an extraordinary expense booked in 2003 were not repeated in 2004. This extraordinary expense was the result of implementing a new policy in 2003 of charging telephone line installation expenses (but not cable) as costs instead of charging them to capital expenditures.

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Transport and access charges increased 2.1% to $79.2 million in 2004 from $77.6 million in 2003, primarily as a result of an increase in interconnection costs. Cable programming costs, which are fees paid to providers for signals and programming content totaled $5.4 million in 2004 compared to $6.7 million in 2003, a 19.4% decrease primarily due to a cost reduction negotiated with cable TV programmers to compensate for the exchange rate increase.

Selling, General and Administrative. SG&A expenses decreased 6.1% to $56.7 million during 2004 from $60.4 million during 2003. This decrease was primarily driven by lower salaries and other personnel compensation, and lower marketing and advertising expenses offset by higher provisions for uncollectible accounts, and an increase in other related expenses.

Salaries and other compensation to personnel decreased 17.6% to $15.5 million in 2004 from $18.8 million in 2003 due to the impact of the Dominican peso devaluation given that salaries are paid in Dominican pesos, and a decrease in the number of employees. At December 31, 2004, we had 1,615 employees compared to 1,635 employees at December 31, 2003. Provisions for uncollectible accounts demonstrated a significant increase of 149.7% to $2.1 million in 2004 from $840,881 in 2003 for reasons related to exchange rate fluctuations. Marketing expenses decreased 3.7% to $2.6 million in 2004 from $2.7 million during 2003. Other expenses, which include legal expenses, maintenance and repair of vehicles and equipment and other professional services, increased 15.5% to $29.1 million in 2004 from $25.2 million in 2003.

Depreciation and Amortization. Depreciation and amortization increased 7.1% to $75.3 million during 2004 from $70.3 million during 2003, primarily due to a higher fixed asset depreciable base.

Operating Loss. Operating loss decreased by 82.1% totaling $41.4 million in 2004 compared to an operating loss of $231.5 million in 2003. The decrease in operating loss was attributable to lower total operating costs and expenses.

Other Expenses. Other expenses increased 2.9% to $60.4 million in 2004 from $58.7 million in 2003, primarily as a result of a foreign currency exchange loss compared to a gain in 2003. Net foreign currency exchange loss totaled $2.7 million in 2004 compared to net foreign currency exchange gains of $5.3 million in 2003. Net interest expense decreased to $63.5 million in 2004 from $64.3 million in 2003.

Income Taxes. Income taxes decreased 77.9% to $300,182 in 2004 from $1,358,861 in 2003 primarily as a result of the recalculation of deferred taxes at December 31, 2003.

Discontinued Operations. Discontinued operations represent the results of operations of our Central American activities prior to their sale in February 2004. We reported losses from discontinued operations, after minority interest, of $46.7 million in 2003.

Net Loss. Net loss totaled $102.2 million or $1.58 per share in 2004 compared to a net loss of $338.2 million or $5.23 per share in 2003. The decrease in net loss during 2004 is attributable to lower operating costs and expenses, in large part due to the effect of asset impairment charges in 2003.

Critical Accounting Policies

Accounting Change.

In November 2001, the Emerging Issue Task Force (“EITF”) of the Financial Accounting Standards Board (“FASB”) reached a consensus on EITF Issue 01-09, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. The Company adopted the provision of EITF Issue 01-9, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)” effective January 1, 2003. EITF Issue 01-09 addresses the recognition, measurement, and income statement classification for sales incentives offered to customers. Sales incentives include discounts and generally any other offers that entitle a customer to receive a reduction in the price of a product by submitting a claim for a refund or rebate. Under EITF Issue 01-09, the reduction in or refund of the selling price of the product resulting from any sales incentives should be classified as a reduction of revenue. Prior to adopting this pronouncement, we recognized sales incentives paid to distributor of prepaid calling card as SG&A expenses. As a result of adopting EITF Issue 01-09,

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sales incentives were restated (reclassified) as a reduction of long distance revenues in the case of long distance calling cards and as a reduction of cellular revenues in the case of prepaid cellular services for the years ended December 31, 2003 and 2004. Amounts reclassified were $9,295,489 and $6,102,127 in the years ended December 31, 2003 and 2004, respectively. This pronouncement did not have any impact on net loss reported in these years.

Long-Lived Assets.

In accordance with Statement of Financial Accounting Statements No.144, long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Goodwill is tested annually for impairment, and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. This determination is made at the reporting unit level and consists of two steps. First, we determine the fair value of a reporting unit and compare it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with FASB Statement No. 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Goodwill and Other Intangible Assets.

Goodwill represents the excess of costs over fair value of assets of businesses acquired. We adopted the provisions of FASB Statement No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002. Pursuant to Statement 142, goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of Statement 142. Statement 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with FASB Statement No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

Effects of Inflation and Currency Devaluation

The annual inflation rate in the Dominican Republic was 7.4% for 2005, 28.7% for 2004, and 42.7% for 2003, according to data published by the Central Bank of the Dominican Republic.

In terms of annual average foreign exchange rates, the U.S. dollar weakened against the Dominican peso during 2005 and strengthened during 2004 and 2003 resulting in a corresponding strengthening of the Dominican peso during 2005 and weakening in 2004 and 2003. The weakening of the U.S. dollar for the year ended December 31, 2005 was approximately 27.8% compared to a strengthening of 36.1% and 66.4% for the years ended December 31, 2004 and 2003, respectively, as derived from data published by the Central Bank of the Dominican Republic.

Our results of operations and financial condition are significantly affected by fluctuations in the Dominican peso against the U.S. dollar. The majority of our revenues are denominated in pesos while we have significant expenses, such as interest, equipment purchase and programming cost denominated in U.S. dollars. We do not have hedging or other arrangements in place to protect ourselves against the effects of currency fluctuations.

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Liquidity and Capital Resources

Background.

Historically, our expansion strategy required us to incur significant costs and to make substantial capital investments in our network infrastructure before realizing related revenues. We funded our expansion primarily through private and public equity, short-term and long-term debt offerings and credit facilities.

Since 2001, our liquidity resources have been significantly restricted by the worldwide contraction of the telecommunications industry and capital markets, at a time when we were completing major network expansion projects. As a result, in 2002 we initiated a rationalization plan to curtail our spending and capital investments, while maintaining a healthy growth in subscribers and revenues.

In 2003, there was a significant devaluation of the Dominican peso that continued into the middle of 2004. The average annual exchange rate of the Dominican peso to the U.S. dollar increased 66.4% and 36.1%, in 2003 and 2004, respectively, adversely affecting the Dominican economy. In particular, the failure of one of the largest private commercial banks, Banco Intercontinental, in 2003 cost the Dominican Republic an amount estimated to be approximately 12% to 15% of Gross Domestic Product and strained the finances of the Central Bank. This banking crisis led to increased inflation and reduced consumer confidence.

In 2005, the average annual exchange rate decreased 27.8% partially alleviating the impacts of the previous years’ exchange rate increases.

Restructuring.

Commencing in 2001, a combination of macro-economic factors and circumstances specific to our business contributed to a steady and significant decline in our operating performance, cash flows and financial condition. In light of these factors, our continuing funding needs, and our inability to service our debt, during late 2003, we took steps to conserve cash and to focus our efforts on our core businesses, as follows:

•Suspension of Capital and Interest Payments to Lenders. In September 2003, we announced that we would not be making a scheduled interest payment on our 11-3/8% Senior Notes due September 1, 2004. In October 2003 we suspended principal and interest payments on our unsecured indebtedness and principal payments on our secured indebtedness. Subsequently, on September 1, 2004, we announced that we would not be making the $200 million principal payment on our 11-3/8% Senior Notes due September 1, 2004. As a result, we do not expect to have available any external funding sources until the restructuring process is concluded;

•Appointment of Chief Restructuring Officer. Our Board of Directors appointed Kevin Lavin of FTI Consulting as Chief Restructuring Officer to assist in negotiations with bondholders and lenders, to assist in the implementation of a cash conservation plan, and to assist in the development of a core business plan;

•Reduction of Capital Spending. We significantly reduced our capital spending in 2003. Capital expenditures were cut from $53.8 million in 2002 to $10.8 million in 2003. Subsequently, capital expenditures increased to $13.3 million in 2004 and $28.6 million in 2005. We made capital expenditures for improvements in all of our business segments as well as for general network maintenance. Our capital expenditures since 2003 have been funded by internally generated cash flow, vendor financing, and from proceeds of asset sales. A large part of our planned capital expenditures are discretionary and can be postponed or cancelled if we determine that funds are not available to us;

•Divestment of Non-Strategic Assets. We sold our Central American trunking assets to a group of Panamanian investors for a purchase price of approximately $12.5 million payable in installments. Estimated net proceeds, after transaction expenses, payments to joint venture partners and satisfaction of liabilities directly related to the Central American operations, totaled approximately $10.7 million;

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•Reduction of Spending. We have implemented a series of expense reduction and cash conservation initiatives, which have resulted in the reduction of SG&A expenses, including headcount reductions, lowering prepaid commission rates and marketing expenses, as well as freezing our discretionary spending.

Cash Flows.

Our primary source of funds in 2005 was cash generated from our operations. Net cash provided by operating activities totaled $43.2 million in 2005 compared to $22.2 million in 2004 and $7.3 million in 2003. The increase in cash from operations in 2005 compared to 2004 resulted from improved operational margins and the effects of a change in our policy for booking capital expenses payments.

During 2005, capital expenditures continued to be our primary use of capital resources. Net cash used in investing activities totaled $28.3 million in 2005 compared to $3.0 million in 2004 and $0.2 million in 2003. Our capital expenditures totaled $28.6 million in 2005, primarily for the installation of additional local access lines, network improvements and network maintenance. The increase in cash used in investing activities in 2005 was primarily due to an increase in our capital expenditures and the effects of a change in our policy for booking capital expense payments.

Net cash used in financing activities was $0.4 million in 2005 compared to $4.1 million used in 2004 and $10.8 million used in 2003. Financing activities during 2005 primarily included refinancing of a capital lease obligation and payments to certain banks and holders of long-term debt.

At December 31, 2005, we had approximately $32.1 million in cash.

Indebtedness.

Our indebtedness was approximately $447.5 million in principal amount at December 31, 2005 compared to $448.3 million at December 31, 2004. Our indebtedness at December 31, 2005 consisted of $200.0 million of 11-3/8% Senior Notes due 2004, and $247.5 million of bank and other borrowings, capital leases, commercial paper and telecommunication equipment trade financings. In October 2003, we suspended principal and interest payments on substantially all unsecured bank debt and Senior Notes through the restructuring process. As a result, all of our indebtedness can be called on demand; accordingly, all of our indebtedness at December 31, 2005 has been reclassified as current debt.

At December 31, 2005, our current liabilities exceeded our current assets by $577.7 million compared to $534.6 million at December 31, 2004. The increase in negative working capital is primarily due to an increase in accrued but unpaid interest, resulting from our suspension of substantially all principal and interest payments to lenders.

Trend Information.

See information provided above in Items 3 & 4.

Off-Balance Sheet Arrangements.

We do not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, which are not disclosed in the notes to the consolidated financial statements.

Contractual Obligations.

The following table contains certain information concerning our material contractual obligations at December 31, 2005 (in millions of U.S. dollars).

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	Payments due by Period
Contractual Cash Obligations	Total		Less than 1 year	1 – 3 years	More than 4 years
	(in thousands)
Short-term debt	$	433.0	433.0	—	—
Long-term debt	—		—	—	—
Capital lease obligations	14.5		14.5	—	—
Operating leases	16.0		3.6	8.9	3.5
Total Contractual Cash Obligations	$	463.5	451.1	8.9	3.5

At December 31, 2003, our 11-3/8% Senior Notes due 2004 were rated “Ca” (“Ca” rating indicates obligations that are highly speculative and likely in, or very near, default, with some prospect of recovery of principal and interest) by Moody’s Investors Service (“Moody’s”) and “D” (“D” rated indicates payment default or the filing of a bankruptcy petition) by Standard & Poor’s (“S&P”), due to our failure to make interest payments on these notes. On April 12, 2004, S&P withdrew its rating of our 11-3/8% Senior Notes due 2004 and on December 21, 2004, Moody’s withdrew its rating as well.

ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

We are managed by a Board of Directors, the members of which, in accordance with our by-laws, are elected at the annual general meeting of shareholders and serve for a period of one year. The Board of Directors is composed of a Chairman and Vice President of the Board and nine additional members. The Board of Directors typically meets at least once every three months. Special meetings of the Board of Directors may be held at any time.

Each Director (whenever elected) holds office until the next Annual General Meeting of Shareholders following his or her election and until his or her successor is elected or until earlier resignation or removal. If any vacancies occur in the Board of Directors, or if the authorized number of directors is increased, the directors then in office may continue to act, and such vacancies may be filled by a majority of the directors then in office. No annual general meeting of shareholders has been held since 2002. Accordingly, most of our directors have been appointed by action of the Board of Directors pursuant to the provisions of our by-laws for filling vacancies.

The names of our directors and executive officers at December 31, 2005 are set forth below together with their ages and current positions at that date:

Name	Age	Position
Board of Directors
Named by GFN Corporation, Ltd.:
Ricardo Valdez Albizu	47	Chairman
Héctor Castro Noboa	64	Vice President of the Board
Adriano Miguel Tejada	57	Director
Manuel Arturo Pellerano	51	Director
Rosangela Pellerano	47	Director
Pablo Linares	68	Director (appointed February 1, 2005)
Named by Motorola, Inc.:
James Deane	62	Director
Thomas Canfield	49	Director
Carlos Castillo	51	Director
Independent Directors:
Anibal de Castro	56	Director
Gerald Gitner	60	Director

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Name	Age	Position
Manuel Arturo Pellerano and Rosangela Pellerano are siblings.
Executive Officers
Héctor Castro Noboa	64	President, Chief Executive Officer (appointed June 15, 2005)
Alfredo Arredondo	41	Vice President, Information Technology
Ryan Larrauri	33	Vice President, Consumer Segment Division
Erwin Mendez	45	Vice President, Finance & Administration
Maripily Peralta	37	Vice President, Human Resources
Carlos Ramón Romero	53	Vice President, Business Segment Division
Luis Ruiz	59	Vice President, Telecable
Bela Szabo	37	Vice President, International Division
Valeriano Valerio	46	Vice President, Network Planning & Operations
Miriam Vargas	43	Vice President, Services Division

In addition, the following directors and executive officers served during 2005 and resigned from the indicated positions prior to December 31, 2005:

Carl H. Carlson, President & Chief Executive Officer (resigned June 15, 2005);

Valerio Valeriano, Director (resigned January 28, 2005).

Each of the current members of the Board of Directors has been elected pursuant to the terms of an amended and restated shareholders agreement, dated at May 8, 1998, among Tricom, Motorola, Oleander Holdings, Inc., Zona Franca San Isidro, S.A. and certain individuals that are affiliates of GFN or Tricom.

The following sets forth further information about the members of our Board of Directors and our executive officers current as at December 31, 2005.

Board of Directors

Ricardo Valdez Albizu has been Chairman of our Board of Directors since May 2004 and a member of our Board of Directors since February 2004. Mr. Albizu has been the Chairman and Chief Executive Officer of Zona Franca San Isidro, a diversified industrial park in the Dominican Republic, since 1997. He obtained his law degree from the Universidad Autónoma de Santo Domingo in 1984.

Héctor Castro Noboa has served as Vice President of our Board of Directors since August 1994 and has been a board member since our formation in January 1988. Mr. Castro was a director and Executive Vice President of GFN from April 1989 to June 2002. Between March 1993 and September 1997, Mr. Castro served as the Executive Vice President of Bancrédito. Mr. Castro has also worked for the Deutsche Sudamerikanische Bank (Germany), Citibank (Marketing Vice President), Bonanza Dominicana (Chief Financial Officer), Banco Metropolitano (Financial Advisor) and Universidad Nacional Pedro Henríquez Ureña (professor of international economics and macroeconomics). Mr. Castro has a degree in Business Economics from Madrid’s Universidad Complutense where he studied business economics.

Thomas Canfield has been a member of our Board of Directors since July 2004. Since February 2004, Mr. Canfield has served as the court-appointed Chief Executive Officer and Plan Administrator of AT&T Latin America Corp., a broadband communications services provider to major metropolitan business markets in Latin America. Mr. Canfield also served as AT&T Latin America’s General Counsel and Secretary from 2000 to 2004. Before joining AT&T Latin America, from 1991 to 2000, Mr. Canfield was an

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associate and counsel in the corporate and international practice groups of the international law firm Debevoise & Plimpton LLP for nine years. Mr. Canfield holds a B.A. in History from Wesleyan University and a J.D. from Fordham University School of Law, New York.

Carlos Castillo has been a member of our Board of Directors since July 2004. Since January 2001, Mr. Castillo has been an independent financial advisory consultant. He has over 20 years of operational and transactional experience in corporate finance, debt restructuring, investment and merchant banking services principally in Latin America. From July 1997 to June 1995, and again from August 1999 to December 2000, Mr. Castillo was a Senior Managing Director at Bear Stearns & Co., Inc. Latin America Equity Capital Markets and Investment Banking. Mr. Castillo’s previous experience also includes positions at Bankers Trust Company and Continental Bank. Mr. Castillo holds a B.S. in Economics from Universidad Nacional de Ingenieria in Peru and an MBA from the Wharton School of Business, University of Pennsylvania.

Aníbal De Castro has been a member of our Board of Directors since May 1998. Mr. De Castro is currently the ambassador of the Dominican Republic to the Court of St. James, Great Britain. He has been President of Editorial AA, a subsidiary of GFN since May 1994 and was Executive Vice President of Omnimedia from May 1994 to June 2004. Mr. De Castro served on the Board of Directors of Corporación Dominicana de Electricidad, the country’s state-owned electric utility provider from 1979 to 1982, and currently serves on the Board of Directors of several Dominican companies and professional associations including Banco de la Pequeña Empresa and Fondo de Financiamiento de la Micro-Empresa. Mr. De Castro graduated from Universidad Autónoma de Santo Domingo with a degree in journalism and holds a B.A. in Economics from the University of East Anglia in Great Britain.

James Deane has been a member of our Board of Directors since June 2004. Since March 1995, he has been the Chief Executive Officer and majority shareholder of DSJ Holdings, Inc., which specializes in the origination of structured trade transactions and procurement for overseas buyers in Latin America and Africa. From June 1971 until January 1992, Mr. Deane was employed by Citibank in Latin America and the U.S., including as Country Corporate Officer in Ecuador and the Dominican Republic. Mr. Deane earned his Bachelor’s degree in Industrial Engineering from Stanford University and an MBA from the Wharton School of Business, University of Pennsylvania.

Gerald Gitner has been a member of our Board of Directors since August 2004. Since 1986, Mr. Gitner has served as Chairman of D. G. Associates, Inc. Since 2002, Mr. Gitner has also served as non-executive Chairman of Kitty Hawk, Inc., which operates an overnight express cargo network and an all cargo airline headquartered in Dallas, Texas. He served as Chairman of the Board of Trans World Airlines, Inc. from 1997 to 2002 and as its CEO from 1996 to 1999. He also co-founded and co-chaired from 1990 to 1997 a private leasing company specializing in wide-bodied aircraft. Mr. Gitner is a former Vice Chairman of Pan American World Airways and CEO of Pan American World Services. Mr. Gitner was President and Co-founder of People Express Airlines, Inc. from 1980 to 1982. He also served as President and CEO of Atasco USA, a private aviation concern involved in commercial aircraft leasing and servicing. Mr. Gitner received a B.A. from Boston University.

Pablo Linares has been a member of our Board of Directors since February 2005. Mr. Linares has dedicated over 30 years to international agencies including the Organization of the Petroleum Exporting Countries (“OPEC”), the United Nations, and the Inter-American Development Bank (“IADB”). He has served as the representative of the IADB in the Dominican Republic and Nicaragua, as Chief of the Operations Division in Washington, D.C. and as Chief of IADB operations for Central America, Panama, Colombia, Equator, Mexico, Bolivia, Uruguay and Paraguay in Washington. He has also served as economic advisor to the OPEC Fund for International Development and advised on the formation of the African Bank of Development and the Asian Bank of Development. He currently serves as the Executive Director of the Dominican Association of Foreign Investment Companies and consults on projects in the Dominican Republic and other countries. Mr. Linares graduated with degrees in Economy, Management, Finance and Accounting from George Washington University, Georgetown University, INCAE in Nicaragua and the Academias Hispanoamericanas in Caracas, Venezuela, respectively.

Manuel Arturo Pellerano Peña has served as a member of our Board of Directors since May 2004. Mr. Pellerano served as Chairman of our Board of Directors and Director from August 1994 until October 2003 and as our Chief Executive Officer from August 1994 until October 2003. Mr. Pellerano has been a member and the Vice President of the Board of Directors of GFN since April 1989. Mr. Pellerano graduated from Universidad Nacional Pedro Henríquez Ureña with a degree in economics.

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Rosangela Pellerano Peña has been a member of our Board of Directors since July 2004. Ms. Pellerano has over 16 years of experience within the Dominican commercial banking industry. From 1987 to 2003, Ms. Pellerano served as a Vice President of both the Consumer and Corporate Banking Services and International Banking Services divisions of Bancrédito, S.A., a former affiliate of GFN Corp., our principal shareholder. Ms. Pellerano is a graduate of Instituto Tecnológico de Santo Domingo where she majored in business administration and holds an MBA from Université du Québec in Montreal, Canada.

Adriano Tejada has been a member of our Board of Directors since May 2004. Since 2000, Mr. Tejada has been the editor of several newspapers in the Dominican Republic and served as press secretary for President Leonel Fernandez from 1997 to 2000. Since June 2004, Mr. Tejada has been the Director of Omnimedia, which produces the Diario Libre newspaper and magazine publications. Mr. Tejada holds a law degree from Universidad Católica Madre y Maestra and a Master of Arts in Political Science from Temple University, Philadelphia. Mr. Tejada also was an associate professor and dean at Pontificia Universidad Católica Madre y Maestra and a Fulbright scholar who studied journalism and political history at the University of Pittsburgh.

Executive Officers

Héctor Castro Noboa has served as Chief Executive Officer following former CEO Carl H. Carlson’s resignation in June 2005 and has served as Vice President of our Board of Directors since August 1994. See additional information in the Board of Directors section above.

Alfredo Arredondo has served as Vice President of Information Technology since 2004 and has held a number of positions in the Company’s Management Information Systems department since 1991. Before joining Tricom, from 1989 to 1991, he was a systems analyst for Nestle Dominicana. Mr. Arredondo has worked as Project Manager for development and deployment of all of the Company’s internally-developed applications, including billing, rating customer care, provisioning and traffic measurement. Mr. Arredondo is a systems engineer from Pontificia Universidad Católica Madre y Maestra and has a post-graduate degree in management from Instituto Tecnológico de Santo Domingo.

Ryan Larrauri has served as Vice President of our Consumer Segment Division since June 2001. Before joining Tricom, he was Vice President of Marketing for GFN’s Bancrédito and Compañía Nacional de Seguros from 1999. He has held numerous executive positions in the textile, consumer goods and financial sectors. Mr. Larrauri is the published author of Marketing in the Dominican Republic, Genesis and Evolution as well as several other specialized articles in the field. Mr. Larrauri has a B.S. in Marketing from the Universidad Iberoamericana, as well as post-graduate degrees in Brand Management, International Business, Bank Management and Strategic Planning.

Erwin Mendez has served as Vice President of Finance and Administration since July 2004 and was the Company’s Controller since November 2002. Before joining Tricom, from May 2001 to November 2002, he was Vice President of Finance for Centennial Dominicana, then a subsidiary of Centennial Communications Corp. Prior to May 2001, Mr. Mendez worked for 14 years for Colgate-Palmolive Company where he served from 1987 to April 2001 in key accounting and financial control positions in the Dominican Republic and the Caribbean, including assignments as Finance Director for Colgate-Palmolive operations in Barbados and Jamaica. Mr. Mendez is a graduate of Universidad APEC in Santo Domingo where he majored in accounting and finance and holds an MBA from Instituto Tecnológico de Santo Domingo, Dominican Republic.

Maripily Peralta has served as Vice President of Human Resources since December 2001. Before joining Tricom, from March 2001 to December 2001, she was Business Manager for Bancrédito. Mrs. Peralta previously held numerous managerial-level human resources positions at Tricom and GFN. Mrs. Peralta holds a B.S. in Business Administration from Universidad APEC as well as a post-graduate degree in Human Resources from Instituto Tecnológico de Santo Domingo. She is presently a member of the Asociación Dominicana de Recursos Humanos (“ADOARH”) and Federación Interamericana de Recursos Humanos. From 2003 to 2005, she was the treasurer of ADOARH. Mrs. Peralta has also taught subjects in the field of Human Resources at Pontificia Universidad Católica Madre y Maestra.

Carlos Ramón Romero has served as Vice President of our Business Segment Division since January 2002. He was Vice President of

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the Customer Relationship Management Division from July 2000 to December 2001 and First Vice President of the Consumer and Business Segments Division from July 1996 until July 2000. Immediately prior to his arrival at Tricom, Mr. Romero served as chief executive of a brokerage company, which he started in February 1994. Mr. Romero served as Vice President of the Technical Area of Compañía Nacional de Seguros, a subsidiary of GFN, from 1980 until February 1994. Mr. Romero earned a B.A. in International Services from the Universidad Nacional Pedro Henríquez Ureña where he has since held various academic posts.

Luis Ruiz has served as Vice President of our Cable TV Division since May 2004. Previously, he served as 2^nd VP Cable and Special Services from September 2001 to April 2004. Before joining Tricom, Mr. Ruiz was Vice President of Telecable Nacional C. por A., were he worked from 1982, with the founding group of cable television business in the country, in partnership with TCI (Comcast). Before that, Mr. Ruiz worked for Codetel, then a GTE subsidiary, where he held various positions in the engineering and services area. Mr. Ruiz has an Industrial Engineering degree from World University and a Communications Studies degree from George Washington University. Active in cable and telecommunications business, Mr. Ruiz is Vice President of TEPAL, an organization uniting cable television companies in Latin America.

