LCC INTERNATIONAL INC, 424B1, 1996-09-25

LCC INTERNATIONAL INC
424B1, 1996-09-25
RADIOTELEPHONE COMMUNICATIONS

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<PAGE> 1

PROSPECTUS
SEPTEMBER 24, 1996

[LCC LOGO] 5,250,000 SHARES
LCC INTERNATIONAL, INC.
CLASS A COMMON STOCK
Of the 5,250,000 shares of Class A Common Stock offered hereby, 2,750,000
shares are being sold by the Company and 2,500,000 shares are being sold by the
Selling Stockholder. See "Principal and Selling Stockholders." The Company will
not receive any of the proceeds from the sale of shares by the Selling
Stockholder.

The Company has two classes of authorized Common Stock, Class A Common
Stock and Class B Common Stock. The rights of the Class A Common Stock and the
Class B Common Stock are substantially identical, except that holders of the
Class A Common Stock are entitled to one vote per share and holders of the Class
B Common Stock are entitled to ten votes per share. Both classes will vote
together as one class on all matters generally submitted to a vote of
stockholders, including the election of directors. See "Description of Capital
Stock." Upon completion of the Offering and the Merger, companies controlled by
the Company's founders will own all of the outstanding shares of Class B Common
Stock, which will represent approximately 94.4% of the combined voting power of
the Common Stock. As a result, such companies will have the ability to elect all
of the Company's directors and will continue to control the Company. See "Risk
Factors -- Control of the Company by RF Investors" and "Description of Capital
Stock -- Common Stock."

Prior to the Offering, there has been no public market for the Class A
Common Stock. See "Underwriting" for information relating to the factors
considered in determining the initial public offering price.

The Class A Common Stock offered hereby has been approved for listing on
the Nasdaq National Market under the symbol "LCCI," subject to official notice
of issuance.

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO THE DISCOUNTS AND TO THE THE SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDER
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share......................... $16.00 $1.12 $14.88 $14.88
Total(3).......................... $84,000,000 $5,880,000 $40,920,000 $37,200,000
- --------------------------------------------------------------------------------------------------
</TABLE>

(1) See "Underwriting" for indemnification arrangements with the Underwriters.

(2) Before deducting expenses estimated at $1,795,050, which will be paid by the
Company.

(3) The Company and the Selling Stockholder have granted to the Underwriters a
30 day option (the "Over-Allotment Option") to purchase up to 787,500
additional shares (412,500 shares from the Company and 375,000 shares from
the Selling Stockholder) at the Price to the Public less Underwriting
Discounts and Commissions, solely to cover over-allotments, if any. If the
Over-Allotment Option is exercised in full, the total Price to the Public,
Underwriting Discounts and Commissions, Proceeds to the Company and
Proceeds to the Selling Stockholder will be $96,600,000, $6,762,000,
$47,058,000, and $42,780,000, respectively. See "Underwriting."

The shares are being offered by the several Underwriters named herein,
subject to prior sale, when, as and if delivered to and accepted by the
Underwriters and subject to various prior conditions including their right to
reject orders in whole or in part. It is expected that delivery of the shares
will be made in New York, New York on or about September 30, 1996.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS
INCORPORATED
OPPENHEIMER & CO., INC.

LOGO
<PAGE> 2

The inside front cover of the prospectus contains a graphic depicting a cellular
telephone silhouetted against a city skyline, circled by the words "World Class
Wireless Solutions."

A fold-out graphics page appears next, titled "Service and Product Solutions for
a Wireless World," and containing the words "By offering a full complement of
network engineering and program management services, design and analysis
software and field measurement equipment, the Company provides a complete and
integrated line of products and services to the wireless industry." Photographs
depict Design Services, Program Management, Engineering Software, and
Measurement Equipment and a cellular telephone handset. In small print to the
right of the handset appears the statement "The Company does not manufacture,
market or distribute wireless telephone handsets." The next page contains the
Company's logo, circled by the words Design Services, Program Management,
Engineering Software, and Measurement Equipment. Below the logo appears the
words "Through LCC International's integrated products and services, the Company
has helped design and optimize hundreds of wireless networks with thousands of
cell sites, servicing millions of subscribers worldwide."

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMPANY'S CLASS
A COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the more detailed information, pro forma
financial information and financial statements and notes thereto appearing
elsewhere in this Prospectus. Unless otherwise indicated, all information in
this Prospectus Summary and elsewhere in this Prospectus assumes no exercise of
the Over-Allotment Option. Unless the context indicates or requires otherwise,
references in this Prospectus to "LCC" or the "Company" are to (1) the combined
operations of the Company's predecessor, LCC, L.L.C., a Delaware limited
liability company, and its subsidiaries (the "Limited Liability Company") prior
to the date of the merger of the Limited Liability Company into LCC
International, Inc., a recently-formed Delaware corporation ("LCC
International"), as described below (the "Merger") and (2) LCC International and
its subsidiaries, after the Merger. Each prospective investor is urged to read
this Prospectus in its entirety. Definitions of technical and other terms are
set forth in the Glossary starting at page G-1. References herein to wireless
telecommunications or similar terms are not intended to include satellite
transmission, which some consider to be a "wireless" technology.

GENERAL

LCC is one of the world's largest independent providers of radio frequency
("RF") engineering and network design services and products to the wireless
telecommunications industry. The Company has provided these services, along with
related proprietary software tools and field measurement and analysis equipment,
to operators of more than 200 wireless systems in more than 40 countries. The
Company intends to leverage its leadership position and its relationships with
major wireless customers to benefit from the expected significant growth in
wireless networks worldwide.

The Company has provided services and products to seven of the ten largest
U.S. cellular system operators; large international cellular operators,
including British Telecommunications plc ("British Telecom"), France Telecom and
Mannesmann Mobilfunk GmbH, Germany ("Mannesmann"); companies building or
proposing to build personal communications services ("PCS") systems, including
AT&T Wireless Services, Pacific Bell Mobile Services, NextWave Telecom, Inc.
("NextWave Telecom") and DCR PCS, Inc. ("DCR"); operators of enhanced
specialized mobile radio ("ESMR") systems, including Nextel Communications, Inc.
("Nextel Communications"); and operators of two-way messaging systems. Many of
the Company's major customers have entered into partnerships with international
wireless operators, which has enabled the Company to obtain significant new
business from such operators. The Company also has established working
relationships with two major telecommunications equipment vendors, pursuant to
which the Company provides services and products on a subcontract basis.

LCC believes that its 26.9% compound annual growth in revenues over the
past five years has been fueled primarily by the growth of the wireless
telecommunications industry. The Company derives a significant portion of its
revenues from its international customers (approximately 39% in 1995). A
substantial number of new wireless network licenses have been awarded worldwide
over the last five years, and the Company expects a significant number of
additional wireless licenses to be awarded in the next few years. Construction
of new networks, and optimization of existing networks, require substantial
amounts of RF engineering services and products. In addition, many existing
systems are continuing to grow; LCC estimates that operators of wireless
networks operating at capacity add a new cell site, requiring additional RF
engineering services, for every approximately 1,500 new subscribers added.

LCC's approximately 370 RF engineers provide engineering solutions to
operators of a wide range of wireless networks, incorporating all major wireless
technologies available today, including TDMA (which includes GSM, DCS and
IS-136), CDMA, iDEN, AMPS and ETACS. LCC believes that it is the largest
independent employer of RF engineers in the world and believes that this is a
substantial competitive advantage, especially with respect to large customers.
LCC provides (or, in the case of Phase 4, is developing) services and products
for operators involved in all four phases of wireless system development: (i)
Phase 1 -- bidding for the licenses necessary to build and operate the system;
(ii) Phase 2 -- build-out of the system; (iii) Phase 3 -- optimization and
enhancement of the system to meet the requirements of an increasing

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<PAGE> 4

subscriber base and to provide increased quality and coverage; and (iv) Phase
4 -- achievement of greater efficiencies in providing service in order to
compete in areas where there are multiple system operators.

The Company's services consist of (i) RF Engineering and Design Services
and (ii) Program Management, which involves the procurement and management, on a
turnkey basis, of a range of services and products for wireless networks. The
Company's products consist of (i) Software Tools and (ii) Field Measurement and
Analysis Equipment, both of which are used to design wireless networks and
optimize the performance of existing networks.

BUSINESS STRATEGY

The Company's objective is to maintain its position as one of the world's
largest independent providers of RF engineering and network design services and
products to the wireless telecommunications industry, and to increase its market
share by pursuing multiple growth paths. The key elements in the Company's
strategy are to:

- Maintain Technological Leadership. LCC believes that it has the most
sophisticated and diversified technological capabilities (incorporating
all major wireless technologies available today) in the wireless network
design industry and intends to maintain its technological leadership.

- Leverage Large Installed Customer Base. The Company believes that its
large customer base gives it a significant advantage in obtaining
additional business for its existing and new services and products.
Typically, a substantial portion of the Company's revenues in a given
year are generated by customers for which the Company has previously
performed services or provided products.

- Pursue International Growth. The Company believes that the growth of the
international wireless industry over the next several years will be
substantial. The Company is devoting significant efforts to increasing
its market share of international business, and is particularly focused
on providing planning services to companies that are participating in
government tender processes for new license grants. The Company has found
that provision of such services often results in engineering contracts if
such companies receive licenses.

- Pursue New Markets

New Wireless Networks and Technologies. The development of new types of
wireless networks and new wireless technologies, including private
corporate networks, wireless cable (LMDS and MMDS) services, wireless
local loop and wireless high speed data services, is expected to result
in additional potential customers for the Company's services and
products.

- Offer and Develop New Types of Services and Products

Program Management Services. Program management involves the procurement
and management, on a turnkey basis, of a range of services and products
relating to deployment or expansion of wireless networks, including
systems integration, site acquisition, site engineering, procurement
management, construction management, installation and commissioning, and
customer training. These management services are often packaged with the
Company's traditional RF and network engineering services, software
tools and field measurement and analysis equipment. The Company believes
that an increasing number of wireless system operators are attracted to
this approach, and

4
<PAGE> 5

that program management will increase revenues from RF engineering
services in addition to providing revenues from new services.

Phase 4 System Efficiency Services and Products. The Company is
developing new RF engineering services and products to increase system
efficiency and manage costs in the multiple-operator environment
expected to develop in the next few years.

- Establish Strategic Relationships with Carriers and Equipment Vendors.
The Company has entered into strategic relationships with new wireless
carriers and major equipment vendors as a means of obtaining new business
opportunities. The Company intends to pursue additional relationships,
including using proceeds from this initial public offering (the
"Offering") for financing and investment arrangements, as a means of
obtaining new business.

- Pursue Strategic Acquisitions. The Company intends to pursue acquisitions
of companies that have developed, or are developing, complementary
products and services. LCC believes that such acquisitions will
accelerate the development of products and enhance the recruitment of
technical staff.

THE OFFERING

Class A Common Shares Offered(1)
By the Company................. 2,750,000 shares
By the Selling Stockholder..... 2,500,000 shares
----------------
Total.................. 5,250,000 shares

Common Stock to be Outstanding
after the Offering(1)
Class A Common Stock........... 5,278,411 shares
Class B Common Stock........... 8,835,984 shares
-----------------
Total.................. 14,114,395 shares

Use of Proceeds.................. Repayment of amounts outstanding under a
Credit Agreement, dated June 14, 1996,
among the Company, certain of its
subsidiaries and The Chase Manhattan Bank
("Chase"), as Administrative Agent, and the
lenders (the "Lenders") signatory thereto,
as amended and restated to substitute the
Company for the Limited Liability Company
(the "Credit Facility"); advancement of
$3.5 million to an entity controlled by the
Company's founders to assist that entity in
paying certain taxes; strategic financing
for customers as incentives for new
business; acquisitions; working capital;
and general corporate purposes. See "Use of
Proceeds."

Voting Rights.................... The shares of Class A common stock, par
value $0.01 per share ("Class A Common
Stock"), have one vote per share, while the
shares of Class B common stock, par value
$0.01 per share ("Class B Common Stock"),
have ten votes per share (the Class A
Common Stock and Class B Common Stock are
collectively referred to herein as "Common
Stock"). The Class B Common Stock, which
has effective control of the Company and
will be wholly-owned by RF Investors,
L.L.C. ("RF Investors") and the Founder
Corporation (as defined below), is not
being offered by this Prospectus. Class B
Common Stock is convertible into Class A
Common Stock on a share-for-share basis.
See

5
<PAGE> 6

"Risk Factors -- Control of the Company by
RF Investors" and "Description of Capital
Stock -- Common Stock."

Proposed Nasdaq National Market
symbol........................... LCCI
- ---------------

(1) In connection with the Offering, it is anticipated that the board of
directors of the Company (the "Board of Directors") will grant (i) pursuant
to the Company's 1996 Employee Stock Option Plan (the "Employee Plan")
options to purchase (a) approximately 590,000 shares of Class A Common
Stock to approximately 265 employees of the Company at an exercise price
per share equal to the Offering price and (b) approximately 2,160,000
shares of Class A Common Stock to approximately 40 employees of the Company
as conversion of interests held under the Limited Liability Company's
Employee Option Plan (the "LLC Option Plan") and Phantom Membership Plan
(the "LLC Membership Plan") at exercise prices per share ranging from $4.00
to $12.00, (ii) options to purchase 20,000 shares of Class A Common Stock
and 70,000 shares of Class B Common Stock at the Offering price to four
directors under the Company's Directors' Plan (the "Directors Plan") and
(iii) options to purchase 25,000 shares of Class A Common Stock at the
Offering price to a person or entity (a "Carlyle Option Designee")
designated by the Carlyle Investors (as defined below), who have designated
one of the Company's directors. In addition, in connection with the
Offering, the Board of Directors will reserve (i) approximately 360,000
shares of Class A Common Stock for purchase by eligible employees of the
Company or any of its subsidiaries pursuant to the Company's Employee Stock
Purchase Plan, (ii) approximately 474,000 shares of Class A Common Stock
for future grants of options under the Employee Plan, (iii) approximately
40,000 shares of Class A Common Stock and 180,000 shares of Class B Common
Stock for future grants of options under the Directors Plan and (iv) 60,000
shares of Class A Common Stock for future grants of options to Carlyle
Option Designees. See "Management -- Stock Plans" and "Certain
Transactions -- Conversion of Interests Under LLC Option Plan and LLC
Membership Plan into Stock Options."

RISK FACTORS

Prospective investors should carefully consider the factors discussed in
detail elsewhere in this Prospectus under the caption "Risk Factors."

6
<PAGE> 7

SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------ ---------------------
1991 1992 1993 1994 1995 1995 1996
(IN THOUSANDS, EXCEPT PRO FORMA PER SHARE INFORMATION)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues.......................................... $40,307 $54,332 $60,307 $76,055 $104,461 $46,560 $60,364
Operating income(1)............................... 3,352.. 13,324 11,411 6,507 9,048 1,945 4,415
Net income(1)..................................... 3,860.. 13,605 10,497 4,970 4,740 742 3,021
PRO FORMA DATA:(2)
Pro forma net income(1)(3)........................ $ 4,084 $ 2,822
Pro forma net income per share(1)(4).............. $ 0.33 $ 0.21
Pro forma weighted average shares
outstanding(4).................................. 18,329 18,329
OTHER DATA:
Non-cash compensation............................. -- -- -- $ 3,255 $ 4,646 $ 2,372 $ 3,599
EBITDA(1)(5)...................................... $ 4,863 $15,030 $13,249 8,527 12,747 3,296 6,937
Depreciation and amortization..................... 1,511 1,706 1,838 2,020 3,699 1,351 2,522
Capital expenditures.............................. 2,455 1,625 1,882 2,403 4,222 2,382 1,437
</TABLE>

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, AS OF JUNE 30,
------------ -------------------------------
1995 1996 1996
PRO FORMA(2)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
DATA:
Cash...................... $ 6,571 $ 5,431 $ 20,980
Working capital........... 17,649 6,947 45,212
Property, plant, and
equipment, net.......... 5,440 5,340 5,340
Licenses and other
intangibles, net........ 3,745 4,486 4,486
Total assets.............. 62,041 80,681 103,130
Total debt................ 30,000 40,000 50,000
Equity (deficit).......... (244) (2,134) 9,831(6)
</TABLE>

- ---------------

(1) Net of non-cash compensation.

(2) Adjusted to reflect the pro forma effects, as applicable, of the Offering
(including the application of estimated net proceeds of the Offering to
repay amounts outstanding under the Credit Facility and related interest
expense), the loan due from Telcom Ventures of $3.5 million, the MCI Note
Assumption (as defined below) and related interest expense and the Merger
(assuming such offering, assumption and merger occurred on January 1, 1995,
except for consolidated balance sheet data, which assumes such transactions
occurred on June 30, 1996).

(3) In connection with the Offering and the Merger, the Company will be
converting to a Subchapter C corporation under the Internal Revenue Code of
1986, as amended (the "Code"). Prior to conversion, the Company had been a
limited liability company for Federal and certain state income tax purposes.
As such, income of the Company was taxable to the individual members rather
than to the Company. Accordingly, the provision for income taxes for the
years ended December 31, 1991 to 1995, and the six months ended June 30,
1995 and 1996 represents state income taxes on earned income in those states
that do not recognize the flow-through nature of the limited liability
company and foreign taxes. Pro forma net income is net of a provision for
income taxes as if the Company were a Subchapter C corporation at an assumed
effective income tax rate of approximately 40%.

(4) Pro forma net income per share has been computed by dividing pro forma net
income by the pro forma weighted average number of common shares and common
share equivalents outstanding.

(5) EBITDA represents earnings before interest income, interest expense, other
income, income taxes, depreciation and amortization. EBITDA is commonly used
in the telecommunications industry to analyze companies on the basis of
operating performance, leverage and liquidity. EBITDA is not intended to
represent cash flows for periods, nor has it been presented as an
alternative to operating income or as an indicator of operating performance
and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with generally accepted accounting
principles. See the Company's Consolidated Statements of Cash Flows in the
Company's Consolidated Financial Statements contained elsewhere in this
Prospectus.

(6) Includes non-recurring payment of compensation expense of $0.9 million (net
of applicable taxes) resulting from the dividend to Telcom Ventures of the
note receivable from Telcom Ventures held by the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data -- Cash
Flows." Also includes a non-recurring deferred tax benefit from conversion
from a limited liability company to a Subchapter C corporation for income
tax purposes, estimated to be approximately $6.9 million, and adjusted for
the MCI Note Assumption, the Offering, and the Telcom Tax Advance.

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RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be carefully considered in evaluating the Company and its
business before purchasing the Class A Common Stock offered hereby.

CHANGES ADVERSELY IMPACTING DEMAND FOR THE COMPANY'S PRODUCTS AND SERVICES

The wireless telecommunications industry is undergoing a number of
significant changes that are adversely impacting demand for the Company's RF
engineering and related services and products. Such changes include (i)
increased use of in-house engineers by operators of mature wireless networks,
(ii) increasing dependence of wireless network operators on equipment vendors
for design services and (iii) delays in deployment of PCS networks.

INCREASED USE OF IN-HOUSE ENGINEERS BY OPERATORS OF MATURE WIRELESS NETWORKS

Over the last few years, operators of several mature wireless networks have
reduced the amount of engineering services purchased from LCC and have replaced
such services with those provided by their own engineers. LCC expects this trend
to continue and to affect other types of wireless networks both within the U.S.
and internationally.

INCREASING DEPENDENCE OF WIRELESS NETWORK OPERATORS ON EQUIPMENT VENDORS FOR
DESIGN SERVICES

Wireless network operators, particularly PCS operators and new
international licensees, are increasingly dependent on equipment vendors to
provide turnkey solutions for the design and deployment of wireless networks and
to provide vendor financing for the entire project. Vendors of wireless
telecommunications equipment have been conditioning the availability of
financing for services or products, other than those principally offered by the
vendor, on being granted the right to select the providers of such services and
products, including RF engineering and network design. The Company believes that
the need of PCS and other wireless operators for vendor financing and the
packaging of services by equipment vendors is making the vendor a competitor of
the Company (since the vendor is providing engineering services, generally
through a subcontract arrangement) and is causing the vendor to replace the
wireless operator as a customer of the Company. While the Company has
established relationships with major telecommunications equipment vendors
pursuant to which the Company provides services and products for the wireless
telecommunications projects for which such vendors act as prime contractors,
such arrangements often are less profitable for the Company than direct sales to
the end user since the vendor often submits a comparatively lower bid for the
engineering work to secure or increase its profits on equipment sales. In
addition, working through a prime contractor weakens the relationship with the
network operator and may reduce the Company's ability to obtain continuing
business.

DELAYS IN DEPLOYMENT OF PCS NETWORKS

The Company believes that demand for its services and products may be
affected by future delays in the pace of deployment of PCS networks in the U.S.
A significant portion of the Company's revenues is generated from new licensees
for designing and building out their networks. Furthermore, a significant
portion of the Company's backlog consists of services and products to be
provided under two five-year contracts for services and products aggregating
$115 million with the two top bidders in the recently concluded C-block
broadband PCS auction. See "Business -- Customers and Backlog." Finally, the
Company anticipates that additional future revenues will be generated from
successful bidders in the D-, E- and F-block broadband PCS auctions expected to
be held within the next two to three years. To date, the pace of PCS network
deployment has been slower than expected, due in part to difficulty experienced
by holders of MTA licenses in raising the necessary financing and there can be
no assurance that bidders for BTA licenses will not experience similar
difficulties. In addition, the C-block bidders have been hampered by delays in
the auction process and by subsequent challenges to the issuance of licenses to
successful bidders, and there can be no assurance as to when the D-, E- and
F-block auctions will occur, nor to when licenses will be granted. Accordingly,
orders for network

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<PAGE> 9

design and deployment from PCS licensees, including a significant portion of the
Company's backlog, are subject to uncertainty. See "Risk Factors -- Risks
Associated with Strategic Relationships, Strategic Financing and Acquisitions."

RISKS FROM COMPETITION

The current market for wireless network design services, related software
tools, field measurement and analysis equipment and program management services
is highly competitive. Many companies offer such services and products, and the
Company believes that the number of other independent firms providing a
combination of these services and products to wireless network operators
throughout the world is increasing. Wireless operators themselves and system
equipment vendors are also developing capabilities competitive with those
provided by LCC. See "Risk Factors -- Changes Adversely Impacting Demand for the
Company's Products and Services -- Increased Use of In-House Engineers by
Operators of Mature Wireless Networks" and "-- Increasing Dependence of Wireless
Network Operators on Equipment Vendors for Design Services." Some of the
Company's competitors are part of large corporate groups or alliances with
greater resources and broader technology bases than those of the Company. In
addition, some of the Company's competitors have been founded by or have
recruited senior engineering executives from current or potential Company
customers and may have better relationships with those current or potential
customers than are available to the Company. Recently, as a result of increased
competition, the Company has experienced a decline in the prices it can charge
for its software tools and field measurement and analysis equipment. There can
be no assurance that competitive factors will not have an adverse effect on the
Company's business.

SUBSTANTIAL LEVERAGE

The Company had $40 million of debt obligations as of June 30, 1996,
consisting of the $20 million Credit Facility and the $20 million note held by
MCI Telecommunications Corporation ("MCI"). Prior to the Offering the Company
will be assuming the $30 million note held by MCI that was issued by Telcom
Ventures (defined below). Accordingly, the Company is highly leveraged. The two
MCI notes, which are due in 2000, are exchangeable for Common Stock of the
Company, and the Company intends to require this exchange in August 1997. See
"The MCI Notes, MCI Note Assumption, MCI Conversion." However, if there is a
default under such MCI notes prior to this exchange, or if there is a default
under the Credit Facility, there would be a material adverse effect on the
Company. The Credit Facility prohibits the Company from incurring additional
debt and contains numerous other restrictive covenants. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data."

RAPID TECHNOLOGICAL CHANGES

The market for wireless network system design services and tools is
characterized by rapid change and improvements in technology. The Company's
future success will depend in part on its ability to enhance its current
products, to introduce new products that keep pace with technological
developments and to address the increasingly sophisticated needs of its
customers. There can be no assurance that the Company will be successful in
developing and marketing in a timely manner product enhancements or new products
that respond to the technological advances by others, or that its products and
services will adequately and competitively address the needs of the changing
marketplace. Technological changes with respect to software tools and field
measurement and analysis equipment have resulted in the shortening of product
cycles, and if the Company is not ready to introduce new competitive products,
the Company's operating results could be adversely affected. In the past, the
Company's operating revenues from sales of software tools and field measurement
and analysis equipment have been adversely affected by this trend. In
particular, approximately two years ago, customer requirements for UNIX-based
products emerged at a time when the Company's UNIX-based products were still
being developed, and the Company's revenues from software tools for 1994 were
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Results of Operations -- Year Ended
December 31, 1994 Compared to Year Ended December 31, 1993." In order to remain
competitive, the Company may be required to expend a greater percentage

9
<PAGE> 10

of its revenues on product innovation and research and development or technology
acquisition than historically has been the case. See Note 1 to the Consolidated
Financial Statements.

In addition, the Company believes that, as the number of wireless networks
in the U.S. increases with the addition of PCS license holders and other
competitors (Phase 4), operators will experience greater price competition and
place greater emphasis on containing costs and system efficiency. The Company's
customers will require new network engineering services and products to increase
system efficiency and manage costs in the Phase 4 multiple-operator environment.
Although the Company is developing such services and products and believes that
none of its existing competitors presently offer such services or products,
there can be no assurance that the Company will be able to offer such services
and products in a timely manner.

DEPENDENCE ON PROFESSIONAL STAFF; NEED FOR ADDITIONAL QUALIFIED TECHNICAL
PERSONNEL

The Company receives the majority of its revenues from the efforts of
approximately 370 RF engineers. The success of the Company's business therefore
depends on its ability to retain its existing staff and replace departing
engineers. Moreover, to continue its growth at its current rate, the Company
needs to attract additional RF engineers and other technical professionals, and
a number of professionals with skills in the program management area. There are
a limited number of RF engineers, and such individuals are sought both by RF
engineering companies such as LCC and by wireless network operators. Competition
for such personnel is intense, which has at times caused LCC to experience
difficulty in recruiting and retaining qualified technical personnel. In the
program management area, although the number of available professionals is
greater, the Company has less experience in hiring such professionals. There can
be no assurance that the Company will not experience difficulties in retaining
and augmenting its professional staff.

DEPENDENCE ON SIGNIFICANT CUSTOMERS AND LARGE CONTRACTS

The Company derived approximately 50% of its revenues from its ten largest
customers in the year ended December 31, 1995. Nextel Communications, the
Company's largest customer in the year ended December 31, 1995, accounted for
approximately 14% of its revenues. Although such major customers generally have
differed from year to year as work under existing contracts is completed and
services under new contracts are commenced, the Company depends on having large
contracts from some customers each year to meet its expected revenues. There can
be no assurance that the Company will continue to receive large contracts from
customers. In addition, the Company's contracts typically have provisions that
permit customers to terminate their respective contracts under various
circumstances, which include nonperformance or unsatisfactory performance by the
Company. There can be no assurance that customers under any of the Company's
long-term contracts will not attempt to cancel or renegotiate their contracts
with the Company.

LENGTHY SALES CYCLE

Purchases of the Company's products or services by customers often entail
an extended decision-making process for the customer because of the substantial
costs and strategic implications associated with selecting wireless network
deployment services and products. Senior management of the customer is often
involved in this process, given the importance of the decision as well as the
risks faced by the customer if the Company's services and products do not meet
the customer's particular needs. Therefore, large procurements of LCC services
and products involve lengthy selling cycles, resulting in a relatively high cost
of new business generation. See "Business -- Sales and Marketing."

SIGNIFICANT FLUCTUATIONS IN QUARTERLY RESULTS; UNCERTAINTIES RELATING TO BACKLOG

The Company's quarterly revenues and operating results have varied
considerably in the past and are likely to vary considerably from quarter to
quarter in the future. Fluctuations in the Company's revenues depend on a number
of factors, some of which are beyond the Company's control. These factors
include, among others, the timing of issuance of new licenses by governmental
agencies, the length of sales cycles, changes in pricing policy by the Company
or its competitors, the timing of contracts and customer budget changes. In
addition, even after contracts are entered into, the timing of delivery of
services and products

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depends in part on the customer's readiness to receive the services and the pace
of the build-out of the customer's network, which in turn depend on a number of
business decisions by the customer and provision of services and equipment by
providers other than the Company. A large portion ($115 million, or
approximately 64.0%) of the Company's current backlog consists of services and
products to be provided under two five year contracts with holders of PCS
licenses, and the customers have flexibility within such five-year periods
regarding the timing of ordering and mix of services and products to be
purchased from the Company. See "Business -- Customers and Backlog." The orders
under such contracts are also subject to uncertainties relating to PCS network
deployment generally and to matters that may affect the businesses and financial
resources of such customers. See "Risk Factors -- Changes Adversely Impacting
Demand for the Company's Products and Services -- Delays in Deployment of PCS
Networks" and "Risk Factors -- Risks Associated with Strategic Relationships,
Strategic Financing and Acquisitions." The Company establishes its expenditure
levels for product development and other operating expenses in large part on its
expected future revenues. As a result, should revenues fall below expectations,
operating results are likely to be adversely affected. Gross profit as a percent
of total revenues generally declined from 1993 through December 31, 1995. There
can be no assurances that this trend will not continue. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Overview."

DEPENDENCE ON PROPRIETARY TECHNOLOGY

The Company relies on a combination of copyrights, trademarks, trade
secrets, non-disclosure and other contractual agreements and technical measures
to protect its proprietary rights in its products. There can be no assurance
that others will not independently develop similar products or duplicate the
Company's products. There can also be no assurance that the steps taken by the
Company will prevent misappropriation of this technology. In addition, effective
copyright, trademark or trade secret protection may be unavailable or limited in
certain circumstances. There can be no assurance that third parties will not
assert infringement claims against the Company in the future or that any such
claims will not require the Company to enter into royalty arrangements or result
in costly litigation involving the imposition of damages or injunctive relief
against the Company, any of which could adversely affect the Company's business.

TRADE ACCOUNT RECEIVABLES

The Company is subject to credit risk in the form of trade account
receivables. As of December 31, 1995 and June 30, 1996, the Company had trade
account receivables, net of allowances for doubtful accounts, of $28.3 million
and $29.5 million, respectively. The Company frequently is unable to enforce a
policy of receiving payment within 30 days of issuing bills, especially in the
case of customers who are in the early phases of business development. In
addition, many of the Company's foreign customers are not accustomed to paying
their suppliers on terms as attractive as those typically existing in the United
States. See "Risk Factors -- Risks of International Operations." Generally, the
Company does not require collateral or other security to support customer
receivables.

RISKS OF INTERNATIONAL OPERATIONS

Approximately 39% of the Company's revenues for 1995 were generated outside
of the United States, and the Company expects this segment of its business to
continue to account for a material part of its revenues. Licensing software and
selling other products and services in foreign countries is subject to various
risks inherent in international business activities. Risks include those
presented by general economic and political conditions in each country, the
effect of applicable foreign tax structures, tariff and trade regulations,
difficulties in obtaining local business licenses, the need to manage a
geographically diverse organization and difficulties in complying with a variety
of foreign laws and regulations. In addition, adverse changes in the regulatory
environments in foreign countries, including delays in deregulation or
privatization affecting the pace at which licenses are awarded to wireless
network system operators, affect the level and timing of the demand for the
Company's services and products. Providing products and services outside the
United States carries the additional risk of currency fluctuations and foreign
exchange controls imposed by certain countries. Foreign customers may be
accustomed to paying their suppliers, including the Company, on terms and

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<PAGE> 12

conditions less attractive than is typical in the United States, and collection
of accounts receivable due from foreign customers can be more difficult than
from domestic customers.

RISKS ASSOCIATED WITH STRATEGIC RELATIONSHIPS, STRATEGIC FINANCING AND
ACQUISITIONS

RISKS ASSOCIATED WITH STRATEGIC RELATIONSHIPS AND STRATEGIC FINANCING

There are a number of risks associated with the Company's plans to pursue
opportunities to enter into strategic relationships with new wireless operators
or to extend financing to customers in return for new business opportunities.
There can be no assurance that the Company will receive the anticipated
business, that the business will be of the anticipated level or that profits
from the new business will offset any possible losses on the investment made or
financing extended by the Company to enter into such relationship. A loan to or
investment in a customer will be subject to many of the same risks to which the
customer is subject in seeking to operate and grow its businesses, and there can
be no assurance that the customer will be able to repay or return the Company's
investment within an acceptable period. The Company's first two arrangements
with customers under this strategy involved financing aggregating $11.5 million
to the two top bidders in the recently-concluded C-block auction for broadband
PCS licenses as part of arrangements involving the Company receiving contracts
aggregating $115 million for new business over a five year period. The Company's
investments in, and expectation of future orders from, these two C-block bidders
could be adversely affected to the extent that the businesses and financial
resources of these two C-block bidders is affected by any (or a combination) of:
the possibility that the FCC will find either entity ineligible for the licenses
for which they were the top bidders; the head start enjoyed by A- and B-block
licensees (which may be exacerbated by delays in the issuance of C-block
licenses caused by challenges to such issuance filed by rival bidders); the
relatively large amounts owed by the C-block bidders to the U.S. Government as a
result of the C-block auction; and the entrepreneurial or "start-up" status of
the C-block bidders and related difficulties in obtaining adequate financing for
the capital intensive build-out of their systems and to cover operating losses
during the early months of operation.

RISKS RELATING TO ACQUISITIONS

The Company's intention to engage in acquisitions to acquire companies that
have developed or are developing complementary products and services is subject
to the risks that the assets being acquired or additional professional staff
being recruited to perform services will not perform as expected, that the
acquired entity will have unanticipated liabilities and that the returns
realized by the Company ultimately will not support the investments made or
indebtedness incurred in such acquisitions.