Bela Szabo has served as Vice President of our International Division since July 2002. He was Director of the International Division from April 2001 to July 2002.  Before joining Tricom, Mr. Szabo worked at Texaco from September 1994 to April 2001 holding numerous positions in marketing, engineering and as manager of Texaco’s Express Lube division. From 1989 to 1994, Mr. Szabo worked for La Universal de Seguros, one of the largest insurance companies in the Dominican Republic, managing insurance policies to engineering companies.  Mr. Szabo holds a post-graduate degree in Corporate Finance from Barna Escuela de Alta Dirección and is currently finishing an MBA with the same institution. Mr. Szabo also holds an engineering degree from the Universidad Nacional Pedro Henríquez Ureña.

Valeriano Valerio has served as our First Vice President of Network Planning and Operations since June 2000. Previously, he served as our Second Vice President of Institutional Relationships between June 1995 and June 2000. Mr. Valerio graduated with a degree in Electrical Engineering from the Universidad Pedro Henríquez Ureña and studied at the Nippon Telegraph and Telephone Public Corporation of Tokyo, Japan.

Miriam Vargas has served as Vice President of our Services Division since January 2002. She was Vice President of Finance from January 1997 to December 2001. From 1985 to 1996, Mrs. Vargas was Vice President of Internal Auditing for a number of GFN´s subsidiaries including Bancrédito and Compañía Nacional de Seguros. Mrs. Vargas is a graduate of Universidad APEC in Santo Domingo where she majored in accounting, finance and auditing and holds an MBA from the Universidad Cató1ica Madre y Maestra. Mrs. Vargas is currently finishing an MBA from Barna Escuela de Alta Dirección.

Executive Compensation

The aggregate amount of compensation we paid during the fiscal year ended December 31, 2005 to our executive officers, as a group (eleven persons), was $2.1 million. In addition, we made severance payments to our executive officers in an aggregate amount of $2 million during the fiscal year ended December 31, 2005.

Employees

	At December 31,
	2003	2004	2005
Executives	195	195	181
Others	1,440	1,420	1,490
Total	1,635	1,615	1,671

At December 31, 2005, we had 1,671 employees. Of this number, 181 were executives, directors and managers, and the remaining 1,490 were technicians, sales, service and staff employees. None of our employees belong to labor unions. We believe that we have good relations with our employees.

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Share Ownership

We refer to Item 7 for information with respect to Manuel Arturo Pellerano Peña, who, to our knowledge, is the only director with 1% or greater percentage of ownership in Tricom.

In connection with our initial public offering, our Board of Directors adopted, and GFN and Motorola approved, our 1998 Long-Term Incentive Plan pursuant to which 750,000 shares of Class A Common Stock were reserved for issuance to officers and employees. At December 31, 2004 and 2005, there were outstanding options to purchase 249,130 and 163,052 shares, respectively, of Class A Common Stock that had been granted to current and former directors, officers and employees (including certain of the executive officers listed above) at exercise prices ranging from $3.00 per share to $16.00 per share. The options granted expire on the tenth anniversary of the date of grant.

ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The following table sets forth certain information known to us with respect to beneficial ownership of our Class A Common Stock at December 31, 2005 (unless otherwise indicated) by each person who, to our knowledge, beneficially owns 5% or more of our Class A Common Stock and all officers and directors as a group. Except as otherwise indicated, the holders listed below have sole voting and investment power with respect to all shares beneficially owned by them.

Each share of Class B Stock is freely convertible at any time into one share of Class A Common Stock, subject to adjustment, and may not be transferred except to GFN, Motorola or their permitted transferees, as defined. Each share of Class B Stock has ten votes and each share of Class A Common Stock has one vote. GFN and Motorola own 100% of the outstanding shares of Class B Stock. Currently, GFN and its affiliates have approximately 55.9% of the voting power (including shares of Class A Common Stock and Class B Stock owned by it and its affiliates) and Motorola approximately 32.3%. If our financial restructuring is consummated as currently contemplated, the interests of the existing holders of our equity will be effectively eliminated, and, as a result, the voting power of GFN and its affiliates and Motorola will substantially reduced.

Shareholder	Class A Common Stock Beneficially Owned (1)	Percentage of Class A Common Stock Beneficially Owned (1)	Percentage of Class B Stock Beneficially Owned	Percentage of Voting Power (assuming that all of the Class B Stock is Converted into Class A Common Stock) (1)
Oleander Holdings, Inc. (2)	25,565,357	44.9	60.0	39.6
GFN Corporation Ltd. (2)	28,444,145	50.0	60.0	44.0
Manuel Arturo Pellerano Peña (2)	28,940,594	50.8	60.0	44.8
Motorola, Inc.	7,657,818	14.4	40.0	11.9
Immobiliaria Carso, S.A. de C.V. (3)	2,445,606	5.4	—	3.8
Marino A. Ginebra Hurtado (4)	3,306,037	7.3	—	5.1
Global Capital Finance Ltd.	3,030,303	6.7	—	4.7
Verkid Finance, S.A.	3,030,303	6.7	—	4.7
Directors and executive officers as a group (20 persons) (5)	29,038,467	51.0	60.0	44.9

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(1)For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares as of a given date which such person or group of persons has the right to acquire within 60 days after such date. Information relating to the percentage beneficially owned is calculated in accordance with SEC Rule 13d-3 and includes for each of GFN Corporation Ltd., Manuel Arturo Pellerano Peña, Oleander Holdings Inc. and Motorola the shares of Class A Common Stock issuable upon conversion of the Class B Stock beneficially owned by it only. For example, for purposes of calculating the percentage of Class A Common Stock beneficially owned by GFN Corporation Ltd in accordance with SEC Rule 13d-3, the number of outstanding shares of Class A Common Stock does not include shares that would be issuable upon conversion of Class B Stock owned by Motorola. As a result, the percentage of Class A Common Stock beneficially owned by any holder of Class B Stock is greater than the percentage of Class A Common Stock owned by that holder, assuming conversion of all Class B Stock, shown in the column, “Percentage of Voting Power.”

(2)Oleander Holdings, Inc., a Panamanian corporation, is a wholly owned subsidiary of GFN Corporation Ltd. Manuel Arturo Pellerano Peña and members of his family control both GFN Corporation Ltd. and Oleander Holdings, Inc.

(3)Carlos Slim Helu, Carlos Slim Domit, Marco Antonio Slim Domit, Patrick Slim Domit, María Soumaya Slim Domit, Vanessa Paola Slim and Johanna Monique Slim Domit own all of the outstanding voting securities of Inmobiliaria Carso, S.A. de C.V., and are deemed to beneficially own indirectly the ADSs directly owned by Inmobiliaria Carso, S.A. de C.V. This information is based on a Schedule 13-G filed with the SEC on February 10, 2006.

(4)Includes 606,061 shares of Class A Common Stock owned by Mr. Ginebra directly and 2,699,976 shares of Class A Common Stock owned by Walbeck Overseas Ltd., an entity controlled by Mr. Ginebra.

(5)Includes 11,486,720 shares of Class B Stock and 17,453,874 shares of Class A Common Stock that may be deemed to be beneficially owned by Mr. Pellerano in his capacity as a controlling person of GFN. Also includes 750 shares of Class A Common Stock that are issuable upon exercise of currently exercisable options beneficially owned by officers.

Shareholders Agreement

Each of the current members of the Board of Directors has been elected under the terms of an amended and restated shareholders agreement, dated at May 8, 1998, among Tricom, Motorola, Oleander Holdings Inc., Zona Franca San Isidro, S.A. and certain nominal shareholders that are affiliates of GFN or Tricom.

The shareholders agreement provides that the Board of Directors will consist, and GFN and Motorola each will vote all of the shares owned by it (or in the case of any transfer of shares to its permitted transferee, as defined in the shareholders agreement, will cause such permitted transferees to vote their shares) in favor, of six directors to be designated by GFN, four directors to be designated by Motorola and two independent directors. The shareholders agreement provides that in order for a person to qualify as an independent director such person must not be:

•An officer, employee, principal stockholder, consultant or partner of Tricom, apart from such directorship, or an officer, employee, principal stockholder, consultant or partner of an entity that was dependent upon Tricom or any affiliate of Tricom for more than 5% of its revenues or earnings in its most recent fiscal year;

•An officer, director, employee, principal stockholder, consultant or partner of a person that is a competitor of Tricom or any of its affiliates, any affiliate of such competitor, or any other person that was dependent upon such competitor or affiliate of such competitor for more than 5% of its revenues or earnings in its most recent fiscal year; or

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•An officer, director, employee, principal stockholder, consultant or partner of Motorola or GFN or an officer, employee, principal stockholder, consultant or partner of an entity that was dependent upon Motorola or any affiliate of Motorola for more than 5% of its revenues or earnings in its most recent fiscal year.

Each of Motorola and GFN will be entitled to nominate one independent director so long as it together with its permitted transferees owns at least 25% of the issued and outstanding shares of Class B Stock. In calculating the number of shares of Class B Stock owned by either GFN or Motorola, there will be included the number of shares of Class B Stock owned by any of it permitted transferees.

The number of directors other than independent directors that GFN or Motorola each may designate will change if its percentage ownership of Class B Stock changes as follows:

•If GFN and Motorola each owns 50% of the then outstanding shares of Class B Stock, each would have the right to designate five directors;

•If either GFN or Motorola owns shares of Class B Stock:

•Greater than 50% but less than or equal to 60% of the then outstanding shares of Class B Stock, it would designate six directors and the other four directors;

•Greater than 60% but less than or equal to 70% of the then outstanding shares of Class B Stock, it would designate seven directors and the other three directors;

•Greater than 70% but less than or equal to 80% of the then outstanding shares of Class B Stock, it would designate eight directors and the other two directors;

•Greater than 80% but less than or equal to 90% of the then issued and outstanding shares of Class B Stock, it would designate nine directors and the other one director; or

•Greater than 90% of the issued and outstanding Class B Stock, it would designate all ten directors.

Until such time as either Motorola or GFN owns less than 25% of the outstanding shares of Class B Stock, the shareholders agreement requires the affirmative vote of nine directors to approve the following actions:

•The acquisition or formation by Tricom of any entity or the making of any investments in an other entity of business, including, but not limited to, the purchasing of equity or debt interests in or the extension of credit to such entity;

•The incurrence of indebtedness, if after giving effect to such incurrence, including the proposed application of the proceeds of such indebtedness to pay existing indebtedness, the ratio of indebtedness to shareholders’ equity would be greater than three to one;

•Approval of annual budgets relating to income, capital expenditure, operating expenses and cash flows (provided that this does not require approval of any projected debt incurrence that otherwise complies with the limits described above or of any other proposed corporate action for which super-majority approval is not specifically required); and

•The issuance, or redemption, of Class A Common Stock or other securities or instruments exercisable for or convertible into Class A Common Stock.

In addition, approval by the independent directors is required for any transaction that has a fair market value exceeding $1.0 million which we enter into with either GFN or Motorola and their respective affiliates. The vote of a majority of the directors present at a duly convened meeting is required for all other board actions (and at such time that Motorola or GFN owns less than 25% of the then outstanding shares of Class B Stock for the four actions specified as requiring a greater vote).

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Under the shareholders agreement, if we propose to register any of our securities under the Securities Act of 1933 (other than a registration in connection with a reorganization on Form F-4 or in connection with any employee stock option, stock purchase or savings plan on Form S-8 or similar registration forms), whether or not for our own account, GFN and Motorola are entitled to include shares of Class A Common Stock owned by them in any such registration, subject to the right of the managing underwriter of any such offering to exclude, due to market conditions, some or all of such securities. In addition, GFN and Motorola each has the right to require us to prepare and file on three occasions a registration statement covering registerable securities with a market value of at least $5.0 million, subject to customary blackout periods. We are generally required to bear the expenses (except underwriting discounts and commissions and fees and expenses of any special counsel) of all such registrations, whether or not initiated by GFN or Motorola.

Certain Transactions with Related Parties

Summary Description of Relationships.

We are, either directly or indirectly, related to various entities through common ownership, contractual rights and/or family ownership, as more fully set forth below.

Mr. Pellerano, together with members of his family, either directly or through wholly-owned subsidiaries were, at December 31, 2004 and 2005, and continue to be, the beneficial owners of 17,453,874 shares of our Class A Common Stock and 11,486,720 shares of our Class B Stock. This represents 50.8% of the issued and outstanding shares of our Class A Common Stock (calculated in accordance with SEC Rule 13d-3) and 60% of the issued and outstanding shares of our Class B Stock. From August 1994 through late 2003, Mr. Pellerano was the Chairman of our Board of Directors, President and Chief Executive Officer. He resigned from our Board of Directors in November 2003 and was reappointed in May 2004. He retains, together with members of his family, the right to appoint a majority of the members of our Board of Directors and, indirectly, the right to control selection of our management.

Until 2003, Mr. Pellerano, together with members of his family, controlled various entities that were engaged in the businesses of banking, insurance, credit card issuance, securities broker-dealer and other businesses, including:

•      Banco Nacional de Crédito S.A., a Dominican Republic Bank (“Bancrédito Dominican Republic”);

•      Bancrédito (Panama), S.A., a Panamanian Bank (“Bancrédito Panama”);

•      Bancredit Cayman, Ltd., a Cayman Islands Bank (“Bancredit Cayman”);

•      Grupo Financiero Nacional, S.A., a Dominican Republic holding company (“GFN, S.A.”); and

•Compañía Nacional de Arrendamientos S.A., a Dominican Republic equipment leasing company (“Conaresa”).

The following additional entities, among others, continue to be controlled by Mr. Pellerano and members of his family, and are therefore related parties:

•Omnimedia, S.A. (“Omnimedia”), a Dominican media holding company;

•Omni TV, S.A. (“Omni TV”), a Dominican subsidiary of Omnimedia that provides television programming;

•Editorial AA, S.A., a Dominican publishing company (which was merged into Omnimedia in 2006);

•Zona Franca San Isidro, S.A., a free trade zone located in the Dominican Republic;

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•Ellis Portafolio, S.A., Balking Trading, Inc., Eastern Power Corp. and Porter Capital, Ltd.,  which hold certain claims against us; and

•Compañía Nacional de Seguridad, S.A., a provider of security services.

Motorola is the beneficial owner of 7,657,818 shares of our Class B Stock and has certain rights under our Shareholders Agreement, including the right to designate a minority of the members of our Board of Directors.

Description of Related Party Transactions.

We have entered into various transactions with related parties (some of which are no longer related).

Indebtedness. We incurred indebtedness from Bancrédito Panama, Bancredit Cayman, Conaresa, GFN Capital Corporation Ltd., Ellis Portafolio, S.A. and certain other current and former affiliates of GFN and Tricom, consisting of loans, overdrafts, commercial paper and capital leases. The aggregate principal amount of our indebtedness from related parties was $74.9 million and $73.8 million at December 31, 2004 and 2005, respectively, as follows:

•Unsecured loans, overdrafts and letters of credit owed to various current and former affiliates of GFN and Tricom in the principal amounts of $25,765,272 and $25,356,872 at December 31, 2004 and 2005, respectively, bearing interest at rates ranging from 11.5% to 12% per annum;

•Commercial paper and promissory notes held by various affiliates of GFN in the principal amounts of $49,091,066 and $48,448,922, at December 31, 2004 and 2005, respectively, bearing interest at rates ranging from 11% to 29%.

Interest incurred on indebtedness due to current and former related parties was $10,083,499 and $10,658,941 during 2004 and 2005, respectively. Because our outstanding debt was in default at December 31, 2004 and 2005, all of the above obligations were payable on demand at those dates. Accrued interest payable on indebtedness due to current and former related parties was $14,879,148 and $24,186,485 at December 31, 2004 and 2005, respectively.

Provision of Telecommunications Services. We provided telecommunications services to certain affiliates of GFN. These entities paid us $14,939 and $157,908 for such services in 2004 and 2005, respectively.

Programming. We entered into a contract with Omni TV, an affiliated entity, to manage our relationship with international cable programmers. During 2004 and 2005, we paid Omni TV $5,359,768 and $2,423,657, respectively, for services provided under this contract.

Equipment Purchased from Motorola. We have purchased telecommunications equipment from Motorola, particularly for the development of our mobile cellular system and our wireless local loop in the Dominican Republic. Aggregate consideration paid to Motorola was $1,535,297 during 2004.

Other Transactions

We have purchased mortgage participation contracts from savings and loan associations in the Dominican Republic that are

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maintained as compensating balances for mortgage loans made by these associations to several of our officers. At December 31, 2004 and 2005, these mortgage participation contracts totaled $986,075 and $647,693, respectively.

ITEM 8.FINANCIAL INFORMATION

Consolidated Financial Statements

See “Item 18. Financial Statements”.

Other Financial Information

Legal Proceedings.

Payment Opposition by Creditors of GFN.

In April 2004, we received a payment opposition (the “Payment Opposition”) from certain alleged creditors (the “GFN Creditors”) of various identified affiliates of GFN, our controlling shareholder (the “Identified GFN Entities”). The Payment Opposition required that we not in any way pay, transfer or otherwise enter into any transaction that may reduce, the amount owing by us to any of the Identified GFN Entities. The amount alleged to be owed to the GFN Creditors by the Identified GFN Entities totaled $32 million. The amount subject to the Payment Opposition was $64 million, as permitted by Dominican law. The Payment Opposition was lifted, without our involvement, in May 2005.

Certain of the Identified GFN Entities (the “Transferring GFN Entities”) caused certain promissory notes, commercial paper and other obligations issued by us in the aggregate principal amount of approximately $52,600,000 and RD$73,000,000 to be either canceled and reissued, or assigned, to certain other affiliates of GFN (collectively, the “New Holders”) (the “Transfer”). None of the New Holders was an Identified GFN Entity. While the Payment Opposition was still in effect, we were advised by counsel that the Transfer may have been a violation of the Payment Opposition. Because the Payment Opposition has been lifted and is no longer in effect, we believe that the possibility that we would be exposed to liability for any such violation is remote.

Grupo Económico Suit.

In April 2004, a suit was brought by certain holders of certificates of deposit and other instruments issued by certain affiliates of Bancrédito Dominican Republic, a banking institution formerly controlled by GFN, seeking to have us and several co-defendants (including, among others, the Central Bank of the Dominican Republic, the Leon Bank and GFN) held jointly and severally liable for amounts owed by such affiliates to the plaintiffs. Although the Court of First Instance of Santo Domingo found in favor of the plaintiffs against certain of the defendants, neither we nor any of our subsidiaries were included among the defendants against whom judgment was entered. The court upheld the terms of the tripartite contract under which the Leon family acquired Bancrédito Dominican Republic, and rendered judgment against the parties to the tripartite contract in the amount of $156,000,000, which was subsequently reduced (upon a motion filed by the same plaintiffs) by the same judge to approximately $13,000,000. In an appeal filed by certain of the parties found liable by the Court of First Instance, the original plaintiffs sought to join us and the other original co-defendants to the appeal proceedings. In June 2007, the Appellate Court declined to join us or any of our subsidiaries to the appeal proceedings and further reduced the trial court’s award against the remaining defendants. While the Appellate Court’s decision has been appealed to the Supreme Court of the Dominican Republic, we believe it is unlikely that we will be found liable in these proceedings.

Bancrédito Criminal Litigation.

In September 2005, a Dominican investigative judge added us and two of our subsidiaries as co-defendants to criminal proceedings brought by certain creditors of Bancrédito and other financial institutions formerly controlled by GFN, our principal shareholder. Several current and former related parties, as well as certain of our directors and officers, were also defendants in the proceedings. The

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Allegations against us and the other co-defendants included fraud, embezzlement, violations of monetary laws and money laundering. We were added to these proceedings without prior notice or participation in the existing proceedings.

In October 2005, an Appellate Court denied our appeal of the investigative judge’s action and in December 2005 the Supreme Court of the Dominican Republic denied our petition to reconsider the lower court’s decision. Following the Supreme Court’s decision, we, together with the other co-defendants, entered into settlements with the private parties that originally brought the criminal actions.

In March 2006, the Criminal Court to which the matter was remanded following the Supreme Court’s decision decided that the criminal actions, which had previously been consolidated into one action, be deconsolidated into six different matters, corresponding to the six criminal complaints originally filed. We were a party to only one of such matters. Subsequently, the Criminal Court dismissed the public actions in four out of the six criminal complaints, including the only one to which we and our subsidiaries were parties. No objection to, or appeal against, this decision was filed; accordingly, all civil and criminal liability to which we might have been subject as a result of these allegations was extinguished. In its rulings, the Criminal Court also dismissed criminal complaints pending against Mr. Héctor Castro Noboa, our Chief Executive Officer, and Ms. Rosangela Pellerano, one of our directors.

The Criminal Court did not, however, dismiss all of the complaints against Mr. Manuel Arturo Pellerano, one of our directors and the beneficial holder of a majority of the voting power of our shares. In August 2006, as part of a series of related proceedings, Mr. Pellerano was convicted by the Criminal Court of several violations of the Dominican Criminal Code and Monetary and Financial Law. The court sentenced each of Mr. Pellerano and a co-defendant to three years imprisonment and ordered each of them to pay a fine of RD$1 million (approximately $31,000). The charges on which Mr. Pellerano was convicted, which we understand stem from Mr. Pellerano’s activities at related financial services entities and not at Tricom itself, include forgery, alteration, manipulation and concealment of banking books and records and financial statements. Mr. Pellerano’s appeal of the decision of the Criminal Court remains pending at the date of this filing.

Potential Claims Arising from Share Placement and Bancredit Cayman Chapter 15 Proceeding.

Our Annual Report on Form 20-F for the year ended December 31, 2004 and our consolidated financial statements included in that report address the possibility of claims arising out of the purchase (the “Placement”) in December 2002 of shares of our Class A Common Stock by a group of investors for an aggregate purchase price of approximately $70 million. As of the filing date of this report, no claims arising out of the events relating to the Placement have been asserted in any jurisdiction in any litigation or similar proceedings brought against us or our subsidiaries. Nevertheless, we have received indications that one or more of the liquidators of the Bancrédito entities in Panama and the Cayman Islands believe that they have claims in connection with the Placement. However, we are unable at the present time to determine either the probability of such claims being asserted against us or the validity or amount of such claims if they are asserted. The Joint Liquidators of Bancredit Cayman have, in connection with a Chapter 15 Petition filed in the Bankruptcy Court for the Southern District of New York, served subpoenas on us and certain of our subsidiaries seeking documents relating to the Placement. In addition, we believe that it is possible that other parties may assert claims arising out of the Placement. Claims brought on behalf of the Bancrédito entities and others could, in the aggregate, equal or substantially exceed the $70 million amount of the Placement, in particular if the claimants seek rescission of the Placement or certain related transactions. At this time we are not able to determine with any certainty who might assert claims, the precise nature of any claims that may be asserted, the jurisdiction in which such claims may be brought, the theories on which such claims may be based, the validity of any such claims, whether viable defenses would be available to such claims and whether any judgment or award arising out of such claims would be enforceable against our or our subsidiaries’ assets. Accordingly, while it is possible that we will in the future need to establish loss contingencies relating to the Placement for purposes of our financial statements, we do not believe that this is necessary at the present time. If such claims were brought and determined in a manner adverse to us, our liquidity and financial resources would be adversely affected.

Potential Claims Arising from Conaresa Leases.

Between 1999 and 2001, we entered into a series of capital leases with Conaresa, at that time a related party. The entity was sold to

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Banco Leon during 2003 in a transaction also involving the Central Bank of the Dominican Republic. These lease agreements provide for the lease to us of telecommunications equipment, automobiles, and other fixed assets.

The installments payable under the above-mentioned lease agreements include lease rental payments and other expenses such as taxes and fees. The lease agreements also provide for the payment of penalty (moratorium) interest on overdue balances, to be calculated at a rate established by Conaresa. No fixed or determinable rate is specified; rather, the lease agreements state that the amount and conditions of penalty interest can be unilaterally set by Conaresa.

In June 2005, we received a payment opposition from GFN, freezing in our hands any payments or other amounts owed by us to Conaresa, up to an amount of $38.7 million (RD$1.349 billion) (double the amount of GFN’s claim against Conaresa, as is customary in the case of payment oppositions under Dominican law). When an entity receives a payment opposition addressed to one of its creditors, the entity in question must refrain from making any payments in violation of the payment opposition (as otherwise it may become liable for damages to the party who served the opposition) until it is lifted by means of a court order or as a result of a settlement between the conflicting parties. In May 2007, we received two further notices under which (i) Artag Meridian Ltd., an entity related to GFN, advised that it had acquired GFN’s aforesaid claims; and (ii) the above-mentioned payment opposition against Conaresa was reiterated, this time by Artag Meridian, as GFN’s assignee. Following a series of court rulings, appeals, and issuances of new payment oppositions, the matter is now pending before an Appellate Court.

For the foregoing reasons, at this time we are prevented from making any payments to Conaresa. Furthermore, we have not established any accrual for penalty interest that might arise out of these lease agreements because we believe that any penalty interest claim based on the lease provision described above would be without merit. Nevertheless, there can be no assurance that any legal proceedings on this issue would be resolved in our favor. Accordingly, while it is possible that we may in the future need to establish a loss contingency relating to penalty interest arising out of these lease agreements, we do not believe that this is necessary at the present time.

Claim for Cost of Interconnection Circuits.

During the period commencing with the enactment of the General Telecommunications Law of 1998 and ending with Indotel’s issuance of interconnection regulations in 2002, we purchased from Codetel, at our sole expense, several hundred T-1, or Trunk Level 1, switches. These are digital transmission links that are necessary for interconnection between our network and Codetel’s network. In December 2002, as part of the process for the adjustment of interconnection agreements before Indotel, we claimed that Codetel should reimburse us for 50% of the cost of the T-1 switches we had purchased. The approximate amount of our claim is $6.8 million. Indotel rejected our claim, and an appeal before the Superior Administration Court is pending.

False Imprisonment Claim.

In August 1999, a Dominican company and two individual plaintiffs brought a claim against us in the Dominican courts for alleged losses and damages of up to approximately RD$200,000,000 (approximately $4,800,000) resulting from the imprisonment by Dominican authorities of the two individuals for 15 days. The plaintiffs have alleged that their imprisonment was the result of an investigation by the local district attorney and police that we instigated following an irregular increase in telephone traffic at certain telephone numbers. The court rejected the action for lack of evidence. The plaintiffs appealed, but the Court of Appeals also rejected their claims, and they subsequently filed a motion for cassation with the Supreme Court of Justice, which is pending. We do not believe that this matter will have a material adverse effect on our operations or financial position.