RESTRICTIONS AFFECTING THE COMPANY'S ABILITY TO ENGAGE IN STRATEGIC FINANCINGS
OR ACQUISITIONS

There are several restrictions and other factors affecting the Company's
ability to engage in strategic financings or acquisitions. Although the Company
presently intends to engage in such transactions only to the extent that the net
proceeds from the Offering, together with amounts that will be available under
the Credit Facility, are sufficient to fund such opportunistic investments and
acquisitions, there can be no assurance that additional capital will not be
required for such purposes. The Company cannot predict the extent to which
additional capital may be required, and there can be no assurance that the
Company will be able to obtain such additional capital on terms acceptable to
the Company. In addition, the Credit Facility contains certain restrictions with
regard to, among other things, acquisitions, capital expenditures and incurrence
of additional indebtedness that may limit the ability of the Company to complete
certain acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity, Capital Resources and Other
Financial Data -- Existing Indebtedness." Certain entities formed by The Carlyle
Group, a Washington, D.C.-based investment group (the "Carlyle Investors") also
have certain rights that limit the ability of the Company to incur debt above
specified ratios or amounts. See "Description of Capital Stock -- Certain
Relationships Between the Founder Corporation and the Carlyle Investors
Affecting the Company." Moreover, in seeking to make investments in wireless
operators or acquire other companies, the Company will be competing with
organizations that are larger, have access to more substantial capital resources
or are

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pursuing other strategic goals. There can be no assurance that the Company will
be successful in completing these transactions.

DEPENDENCE ON KEY PERSONNEL; MANAGEMENT OF GROWTH

DEPENDENCE ON KEY PERSONNEL

The success of the Company depends to a significant degree upon the
contribution of its executive officers and other key personnel. None of the
Company's executive officers has an employment agreement with the Company, other
than an agreement terminable at will. There can be no assurance that the Company
will be able to retain its key managerial and other key personnel or to attract
suitable replacements or additional personnel if required.

MANAGEMENT OF GROWTH

To manage its growth effectively, the Company must continue to strengthen
its operational, financial and management information systems, and expand, train
and manage its work force. Failure to do so effectively and on a timely basis
would have an adverse effect upon the Company's business.

CONCERNS ABOUT MOBILE COMMUNICATIONS HEALTH RISK MAY AFFECT PROSPECTS OF LCC

Allegations have been made that serious health risks have resulted from the
use of portable mobile communications devices. Some studies have found some
instances of interference with hearing aids and other medical devices caused
principally by digital wireless handsets. The actual or perceived health risks
of mobile communications devices could adversely affect LCC through a reduction
in the number of systems deployed worldwide or a reduction in the number of
sites constructed in those systems that are deployed.

CONTROL OF THE COMPANY BY RF INVESTORS

Upon completion of the Merger and the Offering, RF Investors, a recently
formed subsidiary of Telcom Ventures, L.L.C. ("Telcom Ventures"), will own all
(except for a small number of shares held by the Founder Corporation, indirectly
an equity holder of RF Investors) of the outstanding shares of Class B Common
Stock, which will represent 93.5% of the combined voting power of both classes
of Common Stock. See "Principal and Selling Stockholders." Accordingly, RF
Investors and its equity holders will be able, without the approval of the
Company's public stockholders, to (i) elect all of the Company's directors, (ii)
amend the Company's certificate of incorporation (the "Certificate of
Incorporation") with respect to most matters or effect a merger, sale of assets,
or other major corporate transaction, (iii) defeat any non-negotiated takeover
attempt, (iv) sell RF Investors' shares of Common Stock without participation in
such sale by the Company's public stockholders, (v) determine the amount and
timing of dividends paid, if any, with respect to Common Stock and (vi)
otherwise control the management and operations of the Company and the outcome
of virtually all matters submitted for a stockholder vote. RF Investors may
also, by converting its shares of Class B Common Stock into shares of Class A
Common Stock, obtain a sufficient number of shares of Class A Common Stock
(62.4% of the total outstanding shares of Class A Common Stock based upon the
number of shares of Class B Common Stock held by RF Investors on the date of the
Offering) to determine the outcome of any vote with respect to any matter on
which the holders of Class A Common Stock are entitled to vote together as a
class. Dr. Rajendra and Neera Singh, who with certain Singh family trusts
indirectly own 75% of Telcom Ventures (the "Singh Family Group"), are also
directors or executive officers of the Company, and Mark Ein, a designee of the
Carlyle Investors, who are the 25% indirect owners of Telcom Ventures, also is a
director of the Company. The Telcom Ventures and RF Investors limited liability
company agreements provide that, for as long as the Carlyle Investors
collectively own at least 5% of the total membership interests of Telcom
Ventures, Telcom Ventures shall vote any and all shares of the Company held by
it, and shall cause RF Investors to vote any and all shares held by it, from
time to time: (i) to elect as directors of the Company up to two persons
recommended by the Carlyle Investors upon the request of the Carlyle Investors,
and (ii) not to take any of the following actions without the consent of the
Carlyle Investors: (a) approve any amendment to the Certificate of Incorporation
or the Bylaws of the Company; (b) approve the incurrence by the Company of any
debt (or the granting of security

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<PAGE> 14

relating to the incurrence of debt) if as a result of such incurrence, the debt
to equity ratio of the Company exceeds 6:1 or, if as a result of such debt
incurrence, the total outstanding debt of the Company exceeds $50 million plus
or minus, as the case may be, the cumulative net income or the net losses of the
Company after January 1994; (c) approve any new affiliated party transactions in
excess of $150,000 or modifications to existing transactions, subject to certain
limited exceptions; (d) approve the appointment as independent accountants of
the Company of a firm other than one of the "big six" accounting firms; or (e)
approve certain events relating to the bankruptcy or insolvency of the Company.
The RF Investors and Telcom Ventures limited liability company agreements
provide for certain rights of the Carlyle Investors to cause the distribution to
the Carlyle Investors, beginning three years after the Offering, of up to 25% of
the Common Stock held by RF Investors. Such a distribution would still leave RF
Investors with voting control of the Company. See "Description of Capital
Stock -- Certain Relationships Between the Founder Corporation and Carlyle
Investors Affecting the Company."

RELATIONSHIP WITH TELCOM VENTURES; POTENTIAL CONFLICTS OF INTEREST

Telcom Ventures, RF Investors' parent, is principally engaged in making
investments in wireless system operators and emerging wireless technologies.
Directors of Telcom Ventures and its subsidiaries who are also directors or
officers of the Company have certain fiduciary obligations to each organization.
Telcom Ventures and directors of Telcom Ventures and its subsidiaries who are
also directors and officers of the Company are in positions involving the
possibility of conflicts of interest with respect to certain transactions
concerning the Company. In addition, the Company and Telcom Ventures and certain
of Telcom Ventures' subsidiaries have entered and will enter into arrangements
which provide for certain transactions and relationships between the parties or
which otherwise affect the Company. The Company, RF Investors, Telcom Ventures,
and Telcom Ventures' owners (the Founder Corporation, the Singh Family Group and
the Carlyle Investors) (in each case as defined herein and collectively, the
"Telcom Ventures Group") will enter into an agreement (the "Intercompany
Agreement"), effective with the Offering, whereby, among other things, (i) the
Singh Family Group will be limited in its ability to compete with the Company in
its traditional lines of business and (ii) Telcom Ventures will be limited in
its ability to invest in entities whose primary business is to compete with the
Company in its traditional lines of business, in each case until the earlier of
(i) the date on which the Telcom Ventures Group no longer possesses 51% or more
of the outstanding voting power of the Company or (ii) the occurrence of certain
termination events specified in the Formation Agreement among the Telcom
Ventures Group. Each of the Carlyle Investors (but not its affiliates) will be
limited in its ability to invest in entities whose primary business is to
compete with the Company in its traditional line of business (excluding the
program management business) until the earlier of (i) the date on which such
Carlyle Investor no longer owns, directly or indirectly, an interest in the
Company or (ii) the occurrence of certain termination events specified in the
Formation Agreement among the Telcom Ventures Group. The Company will be free to
pursue investment opportunities on its own, but will be obligated to refer to
Telcom Ventures investment opportunities prior to offering such opportunities to
any other third party. If Telcom Ventures does not elect to pursue the
investment opportunity within five days, LCC will be free to offer the
opportunity to third parties. There can be no assurance that the Intercompany
Agreement will eliminate or reduce conflicts of interest or inconsistent
fiduciary obligations. See "Certain Transactions -- Corporate Opportunity" and
"-- Future Transactions with Officers, Directors and Principal Stockholders."

ABSENCE OF DIVIDENDS ON COMMON STOCK

The Company does not anticipate paying any cash dividends on its Common
Stock in the foreseeable future, but instead intends to retain all working
capital and earnings, if any, for use in the Company's business operations and
in the expansion of its business. Certain covenants in the Credit Facility
prohibit the payment of cash dividends without the consent of the Lenders. See
"Dividend Policy."

NEGATIVE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE

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shares of Class A Common Stock offered hereby. As of the completion of the
Offering, the Company's existing stockholders will continue to own an aggregate
of 8,864,395 shares of Common Stock, assuming no exercise of the Over-Allotment
Option. All of such shares of Common Stock are deemed to be "restricted
securities" as that term is defined in Rule 144, promulgated under the
Securities Act.

In general, under Rule 144, a person (or persons whose shares are
aggregated with shares held by another person) who is not an affiliate of the
Company and who has satisfied a two-year holding period may, under certain
circumstances, sell within any three-month period a number of restricted
securities which does not exceed the greater of one percent of the shares
outstanding or the average weekly trading volume during the four calendar weeks
preceding the notice of sale required by Rule 144. In addition, Rule 144
permits, under certain circumstances, the sale of restricted securities, without
any quantity limitations, by a person who is not an affiliate of the Company and
who has satisfied a three-year holding period. Under Rule 144, RF Investors, the
Founder Corporation and TC Group (defined below) may be deemed, at the time of
the Offering, to have held the Common Stock owned by them for more than two
years and, accordingly, each may be able to commence public sale of any of its
Common Stock pursuant to Rule 144 beginning 90 days after the Offering, except
as provided by its "lock-up" agreement with the Underwriters described below.
MCI may be able, at the time of the MCI Conversion (anticipated to be in August
1997), to commence public sale pursuant to Rule 144 of the Common Stock received
by MCI.

The Selling Stockholder, the Founder Corporation, TC Group and executive
officers and directors of the Company have agreed not to, directly or
indirectly, offer, sell, transfer, contract to sell, grant any option to
purchase or otherwise dispose of any Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock or, in any manner, transfer all
or a portion of the economic consequences associated with the ownership of
Common Stock or cause to be filed with the Commission a registration statement
with respect thereto, for a period of 180 days after the date of this Prospectus
without prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), notwithstanding any Rule 144 exemption which may be
available to such person. Pursuant to such "lock-up" arrangements, which may be
terminated earlier at the discretion of DLJ, commencing 180 days after the date
of this Prospectus there may be 8,864,395 restricted shares of Common Stock
available for sale pursuant to Rule 144. The Company intends to file a
registration statement under the Securities Act with respect to the
approximately 3,894,000 shares of Common Stock available upon exercise of
options under the Employee Plan, the Employee Stock Purchase Plan and the
Company's 1996 Directors Stock Option Plan. Finally, RF Investors has and, upon
the exchange of the MCI Notes for Class A Common Stock, MCI will have certain
"demand" rights to require the Company to register their Class A Common Stock
for sale and to register shares on a "piggyback" basis in connection with most
registered public offerings of securities of the Company. RF Investors and MCI
are or will be entitled to registration rights that would, among other things,
permit each of RF Investors and MCI to submit three demand registration requests
to the Company. Generally, the Company will be required to use "best efforts" to
file a registration statement with the Securities and Exchange Commission (the
"Commission") within 90 days of receiving such a request. However, once a year,
the Company may defer a demand registration request for a period of up to 90
days if the Board of Directors makes a good faith determination that it would be
"seriously detrimental" to the Company to file a registration statement within
the time period otherwise required. Any sales of such securities by stockholders
pursuant to Rule 144 or pursuant to a registration statement may have an adverse
effect on the market price of the Class A Common Stock and on the ability of the
Company to obtain additional equity financing. See "Shares Eligible For Future
Sale," "Principal and Selling Stockholder" and "Certain
Transactions -- Registration Rights."

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POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF CERTIFICATE OF
INCORPORATION, BY-LAWS AND THE CREDIT FACILITY

The Certificate of Incorporation and the Company's Bylaws (the "Bylaws")
include provisions that may discourage or prevent certain types of transactions
involving an actual or potential change in control of the Company. In addition,
the Board of Directors has the authority to fix the rights and preferences of
and issue shares of preferred stock, which may have the effect of delaying or
preventing a change in control of the Company without action by the
stockholders. See "Description of Capital Stock -- Preferred Stock" and
"-- Advance Notice Provisions for Stockholder Proposals and Stockholder
Nominations of Directors."

In addition, there are various provisions in the Credit Facility that may
have the effect of discouraging non-negotiated takeover attempts of the Company.
In particular, the Credit Facility provides for an event of default if, without
the prior written consent of the Lenders, (i) the Company sells, leases,
assigns, transfers or otherwise disposes of any of its assets, other than in the
ordinary course of business and in other limited circumstances, (ii) the Company
merges with another corporation other than a wholly-owned subsidiary, (iii) any
person or two or more persons acting in concert (other than Dr. Rajendra Singh,
Neera Singh, any trusts for their benefit or the benefit of their family
members, and any of their respective affiliates which are controlled by any one
or more of them) acquire beneficial ownership of more than 25% of the voting
stock of the Company, or (iv) during any period of 12 consecutive months,
individuals who at the beginning of such 12-month period were directors of the
Company (or other persons nominated by such individuals) cease for any reason to
constitute a majority of the Board of Directors of the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data."

INCURRENCE OF SUBSTANTIAL DILUTION

Investors participating in this Offering will incur immediate and
substantial dilution of approximately $15.62 per share in the pro forma net
tangible book value per share of the Class A Common Stock from the assumed
initial public offering price. See "Dilution."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this Offering, there has been no public market for the stock of
the Company and there can be no assurance that an active public market will
develop or be sustained after the Offering. The Offering price was determined by
negotiations among the Company, the Selling Stockholder and DLJ, Alex. Brown &
Sons Incorporated and Oppenheimer & Co., Inc., acting as representatives for the
Underwriters (the "Representatives"). See "Underwriting." Factors such as the
announcement of the introduction of new products or services by the Company or
its competitors, the award or termination of significant customer contracts,
quarter to quarter variations in the Company's operating results and changes in
earnings estimates by analysts, as well as market conditions in the technology
and emerging growth company sectors may have a significant impact on the market
price of the Class A Common Stock. Further, the stock market has on occasion
experienced extreme price and volume fluctuations, which have particularly
affected market prices of the equity securities of many technology companies and
which have often been unrelated to the operating performance of such companies.
These broad market fluctuations may materially and adversely affect the market
price of the Class A Common Stock.

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THE COMPANY

The Company's business commenced in 1983 in a corporation named LCC,
Incorporated (presently named Cherrywood Holdings, Inc.), a Kansas corporation
organized in 1983 and wholly owned by Dr. Rajendra and Neera Singh and other
members of the Singh Family Group (the "Founder Corporation"). The business was
transferred by the Founder Corporation to Telcom Ventures for a 75% interest in
Telcom Ventures in January 1994, at which time the Carlyle Investors acquired a
25% interest in Telcom Ventures in consideration of a cash contribution. Telcom
Ventures then formed the Limited Liability Company and transferred the business
to the Limited Liability Company in exchange for a 99% interest in the Limited
Liability Company. The Founder Corporation and TC Group, L.L.C., an affiliate of
the Carlyle Investors ("TC Group"), received direct interests of 0.75% and
0.25%, respectively, in the Limited Liability Company. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data -- Capital
Raised to Date" and Note 2 to the Consolidated Financial Statements.

In preparation for the Offering, LCC International will become the
corporate successor to the Limited Liability Company. Immediately prior to the
closing of the Offering, the Limited Liability Company will reorganize into
corporate form by merging with and into LCC International, which until that time
will have minimal assets and liabilities. See "The Merger."

The Company's executive offices are located at 2300 Clarendon Boulevard,
Suite 800, Arlington, VA 22201, and its telephone number is 703-351-6666.

THE MERGER

Immediately prior to the consummation of the Offering, the Limited
Liability Company will be merged with and into LCC International. LCC
International will be the surviving company in the Merger, and the separate
existence of the Limited Liability Company will cease. As a result of the
Merger, LCC International will own all of the assets and rights and be subject
to all of the obligations and liabilities of the Limited Liability Company,
including those under the Credit Facility and the MCI notes. Because the Merger
is intended to qualify as tax-free under Section 351 of the Code, the tax basis
of the assets held by LCC International after the Merger will be the same as the
tax basis of the assets held by the Limited Liability Company immediately before
the Merger, and LCC International will add to its holding period for certain
assets the period for which the Limited Liability Company held such assets.