Uninsured Motor Vehicle Cases.

Until 2003, our principal property and casualty insurance carrier was Compañía Nacional de Seguros (“SEGNA”), at that time a related party. In 2003, SEGNA’s business was taken over by the Superintendence of Insurance, following which SEGNA stopped paying on certain pending motor vehicle accident coverage claims involving our vehicles. Although we moved our property and casualty coverage to a third party insurance carrier, it was necessary for us to assume direct liability for the pending claims. We intend

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to submit a claim in SEGNA’s liquidation at the appropriate time. We believe that the amount of potential liability likely to arise out of these claims will not exceed $1,000,000, and do not believe that these matters will have a material adverse effect on our operations or financial position.

Ordinary Course Tort and Contract Claims.

We are involved from time to time in various other lawsuits and legal proceedings arising in the ordinary course of our business. These claims generally relate to tort and contract actions for damages. We believe that the final resolution of these matters will not have a material adverse effect on our operations or financial position.

Dominican Tax Matters.

In June 2002, we received notice from the Dominican tax authority claiming that we were required to withhold and pay 25% of the amount of our investment in Tricom Latinoamérica, S.A. The 25% withholding tax generally applies for payments made for services rendered by non-Dominican vendors and for certain dividends. The tax authority sought RD$168.1 million (approximately $9 million at 2002 exchange rates), plus penalties and interest. We contested the claim, indicating that there is no requirement to withhold tax on an investment in a wholly owned subsidiary. Our motion before the tax authority failed and an appeal to the Ministry of Finance was rejected. Following a subsequent appeal the Tax Court, in February 2007, ruled in our favor and rejected the tax authority’s claim. The tax authority decided not to file a motion for cassation before the Supreme Court of the Dominican Republic.

In January 2006, we were notified by the tax authority that we should correct our income tax return for the fiscal year ended December 31, 2004. According to the tax authority, the return sought to use prior period losses to reduce taxable income for the current year in amounts in excess of those the tax authority considered were permissible under its interpretation of the applicable tax law. In January 2006, we presented a petition to the tax authority requesting the elimination of this notification. In January 2007, we made a written request to the tax authority seeking its authorization for us to use up to RD$9,480,000,000 (approximately $257,216,000) of accumulated losses to offset potential income arising from the cancellation of our debt within the context of our restructuring. In March 2007, the tax authority notified us that this authorization had been granted, premised on the following conditions: (a) the ruling only applies for fiscal year 2007; (b) we must withdraw our claim against the tax authority’s resolution for losses not recognized in an amount of RD$2,464,677,712 (approximately $66,612,911) and (c) we must also forfeit our right to use any losses after December 31, 2007 in excess of RD$9,480,000,000 (approximately $257,216,000).

Aircraft Lease Termination.

In July 2005, we reached a settlement with General Electric Credit Corporation of Tennessee and General Electric Capital Corporation of Puerto Rico with respect to claims arising from our alleged breach of an aircraft lease agreement due to early termination in December 2003. As part of the settlement, we signed a 7-year $6 million 9% per annum promissory note payable in monthly installments, with the first year comprised of interest-only payments and the principal balance amortized over the remaining 6 years.

World Access Inc. Bankruptcy.

In April 2003, Tricom USA was served with a summons and complaint in an adversary proceeding arising out of the World Access, Inc. et al. bankruptcy case in the United States Bankruptcy Court for the Northern District of Illinois. The complaint alleged that transfers in the aggregate amount of approximately $488,000 were made to Tricom USA by one of the debtors, Facilicom International LLC, within the 90 days prior to the filing of the bankruptcy petition, and that the transfers were avoidable as preferential payments pursuant to the United States Bankruptcy Code. An agreement in principle to settle the matter was reached in March 2007 under which we will undertake to pay $87,500 to Facilicom International LLC. Final documentation of this settlement is pending.

Other.

There are no other legal proceedings to which we are a party, other than routine litigation incidental to our business that is not otherwise material to our business or financial condition.

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ITEM 9.THE OFFER AND LISTING

American Depositary Shares

Since March 29, 2007, the date on which our ADS facility was terminated, our ADSs have not traded on any exchange or other trading market.

Prior to May 11, 2004, our ADSs were traded on the NYSE under the symbol “TDR”. On that date, following the announcement of our financial restructuring update on May 6, 2004, the NYSE suspended trading and subsequently delisted our ADSs. Trading of our ADSs resumed on May 19, 2004 on the OTCBB under the symbol “TRICY”. On July 25, 2004, the OTCBB suspended trading of our ADSs due to the delay in filing our Form 20-F for the year ended December 31, 2003. Trading of our ADSs then resumed on the “Pink Sheets” service on August 19, 2004 under the symbol “TRICY.PK”. In December 2006, the Bank of New York as depositary for our ADS facility notified us and holders of our ADSs that they were terminating the ADS facility which became effective on March 29, 2007. At December 31, 2005, there were 32 record holders in the United States of the ADSs.

Shares of our Class A Common Stock are not traded on any other exchange or automated quotation system.

The following table provides the high and low closing prices for the ADSs reported by the respective markets on which they were traded for (1) our five most recent full fiscal years ended 2001, 2002, 2003, 2004 and 2005, (2) each quarter of 2004 and 2005, our two most recent full fiscal years, and (3) each of the last six months ending with December 2005:

	Tricom ADS Prices
	High	Low
Year Ended:
December 31, 2001	12.46	3.15
December 31, 2002	4.00	3.00
December 31, 2003	3.05	0.82
December 31, 2004	1.95	0.07
December 31, 2005	0.20	0.02
Quarter Ended:
March 2004	1.95	1.05
June 2004	1.28	0.10
September 2004	0.80	0.20
December 2004	0.51	0.07
March 2005	0.16	0.07
June 2005	0.12	0.08
September 2005	0.25	0.08
December 2005	0.15	0.02
Month Ended:
July 2005	0.08	0.08
August 2005	0.13	0.08
September 2005	0.25	0.08
October 2005	0.15	0.08
November 2005	0.10	0.05
December 2005	0.11	0.02

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ITEM 10.ADDITIONAL INFORMATION

Share Capital

At December 31, 2005 and the date hereof, we had 55,000,000 shares of our Class A Common Stock, par value RD$10 per share, authorized. As of December 31, 2005, 45,458,041 shares of Class A Common Stock were issued and outstanding. As of December 31, 2005 and the date hereof, we also had 25,000,000 shares of our Class B Stock, par value RD$10 per share, authorized, 19,144,544 shares of which were issued and outstanding. We have not issued any shares of our Class A Common Stock since December 2002 and we have not issued any shares of our Class B Stock since May 1998.

At December 31, 2005, neither we nor any of our subsidiaries owned any shares of our Class A Common Stock or Class B Stock.

At December 31, 2005, there were outstanding options to purchase 163,052 shares of our Class A Common Stock for an average exercise price of $6.68 per share. These options are held by certain of our officers and employees.

Memorandum and Articles of Association

Board of Directors.

Our business and affairs are managed by the Board of Directors, which consists of not more than fifteen or less than eight persons. Our directors are elected annually at the annual general meeting of shareholders. Each director (whenever elected) holds office until the next annual general meeting of shareholders following his or her election and until his successor is elected and qualified or until his or her earlier resignation or removal.

Any director may resign at any time upon written notice to the Board of Directors, to the Chairman of the Board or to the President. Any director may be removed with or without cause at any time by an affirmative vote of a majority of the shareholders entitled to vote. If any vacancies occur in the Board of Directors, of if the authorized number of directors is increased, the directors then in office may continue to act, and such vacancies may be filled by a majority of the directors then in office. Any vacancies or newly created directorships also may be filled by an affirmative vote of a majority of the shareholders entitled to vote at a general meeting of shareholders called for such purpose.

Regular meetings of the Board of Directors may be held at such places within or out of the Dominican Republic and at such times as the Board of Directors may from time to time determine. Special meetings of the Board of Directors may be held at any time or place within or outside of the Dominican Republic whenever called by the Chairman of the Board, by the President or by any two directors. Any member of the Board of Directors may participate in a meeting of the Board of Directors by means of a telephone conference or similar communications equipment provided that all persons participating in the meeting can hear each other.

At all meetings of the Board of Directors, the presence of a majority of the total number of directors will constitute a quorum for the transaction of business. The vote of at least a majority of the directors present at any meeting at which a quorum is present is necessary to constitute the act of the Board of Directors unless otherwise provided by applicable law.

Purpose.

Article 2 of our by-laws states that our purpose is:

•To provide, maintain and operate telecommunications systems in the Dominican Republic and elsewhere;

•To enter into such agreements as may be required to be interconnected to the switched public telephone network, as well as to any domestic networks rendering inter-urban services, as may be required by said telecommunications systems; and

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•To construct, maintain, and exploit a private telecommunications system for the transmission of national and international calls and for the transmission or reception of messages and signals of any kind.

Capital Stock.

Our authorized capital stock consists of 55,000,000 shares of Class A Common Stock and 25,000,000 shares of Class B Stock. Both classes of capital stock vote together as a single class on matters except any matter that would adversely affect the rights of either class. These matters would need to be approved by a special meeting of the holders of the class of shares to be affected. The Class A Common Stock has one vote per share and the Class B Stock has ten votes per share. The economic rights of each class of capital stock are identical.

Registration and Transfer.

All shares are evidenced by share certificates in registered form. Dominican law requires that all shares be represented by a certificate, although a single certificate may represent multiple shares of stock. Certificates may be issued in the name of the registered holder, bearer or to-order form. All of our share certificates are issued in the name of the registered holder. Dominican law also requires that all transfers, encumbrances and liens on nominative shares must be recorded in the share registry and only are enforceable against us and third parties after such registration occurs. The Bank of New York is the registrar and transfer agent for the Class A Common Stock, except during shareholders meetings when we maintain the share registry for the Class A Common Stock.

Shareholders Meetings.

Shareholders are entitled to vote on all matters at ordinary or special shareholders’ meetings. The Board of Directors will convene an annual shareholders’ meeting at least once a year in order for shareholders:

•To elect new directors and a vigilance officer;

•To acknowledge the vigilance officer’s report; and

•For management to report upon our financial performance and for the shareholders to decide whether or not to distribute dividends.

Ordinary shareholders’ meetings may be convened at other times in order to transact other business, including removal of directors. Special shareholders’ meetings are convened in order to effect fundamental changes in our structure, including approval of amendments to our by-laws. Under our by-laws, shareholders’ meetings may be convened by:

•The Chairman of the Board of Directors;

•A majority of the members of the Board of Directors at any time;

•At the request of the holders of 30% of the shares entitled to be cast at such meeting; and

•At the request of the vigilance officer in urgent circumstances, which are not defined under Dominican law.

Shareholders meetings may he convened not less than 30 but not more than 60 calendar days after written notice has been mailed to shareholders. A majority of the shares entitled to be cast constitutes a quorum at all shareholders meetings. Our by-laws provide that holders of two-thirds of the votes entitled to be cast are required to approve:

•Amendments to the by-laws, including increases or decreases of our authorized share capital;

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•The issuance of shares of Class B Stock in addition to those shares of Class B Stock outstanding on the date of the adoption of the by-laws, except in connection with a dividend or other distribution with respect to, or a subdivision, consolidation or reclassification of all outstanding shares of stock;

•The declaration and payment of any dividend or distribution with respect to our capital stock;

•Any increase or decrease in the number of directors; and

•Our voluntary winding up or liquidation or the filing of a bankruptcy petition.

The affirmative vote of the holders of a majority of votes entitled to be cast is required to approve all other actions. Shareholders may vote by proxy, and the depositary will cast proxies as directed by the holders of the ADSs.

Limitation of Officers’ and Directors’ Liability.

In addition to voting for directors at the annual shareholder’s meeting, shareholders are asked to vote upon the performance of management. Our vigilance officer, an officer elected by the shareholders each year, delivers a report on our financial performance and other issues related to management’s performance. If the holders of a majority of the votes entitled to be cast approve management’s performance, all shareholders are deemed to have released the directors and officers from claims or liability to us or our shareholders arising out of actions taken or any failure to take actions by any of them on our behalf during the prior fiscal year, with certain exceptions. Shareholders will likely fail in any suit brought in a Dominican court with respect to the acts or omissions deemed to have been released. Officers and directors may not be released from any claims or liability for criminal acts, fraud, self-dealing or gross negligence. If the shareholders do not approve management’s performance, the vigilance officer’s report may form the basis of any suit brought by the shareholders against our officers and directors.

Our by-laws provides that we will indemnify any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person, or a person of whom he or she is the legal representative, is or was our director, officer, employee or agent or any of our predecessors, or serves or served any other enterprise as a director, officer, employee or agent at our request or any of our predecessors. We are required to pay any expenses reasonably incurred by a director or officer in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it ultimately is determined that he or she is not entitled to be indemnified by us under our by-laws or otherwise. We may, by action of our Board of Directors, provide for the payment of such expenses incurred by our employees and agents as it deems appropriate.

Liquidation Rights.

Each shareholder is entitled to a proportionate share of any of our assets available upon dissolution after the payment of debts owed to creditors. Shareholders are deemed to be creditors of our Company to the extent of declared and unpaid dividends.

Dividends.

Under Dominican law, only shareholders may authorize the declaration and payment of dividends. Shareholders are entitled to receive dividends in proportion to their respective capital participation, subject to adjustment as provided in the by-laws. Dividends are payable only from after-tax profits, and only after we have set aside at least 5% of our annual profits as a legal reserve (until such reserve equals 10% of paid-in capital). The by-laws provide that shareholders may only approve the declaration and payment of dividends or distributions if the declaration or payment of such dividend or distribution would not violate any obligation, contractual or otherwise, to which we or any of our subsidiaries are a party or by which any of them or their respective properties or operations are bound.

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Voting Rights.

The holders of Class A Common Stock and Class B Stock vote together with respect to all matters. Every holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held and every holder of Class B Stock is entitled to ten votes for each share of Class B Stock held by the number of shares of Class A Common Stock into which one share of Class B Stock is then convertible. Under our by-laws, Class B Stock may not be transferred except to permitted transferees. Permitted transferees include:

1.Oleander;

2.Motorola;

3.Any subsidiary or affiliate, as defined; and

4.With respect to Oleander, Manuel Arturo Pellerano Peña and any member of the family of Manuel Arturo Pellerano Peña as of the date of the initial public offering that had an interest (including indirectly through any corporation, trust or entity) in Oleander and;

•The spouse or surviving spouse and natural and adopted children of any such family member;

•Any trust existing solely for the benefit of family members and any person who would be a permitted transferee of any such family member under clause (4) and any trustee of such trust;

•Upon the death of any such member or any person who would be a permitted transferee of any member, such holder’s estate or any executor, administrator or other legal representative of such holder; and

•Any corporation, partnership or other entity all of the outstanding equity interests of which are owned, or all of the outstanding voting power of which is controlled, directly or indirectly by, or any trust or similar entity the sole beneficiaries of which are, such members and their permitted transferees.

If, despite these restrictions on transfer, a shareholder owning shares of Class B Stock transferred its shares to a person or entity other than to Oleander, Motorola or a permitted transferee, the shareholder will only become entitled to one vote per share. If, with respect to any shares of Class B Stock owned by Oleander and its permitted transferees, the shares of common stock owned by Oleander and its permitted transferees constitute less than 10% of the outstanding common stock, such shares of Class B Stock will entitle the holder to one vote per share. If, with respect to any shares of Class B Stock owned by Motorola and its permitted transferees, the shares of common stock owned by Motorola and its permitted transferees constitute less than 10% of the outstanding common stock, such shares of Class B Stock will entitle the holder to one vote per share. Oleander, Motorola and any permitted transferee may pledge shares of Class B Stock without reducing the number of votes to which it is entitled; provided, however, that if such shares of Class B Stock are transferred to or registered in the name of the pledgee (unless the pledgee is a permitted transferee), the number of votes to which such shares of Class B Stock are entitled will be reduced until Oleander, Motorola or any of their permitted transferees either cures any default that resulted in the transfer or registration or reacquires the shares from the pledgee.

Preemptive and Other Rights.

The holders of Class A Common Stock and Class B Stock are not entitled to preemptive or similar rights. The shares of Class A Common Stock and Class B Stock are not subject to redemption or a sinking fund. Under our by-laws, we are authorized to issue shares of Class B Stock only in connection with a dividend or other distribution with respect to, or a subdivision, consolidation or reclassification of, all outstanding shares of Class A Common Stock. In the event of any subdivision, consolidation, reclassification or other change in the Class A Common Stock, the Board of Directors, in its discretion, in lieu of issuing additional shares of Class B Stock, may adjust the number of shares of Class A Common Stock into which the Class B Stock is convertible and the number of votes to which each share of Class B Stock is entitled.

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Reorganization, Consolidation, Share Exchange or Merger.

In the event of a reorganization, consolidation, share exchange or merger of Tricom, each holder of outstanding shares of our stock shall be entitled to receive for each of his shares the same kind and amount of consideration (whether consisting of cash, property or securities) to be received by each other holder of the same class of stock, if any for each of his or her shares.

Material Contracts

For information on our material contracts, see Item 3, Key Company Developments and Item 7, Major Shareholders and Related Party Transactions—Certain Transactions with Related Parties.

Exchange Controls

There are currently no restrictions under Dominican law on the export or import of capital, including foreign exchange controls, or restrictions on the remittance of dividends, interest or other payments to our non-resident stockholders and bondholders.

Taxation

U.S. HOLDERS AND PROSPECTIVE PURCHASERS OF OUR ADSs, CLASS A SHARES OR SENIOR NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF ADSs, CLASS A SHARES OR SENIOR NOTES BASED UPON THEIR PARTICULAR CIRCUMSTANCES.

We are in discussions with certain holders of our indebtedness regarding a consensual restructuring of our financial obligations, ownership and governance through court supervised reorganization proceedings in the United States. This report does not purport to set forth the tax consequences to any holder of claims against us of participating in either the restructuring currently under discussion or any other restructuring or similar transaction that may be proposed in the future. Holders of claims against us should refer to the applicable plan of reorganization and supporting disclosure statement, if any, when they become available, and should also consult with their own tax advisors as to the tax consequences of participating in any restructuring transaction.

The following discussion summarizes the principal Dominican Republic income tax consequences of an investment in the American Depositary Receipts (“ADRs”), ADSs or shares of Class A Common Stock by a person who is neither domiciled in nor a resident of the Dominican Republic for tax purposes and who holds such ADRs, ADSs or shares of Class A Common Stock for investment purposes and not for purposes of a trade or business.

Cash dividends and other distributions paid by us with respect to ADSs or shares of Class A Common Stock held by any holder could be subject to a 25% withholding tax, which would be required to be withheld by us and paid to the Dominican tax administration at the time a cash dividend or other distribution is paid. Such tax withheld may not be a creditable foreign tax in determining the U.S. tax liability of such holder.

Under the principles of territoriality underlying the Dominican constitution, gain from the sale or exchange of ADRs evidencing the ADSs by a foreign holder outside of the Dominican Republic would not be subject to taxation by the Dominican tax authority.

The Dominican government requires payment of capital gains tax on gain recognized on the sale or exchange in the Dominican Republic of shares of Class A Common Stock (as distinguished from sales or exchanges of ADSs). Under current law, the capital gains tax rate is identical to the regular income tax rate of the person or entity that earned such gain; there is no preferential rate. Thus, a corporation selling shares of Class A Common Stock in the Dominican Republic would be required to pay the corporate income tax of 25% on any gain from a sale or exchange of such shares. An individual also would have to pay income tax at the applicable individual rate on gain from the sale of shares of Class A Common Stock in the Dominican Republic.

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The amount of gain on which the capital gains tax is assessed is equal to the sale or transfer price (i.e., amount realized on the sale or transfer) minus the acquisition price, adjusted for inflation. Regulations for the application of the Dominican Tax Code clarify how the tax basis is to be calculated and also provide how the inflation adjustment is to be applied.

There is no income tax treaty in force between the Dominican Republic and the United States.

There are no Dominican inheritance or succession taxes applicable to the ownership, transfer or disposition of ADSs by a foreign holder not domiciled in the Dominican Republic at the moment of death. It is unclear whether Dominican gift taxes would apply to the transfer or other disposition by gift of shares of Class A Common Stock by a non-resident foreign holder; however, ADSs or ADRs are not subject to Dominican gift taxes. There are no Dominican stamp, issue, registration or similar taxes or duties payable by holders of ADSs or shares of Class A Common Stock.

Dividends and Paying Agents

Not applicable.

Statement by Experts

Not applicable.

Documents on Display

We file annual and special reports and other information with the SEC. You may read and copy any document that we file at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, DC 20549. Copies of such materials can be obtained at prescribed rates from the Public Reference Room or by calling the SEC at 1-800-SEC-0330. Such material can also be obtained from the SEC’s website at http://www.sec.gov.

ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about market risks to certain financial instruments includes “forward-looking” statements that involve risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.

We are exposed to market risks from adverse changes in interest rates and foreign exchange rates. We do not have hedging or other arrangements in place to protect ourselves against the effects of interest rate or currency fluctuations. We do not hold or issue financial instruments for trading purposes.

Interest Rate Risks

Our interest expense is sensitive to changes in the general level of interest rates in the United States and in the Dominican Republic. Our indebtedness at December 31, 2005 consisted of $200.0 million of our 11-3/8% Senior Notes due 2004, and $247.5 million of bank and other borrowings, capital leases, commercial paper and telecommunication equipment trade financings. In October 2003, we suspended principal and interest payments on our unsecured indebtedness and principal payments on our secured indebtedness.

Our primary exposure to market risk for changes in interest rates relates to our borrowings from Dominican banks. This exposure is based on the potential for interest rate variations, not on exposure to changes in fair market value of our long-term debt.

Foreign Exchange Risks

We are subject to currency exchange risks. In 2005, we generated operating revenues of $217.5 million which represents approximately RD$6,610 million using the average private market rate for 2005. Approximately 52.5%

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of our operating revenues were generated in Dominican pesos. At December 31, 2005, we had $437.2 million of U.S. dollar-denominated debt outstanding and we had significant other expenses, such as programming and equipment purchase costs denominated in U.S. dollars.

Our functional currency is the U.S. dollar and, as a result, we must translate the value of Dominican peso-denominated assets into U.S. dollars when compiling our financial statements. This translation can create foreign exchange gains or losses depending upon fluctuations in the relative value of the Dominican peso against the U.S. dollar. In 2005, we recognized an approximate $0.7 million foreign exchange gain.

ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

PART II.

ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Commencing in 2001, a combination of macro-economic factors and circumstances specific to our business contributed to a steady and significant decline in our operating performance, cash flows and financial condition. These factors included, among others, the following:

•A world-wide decline in the telecommunications sector;

•Adverse economic conditions precipitated by the events of September 11, 2001;

•The Dominican Republic banking crisis of 2003 and the resulting currency and economic crisis;

•Continuing volatility and depreciation of the Dominican peso;

•Unprofitable investments we made in certain new business segments; and

•Increased competition in Dominican markets for local, long distance and mobile services triggered by entry of multinational telecommunications providers into the market.

As a consequence of these factors, in September 2003, we announced that we would not be making a scheduled interest payment on our 11-3/8% Senior Notes due September 1, 2004. In October 2003, we suspended principal and interest payments on our unsecured indebtedness and principal payments on our secured indebtedness. Subsequently, on September 1, 2004, we announced that we would not be making the $200 million principal payment on our 11-3/8% Senior Notes due September 1, 2004. As a result, we have defaulted on substantially all of our secured and unsecured indebtedness, which was approximately $447.5 million in principal amount as of December 31, 2005. In addition to our 11-3/8% Senior Notes due 2004, our indebtedness consists of bank and other borrowings, capital leases, commercial paper and telecommunication equipment trade financings.

For information on our restructuring, see Item 3, Key Information – Financial Restructuring.

ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15.DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. Disclosure controls and procedures are defined by the SEC as those controls and other procedures that are designed to ensure that information that we are required to disclose in reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only

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provide reasonable assurance of achieving their control objectives. Our management, with the participation of our Chief Executive Officer and Vice President of Finance and Administration, has evaluated our disclosure controls and procedures as of the end of the period covered by this report and determined that such disclosure controls and procedures are effective.

Internal Control Over Financial Reporting.  Subject to the matters referred to in Item 3, “Risk Factors—We do not have an audit committee and our internal accounting systems and controls may be inadequate to ensure timely and accurate financial reporting,” there were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16.[RESERVED]

ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT

We do not have an audit committee and, in the absence of an audit committee, our full Board of Directors fulfills the functions of the audit committee pursuant to Section 3(a)(58) of the Securities Exchange Act of 1934. Because our ADSs are no longer listed on the NYSE, we are not required to have an audit committee financial expert.

ITEM 16B.CODE OF ETHICS

Our Board of Directors has discussed, but not adopted, a code of ethics that would apply to our principal executive officer and principal financial officer. This code of ethics was not adopted because our Board of Directors could not agree on its scope and terms. If our Board of Directors adopts such a code of ethics, we will either file an amendment to this Annual Report on Form 20-F that includes the code of ethics as an exhibit, or post the text of such code of ethics on our website at www.tricom.net.

Our management has adopted a code of conduct that applies to all employees, including our principal executive officer and principal financial officer. This code of conduct addresses several issues, including compliance with applicable laws and regulations, preservation of confidential information and avoidance of conflicts of interest.

ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES

Sotomayor audited our books and records for the years ended December 31, 2004 and December 31, 2005.

Audit Fees

Fees billed by Sotomayor for professional services for the audits of the 2004 and 2005 annual consolidated financial statements, respectively, totaled approximately $440,625 and $506,344. Such fees include fees associated with the audit of our annual consolidated financial statements or services that are normally provided by Sotomayor in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees

Sotomayor received fees of approximately $805,217 for additional services for the years ended December 31, 2002 through 2005, including review and evaluation of quarterly results, IT audit, fraud audit procedures, the Placement, internal controls, regulatory issues, and the new audit statement format.