In connection with the Merger, 11,250,751 shares of Class B Common Stock
will be issued to RF Investors, 85,233 shares of Class B Common Stock will be
issued to the Founder Corporation and 28,411 shares of Class A Common Stock will
be issued to TC Group. Immediately prior to the Merger, Telcom Ventures will
transfer its membership interest in the Limited Liability Company to RF
Investors in return for a membership interest in RF Investors of 99% (the
remaining membership interests of 0.75% and 0.25% will be held directly by the
Founder Corporation and TC Group, respectively). It is presently intended that
subsequent to the Offering, the Founder Corporation and TC Group will contribute
their shares of Common Stock to RF Investors. As a result of the Merger, RF
Investors and the Founder Corporation will own Class B Common Stock which will
represent upon consummation of the Offering 94.4% of the combined voting power
of both classes of Common Stock. See "Risk Factors -- Control of the Company by
RF Investors" and "Description of Capital Stock."

Pursuant to the Merger, LCC International will be required to indemnify
Telcom Ventures, RF Investors, the Founder Corporation, the Carlyle Investors
and TC Group against obligations and liabilities associated with the Limited
Liability Company's operations. LCC International will bear all of the costs
incurred by the Limited Liability Company and such entities, including transfer
taxes and related fees, in connection with the Merger.

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THE MCI NOTES, MCI NOTE ASSUMPTION, MCI CONVERSION

In June 1994 the Limited Liability Company and Telcom Ventures entered into
a Note Purchase Agreement with a then unrelated third party, MCI, which provided
for the issuance of a $20 million subordinated note by the Limited Liability
Company (the "LCC Note") and of a $30 million subordinated note by Telcom
Ventures (the "Telcom Ventures Note") to MCI in return for cash in such amounts.
When MCI entered into this transaction, it advised the Company that MCI intended
the transaction to facilitate its plans, at that time, to acquire licenses to
build-out and operate a national PCS system. In connection therewith, it was
contemplated that MCI would utilize the services and products of a separate
division of the Company. MCI has not pursued acquisition of licenses for a
national PCS network, has not entered into any service arrangements with the
Company and, as a result, MCI's role regarding the Limited Liability Company has
been limited to that of a passive financial investor.

The LCC Note and the Telcom Ventures Note (collectively, the "Exchangeable
Notes") are both due June 28, 2000 and bear interest at a rate equal to the
higher of 6.8% per annum, payable semiannually, or an amount which approximates
the return had they converted into a membership interest in the Limited
Liability Company from the date when the Exchangeable Notes were issued.
Immediately prior to the Merger, the Telcom Ventures Note will be assumed by the
Limited Liability Company (the "MCI Note Assumption"), and the $30 million
principal repayment obligation and interest thereon will become the sole
obligation of the Limited Liability Company and, following the Merger, the sole
obligation of the Company.

The Exchangeable Notes are exchangeable at certain specified times,
including during the 45 day period commencing on June 27, 1997 (MCI exchange
right), the 45 day period commencing on August 27, 1997 (Company exchange
right), and the same respective periods in 1998 and 1999, and including upon
certain extraordinary events, such as merger or sale of all assets of the
Company, tender offer for more than 25% of the Common Stock or distribution of
assets representing 5% or more of the total assets of the Company. Any exchange
of one note must include the exchange of the other note. The Company presently
intends to exercise its exchange option in August 1997 to cause the Exchangeable
Notes to be exchanged into 2,841,099 shares of Class A Common Stock (such
exchange is herein referred to as the "MCI Conversion"). The Company has granted
MCI registration rights which will be exercisable following the MCI Conversion.
See "Certain Transactions -- Registration Rights."

USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated to be
approximately $39.1 million, (approximately $45.3 million if the Over-Allotment
Option is exercised in full), after deducting the estimated underwriting
discount and estimated transaction fees and expenses payable by the Company. The
net proceeds of the Offering will be used (i) to repay entirely the amount
outstanding under the Credit Facility (approximately $20 million), (ii) to
advance $3.5 million to Telcom Ventures to assist Telcom Ventures in paying
certain taxes due in connection with the MCI Note Assumption (the "Telcom Tax
Advance"), and (iii) for strategic financing or investments in customers and
equipment vendors, acquisitions of companies with complementary products and
services, and working capital and general corporate purposes.

The terms of the Credit Facility, which (following an amendment to the
Credit Facility) will continue in place after the Offering and the application
of net proceeds therefrom, are described below in more detail under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data." Following
such amendment, the terms of the Credit Facility will be as follows. The maximum
amount that the Company may borrow under the Credit Facility is $20 million,
which borrowing shall be in the form of revolving loans and letters of credit.
Interest under the Credit Facility accrues at the Company's election (subject to
certain restrictions and limitations contained in the Credit Agreement), at
either (i) a variable rate (the "Variable Rate") equal to the higher of (a) the
Federal Funds Rate plus 0.50%, and (b) the announced prime commercial lending
rate of Chase, or (ii) a fixed rate (the "Fixed Rate") for a designated period
of time (1, 2, 3 or 6 months) equal to the rate at which U.S. dollar deposits
are offered to leading banks in the London interbank market plus 1.25%. The
revolving loan commitment expires in September 1999. Subject to certain
restrictions on the minimum

18
<PAGE> 19

permitted amount of any prepayment and the requirement that certain notices of
prepayment be given to Chase, the principal of the revolving loans is prepayable
without penalty or premium, so long as the Lenders are compensated for losses,
costs and expenses attributable to any prepayment of any loan accruing interest
at the Fixed Rate on a date other than the last day of the applicable interest
period. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity, Capital Resources and Other Financial
Data -- Existing Indebtedness."

The Telcom Tax Advance will be repayable over five years, with equal annual
principal payments over the term of the loan. Interest will accrue at the rate
of LIBOR plus 1.75% and be payable annually. Such loan will be senior
indebtedness of Telcom Ventures. Upon the sale by Telcom Ventures or any of its
affiliates (defined as each entity controlling, controlled by or under common
control with, Telcom Ventures, each natural person that controls Telcom Ventures
and each member of Telcom Ventures as of the date of the loan) of shares of
Common Stock resulting in Telcom Ventures and such affiliates, in the aggregate,
owning less than 25% of the outstanding Common Stock, the Company may declare
the loan to be immediately due and payable. See "Certain
Transactions -- Advances to and from Telcom Ventures and Related Parties."

The Company periodically reviews acquisition and strategic investment
opportunities that are related to the Company's business and believes that it is
desirable to have funds on hand so as to be able to make acquisitions and
strategic investments promptly. As of the date of this Prospectus, the Company
has no specific agreements, understandings, commitments, or arrangements with
regard to any particular future acquisition or strategic investment, and no
assurances can be given that the Company will be able to consummate any
acquisitions or strategic investments or that, if consummated, such acquisitions
would be on terms that are favorable to the Company.

The Company's proposed use of proceeds is subject to changes in general,
economic and competitive conditions, timing and management discretion, each of
which may change the amount of proceeds expended for the purposes intended. The
proposed application of proceeds is also subject to changes in market conditions
and the Company's financial condition in general.

Pending such uses, the net proceeds will be invested in short-term
investment grade, interest bearing obligations. The Company will not receive any
proceeds from the sale of Class A Common Stock by the Selling Stockholder.

DIVIDEND POLICY

The Company does not anticipate paying dividends on the Common Stock, cash
or otherwise, in the foreseeable future. In addition, the Credit Facility
prohibits the payment of dividends by the Company without consent of the
Lenders. Future dividends, if any, will be at the discretion of the Board of
Directors and will depend upon, among other things, the Company's operations,
capital requirements and surplus, general financial condition, contractual
restrictions and such other factors as the Board of Directors may deem relevant.

19
<PAGE> 20

DILUTION

The pro forma net tangible book value of the Company on June 30, 1996
(determined as if the Merger and MCI Note Assumption but not the Offering had
occurred on June 30, 1996), was $(30.3) million, or a pro forma per share amount
of approximately $(2.66). Pro forma net tangible book value per share represents
the amount of total tangible assets less the amount of total liabilities divided
by the total number of pro forma shares of Common Stock outstanding. After
giving effect to the receipt of approximately $39.1 million of estimated net
proceeds of the sale by the Company of 2.75 million shares of Class A Common
Stock pursuant to the Offering and the Telcom Tax Advance of $3.5 million, the
pro forma net tangible book value of the Company at June 30, 1996 would have
been approximately $5.3 million or $.38 per share. This change represents an
immediate increase in pro forma net tangible book value of $3.04 per share to
the existing stockholders and an immediate dilution of $15.62 per share to new
investors purchasing shares of Class A Common Stock in the Offering. The
following table illustrates the substantial and immediate dilution to new
investors:

<TABLE>
<S> <C> <C>
Offering price per share........................................... $16.00
Pro forma net tangible book value per share before Offering...... $(2.66)
Increase per share attributable to new investors(1).............. 3.04
------
Pro forma net tangible book value per share after Offering(1)...... .38
------
Dilution per share to new investors(2)(3).......................... $15.62
======
</TABLE>

- ---------------

(1) After deducting underwriting discounts, and estimated transaction fees and
expenses of approximately $1.8 million, to be paid by the Company in
connection with the Offering.

(2) Dilution is determined by adding net tangible book value per share after the
Offering to the amount assumed paid by a new investor for a share of Class A
Common Stock.

(3) Assuming the Over-Allotment Option is exercised in full, pro forma net
tangible book value of the Company after the Offering would be $0.79 per
share and the immediate dilution to new investors would be $15.21 per share.

The following table summarizes the difference between existing stockholders
(determined as if the Merger had occurred on June 30, 1996) and new investors
with respect to the number of shares of Common Stock purchased from the Company,
the total consideration paid to the Company by the purchasers of shares of Class
A Common Stock in the Offering and by the existing stockholders, and the average
price paid per share on an as-adjusted basis.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------ ------------------------- AVERAGE PRICE
NUMBER PERCENTAGE AMOUNT PERCENTAGE PER SHARE
<S> <C> <C> <C> <C> <C>
New Investors..................... 2,750,000 19.5% $44,000,000 80.8% $ 16.00
Existing Stockholders(1).......... 11,364,395 80.5 10,423,000 19.2 0.92
---------- ----- ----------- -----
Total................... 14,114,395(2) 100.0% $54,423,000 100.0%
========== ===== =========== =====
</TABLE>

- ---------------

(1) The existing stockholders are RF Investors, the Founder Corporation and TC
Group. See "Principal and Selling Stockholders." Other than 10 shares of
Class A Common Stock purchased in connection with the formation of LCC
International, the Common Stock reflected in this table as being owned by
the existing stockholders will be issued to them in the Merger. See "The
Merger." The above table does not include the shares issuable upon the MCI
Conversion. See "The MCI Notes, MCI Note Assumption, MCI Conversion."

(2) Does not include 412,500 shares of Class A Common Stock issuable upon
exercise of the Over-Allotment Option that the Underwriters have the option
to purchase from the Company to cover over-allotments, if any, or 3,979,000
shares of Class A Common Stock and Class B Common Stock reserved or to be
reserved for issuance under the Company's stock option, directors' or stock
purchase plans or for options granted to the Carlyle Option Designees. See
"Underwriting" and "Management -- Stock Plans."

20
<PAGE> 21

CAPITALIZATION

The following table sets forth at June 30, 1996 (i) the combined
capitalization of LCC International and the Limited Liability Company and (ii)
the pro forma combined capitalization of the Company as adjusted for the Merger,
the MCI Note Assumption and the Offering, including the application of $20
million of the estimated net proceeds of the Offering to pay off amounts
outstanding under the Credit Facility. See "Use of Proceeds." This table should
be read in conjunction with the Consolidated Financial Statements and related
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
----------------------------------------
ACTUAL(1) ADJUSTMENTS PRO FORMA
(IN THOUSANDS)
<S> <C> <C> <C>
Short-term debt, including current installments of long-term
debt(2)................................................... $20,000 $ (20,000)(3) $ --
======= ======== =======
Long-term debt:
Convertible Subordinated Debt............................. $20,000 $ 30,000(4) $ 50,000
------- -------- -------
Total long-term debt.............................. 20,000 30,000 50,000
------- -------- -------
Limited Liability Company equity............................ (2,134) 2,134(5) --
------- -------- -------
Stockholders' equity:
Class A Common Stock, $0.01 par value:
70,000,000 shares authorized; -0- and 5,278,411 shares
issued and outstanding, respectively................... -- 53(6) 53
Class B Common Stock, $0.01 par value:
20,000,000 shares authorized; -0- and 8,835,984 shares
issued and outstanding, respectively................... -- 88(6) 88
Preferred Stock:
10,000,000 shares authorized; -0- shares issued and
outstanding............................................ -- --
Paid-in capital........................................... -- 5,484(6) 5,484
Retained earnings......................................... -- 4,206(7) 4,206
------- -------- -------
Total stockholders' equity................................ -- 9,831 9,831
------- -------- -------
Total capitalization........................................ $17,866 $ 41,965 $ 59,831
======= ======== =======
</TABLE>

- ---------------

(1) Combined capitalization of LCC International and the Limited Liability
Company as of June 30, 1996.

(2) Represents amounts outstanding under the Credit Facility. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial
Data -- Existing Indebtedness."

(3) Reflects the application of $20 million of the estimated net proceeds of the
Offering to pay off amounts outstanding under the Credit Facility.

(4) Reflects MCI Note Assumption.

(5) Reflects elimination of Limited Liability Company equity upon the Merger and
conversion to Subchapter C corporation.

(6) Represents allocation of estimated proceeds from the Offering of $39.125
million, the Merger, the MCI Note Assumption, and the Telcom Tax Advance of
$3.5 million.

(7) Includes non-recurring payment of compensation expense of $0.9 million (net
of applicable taxes) resulting from the dividend to Telcom Ventures of the
note receivable from Telcom Ventures held by the Company. See "Managements'
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data -- Cash
Flows." Also includes a non-recurring deferred tax benefit from conversion
from a limited liability company to a Subchapter C corporation for income
tax purposes, estimated to be approximately $6.9 million, and Limited
Liability Company equity of $(2.134) million.

21
<PAGE> 22

SELECTED CONSOLIDATED FINANCIAL DATA

Set forth below are (i) selected consolidated financial data as of and for
the five years ended December 31, 1991 through 1995, which data have been
derived from the Company's Consolidated Financial Statements that have been
audited by KPMG Peat Marwick LLP, (ii) selected financial data for the six
months ended June 30, 1995 and 1996, which data have been derived from the
Company's unaudited financial statements, and (iii) selected pro forma
consolidated summary of operations data for the year ended December 31, 1995 and
the six months ended June 30, 1996, and selected pro forma consolidated balance
sheet data as of June 30, 1996, which data give effect to the Merger, the MCI
Note Assumption and the Offering (including the application of $20 million of
the estimated net proceeds of the Offering to pay entirely the amount
outstanding under the Credit Facility and the Telcom Tax Advance) as if each had
occurred as of the beginning of the respective pro forma periods. In the opinion
of the Company, the unaudited data for the six month periods include all
adjustments necessary for a fair presentation of such information. Operating
results for the six months ended June 30, 1996 are not necessarily indicative of
the results that may be achieved for any interim periods during the year ending
December 31, 1996 or any future periods. The selected consolidated financial
data set forth below should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
Consolidated Financial Statements and related notes thereto included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------------------------------------------------- --------------------------------------
1991 1992 1993 1994 1995 1995 1995 1996
1996
PRO FORMA(1)(2)(3)
(IN THOUSANDS, EXCEPT PER SHARE DATA) PRO FORMA(1)(2)(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED
STATEMENTS OF
OPERATIONS
DATA:
Revenues:
Service
revenues..... $25,872 $31,053 $30,712 $41,063 $ 64,016 $ 64,016 $29,249 $39,281 $ 39,281
Product
revenues..... 14,435 23,279 29,595 34,992 40,445 40,445 17,311 21,083 21,083
------- ------- ------- ------- -------- -------- ------- ------- --------
Total
revenues... 40,307 54,332 60,307 76,055 104,461 104,461 46,560 60,364 60,364
------- ------- ------- ------- -------- -------- ------- ------- --------
Cost of revenues:
Cost of service
revenues..... 20,466.. 21,352 21,087 29,185 45,682 45,682 21,431 26,103 26,103
Cost of product
revenues..... 9,046 10,565 16,026 21,299 25,455 25,455 11,550 14,719 14,719
------- ------- ------- ------- -------- -------- ------- ------- --------
Total cost of
revenues... 29,512 31,917 37,113 50,484 71,137 71,137 32,981 40,822 40,822
------- ------- ------- ------- -------- -------- ------- ------- --------
Gross profit..... 10,795 22,415 23,194 25,571 33,324 33,324 13,579 19,542 19,542
------- ------- ------- ------- -------- -------- ------- ------- --------
Operating
expenses:
Sales and
marketing.... 776 2,372 4,146 4,987 5,823 5,823 2,934 3,041 3,041
General and
administrative... 5,156 5,013 5,799 8,802 10,108 10,108 4,977 5,965 5,965
Non-cash
compensation... -- -- -- 3,255 4,646 4,646 2,372 3,599 3,599
Depreciation
and
amortization... 1,511 1,706 1,838 2,020 3,699 3,699 1,351 2,522 2,522
------- ------- ------- ------- -------- -------- ------- ------- --------
Total
operating
expenses... 7,443 9,091 11,783 19,064 24,276 24,276 11,634 15,127 15,127
------- ------- ------- ------- -------- -------- ------- ------- --------
Operating
income......... 3,352 13,324 11,411 6,507 9,048 9,048 1,945 4,415 4,415
------- ------- ------- ------- -------- -------- ------- ------- --------
Other income
(expense):
Interest,
net.......... 614 184 146 (221) (2,193) (3,269) (640) (1,295) (1,382)
Other.......... 231 625 (231) 721 1,027 1,027 195 1,670 1,670
------- ------- ------- ------- -------- -------- ------- ------- --------
Total other
income
(expense).. 845 809 (85) 500 (1,166) (2,242) (445) 375 288
------- ------- ------- ------- -------- -------- ------- ------- --------
Income before
income taxes... 4,197 14,133 11,326 7,007 7,882 6,806 1,500 4,790 4,703
Provision for
income taxes... 337 528 829 2,037 3,142 2,722 758 1,769 1,881
------- ------- ------- ------- -------- -------- ------- ------- --------
Net income....... $ 3,860 $13,605 $10,497 $ 4,970 $ 4,740 $ 4,084 $ 742 $ 3,021 $ 2,822
======= ======= ======= ======= ======== ======== ======= ======= ========
PRO FORMA DATA:
Pro forma net
income......... $ 4,729(5) $ 4,084 $ 2,874(5) $ 2,822
======== ======== ======= ========
Pro forma net
income per
share.......... $ 0.36(5) $ 0.33 $ 0.21(5) $ 0.21
======== ======== ======= ========
OTHER DATA:
EBITDA(4)........ $ 4,863 $15,030 $13,249 $ 8,527 $ 12,747 $ 3,296 $ 6,937
Capital
Expenditures... 2,455 1,625 1,882 2,403 4,222 2,382 1,437
</TABLE>