Tax Fees

Fees for tax services rendered to Tricom USA totaled approximately $55,486 and $55,128 for work related to the years ended December 31, 2004 and 2005, respectively.

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All Other Fees

For the fiscal years ended December 31, 2004 and 2005, Sotomayor received $96,568 and $114,461, respectively, for FCC-related regulatory work, planning and research rendered to Tricom USA.

Pre-approval Policies and Procedures

Our Board of Directors, in its capacity fulfilling the functions of the audit committee pursuant to Section 3(a)(58) of the Securities Exchange Act of 1934, has not established pre-approval policies and procedures for the engagement of our independent auditors for services. Our Board of Directors expressly approves, on a case-by-case basis, any engagement of our independent auditors for audit and non-audit services provided to us or our subsidiaries.

ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE

Not applicable.

ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

PART III.

ITEM 17.FINANCIAL STATEMENTS

Not Applicable.

ITEM 18.FINANCIAL STATEMENTS

The following consolidated financial statements are filed as part of this Annual Report on Form 20-F:

1.Report of Independent Registered Public Accounting Firm;

2.Consolidated Balance Sheets as of December 31, 2004 and 2005;

3.Consolidated Statements of Operations for the Years Ended December 31, 2003, 2004 and 2005;

4.Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Loss for the Years Ended December 31, 2003, 2004 and 2005;

5.Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2004 and 2005; and

6.Notes to Consolidated Financial Statements.

69

ITEM 19.EXHIBITS

Exhibit Number
1.1	Amended and Restated By-laws of Tricom, S.A. with English translation thereof (incorporated by reference to Exhibit 3 to our Amendment No. 1 of the Registration Statement on Form F-1, filed on May 1, 1998 (file no. 333-08574)).
2.1	Indenture, dated August 21, 1997, between The Bank of New York, as trustee, and Tricom, S.A. (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form F-4, filed on December 29, 1997 (file no. 08150)).
2.2	Form of Class A Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Amendment No. 1 to Registration Statement on Form F-1, filed on May 1, 1998 (file no. 333-08574)).
2.3	Form of American Depositary Receipt (included as part of Exhibit 2.4) (incorporated by reference to Exhibit 4.2 to our Registration Statement on Form F-1, filed on April 2, 1998 (file no. 333-08574)).
2.4	Form of Deposit Agreement between The Bank of New York, Tricom, S.A. and owners and holders of American Depositary Receipts (incorporated by reference to Exhibit 4.3 to our Registration Statement on Form F-1, filed on April 2, 1998 (file no. 333-08574)).
4.1	IDENÒ Infrastructure Supply Agreement, dated July 31, 2000, between Motorola, Inc. and Tricom Latinoamerica, S.A. (incorporated by reference to Exhibit 4.1 to our Annual report on Form 20-F/A, filed on November 21, 2001 (file no. 14816)).
4.2	Concession Agreement, dated February 20, 1996, between the Dominican State and Tricom, S.A. (incorporated by reference to Exhibit 10.1 to our Registration Statement on Form F-4, filed on December 29, 1997 (file no. 333-08150)).
4.3	Concession Agreement, dated April 30, 1990, between the Dominican State and Tricom, S.A. (incorporated by reference to Exhibit 10.2 to our Registration Statement on Form F-4, filed on December 29, 1997 (file no. 333-08150)).
4.4	Interconnection Agreement, dated May 17, 1994, between Compañía Dominicana de Telefonos, C. por A. (“Codetel”) and Tricom, S.A. (incorporated by reference to Exhibit 10.3 to our Registration Statement on Form F-4, filed on December 29, 1997 (file no. 333-08150)).
4.5	Addendum to Interconnection Agreement, dated January 2, 1998, between Codetel and Tricom, S.A. (incorporated by reference to Exhibit 10.4 to our Amendment No. 1 to Registration Statement on Form F-1, filed on May 1, 1998 (file no. 333-08574)).
4.6	Amended and Restated Shareholders Agreement among Tricom, S.A., Motorola, Inc. and Oleander Holdings, Inc. (incorporated by reference to Exhibit 10.7 to our Amendment No. 1 to Registration Statement on Form F-1, filed on May 1, 1998 (file no. 333-08574)).
4.7	1998 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.11 to our Amendment No. 1 to Registration Statement on Form F-1, filed on May 1, 1998 (file no. 333-08574)).
4.8	The Guaranty, dated August 21, 1997, issued by each of Tricom’s subsidiaries in favor of the holders of 11-3/8% notes due 2004 under the Indenture, dated August 21, 1997 (incorporated by reference to Exhibit 4.2 to our Registration Statement on Form F-4, filed on December 29, 1997 (file no. 333-08150)).

70

8.1	List of Subsidiaries.
12.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2	Certification of the Vice President, Finance & Administration pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1	Certification by Chief Executive Officer of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act.
13.2	Certification by the Vice President, Finance & Administration of periodic financial report pursuant to 18 U.S.C. Section 1350, as mandated by Section 906 of the Sarbanes-Oxley Act.

71

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing Form 20-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRICOM, S.A.
Dated: October 29, 2007		/s/ HECTOR CASTRO NOBOA
		Hector Castro Noboa
		Chief Executive officer

TRICOM, S.A. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

	Sotomayor & Associates, LLP
	Certified Public Accountants
	540 S Marengo Avenue
	Pasadena, California 91101
	(626) 397-4900
	Fax: (626) 397-4908
	E-mail: sotomayor@sotomayorcpa.com
	Web Site www.sotomayorcpa.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

TRICOM, S.A.:

We have audited the accompanying consolidated balance sheets of TRICOM, S. A. and subsidiaries (the Company) as of December 31, 2004 and 2005 and the related consolidated statements of operations, stockholders’ equity (deficit) and comprehensive loss and cash flows for periods ended December 31, 2003, 2004 and 2005. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2004 and 2005 and the results of its operations and its cash flows for each of the periods ended December 31, 2003, 2004 and 2005, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. As discussed in Notes 3, 22, and 25 to the consolidated financial statements, the Company has suffered recurring losses from operations, which have been impacted further by the recognition of impairment losses of long-term assets and intangibles and the loss in the disposal of the Central America operations, which have led the Company to default in its long and short term debt commitments. These situations, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Sotomayor & Associates, LLP

Pasadena, California

June 23, 2006

F-2

TRICOM, S.A. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2004 and 2005

	2004			2005
Assets
Current assets:
Cash and cash equivalents	$	17,590,173		$	32,113,028
Accounts receivable (Notes 5, 6 and 17):
Customers	17,512,945			16,247,151
Carriers	5,806,582			4,815,386
Related parties	200,000			2,664
Other	3,318,057			1,428,250
	26,837,584			22,493,451
Allowance for doubtful accounts	(3,138,530		)	(2,116,291		)
Accounts receivable, net	23,699,054			20,377,160
Accounts receivable – officers and employees	540,003			108,170
Inventories, net of allowance of $528,991 and $871,435 in 2004 and 2005 respectively	1,698,074			2,385,186
Certificates of deposit and other investment, net (Note 7)	986,075			647,693
Prepaid expenses	3,336,381			7,095,561
Deferred income taxes (Note 15)	376,293			966,242
Total current assets	48,226,053			63,693,040
Property, plant and equipment, net (Notes 4, 12, 13, 22 and 25)	332,907,563			298,439,135
Intangible assets (Note 8)	2,664,641			2,664,641
Restricted Cash (Note 2.4)	—			370,378
Other assets at cost, net of amortization (Note 9)	3,884,822			3,365,176
	$	387,683,079		$	368,532,370

See accompanying notes to consolidated financial statements.

F-3

	2004				2005
Liabilities and Stockholders’  Equity (Deficit)
Current liabilities:
Borrowed funds – banks (Note 10)	$	40,619,394			$	48,865,810
Borrowed funds – related parties (Note 6)	8,005,000				—
Commercial paper (Note 11)	8,028,680				6,200,000
Commercial paper – related parties (Notes 6 and 11)	49,091,066				48,448,922
Current portion of long-term debt-related party (Note 6)	25,765,272				25,356,872
Current portion of long-term debt (Note 13)	302,236,880				298,501,504
	433,746,292				427,373,108
Current portion of obligation under capital leases (Note12)	14,531,321				14,531,321
Accounts payable (Note 6):
Carriers	7,837,312				8,196,740
Related parties	1,604,249				—
Suppliers	11,585,842				17,257,287
Other	407,865				994,513
	21,435,268				26,448,540
Accrued expenses (Note 16)	14,567,024				11,705,140
Other liabilities	2,460,831				5,659,756
Deferred revenues	5,804,750				2,050,620
Interest payable – related party (Note 6)	14,879,148				24,186,485
Interest payable	75,366,828				129,439,767
Total current liabilities	582,791,462				641,394,737
Reserve for severance indemnities (Note 2.12)	50,231				284,321
Deferred income taxes (Note 15)	661,795				433,895
Long-term debt (Note 13)	—				5,613,904
Total liabilities	583,503,488				647,726,857
Stockholders’ equity (deficit) (Notes 14, 16 and 18):
Class A common stock of RD$10 par value: Authorized 55,000,000 shares; issued 45,458,041 shares	24,951,269				24,951,269
Class B common stock of RD$10 par value: Authorized 25,000,000 shares; issued 19,144,544 shares	12,595,095				12,595,095
Additional paid-in-capital	275,496,964				275,496,964
Accumulated deficit	(506,839,980			)	(590,214,058			)
Other comprehensive loss-foreign currency translation (Note 2.3)	(2,023,757			)	(2,023,757			)
Stockholders’ deficit, net	(195,820,409			)	(279,194,487			)
Commitments and contingencies (Notes 6, 10, 11, 12, 13, 14, 15, 16, and 19)
	$		387,683,079		$		368,532,370

See accompanying notes to consolidated financial statements.

F-4

TRICOM, S.A. AND SUBSIDIARIES

Consolidated Statements of Operations

Years ended December 31, 2003, 2004 and 2005

	2003				2004				2005
Operating revenues (Notes 2.5, 2.13 and 6):
Long distance	$	92,087,847			$	72,008,996			$	70,620,470
Domestic telephony	59,475,203				64,973,873				84,071,137
Mobile	29,231,686				32,123,985				35,485,447
Cable	13,584,637				13,651,113				19,304,412
Data and Internet	4,486,692				5,354,729				7,952,623
Other	121,448				68,486				90,557
Total operating revenues	198,987,513				188,181,182				217,524,646
Operating costs and expenses: (Notes 2.2, 2.6, 2.10, 3, 4, 5, 6, 16 and 25):
Cost of sales and services	91,009,781				89,540,886				87,696,237
Selling, general and administrative expenses	60,392,716				56,685,365				77,654,448
Restructuring costs	1,597,000				8,146,000				7,803,000
Depreciation and amortization	70,292,451				75,253,831				62,040,872
Assets impairment	191,284,301				—				—
Other charges and special items	15,870,544				—				—
Total operating costs	430,446,793				229,626,082				235,194,557
Operating income (loss) from continuing operations	(231,459,280			)	(41,444,900			)	(17,669,911			)
Other income (expenses) (Note 6):
Interest expense	(65,554,495			)	(63,697,822			)	(69,561,138			)
Interest income	1,203,830				222,776				698,046
Foreign currency exchange gain (loss) net of income tax	5,347,199				(2,673,823			)	727,114
Other, net	302,949				5,739,855				1,613,963
Other expenses, net	(58,700,517			)	(60,409,014			)	(66,522,015			)
Loss from continuing operations before income taxes and discontinued operations	(290,159,797			)	(101,853,914			)	(84,191,926			)
Income taxes benefit (provision) (Note 15)	(1,358,861			)	(300,182			)	817,848
Loss from continuing operations before discontinued operations	(291,518,658			)	(102,154,096			)	(83,374,078			)
Discontinued operations (Note 22):
Loss from discontinued operations	(46,651,629			)	—				—
Net loss	$	(338,170,287		)	$	(102,154,096		)	$	(83,374,078		)
Loss per common share – basic and diluted
Loss from continuing operations	$		(4.51	)	$		(1.58	)	$		(1.29	)
Loss from discontinued operation	(0.72			)	—				—
Net loss per common share – basic and diluted	$	(5.23		)	$	(1.58		)	$	(1.29		)
Average number of common shares used in calculation:
Basic	64,602,585				64,602,585				64,602,585
Diluted	64,602,585				64,602,585				64,602,585

See accompanying notes to consolidated financial statements.

F-5

TRICOM, S.A. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Loss

Years Ended December 31, 2003, 2004 and 2005

	Number of Common Shares								Retained Earnings (Accumulated Deficit)					Other Comprehensive Loss-
	Issued		Common Stock				Additional		Appropriated		Un-			Foreign			Stockholders’ Equity
	Class A	Class B	Class A		Class B		Paid in Capital		Legal Reserve		appropriated			Currency Translation			(Deficit), Net
Balance at December 31, 2002	45,458,041	19,144,544	$	24,951,269	$	12,595,095	$	275,496,964	$	1,653,007	$	(68,168,604	)	$	(2,023,757	)	$	244,503,974
Net loss	—	—	—		—		—		—		(338,170,287		)	—			(338,170,287		)
Balance at December 31, 2003	45,458,041	19,144,544	24,951,269		12,595,095		275,496,964		1,653,007		(406,338,891		)	(2,023,757		)	(93,666,313		)
Net loss	—	—	—		—		—		269,602		(102,423,698		)	—			(102,154,096		)
Balance at December 31, 2004	45,458,041	19,144,544	24,951,269		12,595,095		275,496,964		1,922,609		(508,762,589		)	(2,023,757		)	(195,820,409		)
Net loss	—	—	—		—		—		120,633		(83,494,711		)	—			(83,374,078		)
Balance at December 31, 2005	45,458,041	19,144,544	$	24,951,269	$	12,595,095	$	275,496,964	$	2,043,242	$	(592,257,300	)	$	(2,023,757	)	$	(279,194,487	)

See accompanying notes to consolidated financial statements.

F-6

TRICOM, S.A. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2003, 2004 and 2005

	Year Ended December 31,
	2003			2004			2005
Cash flows provided by operating activities:
Net loss from continuing operations before discontinued operations	$	(291,518,658	)	$	(102,154,096	)	$	(83,374,078	)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:
Depreciation	70,054,454			75,026,380			61,823,944
Impairment charge of long-lived asset, intangible assets and goodwill	191,284,301			—			—
Amortization of debt issue cost and bank debt	7,779,619			—			—
Provision allowance for investments	4,975,023			—			—
Allowance for doubtful accounts	1,676,649			2,296,554			3,497,686
Amortization of radio frequency rights	237,997			227,450			216,928
Net cash used in activities of discontinued operations, including changes in operating assets and liabilities	(4,965,215		)	—			—
Charge for obsolescence of equipment pending installation	590,740			1,114,558			949,094
Charge for inventory obsolescence	1,123,217			196,204			514,641
Expenses for severance indemnities	1,743,419			864,800			2,277,835
Deferred income tax, net	(1,277,482		)	297,676			(817,848		)
Cost of terminating operating lease	7,371,119			—			—
Exchange rate effect in long-term debt	(7,552,955		)	2,673,823			(355,740		)
Loss on disposal and sale of assets	1,935,518			782,352			319,552
Changes in operating assets and liabilities excluding discontinued operations:
Decrease (increase) in accounts receivable	2,751,711			(7,594,438		)	95,616
Decrease(increase) in accounts receivable – related parties	787,767			(144,577		)	197,336
Decrease (increase) in inventories	834,223			(356,553		)	(1,201,753		)
Decrease (increase) in prepaid expenses	6,825,908			(3,229,447		)	(3,759,180		)
Increase in restricted cash	—			—			(370,378		)
Decrease in other assets	1,939,127			406,547			302,717
(Decrease)increase in accounts payable	(5,887,852		)	(5,579,402		)	4,925,111
Increase in interest payable – related parties	7,079,901			7,319,770			9,307,337
Increase in interest payable	14,304,739			49.944,971			54,072,939
(Decrease)increase in other liabilities	(1,494,221		)	(1,565,351		)	2,372,028
(Decrease)increase in deferred revenues	(2,061,577		)	1,280,657			(3,754,130		)
Increase (decrease) in accrued expenses	990,167			1,342,387			(1,983,737		)
Decrease in reserve for severance indemnities	(2,258,675		)	(939,450		)	(2,043,750		)
Total adjustments	298,788,622			124,364,911			126,586,248
Net cash provided by operating activities	7,269,964			22,210,815			43,212,170

See accompanying notes to consolidated financial statements.

F-7

TRICOM, S.A. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2003, 2004 and 2005

	Year Ended December 31,
	2003			2004			2005
Cash flows from investing activities (Notes 4, 7 and 22):
Cancellation (acquisition) of investments	9,259,064			(355,910		)	338,383
Cash provided by investing activities of discontinued operations	1,344,477			10,661,300			—
Acquisition of property and equipment	(10,786,426		)	(13,277,265		)	(28,624,156		)
Net cash used in investing activities	(182,885		)	(2,971,875		)	(28,285,773		)
Cash flows from financing activities (Notes 3, 6, 10, 11, 12, 13 and 16):
Borrowed funds from banks	3,817,614			—			268,979
Principal payments to banks	(13,646,207		)	(310,304		)	—
Proceeds from issuance of commercial paper	7,519,783			—			—
Principal payments of commercial paper to banks	—			—			(1,828,680		)
Principal payments of commercial paper-related parties	—			—			(642,145		)
Borrowed funds from (to) related parties	4,255,593			(2,503,341		)	—
Principal payments to related parties	(2,082,297		)	(3,888		)	—
Cash used in financing activities of discontinued operations	(1,812,607		)	—			—
Payments of long-term debt	(8,803,763		)	(1,246,732		)	(3,749,552		)
Proceeds from issuance of long-term debt	—			—			5,547,856
Net cash used in financing activities	(10,751,884		)	(4,064,265		)	(403,542		)
Net (decrease) increase in cash and cash equivalents	(3,664,805		)	15,174,675			14,522,855
Cash and cash equivalents at beginning of the year	6,080,303			2,415,498			17,590,173
Cash and cash equivalents at the end of the year	$	2,415,498		$	17,590,173		$	32,113,028
Supplementary information:
Interest paid (net of capitalization)	$	(36,389,236	)	$	(6,272,758	)	$	(5,824,428	)
Expense in lieu of income taxes and income taxes paid	$	(2,336,999	)	$	(550,676	)	$	—

See accompanying notes to consolidated financial statements.

F-8

1Organization and Nature of Business

The consolidated financial statements of TRICOM, S.A. (“Tricom” or the “Company”) include operations of the following companies engaged in the telecommunications and cable broadcasting industry, with operations in the Dominican Republic, the United States and, until August 2004 in the Republic of Panama:

TRICOM, S.A. (Parent Company)
GFN Comunicaciones, S.A.
TRICOM Centroamérica, S.A.
Call Tel Corporation
TRICOM USA, Inc. And Subsidiaries
TCN Dominicana, S.A. (TCN or Telecable)

TRICOM Latinoamérica, S.A.

TRICOM is a diversified telecommunications company, which provides international and domestic long distance, basic local service, mobile, Internet and broadband services in the Dominican Republic and long distance services through subsidiaries in the United States. The Company’s operations in the Dominican Republic are governed by the Telecommunications Law (Law No.153-98) and by a Concession Agreement signed with the Dominican Government and ratified by the National Congress on April 30, 1990. This agreement is for an initial term of 20 years through June 30, 2010, subject to renewal for an additional 20-year term. Law No. 153-98 establishes a basic framework to regulate the installation, maintenance and operation of telecommunications networks and the provision of telecommunications services and equipment. The law adopted the “Universal Services Principle” by guaranteeing access to telecommunications services at affordable prices in low-income rural and urban areas. The law creates a fund for the development of the telecommunications sectors that is supported by a 2% tax on industry participants’ billings of all telecommunications services.

TRICOM USA, Inc. (TRICOM USA) is a company organized under the laws of Delaware and authorized by the United States Federal Communications Commission (FCC) to operate as a facilities-based long distance carrier in the United States.

TRICOM Latinoamérica, S.A. is a company organized under the laws of the Cayman Islands on May 12, 2000. The activity of this company is to act as the holding company of the Company’s telecommunications operations in Central America and the Caribbean. These operations were disposed of during 2004.

TCN Dominicana, S.A. is a company organized on September 13, 2001 under the laws of the Dominican Republic, and engaged in the operation of three cable television systems and networks in the Dominican Republic.

2Summary of Significant Accounting Policies

2.1Principles of Consolidation

The accompanying consolidated financial statements include the accounts of TRICOM, S.A. (Parent Company) and its majority owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

F-9

2.2Use of Estimates

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of consolidated financial statements in conformity with these principles requires management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period.

Significant items subject to such estimates and assumptions include: the carrying amount of property, plant and equipment, valuation allowances for receivables, inventories, intangible assets and deferred income tax assets. Actual results could differ from those estimates.

2.3Foreign Currencies

The Company’s and its subsidiaries’ functional currency is the U.S. dollar. All foreign currency balances are restated in US dollars using both historical and current exchange rates. Under this situation, SFAS 52 requires the use of the remeasurement method, also referred to as the monetary/nonmonetary method, when translating the entities’ financial statements. This method translates monetary assets (cash and other assets and liabilities that will be settled in cash) at the current rate at December 31. Nonmonetary assets, liabilities, and stockholders’ equity are translated at the appropriate historical rates, which are the exchange rates at the dates the transactions in the nonmonetary account originated. Also, the income statement amounts related to nonmonetary assets and liabilities, such as cost of goods sold (inventory), depreciation (property, plant and equipment), and goodwill amortization (goodwill), are translated at the same rate used for the related balance sheet translation. Other revenues and expenses occurring evenly over the year may be translated at the weighted-average exchange rate for the period. Remeasurement gains or losses that result from the remeasurement process applied to non-U.S. subsidiaries that are consolidated are reported on the parent company’s consolidated statements of operations.

As of December 31, 2004 and 2005, the rates used by the Company to translate Dominican peso balance sheet denominated accounts were RD$31.07 and RD$34.85 per one US dollar, respectively. The weighted-average exchange rates used to translate certain revenues and expenses accounts for the 2003, 2004 and 2005 statements of operations were RD$30.93, RD$42.11 and RD$30.39 respectively. Panamanian Balboas (B/.) were at par with the U.S. dollar.

2.4Cash and Cash Equivalents

For the purpose of the statements of cash flows, the Company considers as cash and cash equivalents all cash on hand; cash in banks, time deposits and highly liquid debt instruments with original maturities at the time of purchase of three months or less. Restricted cash is primarily related to cash held in escrow at financial institutions as determined by the court judge and restricted for possible litigation settlements.

2.5Customer and Carrier Accounts Receivable

Customer accounts receivable are recorded on the date invoiced and recorded with the amount of services provided plus a late charge, if any, which accrues after a maximum grace period of 15 days for individual customers and 30 days for corporate customers (on the accounts past due). The assessed monthly late charge is 2.98%. Carrier accounts receivable are recognized based on the termination of traffic in the Company’s network.

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2.6Allowance for Doubtful Accounts

The allowance for doubtful accounts receivable is established through a charge to an expense account. The Company, after analyzing current market trends and collection history of its receivables portfolio has estimated those customers’ receivables balances over 90 days past due are uncollectible and are therefore reserved.

The allowance for doubtful accounts from carriers and others is established through a charge to an expense account based on an analysis of the collectability of individual accounts and payment history.

2.7Inventories

Inventories are valued at the lower of average cost or market. Inventory mainly corresponds to telephone equipment available for sale.

The Company’s policy is to review its inventory for specific usage and future utility. Estimates of impairment of individual items of inventory are recorded to reduce the item to the lower of cost or market. The reserve for inventory obsolescence was $528,991 and $871,435 as of December 31, 2004 and 2005, respectively.

2.8Change in Accounting Estimate

The Company’s management reviews the estimated useful lives of its fixed assets. The 2004 review indicated the actual lives for certain asset categories generally were shorter than the useful lives used for depreciation purposes in the Company’s financial statements. As a result, the Company revised the estimated useful lives of certain categories of property, principally building, communication, office, production and transmission equipment, hardware and other. The effect of this change in estimate increased accumulated depreciation by approximately $17.4 million.

The change in the estimates of the useful lives of fixed assets was performed based on a comparison of the company’s useful lives with other companies’ useful lives for similar assets. The Company made these changes to better reflect the estimated periods during which such assets will remain in service.

2.9Property, Plant and Equipment

Property, plant and equipment are carried at cost. Construction costs and equipment installations in process are maintained as construction projects until they are completed and/or the equipment is placed in service. Depreciation is recorded from the first full month that the assets are placed in service. Property and plant related to cable television operations are carried at cost and include all direct costs and certain indirect costs associated with the construction of cable television transmission and distribution systems and new subscriber installations.

2.10Depreciation and Amortization

The depreciation method used by the Company is the straight-line method, that is, the uniform distribution of cost over the estimated useful lives of the corresponding assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvement. The estimated useful lives of assets are as follows:

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Description	Years
Buildings and improvements	15-40
Furniture, equipment and transportation equipment	3-15
Leasehold improvements	5-10
Communications and transmission equipment	7-15
Computer equipment	4
Other equipment	1-10

2.11Other Assets

Radio frequency rights are amortized on a straight-line basis over their useful lives, which range from 15 to 20 years.

Deferred commissions on prepaid calling cards are recognized when the deferred revenues are recorded. Commission expense on sales of calling cards outside of the Dominican Republic is recognized based on the minutes used. Commission expense on sales of calling cards within the Dominican Republic is recorded when collection of outstanding invoices to distributors and/or wholesalers is made.

Cellular service plans that include the price of the telephone equipment generate deferred assets for the net cost of the equipment, which is amortized over the minimum contract period of 18 months starting with the month following the delivery of the equipment. Effective January 1, 2003, the Company changed prospectively its policy for recognizing the net cost of such service plans as an expense (see Note 9).

2.12Severance Indemnities

According to the Labor Code of the Dominican Republic, employers are required to pay severance indemnities to those workers whose labor contracts are terminated without just cause. Just cause is defined in the Labor Code to include misstatements by an employee in his job application, termination within three months of employment for poor performance, dishonesty, threats of violence, willful or negligent destruction of property, unexcused absences or termination of the job for which the employee was hired. The Company maintains a minimal reserve to cover severance indemnities based on its experience. At December 31, 2004 and 2005, the non-current liability for severance indemnities presented in the balance sheet was of $50,231 and $284,321 respectively.