22
<PAGE> 23

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, AT JUNE 30,
----------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1996 1996
(IN THOUSANDS) PRO FORMA(1)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash................................................... $ 4,317 $ 9,369 $ 9,170 $18,469 $ 6,571 $ 5,431 $ 20,980
Working capital........................................ 7,674 5,020 4,682 31,503 17,649 6,947 45,212
Property, plant, and equipment, net.................... 3,949 3,861 3,905 4,019 5,440 5,340 5,340
Licenses and other intangibles, net.................... 0 0 0 1,797 3,745 4,486 4,486
Total assets........................................... 19,717 21,211 55,417 58,586 62,041 80,681 103,130
Total debt............................................. 302 43 30,442 20,000 30,000 40,000 50,000
Equity (deficit)....................................... 9,857 9,431 12,270 13,938 (244) (2,134) 9,831(6)
</TABLE>

- ---------------

(1) Adjusted to reflect the pro forma effects, as applicable, of the Offering
(including the application of estimated net proceeds of the Offering to
repay amounts outstanding under the Credit Facility and related interest
expense), the Telcom Tax Advance of $3.5 million, the MCI Note Assumption
and related interest expense, and the Merger (assuming such offering,
advance, assumption and merger occurred on January 1, 1995, except for
consolidated balance sheet data, which assumes such transactions occurred on
June 30, 1996).

(2) In connection with the Offering and the Merger, the Company will be
converting to a Subchapter C corporation under the Code. Prior to
conversion, the Company has been a limited liability company for Federal and
certain state income tax purposes. As such, income of the Company was
taxable to the individual members rather than to the Company. Accordingly,
the provision for income taxes for the years ended December 31, 1991 to
1995, and the six months ended June 30, 1995 and 1996 represents state
income taxes on earned income in those states that do not recognize the
flow-through nature of the limited liability company and foreign taxes. Pro
forma net income is net of a provision for income taxes as if the Company
were a Subchapter C corporation at an assumed effective income tax rate of
approximately 40%. The amount of the pro forma provision for income taxes is
$2,722,000 and $1,881,000 for the year ended December 31, 1995 and the six
months ended June 30, 1996, respectively.

(3) Pro forma net income per share has been computed by dividing pro forma net
income by the pro forma weighted average number of common shares and common
share equivalents outstanding. The amount of the weighted average shares
used in the computation of pro forma net income per share is 18.33 million.

(4) EBITDA represents earnings before interest income, interest expense, other
income, income taxes, depreciation and amortization. EBITDA is commonly used
in the telecommunications industry to analyze companies on the basis of
operating performance, leverage and liquidity. EBITDA is not intended to
represent cash flows for periods, nor has it been presented as an
alternative to operating income or as an indicator of operating performance
and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with generally accepted accounting
principles. See the Company's Consolidated Statements of Cash Flows in the
Company's Consolidated Financial Statements contained elsewhere in this
Prospectus.

(5) Pro forma net income has been adjusted to reflect the pro forma effects of
the conversion of the Company to a Subchapter C corporation (see (2) above).
The amount of the pro forma provision for income taxes is $3,153,000 and
$1,916,000 for the year ended December 31, 1995 and the six months ended
June 30, 1996, respectively. Weighted average shares used in the computation
of pro forma net income per share is approximately 15.6 million.

(6) Includes non-recurring payment of compensation expense of $0.9 million (net
of applicable taxes) from the dividend to Telcom Ventures of the note
receivable from Telcom Ventures held by the Company. See "Managements'
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity, Capital Resources and other Financial Data -- Cash Flows." Also
includes a non-recurring deferred tax benefit from conversion from a limited
liability company to a Subchapter C corporation for income tax purposes,
estimated to be approximately $6.9 million, the MCI Note Assumption, the
Offering and the Telcom Tax Advance of $3.5 million.

23
<PAGE> 24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

OVERVIEW

The Company's revenues are generated through contracts for RF engineering
and program management services, licenses of the Company's software products and
sales of the Company's field measurement and analysis products. LCC provides
engineering services on a contract basis, usually in a customized plan for each
client. The Company generally charges for engineering services on a time and
materials basis, although Phase 1 services or other projects of short duration
may involve a fixed price or success fee. The Company generally provides program
management services on a time and materials basis; such contracts often have
ceilings on cost per cell site. The Company's revenues also include
reimbursement for expenses, including the living expenses of engineers on
customer sites (approximately 15% of revenues from RF engineering services for
1995). The software tools used by LCC's engineers, which are used as part of the
customer's system after completion of the project pursuant to a license, are
recorded as product, not service revenues. Revenues from software tools are
earned under license arrangements, which in the U.S. often consist of an annual
fee per workstation or per cell site and which are for a fixed term that
requires renewal by the customer to retain the software. The Company charges an
up-front fee in many cases outside the U.S. where customers are not accustomed
to paying annual licensing fees for software. A portion of the revenues from
licensing software to customers, apart from those associated with engineering
services contracts, consists of upgrades or additional software modules
developed by the Company following the initial licensing. Revenues from field
measurement and analysis equipment consist primarily of one-time payments,
although there are some periodic rental payments and there may be additional
charges for equipment maintenance and upgrades.

Service revenue consists of revenues from engineering services
(approximately 56.3% of 1995 revenues) and program management services
(approximately 5.0% of 1995 revenues), which the Company commenced providing in
1995. Product revenue consists of revenue from software tools (approximately
18.5% of 1995 revenues) and revenue from field measurement and analysis products
(approximately 20.2% of 1995 revenues). The Company derives a significant
proportion of its revenues from its international customers (approximately 39%
in 1995). Since almost all of the Company's contracts are denominated in U.S.
dollars, the Company generally does not maintain currency hedge agreements.

Cost of revenues consists of costs associated with engineering design
services and program management services as well as costs associated with the
production and design of field measurement and analysis equipment, licensing of
software and related maintenance costs. Sales and marketing expenses consist of
salaries, sales commissions, travel and other expenses required to implement the
Company's marketing, sales and customer support plans. General and
administrative expenses consist of the compensation, finance, information
systems, professional services, office and occupancy costs required to manage
the Company's business. Non-cash compensation consists of awards under a program
for key executives adopted in 1994. Such plan is accounted for as a variable
plan and, therefore, to the extent that the deemed fair market value of the
Company increases, compensation expense will increase accordingly. It is
anticipated that, in connection with the Offering, the Company will grant
options to replace the awards granted under this plan. It is expected that such
options will be granted with exercise prices substantially below the initial
public offering price. See "Management -- Stock Plans."

The key drivers of LCC's growth have historically been (i) the issuances of
new or additional wireless telecommunications licenses by governmental
authorities to wireless operators, (ii) increases in the number of cell sites
operated and the number of subscribers served by wireless network operators,
(iii) the introduction of new services or technologies, (iv) the increasing
complexity of the systems deployed by wireless network operations and (v) the
expansion and optimization of existing systems by wireless network operators. To
keep

24
<PAGE> 25

pace with the subscriber growth currently anticipated by most industry analysts,
LCC expects that there will continue to be significant investment by network
system operators over the next few years in design services, software tools and
field measurement and analysis equipment. The Company expects that as system
build-out is completed and areas (particularly in the U.S.) begin to have
multiple network operators, the demand for RF engineering services will change.
See "Business -- The LCC Strategy Offer and Develop New Types of Services and
Products -- Phase 4 System Efficiency Services and Products." From 1991 to 1995,
the average operating gross margins of the Company were approximately 34.4% of
total revenue and the compound annual growth rate of its operating gross profit
was approximately 33.0%. Gross profits as a percent of total revenues generally
declined from 1993 through December 31, 1995 due to the factors described below.
There can be no assurance as to the effect of market changes impacting the
Company. See "Risk Factors -- Changes Adversely Impacting Demand for the
Company's Products and Services" and "-- Risks From Competition."

RESULTS OF OPERATIONS

The following table sets forth certain items as a percentage of revenue
from the Company's audited consolidated statements of operations for the years
ended December 31, 1993, 1994, and 1995 and the unaudited statements for the six
months ended June 30, 1995 and 1996.

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
------------------------- ---------------
1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Revenues:
Service revenues.................................. 50.9% 54.0% 61.3% 62.8% 65.1%
Product revenues.................................. 49.1 46.0 38.7 37.2 34.9
----- ----- ----- ----- -----
Total revenues............................ 100.0 100.0 100.0 100.0 100.0
Cost of revenues.................................... 61.5 66.4 68.1 70.8 67.6
----- ----- ----- ----- -----
Gross profit........................................ 38.5 33.6 31.9 29.2 32.4
----- ----- ----- ----- -----
Operating expenses:
Sales and marketing............................... 6.9 6.6 5.6 6.3 5.0
General and administrative........................ 9.6 11.6 9.7 10.7 9.9
Non-cash compensation............................. 0.0 4.3 4.4 5.1 6.0
Depreciation and amortization..................... 3.1 2.6 3.5 2.9 4.2
----- ----- ----- ----- -----
Total operating expenses.................. 19.6 25.1 23.2 25.0 25.1
----- ----- ----- ----- -----
Operating income:................................... 18.9 8.5 8.7 4.2 7.3
----- ----- ----- ----- -----
Other income (expense):
Interest income................................... 0.4 0.7 0.6 0.8 0.5
Interest expense.................................. (0.1) (0.9) (2.7) (2.2) (2.7)
Other............................................. (0.4) 0.9 0.9 0.4 2.8
----- ----- ----- ----- -----
Total other income (expense).............. (0.1) 0.7 (1.2) (1.0) 0.6
----- ----- ----- ----- -----
Income before income taxes.......................... 18.8 9.2 7.5 3.2 7.9
Provision for income taxes.......................... 1.4 2.7 3.0 1.6 2.9
----- ----- ----- ----- -----
Net income.......................................... 17.4% 6.5% 4.5% 1.6% 5.0%
===== ===== ===== ===== =====
</TABLE>

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995

Revenues. Revenues for the six months ended June 30, 1996 were
approximately $60.4 million compared to approximately $46.6 million for the six
months ended June 30, 1995, an increase of approximately $13.8 million or 29.6%.
Service revenues were approximately $39.3 million compared to approximately
$29.2 million for the comparable six months of the prior year, an increase of
approximately $10.1 million or 34.3%. The increase was due to new demand for
engineering design services from the PCS market and revenues generated by the
program management division, which commenced operations in 1995. Product
revenues for the six months ended June 30, 1996 were approximately $21.1 million
compared to approximately

25
<PAGE> 26

$17.3 million for the comparable six months of the prior year, an increase of
approximately $3.8 million or 21.8%. The increase was due primarily to growth in
hardware sales, which increased approximately $2.3 million or 25.7% between
years.

Cost of Revenues and Gross Profit. Cost of revenues was approximately $40.8
million for the six months ended June 30, 1996 compared to approximately $33.0
million for the six months ended June 30, 1995, an increase of approximately
$7.8 million or 23.8%. As a percentage of total revenues, cost of revenues was
67.6% and 70.8% for the six months ended June 30, 1996 and the six months ended
June 30, 1995, respectively. Gross profit was approximately $19.5 million for
the first six months of 1996 compared to approximately $13.6 million for the
comparable period of the prior year, an increase of approximately $5.9 million
or 43.9%. As a percentage of total revenues, gross profit was 32.4% and 29.2%
for the six months ended June 30, 1996 and 1995, respectively. The approximately
$5.9 million increase in gross profit largely resulted from corresponding
revenue growth. The increase in cost of revenues was due, in part, to the
Company's build-up of engineering and related staff to serve the PCS market,
particularly in the program management division.

Sales and Marketing. Sales and marketing expenses were approximately $3.0
million for the six months ended June 30, 1996 compared to approximately $2.9
million for the six months ended June 30, 1995, an increase of approximately
$0.1 million or 3.6%. As a percentage of total revenues, sales and marketing
expenses decreased to 5.0% for the first six months of 1996 compared to 6.3% for
the comparable period of 1995 primarily as a result of a reduction in labor
costs.

General and Administrative. General and administrative expenses were
approximately $6.0 million for for the first six months of 1996 compared to $5.0
million for the first six months of 1995, an increase of approximately $1.0
million or 19.9%. The increase was primarily the result of an increase in the
allowance for doubtful accounts due to increasing revenues. As a percentage of
total revenues, general and administrative expenses were 9.9% and 10.7% for the
six months ended June 30, 1996 and 1995, respectively, as the increase in
revenues outpaced growth in general and administrative expenses.

Non-Cash Compensation. Non-cash compensation increased to approximately
$3.6 million for the six months ended June 30, 1996, from approximately $2.4
million for the six months ended June 30, 1995, an increase of approximately
$1.2 million or 51.7%. The increase is the result of the vesting of certain
portions of the award of non-cash compensation under the LLC Membership Plan and
an increase in the deemed fair market value of the Company.

Net Income. Net income was approximately $3.0 million for the six months
ended June 30, 1996 compared to approximately $0.7 million for the six months
ended June 30, 1995, an increase of approximately $2.3 million or 307.1%. The
increase was the result of an increase in gross profit from corresponding
revenue growth, and an increase in other income due to the sale of the Company's
50% interest in Telemate, S.A. for approximately $3.8 million offset by an
increase in general and administrative expenses, non-cash compensation,
depreciation and amortization expenses, interest expense and income taxes.
Depreciation and amortization expense increased approximately $1.2 million the
first six months of 1996 to approximately $2.5 million as a result of the
increased amount of amortization of capitalized software development costs.
Interest expense increased approximately $0.6 million for the first six months
of 1996 to approximately $1.6 million primarily as a result of borrowings under
a Note Purchase Agreement dated as of May 30, 1995 between Nomura Holding
America, Inc. ("Nomura") and the Company (the "Nomura Facility") and costs
associated with the purchase of the Nomura Facility by Chase. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity, Capital Resources and Other Financial Data -- Existing
Indebtedness." Income taxes increased approximately $1.0 million, or 133.4%, to
approximately $1.8 million for the six months ended June 30, 1996 primarily as a
result of revenue growth.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Revenues. Revenues for 1995 were approximately $104.5 million versus
approximately $76.1 million for 1994, an increase of approximately $28.4 million
or 37.3%. Service revenues were approximately $64.0 million in 1995 versus
approximately $41.1 million in 1994, an increase of approximately $22.9 million
or 55.9%. The increase in service revenues was primarily due to new business in
the PCS market combined with an increase

26
<PAGE> 27

in revenues from domestic cellular and ESMR operators. Further, the program
management division commenced operations in 1995 and had revenues of
approximately $5.2 million. Product revenues were approximately $40.5 million
for 1995 compared to approximately $35.0 million for 1994, an increase of
approximately $5.5 million or 15.6%. An increase in software licensing revenue
was offset by a slight decline in field measurement and analysis product sales.
The increase in software licensing revenue was largely due to increased
international revenues. The Company experienced a stagnant demand for its field
measurement and analysis products during 1994 (reflected in revenues from field
measurement and analysis products for 1995) when it devoted its resources to
enhancing its own field measurement and analysis product development
capabilities rather than developing new products.