2.13Revenue Recognition

Long Distance.

Long distance revenues represent amounts recognized for the transmission of traffic from foreign telecommunication carriers to the Dominican Republic, including revenues derived from the Company’s U.S. based international long distance wholesale and prepaid calling card operations, outbound international and domestic long distance calls generated by calling card users and retail telephone centers. Long distance revenues are recognized as the minutes are provided or as the calls are made, except for revenues from prepaid calling cards which are recognized as the calling cards are used, net of commission paid for sale.

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Domestic Telephony.

Domestic telephony revenues consist of fees received for local exchange services in the Dominican Republic, including monthly fees, local measured service and local measured charges for value-added services, outbound international and domestic long distance calls generated by the Company’s residential and business customers within the Dominican Republic, sales of customer equipment, and interconnection revenues received from other service providers for calls that terminate in the Company’s network. These revenues are recognized as services are rendered. Installation fees are recognized over the estimated average service life based on the Company’s experience (eighteen months), net of costs incurred in the installation. When installation cost are greater than the installation fees charged, the net cost related to the installations are charged as an expense immediately.

Mobile.

Mobile revenues consist of fees received for cellular and PCS services, including fixed monthly fees, per minute usage charges and additional charges for value-added services, outbound international long distance charges, as well as paging services, equipment sales, and interconnection charges received from other service providers for incoming calls that terminate in the Company’s network. These revenues are recognized as services are rendered. Revenues generated by calling cards used for prepaid cellular services are recognized, as the calling cards are used, net of sales commissions paid.

Cable Television.

Cable television revenues consist of monthly fees derived from basic programming, expanded basic programming, digital music services, Internet access and revenues from advertising sales to national advertisers on non-broadcast channels carried over the cable communications systems. Cable revenues are recorded in the period the service is provided, except advertising services, which are recognized when commercials are telecast.

The Company has entered into transactions that exchange advertising services. Such transactions are recorded at the estimated fair value of the advertisement received or given in accordance with the provisions of EITF Issue No. 99-17 “Accounting for Advertising Barter Transactions”. Barter transactions were not material to the Company’s consolidated statements of operations for the years ended December 31, 2003, 2004 and 2005.

Data and Internet.

Data and Internet revenues consist of fixed monthly fees received from residential and corporate customers for high speed broadband data transmission and Internet connectivity services, including traditional dial-up connections, dedicated lines, private networks, frame relay and digital subscriber lines, or xDSLs, that provide broad-band transmission of voice and data over regular telephone lines. These revenues are recognized as services are rendered.

Activation fees are recognized over the estimated average service life net of the cost incurred in the activations based on the Company’s experience. When the activation costs are greater than the activation fees collected, the net cost related to activation is charged as an expense immediately.

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Other Revenues.

Other revenues represent revenues that are not generated from the Company’s core business activities, including commissions and revenues from the provision of miscellaneous services. These revenues are recognized when the service is rendered.

2.14Capitalization of Interest

Interest is capitalized on qualified projects and included as part of project costs during the period necessary for installation.

During the year ended December 31, 2004 interest capitalized as part of construction projects amounted to approximately $160,000. During 2005 Tricom S.A. did not take new loans; therefore no interest has been capitalized for this year.

2.15Income Taxes

Income tax on profit or loss comprises current and deferred tax. Income tax is recognized in the consolidated statements of operations. Current tax is the expected tax payable on the taxable income for the year, using the tax rate in effect at the balance sheet date.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases and operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the assets can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

2.16Earnings Per Common Share

Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings per share reflect the increase in average common shares outstanding that would result from the assumed exercise of outstanding stock options, calculated using the treasury stock method.

The weighted average number of common shares outstanding used in the calculation of basic and diluted (loss) per common share for the years 2003, 2004 and 2005 are as follows:

	2003	2004	2005
Weighted average number of common shares outstanding - basic and diluted	64,602,585	64,602,585	64,602,585

For 2003, 2004 and 2005, all stock options and warrants are excluded from consideration of diluted loss per share because of the Company’s net loss.

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2.17Pension Plan

Until August 2003, a private pension administration company managed the Company’s plan, which was converted to a defined contribution plan in 2000. Under this arrangement, both the Company and the employee made fixed contributions to the employee’s account. The contributions made by the Company were recognized as expenses on a monthly basis.

 In August 2003, a new Social Security law (87-01) entered into effect making employer and employee pension contributions mandatory for all entities based on a percentage of monthly salaries; 2.58% paid by the employee and 6.42% contributed by the employer.

During the years ended December 31, 2003, 2004 and 2005 the Company recognized as expenses contributions for approximately $457,000, $137,000 and $892,000, respectively.

2.18Impairment of Long-Lived Assets

SFAS No. 144 provides a single accounting model for long-lived assets to be disposed of, SFAS No. 144 also changes the criteria for classifying an asset as held for sale, broadens the scope of businesses to be disposed of that qualify for reporting as discontinued operations, and changes the timing of recognizing losses on such operations. The Company adopted SFAS No. 144 on January 1, 2002 (see Note 25).

In accordance with SFAS No. 144, long-lived assets, such as property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented on the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Goodwill and intangible assets not subject to amortization are tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. This determination is made at the reporting unit level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with FASB Statement No. 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

2.19Advertising Costs

Advertising costs are expensed as they are incurred. For the years ended December 31, 2003, 2004 and 2005 these costs amounted to approximately $2,450,000, $2,609,000 and $4,711,000, respectively, and are included as part of selling, general and administrative expenses in the accompanying consolidated statements of operations.

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2.20Stock Option Plan

The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations including FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB Opinion No. 25, issued in March 2000, to account for its fixed-plan stock options. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. SFAS No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements using a fair-value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic-value-based method of accounting described above, and has adopted only the disclosure requirements of SFAS No. 123. The following table illustrates the effect on net loss if the fair-value-based method had been applied to all outstanding and vested awards in each period.

	2003			2004			2005
Net loss – as reported	$	(338,170,287	)	$	(102,154,096	)	$	(83,374,078	)
Add total stock-based employee compensation determined under fair-value-based method for all rewards	(59,709		)	(1,218		)	(136		)
Pro forma net loss	$	(338,229,996	)	$	(102,155,314	)	$	(83,374,214	)
Net loss per share:
As reported – basic and diluted	$	(5.23	)	$	(1.58	)	$	(1.29	)
Pro forma – basic and diluted	$	(5.23	)	$	(1.58	)	$	(1.29	)

2.21Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over fair value of assets of businesses acquired. Effective July 1, 2001, the Company adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, for business combinations consummated after June 30, 2001, and as of January 1, 2002 for business combinations consummated before June 30, 2001. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with estimated useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

In connection with SFAS No. 142’s transitional goodwill impairment evaluation, the Statement required the Company to perform an assessment of whether there was an indication that goodwill was impaired as of the date of adoption. To accomplish this, the Company was required to identify its reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of January 1, 2002. The Company was required to determine the fair value of each reporting unit and compare it to the carrying amount of the reporting unit within six months of January 1, 2002. To the extent the carrying amount of a reporting unit exceeded the fair value of the reporting unit, the Company would be required to perform the second step of the transitional impairment test, as this is an indication that the reporting unit’s goodwill may be impaired. The second step was required for one reporting unit. In this step, the Company compared the implied fair value of the reporting unit goodwill with the carrying amount of the reporting unit goodwill, both of which were measured as of the date of adoption. The implied fair value of

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goodwill was determined by allocating the fair value of the reporting unit to all of the assets (recognized and unrecognized) and liabilities of the reporting unit in a manner similar to a purchase price allocation, in accordance with SFAS No. 141, Business Combinations. The residual fair value after this allocation was the implied fair value of the reporting unit goodwill.

The implied fair value of this reporting unit exceeded its carrying amount, thus the Company was not required to recognize an impairment loss.

Prior to the adoption of SFAS No. 142, goodwill was amortized on a straight-line basis over the expected periods to be benefited, generally 40 years, and assessed for recoverability by determining whether the amortization of the goodwill balance over its remaining life could be recovered through undiscounted future operating cash flows of the acquired operation. The amount of goodwill and other intangible asset impairments, if any, was measured based on projected discounted future operating cash flows using a discount rate reflecting the Company’s average cost of funds.

2.22Investment Securities

Investment securities at December 31, 2004 and 2005 consisted of certificates of deposit and mortgage participation contracts. The Company classifies its securities as held-to-maturity. Held-to-maturity securities are those securities for which the Company has the ability and intent to hold the security until maturity.

Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts.

A decline in the market value of held-to-maturity securities below cost, that is deemed to be other than temporary, results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest method. Interest income is recognized when earned.

2.23Accounting Change

In November 2001, the Emerging Issues Task Force (EITF) of the FASB reached a consensus on EITF issue 01-09, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. The Company adopted EITF Issue 01-09 effective January 1, 2003. EITF Issue 01-09 addresses the recognition, measurement, and income statement classification for sales incentives offered to customers. Sales incentives include discounts and generally any other offers that entitle a customer to receive a reduction in the price of a product by submitting a claim for a refund or rebate. Under EITF 01-09, the reduction in or refund of the selling price of the product resulting from any sales incentives should be classified as a reduction of revenue. Prior to adopting this pronouncement, the Company recognized sales incentives paid to distributors of prepaid calling cards as selling, general and administrative expenses. As a result of adopting EITF Issue 01-09, sales incentives were restated (reclassified) as a reduction of long distance revenues in the case of long distance calling cards and as a reduction of cellular revenues in the case of prepaid cellular services for the years ended December 31, 2003 and 2004. Amounts reclassified were $9,295,489 and $6,102,127 in the years ended December 31, 2003 and 2004, respectively. This pronouncement did not have any impact on net loss reported in these years. Commissions of $10,071,926 paid by cellular sales for the year ended December 31, 2005 were recorded directly as a reduction of revenue.

2.24Reclassifications

Certain amounts in 2004 consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the 2003 consolidated financial statements and notes.

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The reclassifications were to transfer income and expense items related to discontinued operations from revenues and expenses from continuing operations and other.

Reclassifications were made to organize operating revenues by products and services according to the Company’s five reportable segments (see Note 2.13 Revenue Recognition) and to simplify the reading of the costs and expenses section by grouping similar line items that were previously reported individually.

Additionally, the Company reclassified at December 31, 2004 and 2005 deferred commissions for prepaid calling cards in the amount of $1,963,000 and $2,308,000, respectively, net of the related deferred revenues. This amount was previously presented as part of other assets in the consolidated balance sheet. Consolidated assets and liabilities at December 31, 2004 and 2005 have been decreased by this amount.

3Liquidity

The consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business. However, as a result of recurring operating losses and the Company’s on-going debt restructuring process, such realization of assets and satisfaction of liabilities are subject to significant uncertainty.

At December 31, 2004 and 2005, the Company’s current liabilities exceeded its current assets by $534.6 million and $577.7 million, respectively.

On October 2, 2003, the Company announced that it would not be making a scheduled interest payment to the holders of its 11-3/8% Senior Notes due 2004, and that it had initiated discussions with holders of its Senior Notes and its bank lenders, and would be continuing discussions with prospective strategic partners, to formulate a restructuring plan of the Company’s balance sheet.

An unofficial committee of bondholders and commercial banks (the “Special Committee”) was established. Concurrently with the non-payment of interest due to bondholders, the Company suspended principal and interest payments of all unsecured bank debt. As a result, the Company does not expect to have any available funding sources until the restructuring process is concluded.

In December 2003, the Company’s Board of Directors appointed a Chief Restructuring Officer to assist in negotiations with bondholders and other lenders, the implementation of a cash conservation plan and in the development of a core business plan.

Further, the Company has engaged several financial advisory and legal firms to assist in its financial restructuring process. The Company has also agreed to pay the fees and expenses of financial advisory and legal firms engaged by the unofficial committee of bondholders and commercial banks and by the Company’s majority shareholder, GFN Corporation Ltd, and certain of its affiliates, which are also major creditors of the Company. The Company also agreed to pay retention bonuses to certain of its executives. Expenses related to the Company’s financial restructuring were approximately $17.5 million.

Details of restructuring expenses are as follows:

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	2003		2004		2005		Total
Financial Services:
FTI Consulting (Company)	$	75,000	$	1,987,000	$	2,237,000	$	4,299,000
Bear Stearns & Co. Inc (Company)	500,000		906,000		—		1,406,000
Chanin Capital Partners (Committee)	—		1,162,000		1,335,000		2,497,000
Broadspan Capital (GFN)	—		677,000		568,000		1,245,000
Legal Services:
Manatt Phelps & Phillips, LLP (Committee)	572,000		1,082,000		984,000		2,638,000
Greenberg Traurig, LLP (Company)	366,000		780,000		1,386,000		2,532,000
DLA Piper Rudnick Gray Cary US, LLP (co.)	84,000		217,000		—		301,000
White & Case (GFN)	—		207,000		577,000		784,000
E. Veras Consultoria, S.A (Committee)	—		127,000		95,000		222,000
Cadawalader. Wickersham & Taft, LLP (Co.)	—		113,000		—		113,000
Headrick Rizik Alvarez & Fernandez (Vendors)	—		60,000		—		60,000
Melo Guerrero (Company)	—		37,000		35,000		72,000
Jimenez Cruz Peña (Company)	—		31,000		28,000		59,000
Langa & Abinader (GFN)	—		19,000		289,000		308,000
Steel, Hector & Davis (Company)	—		—		269,000		269,000
Executive Compensation:
Retention Bonuses	—		741,000		—		741,000
	$	1,597,000	$	8,146,000	$	7,803,000	$	17,546,000

As part of the restructuring process, effective January 2004, the Company entered into an agreement for the sale of its Central American trunking assets to a group of Panamanian investors for a price of approximately $12.5 million, payable in installments. Estimated net proceeds, after transaction expenses and liabilities directly related to Central America and the payment of a portion of the proceeds to a minority partner, amounted to $10.7 million.

For the years ended December 31, 2004 and 2005, the Company generated $22.2 and $43.2 million respectively of cash flow from operations. Since the Company has not paid interest to its unsecured lenders from September 2003, interest payable as of December 31, 2004 and 2005 amounted to approximately $90.2 and $153.6 million respectively. Had the Company paid all interest on a current basis, cash flows used in operations would have been $(68.1) and $(110.4) million respectively.

At December 31, 2004 and 2005, the Company’s liabilities exceeded its total assets by approximately $195.8 and $279.2 million respectively, resulting from several factors including impairment charges of approximately $191 million recognized in the year 2003, brought about by the devaluation of the Dominican peso and the increased competition for mobile telecommunication services in the Dominican Republic.

At December 31, 2004 and 2005, the Company had indebtedness in the aggregate principal amount of $448.2 and $447.5 million respectively. The ability of the Company to pay future interest on its indebtedness and meet debt service obligations will depend on the outcome of the restructuring process, as well as the Company’s future operating performance, including the ability to increase revenues and control expenses, which in turn depends on the successful implementation of its strategy and on financial, competitive, regulatory, technical and other factors, many of which are beyond the Company’s control. Interest expense was $63.7 million for the year ended December 31, 2004 and $69.5 million for the year ended December 31, 2005.

If the restructuring is not possible, the Company’s creditors could initiate bankruptcy proceedings, most likely in the Dominican Republic, or the Company could be forced to dispose of business segments or assets at unfavorable prices.

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If the restructuring is not possible, the Company’s creditors could initiate bankruptcy proceedings, most likely in the Dominican Republic, or the Company could be forced to dispose of business segments or assets at unfavorable prices.

4Property, Plant and Equipment

A detail of property, plant and equipment at December 31, 2004 and 2005 is as follows:

	2004		2005
Operations and communications:
Land	$	9,101,411	$	8,573,661
Buildings and improvements	16,100,996		19,054,404
Furniture and equipment	4,331,723		4,068,074
Communications equipment	186,452,923		188,990,966
Transmission equipment	184,871,539		197,500,189
Other equipment	2,711,884		1,104,919
	403,570,476		419,292,213
Less accumulated depreciation	115,826,934		164,087,292
Sub-total, operations and communications	287,743,542		255,204,921
Property and equipment:
Buildings	9,751,327		9,723,465
Furniture and office equipment	6,045,887		6,003,680
Transportation equipment	7,268,996		8,421,244
Leasehold improvements	7,400,392		7,689,963
Data processing equipment	36,324,052		36,690,433
	66,790,654		68,528,785
Less accumulated depreciation	37,417,555		50,861,120
Sub-total, property and equipment	29,373,099		17,667,665
Communications equipment pending installation	4,847,925		4,578,188
Cable company equipment pending installation (a)	533,252		642,331
Equipment in transit (b)	216,495		154,354
Construction in process (c)	10,193,250		20,191,676
Property plant and equipment, net	$	332,907,563	$	298,439,135

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(a)  Communications equipment, net of allowance for obsolescence, and cable company equipment pending installation, corresponds to assets acquired for future installation into the network of the Company. These assets are recorded at average cost, which is lower than market.

(b)  Equipment in transit represents accumulated costs of equipment imported by TRICOM, S.A. and TCN, for which additional import related costs are still to be incurred.

(c)  A detail of construction in process at December 31, 2004 and 2005 is as follows:

	2004		2005
Operations and communications:
Transmission equipment	$	7,180,949	$	9,578,625
Cells	2,530,493		8,104,352
Other-property and equipment	481,808		2,508,699
	$	10,193,250	$	20,191,676

5Accounts Receivable

Changes in the allowance for doubtful accounts during the years ended December 31, 2003, 2004 and 2005 were as follows:

	2003			2004			2005
Allowance at beginning of year	$	7,763,109		$	5,152,025		$	3,138,530
Increase for the year, net (a)	1,676,649			2,296,554			3,497,686
Write-offs during the year	(4,287,733		)	(4,310,049		)	(4,519,925		)
Allowance at end of year	$	5,152,025		$	3,138,530		$	2,116,291

(a)  Until June 2003, the Company had contracted services from Recaudadora de Valores Tropical S.A. (RVT), an affiliate of the Company’s majority shareholder, GFN Corporate Ltd, engaged in managing the collection of past due accounts (see Note 6). During the years ended December 31, 2003, 2004 and 2005, the Company recognized collection recoveries from customer accounts previously written-off of $138,549, $181,433 and $276,872, respectively. These amounts are included as a reduction to selling, general and administrative expenses in the accompanying consolidated financial statements of operations, net of increase, in the allowance for doubtful accounts.

6Transactions with Related Parties

As defined in FAS 57, the Company is or was directly or indirectly related to various entities through common ownership, contractual rights and/or family ownership, as more fully set forth below.

Mr. Manuel Arturo Pellerano (“Mr. Pellerano”) together with members of his family, either directly or through their wholly-owned subsidiaries GFN Corporation, Ltd., Oleander Holdings, Inc. and Plan de Pensiones y Jubilaciones de la Compañía Nacional de Seguros (PPJ), were, at December 31, 2005,  the beneficial owners of 15,939,648 shares of the Company’s Class A Common Stock and 11,486,726 shares of the Company’s Class B Common Stock, representing 48.2% of the issued and outstanding shares of Class A Common Stock (calculated in accordance with SEC Rule 13d-3) and 60% of the issued and outstanding shares of Class B Common Stock. From 1994 through late 2003, Mr. Pellerano was the Company’s Chairman of the

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Board of Directors, President and Chief Executive Officer. He resigned from the Board of Directors in October 2003 and was reappointed in May 2004. He retains, together with members of his family, the right to appoint a majority of the members of the Board of Directors of the Company and, indirectly, the right to control selection of the Company’s management.

GFN International Investments Corp., a financial services holding company incorporated in the Cayman Islands was, at the relevant times, wholly owned and controlled by Mr. Pellerano and members of his family. GFN International Investments Corp. was, until 2003, the parent company and related parties of the following entities, among others, which were engaged in the businesses of banking, insurance, credit card issuance, securities broker-dealer and other businesses:

•Grupo Financiero Nacional, S.A., a Dominican Republic holding company (“GFN, S.A.”).

The following additional entities, among others, continue to be controlled by Mr. Pellerano and members of his family, and are therefore related parties:

•Omnimedia, a Dominican media holding company;

•Zona Franca San Isidro, a free trade zone located in the Dominican Republic;

•Ellis Portafolio, which holds certain claims against the Company.

Balances with Related Parties

A detail of balances with related companies at December 31, 2004 and 2005 is as follows:

	2004		2005
Assets:
Accounts receivable (a)	$	200,000	$	2,664
Total Assets	$	200,000	$	2,664
Liabilities:
Borrowed funds (b)	$	8,005,000	$	—
Commercial paper (c)	49,091,066		48,448,922
Accounts payable (d)	1,604,249		—
Interest payable (e)	14,879,148		24,186,485
Current portion of long term-debt (f)	25,765,272		25,356,872
Total Liabilities	$	99,344,735	$	97,992,279

(a)At December 2004, the amount of $200,000 corresponds to an account receivable arising from the sale of land by TCN to Campania Nacional de Seguros (SEGNA). At December 31, 2005 this amount includes rent receivable of $11,060 for space rented to Bancrédito Dominican Republic and $2,664 corresponds to communication services to Editora AA.

(b)At December 31, 2004, this amount include unsecured loans of letter of credit in the amount of $1,282,802 owed to Bancrédito Panama, bearing interest at rates ranging from 9.5% to 11.5% per annum; it also includes a loan owed to Bancrédito Panama in the amount of $6,601,131, bearing interest at 11.5% per annum. This loan was granted for a five-year period maturing in December 2007. The balance of $121,067 corresponds to bank overdrafts owed to Bancrédito Panama and Bancredit Cayman as of December 31, 2004. At the beginning of September 2003, Bancrédito Panama was taken over by the regulatory authorities

F-22

in Panama and is in the process of liquidation. As a result the liquidator is demanding that the loan be repaid early. At December 31, 2004 and 2005, the Company did not have any available lines of credit.

(c)At December 31, 2004 and 2005, these amounts include obligations for the issuance of commercial paper in US$ to a group of GFN’s related companies for the principal amount of $47,339,007 in both 2004 and 2005, bearing interest rates ranging from 11% to 14.93% per annum. These amounts also include the issuance of commercial paper in RD$ for the amount of RD$54,486,463 (equivalent to $1,752,059), and RD$38,680,527 (equivalent to $1,109,915), respectively, with interest rates ranging from 20% and 29% per annum in 2004 and 2005.

(d)At December 31, 2004 the amount of $1,604,249 is an account payable to SEGNA related to the land purchased in 2003.

(e)The nature of the interest payable is related to the loans described above in Notes (b) and (c).

(f)At December 31, 2004 and 2005, these amounts represent unsecured loans of $22,000,000 with GFN Capital Corporation, Ltd., a related offshore entity. Interest accrues monthly at an interest rate ranging from 11.5% to 12% per annum in 2004 and 2005, respectively. The loans mature in December 2007. The Company is not paying interest on these loans; consequently, these amounts are presented as current portion of long-term debt.

Additionally, it includes unsecured loan received from GFN S.A., a related institution, in the amount of RD$94,007,000 (equivalent to $3,025,652 in 2004 and $2,697,475 in 2005) and with a 12% annual interest rates in 2004 and 2005, and RD$22,980,000 with a 12% per annum interest rate (equivalent to $739,620 in 2004 and $659,397 in 2005). At December 31, 2004 and 2005, this loan has been classified as part of the current liabilities in the accompanying consolidated balance sheets, as result of the default in payment of interest and principal. As a result of operating losses, the Company was unable to remain in compliance with the financial covenants arising under substantially all of its long-term note agreements. The Company has been working with different creditors to restructure the existing debt.

Other Transactions with Related Parties

A detail of transactions with related parties during the years ended December 31 2003, 2004 and 2005, are as follows:

	2003			2004			2005
Operating revenues – communications service revenues (a)	$	3,147,585		$	14,939		$	157,908
Selling, general and administrative expenses:
Insurance premiums (b)	(5,890,664		)	—			—
Security services (c)	(162,498		)	—			—
Pension plan contributions (see Note 2.17)	(403,345		)	—			—
Advertising services (d)	(107,391		)	—			—
Professional services (e)	(62,618		)	—			—
Leased premises and equipment (f)	(110,540		)	—			—
Other charges and special items (g)	(4,975,023		)	(5,359,768		)	(2,423,657		)
Other income (expenses):
Interest incurred on loans (h)	(15,713,131		)	(10,083,449		)	(10,658,941		)
Interest earned (i)	1,273,239			—			—
Bank charge (j)	(122,824		)	—			—
Equipment purchased (Motorola) (k)	(1,296,840		)	(1,535,297		)	—

F-23

(a)During the year ended December 31, 2003 this amount corresponds to telecommunications services to Segna of $581,959; Editora AA of $108,313; GFN of $20,972; Banco Nacional de Crédito, S.A. of $2,424,830 and Zona Franca San Isidro of $11,511. At December 31, 2004 this amount corresponds to telecommunications services to Zona Franca San Isidro of $14,939. At December 31, 2005 this amount corresponds to telecommunication services to Zona Franca San Isidro of $17,688 and Editora AA of $140,220.

(b)During the year ended December 31, 2003 this amount represents expense for insurance premiums paid to SEGNA for property and casualty, business interruption and director and officer liability coverage.

(c)During the year ended December 31, 2003 this amount corresponds to expense for security services at all Tricom locations provided by Compañía Nacional de Seguridad, S.A. (CONASE).

(d)During the year ended December 31, 2003 this amount corresponds to expenses for material for promotions and publicity printed in Editora AA.

(e)During the year ended December 31, 2003 this amount corresponds to expenses for internal audit services paid to GFN, S.A. At that time the internal audit department was centralized in GFN, S.A.

(f)During the year ended December 31, 2003, the amount of $110,540 corresponds to rent paid for space leased from Bancredito Dominican Republic.

(g)During the years ended December 31, 2003, 2004 and 2005 these amounts correspond to payments made to Omni, T.V. arising from a contract signed between the company and Omni, T.V. to manage the relationship with international cable programmers.

(h)These interest expenses tie to the loans from commercial paper and other debt from related parties described in Note 6, balances with related parties, Letters b, c and f.

(i)During the year ended December 31, 2003 this amount corresponds to investments in certificates of deposit amounted to $4,830,530. The Company wrote-off the investment in December 31, 2003.

(j)During the year ended December 31, 2003 this amount corresponds to bank service charges related to operations with Banco Nacional de Crédito, S.A.

(k)During the years ended December 31, 2003 and 2004 these amounts relate to the purchase of telecommunications equipment that is being disclosed because Motorola owns 40% of the class B common stock of the Company.

7Certificates of Deposit and Other Investments

At December 31, 2004 and 2005 the Company had mortgage participation contracts by $986,075 and $647,693, respectively, purchased from unrelated savings and loans associations in the Dominican Republic. These contracts earned interest at rates

F-24

ranging from 5% to 10% per annum in 2004 and 2005 respectively. These investments are maintained as compensating balances for mortgage loans made by these savings and loans associations to certain officers and employees of the Company.

8Intangible Assets

There were no acquisitions of intangible assets during the years ended December 31, 2004 and 2005. The summary of changes in the Company’s intangible assets (other than goodwill) during the years ended December 31, 2003, 2004 and 2005, is as follows:

	License				Broadcasting  Contract			Total
Balances at December 31, 2002	$		6,946,978		$		—	$		6,946,978
4th Impairment charge	(4,282,337			)	—			(4,282,337			)
Balances at December 31, 2003	2,664,641				—			2,664,641
4th Impairment charge	—				—			—
Balances at December 31, 2004	2,664,641				—			2,664,641
4th Impairment charge	—				—			—
Balances at December 31, 2005	$	2,664,641			$	—		$	2,664,641

The intangible assets are determined to have indefinite useful lives due to their expected ability to generate cash flows indefinitely. The cable license is based on an agreement signed with the Dominican government, which has an indefinite life. In the case of broadcasting contracts, the contracts can be renewed automatically without additional payment.

At the fourth quarter of 2004 and 2005, the Company performed its annual impairment review for intangible assets and it was determined that there were no impairment charges for these quarters.

9Other Assets

Other assets at December 31, 2004 and 2005 consisted of the following:

	2004		2005
Deposits	$	389,815	$	386,640
Radio frequency rights, net (a)	3,073,629		2,856,702
Other (b)	421,378		121,834
	$	3,884,822	$	3,365,176

(a)           At December 31, 2004 and 2005, these amounts represent payments for frequency usage rights to expand the

F-25

Company’s cellular and PCS capacity in the Dominican Republic. For the years ended December 31, 2003, 2004 and 2005, the amortization expense corresponding to the frequency usage rights in the Dominican Republic amounted to $237,997, $227,450 and  $216,928 respectively.

At December 31, 2004 the Company transferred certain frequency rights to a third party telecommunications company in the amount of $308,706. This transaction generated revenues in the amount of $5,081,508, which is included in other income in the accompanying consolidated statement of operations.

(b)A detail of this amount is as follows:

	2004			2005
Equipment held for investment (Enron)	$	81,022		$	81,022
Other Bank Commission	340,356			40,812
	$		421,378	$	121,834

10Borrowed Funds - Banks

Funds borrowed by the Company consist of:

	2004		2005
Funds denominated in US dollars (a)	$	39,285,503	$	47,676,599
Funds denominated in Dominican pesos (b)	1,333,891		1,189,211
	$	40,619,394	$	48,865,810

(a)At December 31, 2004 and 2005 these amounts included loans made by the Central Bank of the Dominican Republic for $29,745,027 and $29,745,027 respectively, as a result of draws on stand-by letters of credit issued on behalf of the Company by Bancrédito, a financial institution that was related to Tricom at the time the letters of credit were issued and was sold in 2003 to a third party in a transaction involving the Central Bank. In that sale transaction, the Central Bank agreed to assume liability for the letters of credit. The loans made by the Central Bank accrue interest at rates ranging from 10.25% to 14% per annum. The Company has not paid interest on its unsecured debt since September 2004.

At December 31, 2004 and 2005 these amounts included a secured loan of $3,000,000; this loan is secured by transmission equipment with an approximate book value of $5.2 million and accrues interest at an annual rate of 5% per annum. These amounts also include a loan in the amount of $5,640,476 with Citibank, Dominican Republic which accrues interest at an annual rate of 10%.

At December 31, 2005, this amount include unsecured loans of letter of credit in the amount of $1,282,802 owed to Bancrédito Panama, bearing interest at rates ranging from 9.5% to 11.5% per annum; it also includes a loan owed to Bancrédito Panama in the amount of $6,601,131, bearing interest at 11.5% per annum. This loan was granted for a five-year period maturing in December 2007. The balance of $121,067 corresponds to bank overdrafts owed to Bancrédito Panama and Bancredit Cayman as of December 31, 2005. At December 31, 2005, the Company did not have any available lines of credit.

At December 31, 2004 and 2005, these amounts include unsecured loans with various banks totaled $900,000 and $1,286,096, respectively.

(b)At December 31, 2004 and 2005, these loans represented RD$41,444,000 (equivalent to $1,333,891 and $1,189,211 using the prevailing exchange rate at that date, which was RD$31.07 and $34.85, respectively, per US$1.00) bearing interest at a rate of 40% per annum.

F-26

11Commercial Paper

As of December 31, 2004 and 2005, commercial paper issued by the Company consisted of:

	2004		2005
Commercial paper in US dollars (a)	$	55,367,687	$	6,200,000
Commercial paper in US dollars-related parties (Note 6(c))	—		47,339,007
Commercial paper in Dominican pesos (b)	1,752,059		1,109,915
Total commercial paper	57,119,746		54,648,922
Less short-term commercial paper	57,119,746		54,648,922
Long-term commercial paper	$	—	$	—

(a)At December 31, 2004 and 2005, these instruments accrued interest at annual rates ranging from  8.5% to 14.93%.

(b)At December 31, 2004 and 2005, peso-denominated commercial paper consisted of RD$54,436,463 and RD$38,680,538 (equivalent to $1,752,059 and $1,109,915 using the prevailing exchange rate at that date, which was RD$31.07 and $34.85, per $1.00) respectively accruing interest at annual rates ranging between 20% and 29%. At December 31, 2004 and 2005, the Company did not have a facility for the issuance of commercial paper (see Note 6(c)).

At December 31, 2005, a portion of the commercial paper issued by the Company is held by related parties (see Note 6 (c)). All commercial paper issued by the Company and outstanding at December 31, 2004 and 2005 are due on demand. These obligations are issued through the related company “Acciones y Valores, S.A.” and through an unrelated company “Valores Profesionales, S.A.”

The following is a schedule of the maturity for such debt at December 31, 2004 and 2005:

	2004		2005
Due on demand	$	57,119,746	$	54,648,922
Total	$	57,119,746	$	54,648,922

F-27

12Capital Leases

The Company has entered into various capital lease contracts with Conaresa, a former related party that until 2003 was owned and controlled by GFN, S.A.

At December 31, 2004 and 2005, the Company had not made the lease payments due during 2004 and 2005 respectively. The contracts for capital leases provide that in case payments are not made, the lender could cancel the contracts. Due to this fact, the debt has been classified in its entirety as a current liability in the accompanying balance sheets at December 31, 2004 and 2005.

The capital lease contracts also provide for interest and penalty interest in unspecified amounts to be determined by the lessor.

Assets recorded under these capital leases consist of:

	2004			2005
Transportation	$	1,276,815		$	1,276,815
Machinery and equipment	307,748			307,748
	1,584,563			1,584,563
Less accumulated depreciation	(1,584,563		)	(1,584,563		)
	$	—		$	—

At December 31, 2004 and 2005, the fixed assets under capital leases were fully depreciated.

13Current Portion of Long-Term Debt

The outstanding debt at December 31, 2004 and 2005 was in default and consequently classified as a current liability in the Company’s balance sheet. Outstanding debt consists of the following:

F-28

	2004		2005
Senior Notes (a)	$	200,000,000	$	200,000,000
Bank loans and note payable:
Loans denominated in Dominican pesos equivalent to RD$72,085,630 at December 31, 2004. These loans are payable in fixed monthly installments and pay rates ranging from 38% to 40% per annum at December 31, 2004. These loans are secured by mortgages on the transmission and telecommunications equipment with an approximate book value of $6.4 million. During December 2003, the Company renegotiated a deferral of these payments until May 2004. The Company did not pay the corresponding installments during 2004, and the loans therefore can be called on demand. This loan was cancelled during 2005.	2,320,104		—
Loans denominated in Dominican pesos equivalent to RD$162,400,000 at December 31, 2004 and 2005, equivalent to US$5,226,907 and US$4,659,972 respectively. These loans carried annual interest rates ranging from 36% to 40% per annum at December 31, 2004 and 2005 respectively.	5,226,907		4,659,972
Loans with variable annual interest between 4.90% and 9.00% at December 31, 2004 and 2005, respectively. These loans are payable in installments up to 2011. A related party company secures these loans. Some of these loans include clauses with respect to non-compliance of payments of installments of interest and principal, maintaining the levels of assets and debts, among others. At December 31, 2003, the Company had not complied with the debt contracts and, as a result, these loans may be called on demand with the exception of the General Electric note. At December 31, 2004 and 2005, these loans were classified as current liabilities in the consolidated balance sheet.	54,491,878		59,216,917
Loans which pay interest at rates ranging between 9.5% and 15.50% per annum and at December 31, 2004 and 2005. These loans have maturities up to 2007. Some of the loans are secured by liens on telecommunications equipment and a mortgage over Real Estate (Tricom Duarte) with a book value of approximately $15.3 million at December 31, 2005. Some of these loans include clauses related to non-compliance with the timely payment of interest and principal and maintaining a minimum of assets and debts. At December 31, 2003, the Company was not in compliance with debt contracts in an amount of $38,714,515. At December 2004 and 2005 these loans were classified as current liabilities on the consolidated balance sheet	40,197,991		40,238,519
Total bank loans and note payable	102,236,880		104,115,408
Total debt	302,236,880		304,115,408
Less current portion of long-term debt	302,236,880		298,501,504
Long-term debt excluding current portion	$	—	$	5,613,904

(a)Senior Notes

On August 15, 1997, the Company issued $200,000,000 aggregate principal amount of 11- 3/8% Senior Notes due in 2004 (the “Senior Notes”). Interest on the Senior Notes is payable in semi-annual installments on March 1 and September 1 of each year.

On September 2, 2003 the Company did not pay interest due on the Senior Notes in the amount of $11.3 million. According to the terms governing the notes, the Company had a period of 30 additional days to comply with the payment of the interest. On October 2, 2003 the Company announced that it would not be able to make the interest payment. The Company commenced a discussion process with certain holders of the Senior Notes and other creditors.

F-29

The Senior Notes are senior unsecured obligations of the Company ranking pari passu in right of payment with all other existing and future senior debt, and will rank senior to any future subordinated indebtedness.

The indenture for the Senior Notes contains certain covenants that, among other things, limit the ability of the Company and its Restricted Subsidiaries, as defined in the indenture, to incur additional indebtedness and issue preferred stock, pay dividends or make other distributions, repurchase equity interests or subordinated indebtedness, engage in sale and leaseback transactions, create certain liens, enter into certain transactions with affiliates, sell assets of the Company or its Restricted Subsidiaries, engage in any business other than the telecommunications business, issue or sell equity interests of the Company’s Restricted Subsidiaries or enter into certain mergers and consolidations.

The Senior Notes are guaranteed fully, unconditionally, jointly and severally by each of the Company’s Restricted Subsidiaries, as defined in the indenture for the Senior Notes, each of which is wholly owned by the Company. Separate financial statements of each of the guarantor subsidiaries have not been presented herein because management has determined that such separate financial statements would not be material to the holders of the Senior Notes.

Summarized condensed consolidated financial information of TRICOM, S.A. (Parent Company), the subsidiary guarantors on a combined basis (GFN Comunicaciones, TRICOM Centro America, S.A., Call Tel Corporation, TRICOM USA and Subsidiaries, TRICOM Latinoamérica, S.A., TRICOM, S.A. –Panama- and TCN Dominicana, S.A.) and the subsidiary non-guarantor (TRICOM Panama, S.A. - formerly Cellular Communications of Panama, S.A. -) at December 31, 2004 and 2005 and for the years ended December 31, 2003, 2004 and 2005 is as follows (see Note 1):

Balance sheet data at December 31, 2004:

Assets	TRICOM,  S.A. Parent  Co.		Subsidiary  Guarantors		Consolidating  Adjustments			Total  Consolidated
Current assets:
Cash on hand and in banks	$	1,029,011	$	16,561,162	$	—		$	17,590,173
Accounts receivable, net	78,756,056		13,047,460		(68,104,462		)	23,699,054
Other current assets	6,039,393		897,433		—			6,936,826
Total current assets	85,824,460		30,506,055		(68,104,462		)	48,226,053
Property and equipment net	276,489,285		56,418,278		—			332,907,563
Other non-current assets	6,295,074		254,389		—			6,549,463
Total assets	$	368,608,819	$	87,178,722	$	(68,104,462	)	$	387,683,079

F-30

Liabilities and  Stockholders’ Equity	TRICOM,  S.A. Parent  Co.			Subsidiary  Guarantors			Consolidating Adjustments			Total  Consolidated
Current liabilities:
Borrowed funds - banks	$	39,719,394		$	900,000		$	—		$	40,619,394
Borrowed funds - related parties	1,399,597			6,605,403			—			8,005,000
Commercial paper and current portion of long term-debt - banks	307,239,908			3,025,652			—			310,265,560
Commercial paper and current portion of long term-debt - related parties	74,856,338			—			—			74,856,338
Current portion of capital leases	14,531,321			—			—			14,531,321
Accounts payable	21,625,149			67,914,580			(68,104,461		)	21,435,268
Other current liabilities	70,553,586			42,524,995			—			113,078,581
Total current liabilities	529,925,293			120,970,630			(68,104,461		)	582,791,462
Non-current liabilities	34,494,785			687,001			(34,469,760		)	712,026
Total liabilities	564,420,078			121,657,631			(102,574,221		)	583,503,488
Stockholders’ deficit	(195,811,259		)	(34,478,909		)	34,469,759			(195,820,409		)
Total liabilities and stockholders’ deficit	$	368,608,819		$	87,178,722		$	(68,104,462	)	$	387,683,079

Balance sheet data at December 31, 2005:

Assets	TRICOM,  S.A. Parent  Co.		Subsidiary  Guarantors		Consolidating  Adjustments				Total  Consolidated
Current assets:
Cash on hand and in banks	$	27,618,902	$	4,494,126	$		—		$	32,113,028
Accounts receivable, net	56,620,492		12,369,745		(48,613,077			)	20,377,160
Other current assets	9,423,049		1,779,803		—				11,202,852
Total current assets	93,662,443		18,643,674		(48,613,077			)	63,693,040
Property and equipment net	251,632,743		46,806,392		—				298,439,135
Restricted Cash	263,630		106,748		—				370,378
Other non-current assets	5,915,733		114,084		—				6,029,817
Total assets	$	351,474,549	$	65,670,898	$	(48,613,077		)	$	368,532,370

F-31

Liabilities and  Stockholders’ Equity	TRICOM,  S.A. Parent  Co.				Subsidiary  Guarantors			Consolidating Adjustments				Total Consolidated
Current liabilities:
Borrowed funds - banks	$		40,974,312		$	7,891,498		$		—		$	48,865,810
Commercial paper and current portion of long term-debt - banks	302,004,029				2,697,475			—				304,701,504
Commercial paper and current portion of long term-debt - related parties	73,805,794				—			—				73,805,794
Current portion of capital leases	14,531,321				—			—				14,531,321
Accounts payable	25,857,832				49,203,785			(48,613,077			)	26,448,540
Other current liabilities	90,658,192				82,383,576			—				173,041,768
Total current liabilities	547,831,480				142,176,334			(48,613,077			)	641,394,737
Non-current liabilities	82,837,556				6,051,918			(82,557,354			)	6,332,120
Total liabilities	630,669,036				148,228,252			(131,170,431			)	647,726,857
Stockholders’ deficit	(279,194,487			)	(82,557,354		)	82,557,354				(279,194,487			)
Total liabilities and stockholders’ deficit	$	351,474,549			$	65,670,898		$	(48,613,077		)	$		368,532,370

Statements of operations for the year ended December 31, 2003:

	TRICOM,  S.A. Parent  Co.			Subsidiary  Guarantors			Subsidiary  Non- Guarantor		Consolidating Adjustments			Total Consolidated
Operating revenues	$	137,463,472		$	91,701,176		$	—	$	(30,177,135	)	$	198,987,513
Operating costs	(345,453,194		)	(108,395,571		)	—		23,401,972			(430,446,793		)
Operating loss from continuing operations	(207,989,722		)	(16,694,395		)	—		(6,775,163		)	(231,459,280		)
Other expenses, net	(128,061,926		)	(2,934,635		)	—		72,296,044			(58,700,517		)
Loss from continuing operations before income taxes and discontinued operations	(336,051,648		)	(19,629,030		)	—		65,520,881			(290,159,797		)
Income taxes	(2,118,638		)	759,777			—		—			(1,358,861		)
Loss from continuing operations before discontinued operations	(338,170,286		)	(18,869,253		)	—		65,520,881			(291,518,658		)
Discontinued operations	—			(46,651,629		)	—		—			(46,651,629		)
Net loss	$	(338,170,286	)	$	(65,520,882	)	$	—	$	65,520,881		$	(338,170,287	)

F-32

Statements of operations for the year ended December 31, 2004:

	TRICOM,  S.A. Parent  Co.			Subsidiary  Guarantors			Subsidiary  Non- Guarantor		Consolidating Adjustments		Total  Consolidated
Operating revenues	$	112,540,316		$	75,640,866		$	—	$	—	$	188,181,182
Operating costs	(141,051,483		)	(88,574,599		)	—		—		(229,626,082		)
Operating loss from continuing operations	(28,511,167		)	(12,933,733		)	—		—		(41,444,900		)
Other expenses, net	(73,642,929		)	(28,969,442		)	—		42,203,357		(60,409,014		)
Loss from continuing operations before income taxes	(102,154,096		)	(41,903,175		)	—		42,203,357		(101,853,914		)
Income taxes	—			(300,182		)	—		—		(300,182		)
Net loss	$	(102,154,096	)	$	(42,203,357	)	$	—	$	42,203,357	$	(102,154,096	)

Statements of operations for the year ended December 31, 2005:

	TRICOM,  S.A. Parent  Co.			Subsidiary  Guarantors			Subsidiary  Non- Guarantor		Consolidating Adjustments		Total  Consolidated
Operating revenues	$	135,310,532		$	82,214,114		$	—	$	—	$	217,524,646
Operating costs	(146,531,995		)	(88,662,562		)	—		—		(235,194,557		)
Operating loss from continuing operations	(11,221,463		)	(6,448,448		)	—		—		(17,669,911		)
Other expenses, net	(72,152,615		)	(42,447,946		)			48,078,546		(66,522,015		)
Loss from continuing operations before income taxes	(83,374,078		)	(48,896,394		)	—		48,078,546		(84,191,926		)
Income taxes	—			817,848			—		—		817,848
Net loss	$	(83,374,078	)	$	(48,078,546	)	$	—	$	48,078,546	$	(83,374,078	)

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Statement of Cash flows for the year ended December 31, 2003:

	TRICOM,  S.A. Parent  Co.			Subsidiary  Guarantors			Subsidiary  Non- Guarantor			Consolidating  Adjustments			Total  Consolidated
Net cash provided by (used in) operating activities	$	608,997		$	7,217,067		$	(556,100	)	$	—		$	7,269,964
Net cash provided by (used in) investing activities	3,807,597			(6,138,482		)	—			2,148,000			(182,885		)
Net cash (used in) provided by financing activities	(9,963,504		)	780,326			579,294			(2,148,000		)	(10,751,884		)
Net (decrease) increase in cash on hand and in banks	(5,546,910		)	1,858,911			23,194			—			(3,664,805		)
Cash on hand and in banks at beginning of the year	5,618,403			387,612			74,288			—			6,080,303
Cash on hand and in banks at the end of the year	$	71,493		$	2,246,523		$	97,482		$	—		$	2,415,498

Statement of Cash flows for the year ended December 31, 2004:

	Tricom, S.A.Parent  Co.			Subsidiary  Guarantors			Subsidiary  Non- Guarantor		Consolidating Adjustments			Total Consolidated
Net cash provided by (used in) operating activities	$	17,563,423		$	12,108,557		$	—	$	(7,461,165	)	$	22,210,815
Net cash (used in) provided by investing activities	(13,763,536		)	3,330,496			—		7,461,165			(2,971,875		)
Net cash used in financing activities	(2,842,369		)	(1,221,896		)	—		—			(4,064,265		)
Net increase in cash on hand and in banks	957,518			14,217,157			—		—			15,174,675
Cash on hand and in banks at beginning of the year	71,493			2,246,523			—		97,482			2,415,498
Cash on hand and in banks at the end of the year	$	1,029,011		$	16,463,680		$	—	$	97,482		$	17,590,173

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Statement of Cash flows for the year ended December 31, 2005:

	Tricom, S.A.  Parent Co.			Subsidiary  Guarantors			Consolidating Adjustments		Total Consolidated
Net cash provided by (used in) operating activities	$	59,265,034		$	(16,052,864	)	$	—	$	43,212,170
Net cash used in investing activities	(26,350,788		)	(1,934,985		)	—		(28,285,773		)
Net cash (used in) provided by financing activities	(6,431,104		)	6,027,562			—		(403,542		)
Net increase (decrease) in cash on hand and in banks	26,483,142			(11,960,287		)	—		14,522,855
Cash on hand and in banks at beginning of the year	1,029,011			16,561,162			—		17,590,173
Cash on hand and in banks at the end of the year	$	27,512,153		$	4,600,875		$	—	$	32,113,028

14Stockholders’ Equity

Introduction.

The authorized capital stock of the Company consists of 55,000,000 shares of Class A common stock and 25,000,000 shares of Class B common stock.

Subject to the matters described in Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2004 (the “2004 Financial Statements”) and under “December 2002 Private Placement” below, all of the Company’s outstanding shares are duly authorized, validly issued and fully paid. Both classes of capital stock vote together as a single class, except on any matter that would adversely affect the rights of either class. The Class A common stock has one vote per share and the Class B stock has ten votes per share. The economic rights of each class of capital stock are identical.

December 2002 Private Placement.

In December 2002 the Company completed the Placement (the “Placement”) of 21,212,121 shares of Class A Common Stock, as described in Note 3 to the 2004 Financial Statements. Various related parties were involved in the Placement as described in Notes 3 and 7 to the 2004 Financial Statements. In its letter requesting initiation of the Special Committee’s (as defined in Note 3) investigation, the Company’s former independent auditor, the member firm of KPMG International in the Dominican Republic (“KPMG”) stated that the investigation should determine whether the Placement qualified to be recorded as equity on the Company’s consolidated balance sheet as at December 31, 2002. The resolutions appointing the Special Committee authorized it to, among other matters, conduct a review of the Placement to determine facts reasonably necessary to allow the Company and its advisors to determine the appropriate accounting treatment to be given to the Placement. The Special Committee Report included a report by BDO Seidman LLP, a national public accounting firm (“BDO”) that, in summary,

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stated that varying conclusions as to whether the Company properly accounted for the Placement can be reached based on different hypothetical fact scenarios. Under certain hypothetical fact scenarios, the accounting treatment of the Placement as equity would remain unchanged. Under certain alternative hypothetical fact scenarios, BDO stated that the consolidated financial statements of the Company included in its Annual Report on Form 20-F for the fiscal year ended in December 31, 2002 “should be restated to reflect the proceeds of the Placement as debt, or “mezzanine financing” (and not as “permanent equity”) if (a) the Placement and/or the conduct of the relevant parties related to the Placement could be deemed fraudulent and/or any applicable laws or regulations (including applicable SEC laws and regulations) were violated  in connection with the Placement and (b) a court of competent jurisdiction, as a remedy in litigation initiated by the SEC or a third party, has power to, and possibly could,  order and compel a rescission of the Placement.”  The Company’s management is not at this time in a position to definitively determine which, if any, of BDO’s hypothetical scenarios most closely resembles the circumstances surrounding the Placement. Determinations as to the conduct of the relevant parties involved in the Placement are inherently fact intensive, and therefore uncertain, and in certain of the relevant jurisdictions it is unclear whether or not a rescission remedy would be available based on the facts currently known to the  Company’s management. Furthermore, the Company has received advice from counsel representing its independent accounting firm questioning whether certain of the accounting literature cited by BDO in support of its rescission analysis is applicable to the circumstances surrounding the Placement.

In light of these uncertainties, and the limited records relating to the Placement available to it, the Company’s management has weighed the following factors, among others, in reaching a determination as to the appropriate accounting treatment of the Placement. On the one hand, the Company’s board minutes and stock books, the records of its transfer agent, the Company’s internal accounting records, certain resolutions of the liquidator of Bancrédito Panama (as defined in Note 6(b)), the stated purpose of the investor financing provided by Bancrédito Panama, and those records available to the Company’s management documenting the application of the proceeds of the Placement, all indicate that Class A common stock was issued in the Placement, supporting the Company’s management’s belief that the intent behind, and the effect of, the transaction was to increase stockholders’ equity. These factors would tend to indicate that the Placement should continue to qualify to be recorded as equity on the Company’s balance sheet as at December 31, 2002. On the other hand, the incomplete nature of the records of the transaction currently available to the Company’s management, in particular the lack of subscription or similar documentation establishing a legal relationship between the Company and the investors, incomplete and in some cases inconsistent records as to both the receipt and application by the Company of the proceeds of the Placement, the possible non-recourse nature of the financing provided to the investors in the Placement, the involvement of related parties in providing that financing, and suggestions that negotiation of the transactions surrounding the Placement was not in all respects at arm’s length, raise questions as to whether the Placement should continue to be recorded as equity in accordance with generally accepted accounting principles. After weighing these factors, the Company’s management has concluded that, on balance, the Placement should continue to qualify to be recorded as equity on its consolidated balance sheet as at December 31, 2002, but acknowledges that this conclusion is not beyond dispute and may change if additional information becomes available that is inconsistent with this treatment.