Cost of Revenues and Gross Profit. Cost of revenues increased to
approximately $71.1 million for 1995 compared to approximately $50.5 million for
1994, an increase of approximately $20.6 million or 40.9%. As a percentage of
total revenues, cost of revenues was approximately 68.1% and approximately 66.4%
for 1995 and 1994, respectively. Gross profit was approximately $33.3 million
for 1995 from approximately $25.6 million for 1994, an increase of approximately
$7.7 million or 30.3%. As a percentage of total revenues, gross profit was
approximately 31.9% and 33.6% for 1995 and 1994, respectively. The approximately
$7.7 million increase in gross profit largely resulted from corresponding
revenue growth. The increase in costs of revenues and the decline in gross
profit as a percentage of total revenues were due, in part, to the Company's
build-up of staff to serve the PCS business which was followed by the slower
than anticipated development of that business, competitive pressures with
respect to field measurement and analysis products and software tools, and costs
associated with the start-up of the program management division.

Sales and Marketing. Sales and marketing expenses were approximately $5.8
million for 1995 compared to approximately $5.0 million for 1994, an increase of
approximately $0.8 million, or 16.8%. The increase was primarily attributable to
growth in the Company's marketing personnel to support the increase in revenues.
As a percentage of total revenues, sales and marketing expenses decreased to
approximately 5.6% for 1995 compared to 6.6% for 1994, as a result of a greater
rate of increase in revenues relative to the growth in sales and marketing
expenses.

General and Administrative. General and administrative expenses were
approximately $10.1 million for 1995 compared to approximately $8.8 million for
1994, an increase of approximately $1.3 million or 14.8%. The increase was
primarily the result of increases in the Company's administrative personnel to
support growth. As a percentage of total revenues, general and administrative
expenses were approximately 9.7% and approximately 11.6% for 1995 and 1994,
respectively, due to the fixed nature of certain overhead costs.

Non-Cash Compensation. Non-cash compensation increased to approximately
$4.6 million for 1995 from approximately $3.3 million for 1994, an increase of
approximately $1.3 million or 42.7%. The increase was the result of an increase
in the vesting of the awards under the LLC Membership Plan and an increase in
the deemed fair market value of the Company.

Net Income. Net income was approximately $4.7 million for 1995 compared to
approximately $5.0 million for 1994, a decrease of approximately $0.3 million or
4.6%. As a percent of total revenues, net income decreased to approximately 4.5%
for 1995 from approximately 6.5% for 1994. The decrease in net income of $0.3
million was the result of an increases in operating expenses, interest expense,
and the provision for income taxes. Depreciation and amortization expense
increased as a result of the capitalization and amortization of external costs
incurred by the Company in connection with the upgrade of its financial
information systems. Interest expense increased approximately $2.1 million or
293.0% for 1995 as a result of additional borrowings under the Nomura Facility
which was used to dividend and loan funds to Telcom Ventures. Income taxes
increased approximately $1.1 million or 54.2% for 1995 as a result of an
increase in the absolute amount of international revenues.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Revenues. Revenues for 1994 were approximately $76.1 million compared to
approximately $60.3 million for 1993, an increase of approximately $15.8 million
or 26.1%. Service revenues were approximately $41.1 million for 1994 versus
approximately $30.7 million for 1993, an increase of approximately $10.4 million

27
<PAGE> 28

or 33.7%. Engineering design services accounted for the entire increase as the
program management services did not commence until 1995. The increase in
engineering design services revenues was primarily due to significantly
increased revenues from domestic cellular and ESMR operators. International
engineering design service revenues grew at a slower rate in 1994 due to the
completion of several major European projects, which were offset by a broadening
of the Company's international client base. Product revenues were approximately
$35.0 million for 1994 versus approximately $29.6 million for 1993, an increase
of approximately $5.4 million or 18.2%. An increase in field measurement and
analysis product sales was offset by a decline in software licensing revenue.
The increase in field measurement and analysis product sales was primarily due
to increases in European sales and sales to ESMR operators. In addition, sales
to domestic cellular operators and to systems operators in Asia and South
America increased. The decline in software licensing revenues was a result of
increased customer requirements for UNIX-based products at a time when the
Company's UNIX-based products were still being developed, as well as increased
competition in software products.

Cost of Revenues and Gross Profit. Cost of revenues was approximately $50.5
million for 1994 compared to $37.1 million for 1993, an increase of
approximately $13.4 million or 36.0%. As a percentage of total revenues, cost of
revenues was approximately 66.4% and approximately 61.5% for 1994 and 1993,
respectively. Gross profit was approximately $25.6 million for 1994 compared to
$23.2 million for 1993, an increase of approximately $2.4 million or 10.2%. As a
percentage of total revenues, gross profit was approximately 33.6% for 1994
compared to approximately 38.5% for 1993. The approximately $2.4 million
increase in gross profit resulted primarily from corresponding revenue growth.
The increase in the cost of revenues and the decline in gross profit as a
percentage of total revenues were due, in part, to an investment in training and
process development for PCS capabilities by the engineering design services
division and increased cost of software products relative to licensing revenues
as a result of technical issues associated with the development of UNIX-based
products.

Sales and Marketing. Sales and marketing expenses were approximately $5.0
million for 1994 compared to approximately $4.1 million for 1993, an increase of
approximately $0.9 million or 20.3%. As a percentage of total revenues, sales
and marketing expenses declined slightly to approximately 6.6% for 1994 as
compared to approximately 6.9% for 1993. The increase of approximately $0.9
million was primarily due to an increase in commissions paid to agents.

General and Administrative. General and administrative expenses were
approximately $8.8 million for 1994 compared to approximately $5.8 million for
1993, an increase of approximately $3.0 million or 51.8%. As a percentage of
total revenues, general and administrative expenses increased to approximately
11.6% for 1994 from approximately 9.6% for 1993. The increase was primarily due
to an increase in administrative labor costs as a result of revenue growth.

Non-Cash Compensation. During 1994 the Company established the LLC
Membership Plan for certain of the Company's key executives whose
responsibilities and decisions affect the long-term growth and profitability of
the Company. Expense is recognized over the vesting period of the award and is
based on a percentage of the deemed fair market value of the Company. Non-cash
compensation under the LLC Membership Plan was approximately $3.3 million for
1994.

Net Income. Net income was approximately $5.0 million for 1994 compared to
approximately $10.5 million for 1993, a decrease of approximately $5.5 million
or 52.7%. As a percent of total revenues, net income declined to approximately
6.5% for 1994 from approximately 17.4% for 1993. The decrease in net income was
primarily due to an increase in general and administrative expenses,
establishment of the LLC Membership Plan and an increase in income taxes of
approximately $1.2 million or 145.7%. The increase in income taxes was due to an
increased amount of foreign income taxes as a result of an expanding
international presence.

28
<PAGE> 29

LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA

Additions to property and equipment were approximately $4.2 million for
1995, compared to approximately $2.4 million for 1994 and approximately $1.9
million for 1993. Approximately $0.9 million of the $1.8 million increase from
1994 to 1995 related to an upgrade of the Company's financial information
systems software. The remainder of the increase from 1994 to 1995 and the
approximately $0.5 million increase from 1993 to 1994 represented ongoing
additions to office furniture and computer equipment, largely in support of the
Company's expanding revenue base. Software development costs are primarily wages
and contractor fees which are capitalized after establishing the commercial and
technological feasibility of the product.

<TABLE>
<CAPTION>
1993 1994 1995
(IN MILLIONS)
<S> <C> <C> <C>
Additions to property and equipment............................. $1.9 $2.4 $4.2
Investments in joint ventures................................... -- 0.2 0.4
Software development costs...................................... -- 1.9 2.9
---- ---- ----
Total................................................. $1.9 $4.5 $7.5
==== ==== ====
</TABLE>

CASH FLOWS

The Company has generally maintained a positive cash flow and has generally
funded its operating requirements with cash generated from operations. Cash and
cash equivalents were approximately $5.4 million at June 30, 1996, a decrease of
approximately $1.1 million or 17.3% from December 31, 1995. The decrease is due
primarily to changes in operating assets and liabilities. No dividends were paid
during the six months ended June 30, 1996. Dividends paid during the six months
ended June 30, 1995 were $9.5 million. During the six months ended June 30,
1996, the Company advanced approximately $4.8 million to its parent, Telcom
Ventures, under a revolving promissory note. Total advances of $14.1 million at
June 30, 1996 are reflected as a reduction of members' capital in the statement
of members' capital in the accompanying unaudited Consolidated Financial
Statements.

Net cash generated from operations was approximately $4.8 million in 1995
and approximately $8.0 million in 1994. Net cash used in operations was
approximately $4.2 million in 1993. Dividends paid were approximately $9.5
million in 1995, approximately $9.3 million in 1994 and approximately $7.7
million in 1993. In addition, during 1995 the Company loaned approximately $9.4
million to Telcom Ventures under a revolving promissory note, classified as a
reduction of members' capital in the statement of members' capital in the
accompanying Consolidated Financial Statements.

Cash and cash equivalents were $6.6 million at December 31, 1995, a
decrease of approximately $11.9 million or 64.4% from 1994. The decrease was due
primarily to the $9.4 million loan to Telcom Ventures, additional purchases of
equipment and increased software development costs. Cash and cash equivalents
were approximately $18.5 million at December 31, 1994, an increase of
approximately $9.3 million or 101.4% from December 31, 1993. The increase was
primarily due to proceeds from the issuance of convertible subordinated debt in
June 1994 (see Note 11 to the Consolidated Financial Statements).

Working capital (excluding cash and cash equivalents and current portion of
note payable) was approximately $21.5 million at June 30, 1996 versus $21.1
million at December 31, 1995, an increase of approximately $0.4 million or 2.0%.
The increase is primarily the result of an increase in unbilled and trade
accounts receivables offset by an increase in accounts payable and accrued
expenses.

Working capital (excluding cash and cash equivalents) was $21.1 million at
December 31, 1995 versus approximately $13.0 million at December 31, 1994, an
increase of approximately $8.1 million or 61.7%. The increase was primarily due
to an increase in trade receivables as a result of higher overall sales
activity, higher export sales and a generally slower collection of receivables.

Working capital (excluding cash and cash equivalents and current portion of
note payable) was approximately $13.0 million at December 31, 1994 versus
approximately $26.0 million at December 31, 1993, a decrease of approximately
$13.0 million or 49.8%. The decrease was primarily the result of the transfer to
Telcom Ventures of certain investments during the formation of the Limited
Liability Company in 1994.

29
<PAGE> 30

CAPITAL RAISED TO DATE

The Limited Liability Company was capitalized in January 1994 with a
contribution of $16.7 million from Telcom Ventures in exchange for a 99%
interest in the Limited Liability Company. Telcom Ventures' capital contribution
consisted of approximately $6.4 million in the form of assets, net of
liabilities assumed, formerly employed by the Founder Corporation and affiliates
in the Company's business, which were transferred to the Limited Liability
Company at their respective carrying values, and approximately $10.3 million in
cash received by Telcom Ventures from the Carlyle Investors. The Founder
Corporation and TC Group (on behalf of the Carlyle Investors) received 0.75% and
0.25% interests in the Limited Liability Company.

The Company has raised capital on several occasions since the beginning of
1994, but on most occasions has used such capital to make distributions to the
Limited Liability Company's owner, Telcom Ventures, for use by Telcom Ventures
in its investment activities, which consist of investments in wireless license
holders in Asia and Latin America. Such distributions have included (i) a
dividend of the proceeds of and the guarantee by the Company of the Telcom
Ventures Note (see below); (ii) the loan to Telcom Ventures of approximately
$9.4 million of the proceeds of the issuance of $10 million of Variable Rate
Guaranteed Senior Secured Notes to Nomura in June 1995; and (iii) advances to
Telcom Ventures of approximately $3.1 million in January 1996 of certain
proceeds from the sale of the Company's interest in Telemate, S.A. In March
1996, the Company borrowed $10 million from Chase to fund two investments in
customers, aggregating $11.5 million, as part of arrangements involving
contracts aggregating $115 million in orders for services and products over the
next five years. See Note 19 to the Consolidated Financial Statements.

EXISTING INDEBTEDNESS

In June 1994, the Company and Telcom Ventures sold $20 million and $30
million, respectively, of notes to MCI, which notes are exchangeable, at certain
times, consisting of 45 day periods commencing in June and August of 1997, 1998
and 1999, into 2,841,099 shares of Class A Common Stock. The Company distributed
the proceeds of its loan to Telcom Ventures, for use by Telcom Ventures in its
investment activities, as discussed in more detail above. The $30 million owed
by Telcom Ventures, which has been guaranteed by the Company, will be assumed by
the Company immediately prior to the Merger. The Company presently intends to
exercise its option in August 1997 to cause the Exchangeable Notes to be
exchanged into Class A Common Stock. The events of default under the
Exchangeable Notes (which would cause such notes to become due and payable)
include non-payment and bankruptcy. See "The MCI Notes, MCI Note Assumption, MCI
Conversion."

Effective May 30, 1995, the Company entered into the Nomura Facility under
which Nomura agreed to purchase from LLC up to $15 million of Variable Rate
Guaranteed Senior Secured Notes (the "Nomura Notes"), $10 million of which were
issued on June 5, 1995. The Nomura Notes were secured by substantially all the
assets of the Limited Liability Company and a pledge of all of Telcom Ventures'
membership interest in the Limited Liability Company. Chase purchased the Nomura
Notes in March 1996 and became the lender under these notes. Also in March 1996,
the Company borrowed an additional $10 million from Chase to fund two
investments in customers, aggregating $11.5 million, as part of arrangements
involving contracts aggregating $115 million in orders for services and products
over the next five years. See "Business -- The LCC Strategy -- Establish
Strategic Relationships with Carriers and Equipment Vendors."

In June 1996, the Limited Liability Company and its subsidiaries entered
into the Credit Facility with Chase, as Administrative Agent, and the Lenders,
which Credit Facility will be transferred to LCC International and amended and
restated to reflect the transactions contemplated by the Merger immediately
prior to the closing of the Offering. The Credit Facility consists of a
revolving loan and letter of credit facility in an aggregate principal amount
not to exceed $20 million. The revolving loan commitment will expire in
September 1999. Subject to certain restrictions on the minimum permitted amount
of any prepayment and the requirement that certain notices of prepayment be
given to Chase, the principal of the revolving loans is prepayable without
penalty or premium, so long as the Lenders are compensated for losses, costs and
expenses attributable to any prepayment of any loan accruing interest at the
Fixed Rate on a date other than the last day of the applicable interest period.
Interest under the Credit Facility accrues at the Company's election (subject to
certain restrictions and limitations contained in the Credit Agreement), at
either (i) the Variable Rate

30
<PAGE> 31

equal to the higher of (a) the Federal Funds Rate plus 0.50%, and (b) the
announced prime commercial lending rate of Chase, or (ii) the Fixed Rate for a
designated period of time (1, 2, 3 or 6 months) equal to the rate at which U.S.
dollar deposits are offered to leading banks in the London interbank market plus
1.25%.

The payment and performance of the obligations of the Company under the
Credit Facility are secured by substantially all of the assets of the Company,
including the stock and membership interests of its subsidiaries. The Credit
Facility requires that the Company satisfy certain financial tests, including
the maintenance of certain leverage, debt service and other financial ratios,
and that the Company meet certain minimum quarterly operating cash flow
requirements. The Credit Facility also contains certain restrictive covenants
which impose restrictions and/or limitations on the operations and activities of
the Company including, among other things: the incurrence of indebtedness and
the terms thereof, the creation or incurrence of liens, investments and
acquisitions, sales of assets, declaration or payment of dividends on or other
payments or distributions to stockholders and capital expenditures. The Credit
Facility provides for various events of default, including interest or principal
payments defaults, breach of any condition or covenant that (in certain cases)
continues unremedied for 30 days, materially adverse events, the rendering of
one or more material judgments against the Company or any subsidiary thereof
which is not vacated, satisfied, discharged, or stayed within 30 days, and
certain events relating to the bankruptcy or insolvency of the Company. In
addition, the Credit Facility provides for an event of default if, without the
prior written consent of the Lenders, (i) the Company sells, leases, assigns,
transfers or otherwise disposes of any of its assets, other than in the ordinary
course of business and in other limited circumstances, (ii) the Company merges
with another corporation other than a wholly-owned subsidiary, (iii) any person
or two or more persons acting in concert (other than Dr. Rajendra Singh, Neera
Singh, any trusts for their benefit or the benefit of their family members, and
any of their respective affiliates which are controlled by any one or more of
them) acquire beneficial ownership of more than 25% of the voting stock of the
Company, or (iv) during any period of 12 consecutive months, individuals who at
the beginning of such 12-month period were directors of the Company (or other
persons nominated by such individuals) cease for any reason to constitute a
majority of the Board of Directors of the Company. The Credit Facility is
guaranteed by Telcom Ventures, provided that the guarantee of the Credit
Facility will terminate upon consummation of the Offering assuming that no event
of default is then existing thereunder. The Company intends to repay all amounts
that will be outstanding under the Credit Facility (approximately $20 million)
with proceeds of the Offering.

TAXES

Prior to the Merger, the Company has generally not been liable for U.S.
Federal and state income taxes. States that did not recognize the limited
liability company as a flow-through entity required the Limited Liability
Company to be taxed as if it were a corporation. The Company has been and will
continue to be subject, however, to taxation on income in certain countries in
North America, Latin America, Europe, the Middle East and the Far East, where
the Company has either established branch offices or has performed significant
services which constitute a permanent establishment for tax reporting purposes.
Following the Merger, the Company will not be a flow-through entity and will be
liable for applicable income taxes. The Company has established a provision for
state and foreign income taxes. See Consolidated Financial Statements and Notes
3 and 9 thereto.