15Income Taxes

TRICOM, S.A. (Parent Company) and its subsidiaries operate in several jurisdictions and under different tax regimes, of which the most relevant operations are located in the Dominican Republic, the United States of America and until February 2004, Panama. Accordingly, each subsidiary must file income and other tax returns for its operations in these and other jurisdictions.

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Because of the differences in the tax legislation in each country, each of the individual subsidiaries must file separate income tax returns instead of one return on a consolidated basis.

Therefore, the information about corporate income tax expense for the years ended December 31, 2003, 2004 and 2005, respectively, represents the sum of the tax obligations of each of the consolidated subsidiaries.

The components of the Company’s provision for (benefit from) income taxes are summarized as follows:

	Current		Deferred			Total
Year ended December 31, 2003
U.S. Federal	$	—	$	(569,073	)	$	(569,073	)
Dominican Republic	2,336,999		(409,065		)	1,927,934
	$	2,336,999	$	(978,138	)	$	1,358,861
Year ended December 31, 2004
U.S. Federal	$	—	$	470,666		$	470,666
Dominican Republic	134,978		(305,462		)	(170,484		)
	$	134,978	$	165,204		$	300,182
Year ended December 31, 2005
U.S. Federal	$	—	$	(817,848	)	$	(817,848	)
Dominican Republic	—		—			—
	$	—	$	(817,848	)	$	(817,848	)

The components of deferred tax assets and liabilities are as follows:

	2003			2004			2005
Deferred tax assets:
Deferred revenues	$	92,559		$	763,164		$	1,436,260
Property, plant and equipment in the Dominican Republic	14,277,685			18,212,994			14,487,443
Net operating loss	69,888,827			113,698,471			111,711,894
Tax credit carryforward	96,369			96,369			96,369
Other	45,390
Gross deferred tax assets	84,400,830			132,770,998			127,731,966
Valuation allowance	(83,032,658		)	(132,007,834		)	(126,295,706		)
Deferred tax assets, net	1,368,172			763,164			1,436,260
Deferred tax liabilities:
Property and equipment in USA	713,360			661,795			433,895
US IRC Section 481 adjustment	327,936			386,871			470,018
Other – net	141,712			—			—
Gross deferred tax liabilities	1,183,008			1048,666			903,913
Deferred tax, net	$	185,164		$	(285,502	)	$	532,347

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At December 31, 2003, the applicable taxes of the companies in the Dominican Republic were determined based on 1.5% of gross revenues for the year ended December 31, 2003.

At December 31, 2004 and 2005, the applicable taxes of the companies in the Dominican Republic were determined based on 25% of the net taxable income for the years ended December 31, 2004 and 2005. As a result of this new tax regimen, TRICOM S.A. and TCN Dominicana S.A. were not being requested to pay taxes.

In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

At December 31, 2005, Tricom USA, the subsidiary in the United States has an unused net operating loss carry forward which for US income tax purpose may be used to offset future taxable income, if any, until 2025 and expires as follows:

Year	Amount
2013	$	561,115
2015	38,173
2021	1,337,981
2022	11,699,337
2023	15,227,395
2024	34,681,203
2025	41,566,837
Total	$	105,112,041

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16Commitments and Contingencies

A summary of commitments and contingencies at December 31, 2003, 2004 and 2005 is as follows.

(a)Commitments.

(i)  TRICOM maintains contracts with foreign entities for the traffic of overseas calls. Such contracts require each entity to obtain the necessary facilities to establish, maintain and operate its respective terminals. The cost of each contract is based upon negotiated rates, which are computed based on the amount of traffic each month. For the years ended December 31, 2003, 2004 and 2005 this cost amounted to $7,371,917, $4,883,018 and $4,379,036 respectively, and is included in the cost of sales and services in the accompanying consolidated statements of operations.

(ii)  On May 8, 1997, the Federal Communications Commission (FCC) issued an order to adopt the provisions of the Telecommunications Act of 1996 relating to the preservation and advancement of universal telephone service (the “Universal Service Order”). The Universal Service Order requires all telecommunications carriers providing interstate telecommunications services to contribute to universal service by contribution to a Order (the “Universal Service Order”). Universal Service Order contributions were assessed based upon intrastate, interstate and international end-user gross telecommunications revenue effective January 1 through December 31.

At December 31, 2003, 2004 and 2005 the Company contributed $62,268, $50,504 and $44,816 respectively, to the “Universal Service Order” on end-user telecommunications revenue of $2,298,904, $594,498 and $472,730 for the years then ended respectively. The contribution paid is included as part of selling, general and administrative expenses in the accompanying consolidated statements of operations.

(iii)  The subsidiary dedicated to cable television systems operations has contracts with television and network companies around the world for the transmission of programming content in the Dominican Republic. Such companies required monthly payments that range between $0.05 and $0.16 per subscriber in 2003, between $0.05 and $12.5 per subscriber in 2004 and 2005. The terms of these contracts fluctuate between two and three years and are renewable at the option of the parties. For the years ended December 31, 2003, 2004 and 2005 the total amount of these payments was $6,682,249, $5,359,768 and $2,423,657, respectively, which is included as part of the cost of sale and services in the accompanying consolidated statements of operations. The subsidiary had a trade agreement with Omnimedia S.A, a related party to receive publicity service in exchange of television services (advertising announcements). Part of the agreement involves managing the international cable programmers. According to management and the market practice, the cost of cable programmers is considered as a product not as a service and therefore, is not subject to the 25% income tax withholding.

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(iv)  The Company has employment agreements with certain of its executive’s officers, the terms of which expire at January 14, 2006. Such agreements provide minimum salary levels, as well as incentive bonuses that are payable if specified management goals are reached. The aggregate commitment for future salaries at December 31, 2005, excluding bonuses, is approximately $3,153,000.

(v)  The telecommunications law of the Dominican Republic (Law 153-98) requires that companies operating in this sector pay to the Instituto Dominicano de Telecomunicaciones (INDOTEL) a monthly fee equivalent to 2% of their international net income. As of December 31, 2003, 2004 and 2005 this expense amounted to $668,123, $462,165 and $487,169, respectively, which is included as part of selling, general and administrative expenses in the accompanying consolidated statements of operations.

(vi)  The Company has engaged several financial advisory firms to assist in its financial restructuring process. Currently, the Company has monthly commitments from retainer and advisory fees related to its financial restructuring in the aggregate of approximately $700,000. In addition, the Company has contingencies in the aggregate of approximately $2,000,000 for success-based advisory compensation fees upon the completion of the Company’s restructuring process.

(vii)  The subsidiary Tricom USA, Inc. has guaranteed loans made to Tricom S.A., its parent company. Two guarantees are to The International Bank of Miami as lender and Export-Import Bank of the United States for $36,002,530 on July 2000 and $20,000,000 on November 2000 respectively. The first is a five-year loan with an interest rate equal to the sum of LIBOR for the applicable period plus 2.25 percent per annum, the second has the same interest rate and the loan payment term could be from two to seven years. The outstanding balance as of year-end is $40,481,013. The third is a corporate guarantee to the Export Development of Canada for $1,122,000 on May 27, 2002 with the rate of interest of LIBOR plus 4% per annum. The loan term is 18 months to be paid in 5 consecutive semi-annual installments commencing on September 30, 2002. This loan is to be paid in three installments, the last installment is due in June 30, 2004 and the interest rate is equal to the sum of Eurodollar rate and the applicable margin. Since October 2003, TRICOM, S.A has made no interest or principal payments on any of its debt. TRICOM, S.A., is negotiating with the lenders but at this time there is no assurance that an agreement will occur.

(b)Lease Obligations.

The Company maintains operating leases for the use of office space, telecommunications centers, commercial offices, warehouse, automobiles and others. These operating leases are renewable at the end of the lease period, which is usually one year. Expenses for these leases in 2003, 2004 and 2005 amounted to approximately, $922,370, $2,005,726 and $3,640,011 respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations. The commitment for lease payments for the next five years is as follows:

Year	Amount
2006	$	2,750,000
2007	2,970,000
2008	3,207,600
2009	3,464,000
2010 and beyond	3,750,000

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(c)Legal Proceedings.

(i)  Grupo Económico Suit. In April 2004, a suit was brought by certain holders of certificates of deposit and other instruments issued by certain affiliates of Bancrédito Dominican Republic a banking institution formerly controlled by GFN, seeking to have the Company and several co-defendants (including, among others, the Central Bank of the Dominican Republic, the Leon Bank and GFN) held jointly and severally liable for amounts owed by such affiliates to the plaintiffs. Although the Court of First Instance of Santo Domingo found in favor of the plaintiffs against certain of the defendants, it also found that neither the Company nor any of its subsidiaries were liable to the plaintiffs. The court upheld the terms of the tripartite contract under which the Leon family acquired Bancrédito, and rendered judgment against parties to the tripartite contract in the amount of $156,000,000, which was subsequently reduced (upon a motion filed by the same plaintiffs) by the same judge to approximately $13,000,000. In an appeal filed by certain of the parties found liable by the Court of First Instance, the original plaintiffs sought to join the Company and the other original co-defendants to the appeal proceedings. In June 2007 the Appellate Court declined to join the Company or any of its subsidiaries to the appeal proceedings. While it is possible that this decision may be challenged by means of a motion for cassation before the Supreme Court of the Dominican Republic, the Company believes it is unlikely that it will be found liable in these proceedings.

(ii)  Bancrédito Criminal Litigation. In September 2005 a Dominican investigative judge added the Company and two of its subsidiaries as co-defendants to criminal proceedings brought by certain creditors of Bancrédito and other financial institutions formerly controlled by GFN, the Company’s principal shareholder. Certain former directors and officers of these entities were also defendants in the proceedings. The allegations against the Company and the other co-defendants included fraud, embezzlement, violations of monetary laws and money laundering. The Company was added to these proceedings without prior notice or participation in the existing proceedings.

In October 2005 an Appellate Court denied the Company’s appeal of the investigative judge’s action and in December 2005 the Supreme Court of the Dominican Republic denied the Company’s petition to reconsider the lower court’s decision. Following the Supreme Court’s decision, the Company, together with the other co-defendants, entered into settlements with the private parties that originally brought the criminal actions.

In March 2006 the Criminal Court to which the matter was remanded following the Supreme Court’s decision decided that the criminal actions, which had previously been consolidated into one action, be deconsolidated into six different matters, corresponding to the six criminal complaints originally filed. The Company was a party to only one of such matters. Subsequently the Criminal Court dismissed the public actions in four out of the six criminal complaints, including the only one to which the Company and its subsidiaries were parties. No objection to, or appeal against, this decision was filed; accordingly, all civil and criminal liability to which the Company might have been subject as a result of these allegations was extinguished. In its rulings, the Criminal Court also dismissed criminal complaints pending against Mr. Hector Castro Noboa, the Company’s Chief Executive Officer, and Ms. Rosangela Pellerano, one of the Company’s directors.

The Criminal Court did not, however, dismiss all of the complaints against Mr. Manuel Arturo Pellerano, one of the Company’s directors and the beneficial holder of a majority of the voting power of the Company’s shares. In August 2006, as part of a series of related proceedings, Mr. Pellerano was convicted by the Criminal Court of several violations

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of the Dominican Criminal Code and Monetary and Financial Law. The court sentenced each of Mr. Pellerano and a co-defendant  to three years imprisonment and ordered each of them to pay a fine of RD$1 million (approximately $31,000). The charges on which Mr. Pellerano was convicted, which the Company understands stem from Mr. Pellerano’s activities at related financial services entities and not at Tricom itself, include forgery, alteration, manipulation and concealment of banking books and records and financial statements. Mr. Pellerano’s appeal of the decision of the Criminal Court remains pending at the date of this filing.

(iii)  Claim for Cost of Interconnection Circuits. During the period commencing with the enactment of the General Telecommunications Law of 1998 and ending with Indotel’s issuance of interconnection regulations in 2002, the Company purchased from Codetel, at the Company’s sole expense, several hundred T-1, or Trunk Level 1, switches. These are digital transmission links that are necessary for interconnection between the Company’s network and Codetel’s network. In December 2002, as part of the process for the adjustment of interconnection agreements before Indotel, the Company claimed that Codetel should reimburse it for 50% of the cost of the T-1 switches it had purchased. The approximate amount of the Company’s claim is $6.8 million. Indotel rejected the Company’s claim, and an appeal before the Superior Administration Court is pending.

(iv)  False Imprisonment Claim. In August 1999, a Dominican company and two individual plaintiffs brought a claim against the Company in the Dominican courts for alleged losses and damages of up to approximately RD$200,000,000 (approximately $4,800,000) resulting from the imprisonment by Dominican authorities of the two individuals for 15 days. The plaintiffs have alleged that their imprisonment was the result of an investigation by the local district attorney and police that the Company instigated following an irregular increase in telephone traffic at certain telephone numbers. The court rejected the action for lack of evidence. The plaintiffs appealed, but the Court of Appeals also rejected their claims, and they subsequently filed a motion for cassation with the Supreme Court of Justice, which is pending. The Company does not believe that this matter will have a material adverse effect on its operations or financial position.

(v)  Uninsured Motor Vehicle Cases. Until 2003, the Company’s principal property and casualty insurance carrier was Compania Nacional de Seguros (“SEGNA”), at that time a related party. In 2003 SEGNA’s business was taken over by the Superintendence of Insurance, following which SEGNA stopped paying on certain pending motor vehicle accident coverage claims involving the Company’s vehicles. Although the Company moved its property and casualty coverage to a third party insurance carrier, it was necessary for the Company to assume direct liability for the pending claims. The Company intends to submit a claim in SEGNA’s liquidation at the appropriate time. The Company believes that the amount of potential liability likely to arise out of these claims will not exceed $1,000,000, and does not believe that these matters will have a material adverse effect on its operations or financial position.

(vi)  Ordinary Course Tort and Contract Claims. The Company is involved from time to time in various other lawsuits and legal proceedings arising in the ordinary course of its business. These claims generally relate to tort and contract actions for damages. The Company believes that the final resolution of these matters will not have a material adverse effect on its operations or financial position.

(vii)  Aircraft Lease Termination. In July 2005, the Company reached a settlement with General Electric Credit

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Corporation of Tennessee and General Electric Capital Corporation of Puerto Rico with respect to claims arising from the Company’s alleged breach of an aircraft lease agreement due to early termination in December 2003. As part of the settlement, the Company signed a 7-year $6 million 9% per annum promissory note payable in monthly installments, with the first year comprised of interest-only payments and the principal balance amortized over the remaining 6 years.

(viii)  World Access Inc. Bankruptcy. In April 2003, Tricom USA was served with asummons and complaint in an adversary proceeding arising out of the World Access, Inc. et al. bankruptcy case in the United States Bankruptcy Court for the Northern District of Illinois. The complaint alleged that transfers in the aggregate amount of approximately $488,000 were made to Tricom USA by one of the debtors, Facilicom International LLC, within the 90 days prior to the filing of the bankruptcy petition, and that the transfers were avoidable as preferential payments pursuant to the United States Bankruptcy Code. An agreement in principle to settle the matter was reached in March 2007 under which the Company will undertake to pay $87,500 to Facilicom International LLC. Final documentation of this settlement is pending.

No amounts have been recorded in the accompanying financial statements related to these legal proceedings.

(d)Dominican Tax Matters.

In June 2002, the Company received notice from the Dominican tax authority claiming that the Company was required to withhold and pay 25% of the amount of its investment in Tricom Latinoamérica, S.A. The 25% withholding tax generally applies for payments made for services rendered by non-Dominican vendors and for certain dividends. The tax authority sought RD$168.1 million (approximately $9 million at 2002 exchange rates), plus penalties and interest. The Company contested the claim, indicating that there is no requirement to withhold tax on an investment in a wholly owned subsidiary. The Company’s motion before the tax authority failed and an appeal to the Ministry of Finance was rejected. Following a subsequent appeal the Tax Court, in February 2007, ruled in the Company’s favor and rejected the tax authority’s claim. The tax authority decided not to file a motion for cassation before the Supreme Court of the Dominican Republic.

In January 2006 the Company was notified by the tax authority that it should correct its income tax return for the fiscal year ended December 31, 2004. According to the tax authority, the return sought to use prior period losses to reduce taxable income for the current year in amounts in excess of those the tax authority considered were permissible under its interpretation of the applicable tax law. In January 2006 the Company presented a petition to the tax authority requesting the elimination of this notification. In January 2007 the Company made a written request to the tax authority seeking its authorization for the Company to use up to RD$9,480,000,000 (approximately $257,216,000) of accumulated losses to offset potential income arising from the cancellation of debt within the context of the Company’s restructuring. In March 2007 the tax authority notified the Company that this authorization had been granted on the condition that any losses not used at December 31, 2007 will not be carryforward.

(e)    Potential Claims Arising from 2002 Share Placement and Bancredit Cayman Chapter 15 Proceeding.

Under SFAS 5 the Company is required to disclose certain loss contingencies and to determine whether an accrual for the

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estimated loss arising out of such contingencies should be made in its financial statements. This determination is made based on assessments as to the likelihood that the future event will confirm the loss or liability in question.

The Company’s Annual Report on Form 20-F for the year ended December 31, 2004 and the consolidated financial statements included in that report address the possibility of claims arising out of the purchase (the “Placement”) in December 2002 of shares of the Company’s Class A Common Stock by a group of investors for an aggregate purchase price of approximately $70 million. As of the filing date of this report, no claims arising out of the events relating to the Placement have been asserted in any jurisdiction in any litigation or similar proceedings brought against the Company or its subsidiaries. Nevertheless, the Company has received indications that one or more of the liquidators of the Bancrédito entities in Panama and the Cayman Islands believe that they have claims in connection with the Placement. However, the Company is unable at the present time to determine either the probability of such claims being asserted against it or the validity or amount of such claims if they are asserted. The Joint Liquidators of Bancredit Cayman have, in connection with a Chapter 15 Petition filed in the Bankruptcy Court for the Southern District of New York, served subpoenas on the Company and certain of its subsidiaries seeking documents relating to the Placement. In addition, Tricom believes that it is possible that other parties may assert claims arising out of the Placement. Claims brought on behalf of the Bancrédito entities and others could, in the aggregate, equal or substantially exceed the $70 million amount of the Placement, in particular if the claimants seek rescission of the Placement or certain related transactions. At this time the Company is not able to determine with any certainty who might assert claims, the precise nature of any claims that may be asserted, the jurisdiction in which such claims may be brought, the theories on which such claims may be based, the validity of any such claims, whether viable defenses would be available to such claims and whether any judgment or award arising out of such claims would be enforceable against the Company or its subsidiaries’ assets. Accordingly, while it is possible that the Company will in the future need to establish loss contingencies relating to the Placement for purposes of its financial statements, it does not believe that this is necessary at the present time. If such claims were brought and determined in a manner adverse to the Company, its liquidity and financial resources would be adversely affected.

(f)Confirmation Letter from Liquidator Bancredit Cayman Limited.

In response to a letter dated October 5, 2006 sent by Tricom S.A. to the liquidator of Bancredit Cayman Limited requiring documentary support related to the 2002 Private Placement, Tricom S.A. received a response letter dated November 24, 2006 from the Bancredit Cayman Limited Liquidator purporting to have a claim against the Company of  $70,000,000 in connection with the “ Private Placement “and referencing as support for the claim resolution No 056-2004 issued by the Liquidator of Bancrédito Panama S.A., which establishes that there were thirteen (13) loans issued to thirteen (13) different borrowers who invested the total amount of the loans in Tricom S.A. class A common shares. The details of the borrowers are as follows:

Name	Relationship to the  Company	Number of class A common shares	Amount of Investment
GFN, S.A.	Wholly owned and controlled by Manuel Arturo Pellerano	2,878,788	$	9,500,000
Marino A. Ginebra	Director	606,061	2,000,000
Investors believed by the Company’s management to be unaffiliated	None to the knowledge of the Company’s management	17,727,272	58,500,000
TOTAL		21,212,121	$	70,000,000

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The funds received from 2002 Private Placement were used by the Company, according to its internal records, as follows:

Bancrédito Panama, for repayment of Tricom loans, credit lines, letters of credit and past due interest	$	35,582,461
Bancredit Cayman, for repayment of Tricom and Telecable loans, over drafts and past due interest	9,846,384
Bancrédito Domican Republic, for repayment of Tricom and Telecable loans, credit lines, overdrafts and letters of credit	16,757,543
Segna, for repayment of Tricom loans and payment of premium on directors and officers insurance policy	4,464,035
Conaresa, for payment of past due amounts owed by Tricom	1,754.656
ACYVAL finder’s fee	1,400,000
Other issuance costs	194,921
TOTAL	$	70,000,000

The mentioned resolution of the liquidator of Bancrédito Panama suggests that, $ 20,964,510.71 of the funds loaned to the investors in the Placement were never turned over to Bancredit Cayman Limited and acknowledges a claim for such amount owed by Bancrédito Panama to Bancredit Cayman Limited. Nevertheless, there is not sufficient evidence or documentation to support the $70,000,000 claim per the Bancredit Cayman Limited Liquidator or to justify a contingency accrual in

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the 2004 and 2005 financial statements. Under SFAS 5 (see Note 16 (e)) it is possible that the Company will in the future need to establish loss contingencies relating to the Placement, but, at this time the Company’s management does not believe that is necessary.

(g)Potential Claims Arising from Conaresa Leases.

According to SFAS 5, if the conditions for the accrual of a loss contingency are not met but a loss is nevertheless considered probable or reasonably possible, financial statement disclosure of the loss contingency is required. The disclosure should contain a description of the nature of the loss contingency and the range of possible loss, or include a statement that an estimate of the loss cannot be made.

Between 1999 and 2001, the Company entered into a series of capital leases with Compañia Nacional de Arrendamientos, S.A. (“Conaresa”), at that time a related party. The entity was sold to Banco Leon during 2003 in a transaction also involving the Central Bank of the Dominican Republic. These lease agreements provide for the lease to the Company of telecommunications equipment, automobiles, and other fixed assets.

The installments payable under the above-mentioned lease agreements include lease rental payments and other expenses such as taxes and fees. The lease agreements also provide for the payment of penalty (moratorium) interest on overdue balances, to be calculated at a rate established by Conaresa. No fixed or determinable rate is specified; rather, the amount and conditions of penalty interest can be unilaterally set by Conaresa.

In June 2005, the Company received a payment opposition from GFN, freezing in the Company’s hands any payments or other amounts owed by the Company to Conaresa, up to an amount of $38.7 million (RD$1.349 billion) (double the amount of GFN’s claim against Conaresa, as is customary in the case of payment oppositions under Dominican law). When an entity receives a payment opposition addressed to one of its creditors, the entity in question must refrain from making any payments in violation of the payment opposition (as otherwise it may become liable for damages to the party who served the opposition) until it is lifted by means of a court order or as a result of a settlement between the conflicting parties. In May 2007, the Company received two further notices under which (i) Artag Meridian Ltd., an entity related to GFN, advised that it had acquired GFN’s aforesaid claims; and (ii) the above-mentioned opposition against Conaresa was reiterated, this time by Artag Meridian, as GFN’s assignee. In July 2007 the Company was notified that a court ruling had lifted these payment oppositions. Subsequently, Artag Meridian appealed the court’s ruling and issued a new payment opposition seeking to freeze any payments to Conaresa.

For the foregoing reasons, at this time the Company is prevented from making any payments to Conaresa. Furthermore, the Company has not established any accrual for penalty interest that might arise out of these lease agreements because it believes that any claim based on the lease provision described above would be without merit. Nevertheless, there can be no assurance that any legal proceedings on this issue would be resolved in the Company’s favor. Accordingly, while it is possible that the Company may in the future need to establish a loss contingency relating to penalty interest arising out of these lease agreements, it does not believe that this is necessary at the present time.

17Business and Credit Concentration

In the normal course of business, the Company has accounts receivable from carriers. Although the Company’s exposure to credit risk associated with non-payment by these carriers is affected by conditions or occurrences within the industry, most of

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these receivables are due from large, well-established companies. The Company does not believe that this concentration of credit risk represents a material risk of loss.

18Legal Reserve

Article 58 of the Code of Commerce of the Dominican Republic requires all companies to segregate at least 5% of their net earnings as a legal reserve until such reserve equals 10% of its paid-in capital as disclosed in the Consolidated Statements of Stockholders’ Deficit. This reserve is not available for distribution as dividend, except in case of the dissolution of the corporation.

19Stock Option Plan

On May 4, 1998, the Company initiated a Long-term Incentive Plan (the Plan), in which certain employees could be granted options to purchase shares of the Company’s common stock. The Plan is administered by the Board of Directors of the Company and has the authority to determine which employees will participate in the Plan.

The Plan authorizes grants of options to purchase up to 750,000 authorized Company shares. Stock options are granted with an exercise price equal to the stock’s fair market value at the date of grant. All stock options have a term of ten-years and become exercisable after one and three years from the date of grant.

At December 31, 2004 and 2005, there were 500,870 and 586,948 additional shares available for grant under the Plan, respectively.

Changes in the number of shares subject to option are summarized as follows:

	Options		Weighted Average Exercise Price
Balance December 31, 2002	411,037		$	7.11
Surrendered	(73,446	)	7.58
Balance, December 31, 2003	337,591		7.00
Surrendered	(88,461	)	7.61
Balance, December 31, 2004	249,130		6.79
Surrendered	(86,078	)	7.00
Balance, December 31, 2005	163,052		$	6.68

In 2001 the Board of Directors approved a stock option re-pricing pursuant to which the Company’s employees could elect to cancel granted options in exchange for new options with an exercise price of $7.00, which was the Company’s common stock price on the New York Stock Exchange at the moment. Approximately 520,000 options were eligible for re-pricing, of which the Company cancelled 453,130 options and granted 241,994 options.

The number of re-priced options was also reduced proportionately. All other conditions were unchanged. Effective July 1, 2000, the FASB issued Financial Interpretation No. 44 (FIN 44) which amended APB 25 and requires “variable” accounting for all stock option re-pricing granted before six months of the cancelled date. As a result, these options will require variable accounting until they are exercised, cancelled, forfeited or expired.

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Under variable accounting, compensation expense must be measured by the difference between the exercise price and the market price of the Company’s stock at each reporting period amortized over the vesting period. The effect of the application of FIN 44 during  2003, 2004 and 2005 was not significant.

Exercise prices of options outstanding at December 31, 2004 and 2005 ranged from $3 to $16 per share. The following table provides certain information with respect to stock options outstanding at December 31, 2004 and 2005:

	2004
	Options Outstanding				Options Exercisable
Range of  Exercise Price	Number Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Weighted Number Exercisable	Average Exercise Price
$3.00- $5.00	7,000	$	3.46	7.26	1,875	$	3.65
$5.01 - $7.00	240,130	6.81		6.22	72,894	6.77
$9.01- $16.00	2,000	16.00		6.00	750	16.00
	249,130	$	6.79	6.25	75,519	$	6.79

	2005
	Options Outstanding				Options Exercisable
Range of  Exercise Price	Number Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Weighted Number Exercisable	Average Exercise Price
$3.00 - $5.00	7,000	$	3.46	7.26	2,625	$	3.46
$5.01 - $7.00	154,052	6.70		6.14	48,629	6.65
$ 7.01 - $9.00	—	—		—	—	—
$9.01 - $16.00	2,000	16.00		6.00	750	16.00
	163,052	$	6.68	6.19	52,004	$	6.62

The weighted-average fair value at date of grant for options granted during, 2004 and 2005 were $0.60 and $0, respectively and were estimated using the Black-Scholes option valuation model with the following weighted-average assumptions.

	2004	2005
Expected life in years	6.25	6.19
Interest rate	4.27	4.29
Volatility	100.00	100.00
Expected dividends	—	—

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20Fourth Quarter Results

During the fourth quarter of 2003, the Company recognized expenses of approximately $191 million as a result of the impairment of long-lived assets, intangible assets and goodwill based on the requirements of SFAS 142 and 144. Additionally, in the last quarter of 2003, the Company recognized an impairment loss for discontinued operations of approximately $38.6 million related to the Central America operations.

During the fourth quarter of 2004, the Company recognized approximately $17.4 in depreciation expenses to reduce the useful life of some Long-Lived Assets (see Note 2.8). The company did a survey in the telecommunications market and determined that the useful lives of some assets were not reasonable.

During the fourth quarter of 2005, the company performed its annual impairment review and it was determined that no impairment charges were necessary.

21Segment Information

The Company has adopted Financial Accounting Standards Board Statement No. 131, “Disclosures about Segment of an Enterprise and Related Information”, which establishes standards for reporting information about a company’s operating segments.

Beginning in 2003, the Company changed its income statement reporting presentation in order to more accurately align its core product and service segments with how management evaluates its consolidated results of operations and to simplify the reading and understanding of its financial information, as well as facilitate benchmark comparisons with other telecommunications companies globally. As a result, certain amounts in the 2002 consolidated financial statements and notes to the consolidated financial statements have been reclassified to conform to the new presentation.

The Company has divided its operations into six reportable segments, which include five core business reportable segments based upon similarities in revenue generation, cost recognition, marketing and management of its businesses. The Company’s five core business reportable segments are: Long Distance, Domestic Telephony, Mobile, Cable and Data and Internet. The Company’s six reportable segment corresponds to other revenues that are not generated from its core businesses.

The reporting segments follow the same accounting policies used for the Company’s consolidated financial statements and described in the summary of significant accounting policies. Management measures and evaluates reportable segments based on several factors, of which revenues and operating income (loss) are the primary financial measures.

The segments and a description of each are as follows:

•Long distance, which represents international long distance traffic generation and termination services, including those derived from the Company’s U.S.-based wholesale carrier and prepaid calling card operations, as well as outbound international and domestic long distance calls generated by the Company’s retail call centers and prepaid cards sold within the Dominican Republic;

•Domestic telephony, which represents local exchange services in the Dominican Republic;

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•Mobile, which represents wireless communication services in the Dominican Republic, including cellular and PCS services and paging;

•Cable, which represents cable television basic and expanded programming services and other related services, including advertising sales to national advertisers on non-broadcast channels the Company carries over its cable communications systems;

•Data and Internet, which represents high speed broadband data transmission and Internet connectivity services, including traditional dial-up connections, dedicated lines, private networks, frame relay, digital subscriber lines, or xDSLs; and

•Other segments, which represents all of the Company’s non-core business revenues.

Geographic

	2003
	United States			Dominican Republic			Discontinued Operations – Central America			Elimination (a)			Consolidated
Long distance	$	77,559,120		$	44,099,843		$	—		$	(29,571,116	)	$	92,087,847
Others	557,420			107,005,929			—			(663,683		)	106,899,666
Total revenues from external customers	$	78,116,540		$	151,105,772		$	—		$	(30,234,799	)	$	198,987,513
Net loss before income tax minority interest and discontinued operations	$	(12,794,736	)	$	(277,365,061	)	$	—		$	—		$	(290,159,797	)
Income tax	569,074			(1,927,935		)	—			—			(1,358,861		)
Net loss before discontinued operations	(12,225,662		)	(279,292,996		)	—			—			(291,518,658		)
Discontinued operations	—			—			(46,651,629		)	—			(46,651,629		)
Net loss	$	(12,225,662	)	$	(279,292,996	)	$	(46,651,629	)	$	—		$	(338,170,287	)
Identifiable assets (include long-lived assets)	$	40,491,094		$	441,509,800		$	10,661,300		$	(53,817,210	)	$	438,844,984

	2004
	United States			Dominican Republic			Discontinued Operations – Central America		Elimination (a)			Consolidated
Long distance	$	61,156,846		$	33,503,473		$	—	$	(22,651,323	)	$	72,008,996
Others	832,908			116,028,939			—		(689,661		)	116,172,186
Total revenues from external customers	$	61,989,754		$	149,532,412		$	—	$	(23,340,984	)	$	188,181,182
Net loss before income tax	$	(36,665,106	)	$	(65,188,808	)	$	—	$	—		$	(101,853,914	)
Income tax	(470,666		)	170,484			—		—			(300,182		)
Net loss	$	(37,135,772	)	$	(65,018,324	)	$	—	$	—		$	(102,154,096	)
Identifiable assets (include long-lived assets)	$	41,068,670		$	414,718,871		$	—	$	(68,104,462	)	$	387,683,079

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	2005
	United States			Dominican Republic			Discontinued Operations – Central America		Elimination (a)			Consolidated
Long distance	$	61,917,543		$	33,744,587		$	—	$	(25,041,660	)	$	70,620,470
Others	992,148			146,406,223			—		(494,195		)	146,904,176
Total revenues from external customers	$	62,909,691		$	180,150,810		$	—	$	(25,535,855	)	$	217,524,646
Net loss before income tax	$	(46,539,433	)	$	(37,652,493	)	$	—	$	—		$	(84,191,926	)
Income tax	817,848			—			—		—			817,848
Net loss	$	(45,721,585	)	$	(37,652,493	)	$	—	$	—		$	(83,374,078	)
Identifiable assets (include long-lived assets)	$	29,244,099		$	411,434,686		$	—	$	(72,146,415	)	$	368,532,370

(a)Revenues represent the elimination of the revenues between subsidiaries and the Company. Identifiable assets represent eliminations of inter-company accounts and investments in common stock between TRICOM, S.A. (Parent Company) in the Dominican Republic and the subsidiaries in United States and Central America.

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Products and Services

	2003
	Long Distance			Domestic Telephony			Mobile			Cable			Data and Internet			Other (b)			Consolidated
Revenues from external customers	$	92,087,847		$	59,475,203		$	29,231,686		$	13,584,637		$	4,486,692		$	121,448		$	198,987,513
Inter-segment revenues	—			3,847,892			2,868,341			—			—			—			6,716,233
Total revenues	92,087,847			63,323,095			32,100,027			13,584,637			4,486,692			121,448			205,703,746
Reconciling items intersegment revenues	—			(3,847,892		)	(2,868,341		)	—			—			—			(6,716,233		)
Total consolidated revenues	$	92,087,847		$	59,475,203		$	29,231,686		$	13,584,637		$	4,486,692		$	121,448		$	198,987,513
Net earnings (loss) before income tax	$	(18,957,719	)	$	(77,281,257	)	$	(167,943,116	)	$	(6,735,330	)	$	(19,363,823	)	$	121,448		$	(290,159,797	)
Income tax	(564,440		)	(718,173		)	(226,475		)	190,703			(40,476		)	—			(1,358,861		)
Net (loss) earnings before discontinued operations	(19,522,159		)	(77,999,430		)	(168,169,591		)	(6,544,627		)	(19,404,299		)	121,448			(291,518,658		)
Loss from discontinued operation	—			—			(46,651,629		)	—			—			—			(46,651,629		)
Net (loss) earnings	$	(19,522,159	)	$	(77,999,430	)	$	(214,821,220	)	$	(6,544,627	)	$	(19,404,299	)	$	121,448		$	(338,170,287	)
Identifiable assets	$	62,382,511		$	229,060,042		$	34,558,200		$	51,899,330		$	575,928		$	60,368,973		$	438,844,984
Interest revenues	$	97,051		$	785,429		$	152,161		$	109,282		$	18,365		$	41,542		$	1,203,830
Interest expenses	$	(5,284,949	)	$	(42,770,544	)	$	(8,285,948	)	$	(5,950,956	)	$	(1,000,087	)	$	(2,262,011	)	$	(65,554,495	)
Depreciation expense	$	(5,647,733	)	$	(45,706,509	)	$	(8,854,734	)	$	(6,359,457	)	$	(1,068,738	)	$	(2,417,283	)	$	(70,054,454	)
Capital expenditure	$	398,354		$	2,592,634		$	2,924,907		$	4,545,645		$	324,886		$	—		$	10,786,426

	2004
	Long Distance			Domestic Telephony			Mobile			Cable			Data and Internet			Other (b)			Consolidated
Revenues from external customers	$	72,008,996		$	64,973,871		$	32,123,985		$	13,651,113		$	5,354,729		$	68,488		$	188,181,182
Intersegment revenues	—			3,527,942			2,252,883			—			—			—			5,780,825
Total revenues	72,008,996			68,501,813			34,376,868			13,651,113			5,354,729			68,488			193,962,007
Reconciling items intersegment revenues	—			(3,527,942		)	(2,252,883		)	—			—			—			(5,780,825		)
Total consolidated revenues	$	72,008,996		$	64,973,871		$	32,123,985		$	13,651,113		$	5,354,729		$	68,488		$	188,181,182
Net (loss) earnings before income tax	$	(32,540,216	)	$	(54,274,468	)	$	(8,301,760	)	$	(5,238,069	)	$	(1,567,889	)	$	68,488		$	(101,853,914	)
Income tax	(470,666		)	—			—			170,484			—			—			(300,182		)
Net (loss) earnings	$	(33,010,882	)	$	(54,274,468	)	$	(8,301,760	)	$	(5,067,585	)	$	(1,567,889	)	$	68,488		$	(102,154,096	)
Identifiable assets	$	61,817,191		$	195,559,882		$	30,383,936		$	42,942,282		$	1,797,649		$	55,182,139		$	387,683,079
Interest revenues	$	33,230		$	64,026		$	39,524		$	83,658		$	2,338		$	—		$	222,776
Interest expenses	$	(9,380,827	)	$	(32,327,083	)	$	(15,728,096	)	$	(5,320,763	)	$	(941,053	)	$	—		$	(63,697,822	)
Depreciation expense	$	(13,118,393	)	$	(46,227,019	)	$	(5,831,811	)	$	(8,111,033	)	$	(157,968	)	$	(1,580,156	)	$	(75,026,380	)
Capital expenditure	$	298,169		$	6,441,058		$	3,991,082		$	717,291		$	881,475		$	948,190		$	13,277,265

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	2005
	Long Distance			Domestic Telephony			Mobile			Cable			Data and Internet			Other (b)			Consolidated
Revenues from external customers	$	70,620,470		$	84,071,137		$	35,485,447		$	19,304,412		$	7,952,623		$	90,557		$	217,524,646
Intersegment revenues	—			3,849,016			2,659,182			—			—			—			6,508,197
Total revenues	70,620,470			87,920,153			38,144,629			19,304,412			7,952,623			90,557			224,032,843
Reconciling items intersegment revenues	—			(3,849,016		)	(2,659,182		)	—			—			—			(6,508,197		)
Total consolidated revenues	$	70,620,470		$	84,071,137		$	35,485,447		$	19,304,412		$	7,952,623		$	90,557		$	217,524,646
Net (loss) earnings before income tax	$	(26,154,009	)	$	(51,303,885	)	$	(5,931,361	)	$	(2,356,962	)	$	1,463,734		$	90,557		$	(84,191,926	)
Income tax	817,848			—			—			—			—			—			(817,848		)
Net (loss) earnings	$	(25,336,161	)	$	(51,303,885	)	$	(5,931,361	)	$	(2,356,962	)	$	1,463,734		$	90,557		$	(83,374,078	)
Identifiable assets	$	45,520,496		$	181,818,354		$	34,221,999		$	33,781,140		$	2,436,099		$	70,754,282		$	368,532,370
Interest revenues	$	104,803		$	457,523		$	65,522		$	68,719		$	1,479		$	—		$	698,046
Interest expenses	$	(18,226,825	)	$	(44,170,647	)	$	(6,708,543	)	$	(295,704	)	$	(159,419	)	$	—		$	(69,561,138	)
Depreciation expense	$	(8,499,413	)	$	(37,801,565	)	$	(6,892,403	)	$	(8,015,984	)	$	(403,037	)	$	(211,542	)	$	(61,823,944	)
Capital expenditure	$	1,608,404		$	10,859,830		$	9,160,876		$	1,623,548		$	1,285,049		$	4,086,449		$	28,624,156

(b)Other identifiable assets include administrative/corporate assets which are not revenue generating. Also includes construction in process and communication equipment pending installation, which at December 31, had not been placed in service and were not specifically associated with any business segment. Other remaining assets do not meet any quantifiable test for determining reportable segments.

22Discontinued Operations

During the last quarter of 2003, the Company began negotiating with various Panamanian groups for the sale of its assets located in Panama, Salvador and Guatemala, which at December 31, 2003 had a book value of $49,228,323. The net sale price of these assets was $10,661,300. The sale was completed in January 2004. As a result of sale, the Company recognized an impairment loss on assets held for sale amounting to $38,567,023, which is presented as part of discontinued operations in the consolidated statements of operations for the year ended December 31, 2003.

As result of the sale, in 2003 the Company reclassified its prior period-consolidated financial statements to reflect the operations in Central America as discontinued operations.

Summarized financial information for Central America operations (discontinued operations) is set forth below:

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	2003			2004	2005
Revenues	$	6,202,277		—	—
Operating loss	$	(47,079,031	)	—	—
Net loss	$	(46,651,629	)	—	—

The effect of discontinued operations does not have any income tax effect for purpose of the consolidated financial statements.

23New Accounting Standards

In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (VIE), an interpretation of ARB No. 51. This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. The Interpretation applies immediately to variable interests in variable interest entities created after January 31, 2003, and to variable interests in variable interest entities obtained after January 31, 2003. The application of this Interpretation is not expected to have an effect on the Company’s consolidated financial statements. The Interpretation requires certain disclosures in financial statements issued after January 31, 2003 if it is reasonably possible that the Company will consolidate or disclose information about variable interest entities when the Interpretation becomes effective.

In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46, Consolidation of Variable Interest Entities, which was issued in January 2003. The Company will be required to apply FIN 46R to variable interests in VIEs created after December 31, 2003. For variable interests in VIEs created before January 1, 2004, the Interpretation will be applied beginning on January 1, 2005. For any VIEs that must be consolidated under FIN 46R that were created before January 1, 2004, the assets, liabilities and no controlling interests of the VIE initially would be measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change.  If determining the carrying amounts is not practicable, fair value at the date FIN 46R first applies may be used to measure the assets, liabilities and no controlling interest of the VIE. The application of this interpretation is not expected to have an effect on the Company’s consolidated financial statements of the year 2004.

FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, was issued in May 2003. This Statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. The Statement also includes required disclosures for financial instruments within its scope. For the Company, the Statement was effective for instruments entered into or modified after May 31, 2003 and otherwise will be effective as of January 1, 2004, except for mandatory redeemable financial instruments. For certain mandatory redeemable financial instruments, the Statement will be effective for the Company on January 1, 2005. The effective date has been deferred indefinitely for certain other types of mandatory redeemable financial instruments. The Company currently does not have any financial instruments that are within the scope of this Statement.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Errors Corrections. This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial

F-54

Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. This Statement improves financial reporting because its requirement to report voluntary changes in accounting principles via retrospective application, unless impracticable, enhances the consistency of financial information between periods. That improved consistency enhances the usefulness of the financial information, especially by facilitating analysis and understanding of comparative accounting data. See Note 2.23 for the effect of this Statement on the Company’s consolidatedfinancialstatements.

24Fair Values of Financial Instruments

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments at December 31, 2004 and 2005. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. Amounts in parentheses represent liabilities.

	2004						2005
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalents	$	17,590,173		$	17,590,173		$	32,113,028		$	32,113,028
Accounts receivable, net	23,699,054			23,699,054			20,377,160			20,377,160
Certificates of deposit and other Investment	986,076			986,076			647,692			647,692
Restricted Cash	—			—			370,378			370,378
Borrowed funds – banks and related parties	(48,624,394		)	(48,624,394		)	(48,865,810		)	(48,865,810		)
Accounts payable	(21,435,268		)	(21,435,268		)	(26,448,540		)	(26,448,540		)
Interest payable to banks and related parties	(90,245,976		)	(90,245,976		)	(153,626,252		)	(153,626,252		)
Other liabilities and deferred revenues	(8,265,581		)	(8,265,581		)	(7,710,376		)	(7,710,376		)
Accrued expenses	(14,567,024		)	(14,567,024		)	(11,705,140		)	(11,705,140		)
Commercial paper – banks and related parties	(57,119,746		)	(57,119,746		)	(54,648,922		)	(54,648,922		)
Capital leases	(14,531,321		)	(14,531,321		)	(14,531,321		)	(14,531,321		)
Long-term debt – banks and related parties	(128,002,152		)	(128,002,152		)	(129,472,280		)	(129,472,280		)
Long-term debt – senior notes	(200,000,000		)	(110,000,000		)	(200,000,000		)	(110,000,000		)

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The following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash on hand and in banks, investments in certificates of deposit and other investment, notes payable to banks and related parties, accounts payable, other liabilities in 2004 and 2005, the carrying amounts approximate fair value because of the short maturity of these instruments. Accounts receivable are adjusted by their valuation allowance and, therefore, are presented at realizable value that approximates fair value.

The fair value of the value of the Company’s publicly traded 11-3/8% Senior Notes, shown above, are based on quoted market prices. The fair values of the Company’s non-traded debt in 2005, also shown above, was estimated by discounting the future cash flows of each instrument at rates offered to the Company for similar debt instruments by the Company’s bankers at that time.

At December 31, 2005, the Company was engaged in discussions with its principal lenders in an effort to effect a restructuring of its indebtedness. These discussions and negotiations focused on, among other things, the level of debt to be issued by the Company to its creditors and rates of interest, the amount and structure of any equity-linked instrument to be issued to lenders and the extent, if any, to which any part of the new debt obligations would be collateralized.

Because the Company’s restructuring plans remain subject to significant uncertainties and no funding sources are available until the restructuring process is concluded, management believes that it is not practicable at December 31, 2005 to estimate reasonably the fair values of interest payable, accrued expenses (provision of terminating operating lease) of non-traded debts, including amounts owed to banks and related parties, commercial paper, capital leases, and long-term debt to banks and relates parties. At December 31, 2005 the detail of these amounts are as follow:

Description	Carrying Amount			Interest Rate		Maturity
Interest payable	$	(153,626,252	)	—		Demand
Accrued expenses	$	(11,705,140	)	—		Demand
Commercial paper	$	(54,648,922	)	8.5% - 26	%	Demand
Capital leases	$	(14,531,321	)	12.0% - 12.875	%	Demand
Long-term debt – banks and related parties	$	(129,472,280	)	3.8% - 40	%	Demand
Long-term debt – senior notes	$	(200,000,000	)	11.375	%	Demand

25Impairment of Long-Lived Assets

During the year ended December 31, 2003, the Company recorded asset impairment charge of $191,284,301 in the consolidated statements of operations. Included in the impairment charge was $165,087,637 for tangible assets and $26,196,664 for intangible assets (including goodwill). Refer to Note 9 for details of the intangible assets impairment charges.

F-56

The impairment charges for tangible assets in 2003 are attributable to cellular assets (mobile segment) for $151,369,075 and data and Internet (segment) for $13,718,292, based on the deterioration of the telecommunications business in the Dominican Republic, which has been affected by a 84% devaluation of the Dominican peso with respect to the United States dollar (USD) in 2003. The USD is the functional currency of the Company. Also the Company has been impacted by increased competition for mobile telecommunication services and, in the case of data and Internet assets the Dominican Government cancelled a contract for Internet services to the public schools, which impacted the revenues generated for the related assets. The Company assessed the recoverability of certain long-lived assets in conformity with Statement of Financial Accounting Standard No. 144. The Company was required to reduce the carrying value of the assets to fair value and recognized an asset impairment charge because the carrying value of the affected assets exceeded the projected future discounted cash flows of these assets. Fair value is generally determined using a discounted cash flow analysis. The impairment charge is included as part of assets impairment in the accompanying consolidated statements of operations for the year ended December 31, 2003.

The Company’s management reviews the estimated useful lives of its fixed assets. This review during 2003 indicated those actual lives for certain asset categories generally were longer than the useful lives used for depreciation purposes in the Company’s financial statements. As a result, the Company revised the estimated useful lives of certain categories of property, principally building, improvements communication, office, production, transmission equipments, hardware and other. The effect of this change during 2004 increased accumulated depreciation by $17.4 million approximately.

The change in estimates of the useful lives of fixed assets was based on comparison of the Company’s useful lives with other companies’ useful lives of certain machinery and equipment. The Company made these changes to better reflect the estimated periods during which such assets will remain in service.

26De-listing of American Depositary Shares and Termination of Deposit Facility

On May 11, 2004, the New York Stock Exchange, Inc. (“NYSE”) determined to suspend trading and pursue delisting of our ADSs, ticker symbol “TDR”. On May 19, 2004, our ADSs, began trading on the OTC (over-the-counter) Bulletin Board (“OTCBB”), under the symbol “TRICY.OB”. On July 25, 2004, the OTCBB suspended trading of our ADSs. Thereafter, our ADSs were traded on the “Pink Sheets” service under the symbol “TRICY.PK”.

27Subsequent Events

On December 2005, the Congress of the Dominican Republic modified some articles of tax Law in connection with the entrance of the Free Trade Agreement with the United States and Central America (DR-CAFTA). This reform took place at January 1^st, 2006.

The articles mainly affected by the Reform, were numbers II, III and IV related to the Income Tax (ISR). The corporative income tax rate increased from 25% to 30%, to be applied in 2006 at 30%, 2007 at 29%, 2008 at 27% and 2009 at 25%.

Value Addvaloren Tax (ITBIS): The base of the tax was extended, including new products and services.

Selective tax to the Consumption (ISC): The tax rate increased from 26% to 32.5%. The new tax rate for internal consumptions is 13%.

Equally, the article V was added to institute an annual tax rate to the assets, equivalent 1% of the total assets of entities, as well as modification to the tax rate to real estate property, to banking transactions and taxes to fossil fuels.

F-57

Another important aspect of the Reform was the modification of article 287 (Loss Carry Forward). According to this article, the companies will be able to compensate their Loss Carry Forward with future taxable income, in a term of 5 years, base on 20% of the losses during the first three years and 80% and 70% of taxable income in forth and fifth years respectively.

F-58

EX-8.1

Exhibit 8.1

List of Significant Subsidiaries

The following table lists the Registrant’s significant subsidiaries, as defined in Rule 1-02(w) of Regulation S-X, as at December 31, 2005. The table includes the legal name of the subsidiary and its jurisdiction of incorporation:

Name

Call Tel Corporation (Panama)

GFN Comunicaciones, S.A. (Dominican Republic)

TCN Dominicana, S.A. (Dominican Republic)

Tricom Centroamérica, S.A. (Panama)

Tricom USA, Inc. (Delaware)

EX-12.1

Exhibit 12.1

Certification of Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act Of 2002

I, Hector Castro Noboa, certify that:

1.I have reviewed this annual report on Form 20-F of Tricom, S.A. (the “Company”);

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 Company as of, and for, the periods presented in this annual report;

4.The Company’s other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) for the Company and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,  to ensure that material information relating to the Company, 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 Company’s disclosure controls and procedures and presented in this annual report our conclusion about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

c)disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent function):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Dated: October 29, 2007
	/s/ HECTOR CASTRO NOBOA
	Hector Castro Noboa
	Chief Executive Officer

EX-12.2

Exhibit 12.2

Certification of Vice President of Finance and Administration

Pursuant To Section 302 of the Sarbanes-Oxley Act Of 2002

I, Erwin Mendez, certify that:

1.I have reviewed this annual report on Form 20-F of Tricom, S.A. (the “Company”);

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 Company as of, and for, the periods presented in this annual report;

4.The Company’s other certifying officers and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) for the Company and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,  to ensure that material information relating to the Company, 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 Company’s disclosure controls and procedures and presented in this annual report our conclusion about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

c)disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent function):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Dated:  October 29, 2007
	/s/ ERWIN MENDEZ
	Erwin Mendez
	Vice President, Finance & Administration

EX-13.1

Exhibit 13.1

Certification Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the accompanying Annual Report on Form 20-F of Tricom, S.A. (the “Company”) for the fiscal year ended December 31, 2005 (the “Periodic Report”), I, Hector Castro Noboa, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge the Periodic Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ HECTOR CASTRO NOBOA
Dated: October 29, 2007	Hector Castro Noboa
	Chief Executive Officer

EX-13.2

Exhibit 13.2

Certification Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the accompanying Annual Report on Form 20-F of Tricom, S.A. (the “Company”) for the fiscal year ended December 31, 2005 (the “Periodic Report”), I, Erwin Mendez, Vice President, Finance & Administration of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge the Periodic Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ ERWIN MENDEZ
Dated: October 29, 2007	Erwin Mendez
	Vice President, Finance & Administration