INFLATION

The financial statements are presented on a historical cost basis and do
not fully reflect the impact of prior years' inflation. It is estimated that the
cost of replacing equipment today is greater than its historical cost.
Accordingly, depreciation expense would be greater if the expense were stated on
a current cost basis.

31
<PAGE> 32

BUSINESS

LCC is one of the world's largest independent providers of RF engineering
and network design services and products to the wireless telecommunications
industry. The Company has provided these services, along with related
proprietary software tools and field measurement and analysis equipment, to
operators of more than 200 wireless systems in more than 40 countries. The
Company intends to leverage its leadership position and its relationships with
major wireless customers to benefit from the expected significant growth in
wireless networks worldwide.

The Company has provided services and products to seven of the ten largest
U.S. cellular system operators; large international cellular operators,
including British Telecom, France Telecom and Mannesmann; companies building or
proposing to build PCS systems, including AT&T Wireless Services, Pacific Bell
Mobile Services, NextWave Telecom and DCR; operators of ESMR systems, including
Nextel Communications; and operators of two-way messaging systems. The customers
listed above each contributed 5% or more of the Company's consolidated revenues
(10% or more in the case of Nextel) during one or more of fiscal years 1991
through 1995 (or, in the case of NextWave Telecom and DCR, have entered into
agreements to purchase services and products aggregating $115 million over
approximately the next five years). Many of the Company's major customers have
entered into partnerships with international wireless operators, which has
enabled the Company to obtain significant new business from such operators. The
Company also has established working relationships with two major
telecommunications equipment vendors, pursuant to which the Company provides
services and products on a subcontract basis.

LCC's approximately 370 RF engineers provide engineering solutions to
operators of a wide range of wireless networks, incorporating all major wireless
technologies available today, including TDMA (which includes GSM, DCS and
IS-136), CDMA, iDEN, AMPS and ETACS. LCC believes that it is the largest
employer of RF engineers in the world and believes that this is a substantial
competitive advantage, especially with respect to large customers. LCC provides
(or, in the case of Phase 4, is developing) services and products for operators
involved in all four phases of wireless system development: (i) Phase
1 -- bidding for the licenses necessary to build and operate the system; (ii)
Phase 2 -- build-out of the system; (iii) Phase 3 -- optimization and
enhancement of the system to meet the requirements of an increasing subscriber
base and to provide increased quality and coverage; and (iii) Phase
4 -- achievement of greater efficiencies in providing service in order to
compete in areas where there are multiple system operators.

THE LCC STRATEGY

MAINTAIN TECHNOLOGICAL LEADERSHIP

LCC believes that it has the most sophisticated and diversified
technological capabilities (incorporating all major wireless technologies
available today) in the wireless network design industry and intends to maintain
its technological leadership. The Company is continuously working on new
software releases and field measurement and analysis product upgrades to keep
its products technologically equal or superior to

32
<PAGE> 33

those of its competitors. One of LCC's principal assets is its staff of
approximately 370 highly trained and experienced RF engineers, which the Company
believes is considerably larger than the engineering staff of any other
independent company in its field. LCC's engineers have experience working in,
and have prepared wireless design databases for, many of the world's
metropolitan areas, which the Company believes gives LCC a significant advantage
in pursuing new business in these areas.

LEVERAGE LARGE INSTALLED CUSTOMER BASE

LCC has a substantial customer base among major wireless network system
operators worldwide. Its services and products have been used in virtually every
major market in the U.S. and in more than 40 foreign countries. The Company
believes that its large customer base gives it a significant advantage in
obtaining additional business for its existing and new products and services.
LCC believes that if it provides the original network design services to a
customer, it has an advantage over competitors in offering follow-on services
relating to expansion or optimization of that customer's network. In addition,
many of the Company's major customers have entered into partnerships with
international wireless operators, from which the Company has received
significant business. Typically, a substantial portion of the Company's revenues
in a given year are generated by customers for which the Company has previously
performed services or provided products.

PURSUE INTERNATIONAL GROWTH

Approximately 39% of the Company's revenues during 1995 was derived from
international customers. The Company believes that the growth of the
international wireless industry over the next several years will be substantial.
In particular, foreign governments have been awarding, and are expected to
continue to award, a large number of new wireless system licenses. The Company
is devoting significant efforts to increasing its market share of international
business, and is particularly focused on providing planning services to
companies that are participating in government tender processes for new license
grants. The Company has found that the provision of such services often result
in engineering contracts if such companies receive licenses.

PURSUE NEW MARKETS

The Company is pursuing growth in several new areas, as follows:

PCS. According to the FCC, over $17.9 billion has been spent or
committed to acquire new PCS licenses in the U.S. over the past two years,
and each of the licensed areas must be built out over the five years
following the date of the license grant. The Company expects that such new
licensees will account for a significant portion of the demand for the
Company's services and products over the next several years. The Company's
efforts in this area include working with new or potential licensees in the
initial designs of their systems and making investments in new PCS entities
in return for significant contracts to be implemented over the next several
years.

New Wireless Networks and Technologies. The development of new types
of wireless networks and new wireless technologies, including private
corporate networks, wireless cable (LMDS and MMDS) services, wireless local
loop and wireless high speed data services, is expected to result in
additional potential customers for the Company's services and products.

Analog to Digital Conversion. The Company expects that many cellular
operators will convert from an analog to a digital format in the next
several years, and that this conversion will result in additional demand
for the Company's services and products. LCC currently offers products and
services to operators of wireless systems utilizing both existing analog
technologies and virtually all forms of digital technology.

OFFER AND DEVELOP NEW TYPES OF SERVICES AND PRODUCTS

The Company is seeking new business by offering or developing new types of
services and products, including the following:

Program Management Services. Program management involves the
procurement and management, on a turnkey basis, of a range of services and
products relating to deployment or expansion of wireless

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<PAGE> 34

networks, including systems integration, site acquisition, site
engineering, procurement management, construction management, installation
and commissioning, and customer training. These management services are
often packaged with the Company's traditional RF and network engineering
services, software tools and field measurement and analysis equipment. To
provide program management, LCC has affiliated with commercial real estate
firms (for site acquisition), architectural engineering firms and
contracting and construction firms. The Company believes that an increasing
number of wireless system operators are attracted to this approach, and
that program management will increase revenues from RF engineering services
in addition to providing revenues from new services.

Phase 4 System Efficiency Services and Products. The Company believes
that wireless network operators will experience greater price competition
and will place greater emphasis on containing costs and system efficiency.
The Company is developing new RF network engineering services and products
to increase system efficiency and manage costs in the multiple-operator
environment expected to develop in the next few years.

ESTABLISH STRATEGIC RELATIONSHIPS WITH CARRIERS AND EQUIPMENT VENDORS

The Company has entered into strategic relationships with new wireless
carriers and major equipment vendors as a means of obtaining new business
opportunities. For example, LCC has helped applicants seeking licenses in formal
foreign government license grant processes. LCC's involvement in successful
license tenders has generally led to contracts with winning applicants as they
implement new systems. The Company has provided financing aggregating $11.5
million, to NextWave Telcom and DCR, the two top bidders in the
recently-concluded C-band auctions for broadband PCS licenses. See Note 19 to
the Consolidated Financial Statements. The Company intends to pursue additional
relationships, including financing and investment arrangements, using proceeds
from the Offering, as a means of obtaining new business. The Company also has
established working relationships with two major telecommunications equipment
vendors, pursuant to which the Company provides services and products on a
subcontract basis. The Company intends to pursue similar relationships with
other equipment vendors.

PURSUE STRATEGIC ACQUISITIONS

The Company intends to pursue acquisitions of companies that have
developed, or are developing, complementary products and services, particularly
systems efficiency products, that could be bundled with the Company's services
or that the Company would otherwise develop over the next few years. LCC
believes that such acquisitions will move LCC ahead more quickly in the
development of products or the recruiting of technical staff.

INDUSTRY BACKGROUND

OVERVIEW

Wireless telecommunications networks use a variety of radio frequencies to
transmit voice and data. Wireless telecommunications networks include two-way
radio applications, such as cellular, wide band and narrow band PCS and ESMR
networks, and one-way radio applications, such as paging services. Each
application operates within a distinct radio frequency block. Although cellular
represents the largest segment of the wireless communications industry, other
wireless technologies are expected to grow significantly.

TYPES OF WIRELESS COMMUNICATIONS

Cellular. Demand for commercial cellular services has grown dramatically
since its introduction in the early 1980's. According to the Cellular
Telecommunications Industry Association ("CTIA"), in the U.S. alone, service
revenues have grown from $482 million in 1985 to over $19 billion in 1995 and
the number of cellular users in the U.S. grew from 340,000 at the end of 1985 to
over 30 million at December 1995, a compound annual growth rate of 57.2%.
According to Mobile Communications, the number of cellular users in Western
Europe grew from 270,000 in 1985 to 22.6 million in 1995 (a compound annual
growth rate of 55.7%).

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<PAGE> 35

The cellular industry is well established in the developed world. Cellular
is growing rapidly in developing countries because of the generally poor quality
of the existing phone service, the unsatisfied demand for basic telephone
service and the increasing demand from mobile users who want the convenience of
cellular. In some countries, the cellular network provides significantly
improved access to the local and international wireline telephone network
compared to existing wireline telephone service. According to the U.S.
Department of Commerce, at the end of 1995, there were approximately 87 million
cellular subscribers worldwide.

PCS. In 1993, the FCC allocated a portion of the radio spectrum for the
provision of a new wireless communications service, commonly known as PCS. In
the U.S., PCS differs from traditional cellular service principally in that PCS
systems will operate at a higher frequency range and employ different digital
technologies. PCS is expected to offer greater feature functionality resulting
in lower cost service options, lighter handsets with longer battery lives and
new and enhanced service offerings such as the provision of all services to one
mobile number, medium-speed data transmissions to and from portable computers,
advanced paging services and facsimile services. Economic and Management
Consultants International, Inc. ("EMCI") estimates that, of the approximately 71
million wireless subscribers expected by the year 2000 in the U.S., 20 million,
or 28%, will be PCS users. Licenses to operate PCS networks were awarded in the
United States through auctions conducted during 1995 (the A- and B-blocks, which
involved licenses for large areas known as MTAs) and are expected to be granted
during 1996 (the C-block, which involved licenses for smaller metropolitan and
rural areas known as BTAs). According to the FCC, over $17.9 billion has been
spent or committed to acquire new PCS licenses (for MTAs and BTAs) in the U.S.
over the past two years, and each of the licensed areas must be built out over
the five years from the respective license grant dates.

ESMR. Enhanced Specialized Mobile Radio is a mobile communication service
that relies on specialized mobile radio frequencies that have been historically
limited to two-way voice communications in small local networks (such as for
taxi or messenger dispatch). As a result of advances in digital technology, ESMR
operators have begun to design and deploy digital mobile networks that increase
the frequency capacity of ESMR systems to a level that may be competitive with
that of cellular systems. A limited number of ESMR operators have recently begun
offering short messaging, data services and interconnected voice telephony
services on a limited basis. Companies such as Nextel Communications (in the
U.S.), Clearnet Communications (in Canada) and Tricom (in Mexico) have acquired
licenses for ESMR two-way radio channels in their respective operating areas and
are beginning to offer wireless voice services over their networks.

Paging. Paging is a method of wireless telecommunications that uses an
assigned radio frequency to contact a paging subscriber anywhere within a
service area. Each paging subscriber is assigned a distinct telephone number
which a caller dials to activate a subscriber's pager (a pocket-size radio
carried by the subscriber). The radio signal causes the pager to emit a beep or
vibrate and to provide the subscriber with information from the caller in the
form of a voice, time, numeric or alphanumeric message. EMCI estimates that the
number of pagers in service in the U.S. increased at a compound annual growth
rate of approximately 26.5% to approximately 27.3 million units from 1984 to
1994 and that the total number of paging devices in use worldwide by the year
1999 will exceed 130 million.

Other. Wireless cable (LMDS, MMDS), wireless local loop (a system that
eliminates the need for a wire loop connecting users to the public switched
telephone network) and wireless high speed data services represent other areas
of the wireless communications industry being developed by operators in the U.S.
and abroad.

WIRELESS TECHNOLOGIES

Most cellular and other services currently transmit voice and data signals
over analog-based systems, which use one continuous electronic signal that
varies in amplitude or frequency over a single radio channel. Digital systems,
on the other hand, convert voice or data signals into a stream of digits that is
compressed before transmission, enabling a single radio channel to carry
multiple simultaneous signal transmissions. This enhanced capacity, along with
enhancements in digital protocols (discussed below), allows digital-based
wireless technologies to offer new and enhanced services, such as greater call
privacy and single number (or

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<PAGE> 36

"find me") service, and more data transmission features, such as "mobile office"
applications (including facsimile, electronic mail and connecting notebook
computers with computer/data networks).

Digital signal transmission is accomplished through the use of frequency
management technologies, or "protocols." Two common protocols used in cellular
and other networks "manage" the radio channel either by dividing it into
distinct time slots (a method known as Time Division Multiple Access, or "TDMA")
or by assigning specific coding instructions to each packet of digitized data
that comprises a signal (a method known as Code Division Multiple Access, or
"CDMA"). In the U.S., the FCC has intentionally avoided mandating a universal
digital signaling protocol, and three principal digital signal protocols (which
are incompatible with each other) are currently being used in the U.S. for PCS
networks: GSM, CDMA and IS-136. European Union countries generally have agreed
to adopt GSM as a common standard protocol for cellular and PCS transmission and
approximately 60 countries, including virtually all countries in Western Europe,
have issued or propose to issue GSM 900 MHz licenses. The universal GSM standard
is designed to allow subscribers to roam throughout Europe and wherever else GSM
technology has been adopted. Other wireless technologies are also presently in
use for a variety of different types of transmission. The Company has expertise
in all these technologies.

Existing analog cellular networks are gradually converting to digital
technology. This conversion has occurred in many of the largest cellular service
areas, such as Los Angeles, New York and Chicago, due in part to capacity
constraints. As carriers reach limited capacity levels, certain calls may be
unable to be completed, especially during peak hours. The conversion from analog
to digital technology is expected to be an industry-wide process in the U.S.
that will take several years. PCS providers, which do not have the existing
analog-based plant and equipment, are expected to move directly to digital
technology.

OPERATION OF TWO-WAY WIRELESS SYSTEMS

Two-way wireless service areas are divided into multiple regions called
"cells," each of which contains a base station consisting of a low-power
transmitter, a receiver and signaling equipment. The cells are typically
configured on a grid pattern, although terrain factors (including natural and
man-made obstructions) and signal coverage patterns may result in irregularly
shaped cells and overlaps or gaps in coverage. Cellular system cells generally
have a radius ranging from two miles to 25 miles. PCS system cells are expected
to have a radius ranging from one-quarter mile to 12 miles, depending on the PCS
technology being used and the terrain. Since each cell site requires engineering
services, growth in the number of cell sites is one of the key drivers of demand
for the Company's products and services. The base station in each cell is
connected by microwave, fiber optic cable or telephone wires to a switch, which
uses computers and specially developed software to control the operation of the
wireless telephone system for its entire service area. The switch controls the
transfer of calls from cells within the system and connects calls to the local
landline telephone system or to a long distance telephone carrier.

Wireless transmission requires a certain signal strength for the parties to
hear each other or for data to be received. The signal strength of a
transmission between handset and a base station declines as the handset moves
away from the base station, so the switch and the base stations monitor the
signal strength of calls in progress. When the signal strength of a call
declines to a predetermined level, the switch may "hand off" the call to another
base station that can establish a stronger signal with the handset. Hand-off to
an adjacent system must be effected through an appropriate technical interface
when a handset leaves the service area of the wireless service provider. The
quality of wireless transmission depends in part on signal strength, limitations
imposed by the terrain and interference from other uses of radio signals.
Transmission quality is measured in the field at various locations so that
adjustments can be made to enhance quality.

Each wireless network is planned and laid out to meet a certain level of
subscriber density and traffic demand and to provide a certain geographic
coverage. Each transmission over the wireless network requires a certain amount
of radio frequency, so a system's capacity is limited by the amount of frequency
that is available. The same frequency can be reused by each separate
transmitter, subject to certain interference limitations. The design of each
wireless system involves placement of transmission equipment in locations that
will make optimal use of available frequency based upon projected subscriber
usage patterns, subject to

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<PAGE> 37

availability of such locations and ability to use them for wireless
transmissions under applicable zoning requirements.

After a wireless system has been installed, the system's capacity can be
increased in various ways, by (i) adding available frequency capacity to cells
as required, if such capacity is available, (ii) using directional antennae to
divide a cell into discrete multiple sectors or coverage areas, thereby reducing
the required distance between cells using the same frequency, or (iii) "cell
splitting" (i.e., dividing a single cell into a number of smaller cells served
by lower-power transmitters, thereby increasing the ability to reuse radio
frequencies and increasing the number of calls that can be handled in a given
area). Additional solutions are being designed to increase network capacity and
coverage, including (i) the introduction of microcells, which can be placed very
close together to increase frequency reuse and the total capacity of the
cellular network and which can be placed within buildings, train stations and
other structures to provide coverage where none was available before and (ii)
the introduction of digital technologies, which increase the number of
conversations which can be transported on a single radio carrier from two to
potentially more than ten times, depending on the type of digital technology
deployed.

ENGINEERING SERVICES AND PRODUCTS FOR THE WIRELESS INDUSTRY

The planning, geographic layout, build out and operation of a wireless
network requires significant RF engineering work. The RF engineer must design
the wireless network to meet the operator's requirements for transmission over
the wireless network, which requirements are based upon a projected level of
subscriber density and traffic demand and the coverage area specified by the
operator's license or cost-benefit decisions. In addition to meeting basic
transmission requirements, the RF network design must make optimal use of
available radio frequency and result in the highest possible signal quality for
the greatest portion of projected subscriber usage within existing constraints.
These constraints may be imposed by cost parameters, terrain, limitations in the
license, interference with other operators, availability of cells, applicable
zoning requirements and other factors. The complexity of network design and
large number of variables requires the RF engineer to rely on advanced
technology including specially-developed software design tools. As the design is
implemented and the network is built out, the system's performance must be
tested in the field with field measurement and analysis equipment so that
optimization adjustments can be made.

Set forth below is a description of the life cycle of a typical wireless
system:

<TABLE>
<CAPTION>
<S> <C>
Phase 1.............................. pursuit of the licenses necessary to build and
operate the system
Phase 2.............................. build-out of the system
Phase 3.............................. optimization and enhancement of the system to
meet the requirements of an increasing
subscriber base and to provide increased
quality and coverage
Phase 4.............................. achievement of greater efficiencies in
providing service in order to compete in areas
where there are multiple system operators
</TABLE>

Phase 1. In Phase 1, the pursuit of the licenses necessary to build and
operate the system, a rough engineering design is often required to determine
construction costs and revenue generating ability of the system.

Phase 2. A substantial amount of engineering services are required for
Phase 2, the actual design and build-out of the wireless system. Detailed site
location designs are prepared, interference to or from co-located antennae is
checked, site performance is measured after completing construction and,
finally, the site is optimized to work with neighboring sites. Wireless network
operators (even the few which have sizable internal engineering staffs)
typically rely on outside RF engineering companies, such as LCC, for Phase 2.
Depending on the size of the system, this phase can involve from four RF
engineers for a typical small system,

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<PAGE> 38

to 15 RF engineers for a typical medium-sized system to up to 100 RF engineers
for a nationwide deployment (all of whom require software design tools) over a
period of 12 to 24 months. LCC believes that the number of RF engineers is
limited (the Company estimates that there are only approximately 2,000 RF
engineers in the U.S.).

Phase 3. As the number of subscribers handled by the wireless system
increases, the system enters Phase 3, in which RF engineering services are
necessary to expand the system by adding cell sites or using other techniques to
increase system coverage and capacity. The system must also be optimized to meet
the increased subscriber usage from the new cell cites and to provide increased
quality and coverage. In network expansions, the operator typically continues to
rely on the RF engineering company, such as LCC, to design the expansion and
make optimization adjustments to the existing system. Although the network
software and system databases included therein are already in place from the
design phase, the software license obtained from the RF engineering company
generally only allows the operator to use the software. Since the cost of
obtaining replacement software and generating a separate database through a new
provider of RF engineering services is substantial, the original RF engineering
firm has a significant competitive advantage in follow-on work with existing
customers. Since each new cell site requires additional RF engineering, the
increase in cell sites is a key driver of the demand for RF engineering services
and products.

Phase 4. Eventually the system will enter Phase 4, in which the operator
must achieve greater efficiencies in service provision in order to compete in
areas where there are multiple system operators. In various European countries
and Australia, certain systems have recently entered Phase 4. In the U.S., since
cellular service arose in a duopoly environment, it is only with the
construction of new PCS systems that wireless networks will reach Phase 4.

SERVICES AND PRODUCTS

BACKGROUND

In the early 1980's, when the FCC began to issue licenses for cellular
systems, wireless system design was an unsophisticated process. Since minimal
data had been collected on system performance and limited engineering had been
done, LCC (following its formation in 1983) worked to develop a standard method
of applying design engineering principles to wireless system design. The method
included the development of software to accelerate and automate the design
process, and use of such software with digitized system coverage maps, enabling
the engineer to measure the effect of changes to various system parameters or
use of different locations for cell sites. Over time, LCC gathered significant
amounts of data on various system configurations, improving the ability of its
engineering models to predict system coverage. LCC also developed a large staff
of RF engineers experienced in conducting the design analysis. Moreover, because
the field measurement and analysis equipment required for verification and
measurement of wireless system performance in the field was generally
unsophisticated, LCC created its own field measurement and analysis equipment.
Originally, RF engineering focused principally on the cellular industry.
Although the services provided by various wireless technologies may be similar,
the engineering requirements of each system are different. As new wireless
technologies were introduced, the Company developed engineering solutions for
the different forms of wireless transmissions, and modified its field
measurement and analysis equipment and software products to function with
differing wireless technologies.

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<PAGE> 39

ENGINEERING SERVICES

LCC provides a variety of RF engineering services over three phases of the
life cycle of a wireless telecommunications system, and intends to provide such
services over the fourth phase as follows:

Phase 1 Services. LCC engineers help prepare applications for network
system operators seeking licenses in formal government license grant processes.
LCC also has assisted foreign governments in preparing Requests for Proposals
("RFPs") and analyzing responses thereto. Phase 1 services include the
following:

- preparation of the technical response to a government tender

- preliminary design

- coverage parameters

- propagation maps

- technical requirements

- advice on strategic issues relating to license tender responses

- preparation of RFPs and analysis of responses

- refinement of system objectives and translation into technical
requirements

- evaluation of responses on technical, cost and regulatory compliance
grounds

The Company has assisted in preparing winning applications in several
(approximately eight) license tender processes worldwide, including the second
nationwide cellular license in Germany and the first cellular license in Bombay,
India. LCC's involvement in successful tenders has generally led to follow-on
contracts with winning applicants as they implement new systems.

Phase 2 Services. Services in Phase 2, which constitute the largest number
of billed engineering hours for the Company, include some or all of the
following:

- analysis of customer expectations for network coverage, capacity and
other requirements

- development of necessary databases for network design, including
digitized maps of terrain and buildings

- use of software tools to prepare network design, including analysis of
interference and other technical factors affecting coverage, capacity and
performance

- identification and rank of desirable cell sites

- preparation of regulatory filings (FCC, Federal Aviation Administration
and others) required for system deployment

- assistance with systems deployment

- measurement of network performance

- optimization of system

Phase 3 Services. LCC's services are used by existing system operators to
plan system expansions to accommodate subscriber growth (the Company estimates
that operators of wireless networks operating at capacity require a new cell
site for approximately each additional 1,500 subscribers), incorporate
improvements in technology, improve system performance and achieve efficient use
of available radio spectrum. LCC also assists in capacity expansion planning and
technology changeovers, such as conversion from analog to digital technology. In
Phase 3 the Company provides some or all of the following:

- identification of additional cell sites

- integration of new cell sites with existing cell sites

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<PAGE> 40

- measurement of network performance

- optimization of system

- technology migration analysis and implementation

Phase 4 Services. Although to date the Company has not offered any services
or products for Phase 4, the Company anticipates that, as wireless systems
mature and as multiple service providers offer competing services in the same
service area, network operators will require additional engineering services
focusing on the achievement of cost savings and quality enhancements within the
existing coverage area. These services may include the following:

- system analysis and network management, including redistribution or
elimination of cell sites

- cost management

- measurement of network performance

- technology and network upgrades

The Company is currently working with several existing customers to further
define the types of services that such customers will require during Phase 4,
although there can be no assurance that the Company will provide any such
services.

The Company performs engineering services using approximately 370 RF
engineers (as of June 30, 1996). Most of such engineers are based in Arlington,
Virginia, but spend significant periods (approximately one to nine months per
year) at customer sites. LCC is one of the world's largest independent providers
of RF engineering and wireless network design services. The Company believes
that its large number of RF engineers enables it to respond quickly to customers
who may require the Company to staff a major project on a timely basis. In
addition, the Company believes that the wide-ranging experience of its RF
engineers, including exposure to and participation in the standards-setting
process for new digital technologies, helps the Company understand the changing
marketplace for wireless communications and for engineering services and
products to support the wireless industry. Since a large number of its RF
engineers work on customer sites, the Company is able to develop an
understanding of many of the issues of importance to its customers and uses this
information in planning. The Company also believes that the various
nationalities of its RF engineers provides LCC with an understanding of
different practices in business and wireless telephony in many countries around
the world that will assist the Company in continuing to pursue international
opportunities. See "Risk Factors -- Dependence on Professional Staff."

LCC provides engineering services on a contract basis, usually in a
customized plan for each client. The Company generally charges for engineering
services on a time and materials basis, although Phase 1 services or other
projects of short duration may involve a fixed price or success fee. The
Company's revenues also include reimbursement for expenses, including the living
expenses of engineers on customer sites (approximately 15% of revenues from
engineering services for 1995). Revenues from engineering services represents
the largest portion of LCC's revenues, representing approximately 56.3% of
revenues for 1995.

SOFTWARE TOOLS

LCC's software tools are used by LCC's engineers and by customers to design
wireless networks, optimize the performance of an existing network, adapt
networks to demand growth and environmental changes and migrate networks to new
technologies. Software revenue represented approximately 18.5% of revenues for
1995. Approximately one-third of LCC's revenues from software tools is generated
by LCC's use of the tools (which are typically charged to customers separately
from engineering services) in conjunction with engineering service projects,
particularly large build-outs or enhancements during Phase 2 or Phase 3. As
these software tools are used by LCC's engineers, a database for the customer
network is generated based upon the actual design. The software and database are
used by the customer pursuant to a license following implementation of the
network, become the foundation of the customer's design environment and record
of network design, and are critical to subsequent expansion or enhancement of
the system. The other

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<PAGE> 41

approximately two-thirds of LCC's software revenues is generated by licensing of
the software to customers, which use the tools in network design and generate
their own design specific databases.

The Company's software offerings include:

<TABLE>
<S> <C>
ANET(TM).................... DOS-based software for network design. Allows users to
locate, move and configure cell sites on computer
screens, run propagation analyses, change frequency or
power settings, analyze cell hand-offs, conduct
interference analysis, manipulate other variables and
run analysis of system parameters under varying
conditions. Accepts input from the Company's field
measurement products.
CellCAD(R).................. UNIX-based software for network design with same
functionality as ANET(TM) plus microcell and CDMA
design capability.
CellSIGHT(R)................ Allows user to generate a series of customized
spreadsheet programs to organize and display statistics
and other data, to generate and store reports, and to
filter data and information into a database. Interfaces
with ANET(TM) and CellCAD(R) products.
Design Check(TM)............ Combines features of CellCAD(R) and CellSIGHT(R).
CellManager(TM)............. An information management and automated work-flow
processing tool designed for wireless system
deployment, including separate modules for (i) RF
planning, site positioning and site acquisition, (ii)
construction preparation, (iii) management of
construction and equipment delivery timetables, (iv)
management of network integration and acceptance
testing, and (v) management of purchasing and human
resources. (The Company did not develop
CellManager(TM), but has obtained exclusive perpetual
distribution rights and software development and
enhancement rights for CellManager in North, Central
and South America, and non-exclusive distribution
rights in the remainder of the world.)
</TABLE>

Revenues from ANET(TM) and CellCAD(R) represented approximately 90% of
software revenues for 1995.

Another component of the Company's software offerings is its database
services. Databases are maintained for virtually all of the U.S. and many other
parts of the world and include data useful in designing and implementing
wireless networks, including data regarding terrain, building heights, land-use,
highways and secondary roads, traffic volume, political boundaries, demographics
and other parameters. Customers use a combination of these data sources in
designing their wireless networks. The Company believes that as the need for
more efficient system design becomes more important in the wireless industry,
databases with precise information will become more important.

The Company provides its software tools to customers under license
agreements that call for license fees on a per user basis or, under certain
limited circumstances, on a per cell site basis. As of December 31, 1995, the
Company had software license agreements in effect with over 70 customers.
Typically, customers license the software for between one to five years, with
the right to annual renewals thereafter. In some cases, the Company will grant a
perpetual license to software for a fixed fee payable at the commencement of the
licenses. The number of work stations licensed by LCC's current customers range
up to 150, with an average of 14. LCC generally warrants that the software will
perform substantially in the manner specified in its documentation. Many
customers purchase maintenance support following expiration of the warranty
period as well as contract for installation and training services.

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FIELD MEASUREMENT AND ANALYSIS PRODUCTS

LCC's field measurement and analysis products are used by both by LCC's
engineers and by customers in connection with system design and build out and
the maintenance and improvement of operational systems. Revenues from sales and
rentals of field measurement and analysis products represented approximately
20.2% of revenues for 1995. LCC's revenues from field measurement and analysis
products are generated from sales or monthly rentals to customers and associated
maintenance and upgrade fees.

The Company's field measurement and analysis products lines are as follows:

<TABLE>
<S> <C>
EXP-2001(R)................. Modular vehicle mounted measurement system used to
measure RF system parameters for field diagnostics,
troubleshooting and RF analysis. Linked to Global
Positioning System receivers, permitting identification
of changes in system performance based on time and
location. Information captured into laptop computer for
subsequent analysis.
RSAT-2000(R)................ Performs the same functions as EXP-2001(R), but also
provides real-time data for on-site troubleshooting.
MSAT-2000(TM)............... Performs similar functions as the EXP-2001(R) and
RSAT-2000(R) but is lightweight and portable for use
inside buildings.
PENCAT(TM).................. Five pound pen-based collection and analysis tool used
with the MSAT-2000(TM) for real-time display and
post-processing analysis.
TX-1500(TM)................. Continuous wave test transmitter used to simulate cell
sites from which test transmissions are emitted,
allowing validation of predicted coverage.
LL-2000(R).................. Analysis tool used to measure the quality of the
"uplink" from the wireless network to the Public
Switched Telephone Network.
</TABLE>

Each of the EXP-2001(R), RSAT-2000(R) and MSAT-2000(TM) are designed for
use in wireless systems employing any of the major access technologies
(cellular, PCS, ESMR, etc.) and may be utilized by network operators to measure
the performance of other wireless systems. These three products represented
approximately 83% of field measurement and analysis products revenues for 1995.
To support the RSAT-2000(R), EXP-2001(R) and LL-2000(R) products, LCC offers a
DOS-based software package called Cellular Measurement Analyst and a
corresponding UNIX-based product called CellQUEST, which provide comprehensive
data analysis functions for coverage, interference, calls-in-progress and call
quality. These programs organize, edit and analyze RF and navigation data for
both digital and analog measurements. They provide detailed reports,
multi-colored graphs and high resolution on-screen graphic displays which can be
generated on a laptop computer for immediate field analysis.

The Company believes that in the future, customers will expect field
measurement and analysis products from one company to be compatible with
software design products from other companies, so that measurements taken from
field measurement and analysis products can be analyzed using the software. LCC
is designing a series of products consistent with this objective. Currently,
wireless operators must separately analyze the coverage of their competitors'
systems. The Company intends to develop Phase 4 products that can simultaneously
analyze system quality of several different competing technologies. LCC intends
to offer new products that will allow data from several different systems in one
geographic area to be collected and analyzed simultaneously.

The Company provides its field measurement and analysis products to
customers primarily through sales and to a lesser extent through long-term
leases and monthly rentals. LCC generally warrants that the field measurement
and analysis products will perform substantially in the manner specified in
their documentation for a period of 12 months following delivery thereof. The
Company offers various extended maintenance and support programs to customers.

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PROGRAM MANAGEMENT SERVICES

Program management involves the procurement and management, on a turnkey
basis, of a range of services and products relating to deployment or expansion
of wireless networks, including systems integration, site acquisition, site
engineering, procurement management, construction management, installation and
commissioning, and customer training services. These management services are
often packaged with the Company's traditional RF and network engineering
services, software tools and field measurement and analysis equipment. To
provide program management, LCC has affiliated with commercial real estate firms
(for site acquisition), architectural engineering firms and contracting and
construction firms. The Company believes that an increasing number of wireless
system operators are attracted to this approach, and that program management
will increase revenues from RF engineering services in addition to providing
revenues from new services. Fees from program management services, which were
commenced in 1995, represented approximately 5% of revenues for 1995.

LCC offers its customers a "one stop shopping" approach to Phase 1 system
build-out and Phase 2 network expansions by packaging services together in a
customized plan for each client. LCC provides these services on a contract
basis, in most cases on a time and materials basis but occasionally on an
overall cost per cell site.

In connection with its program management services, the Company uses and
licenses a software tool called CellManager(TM), which can help network system
operators manage their deployment and construction activities cost effectively,
as discussed in more detail in "Software Tools" above.

CUSTOMERS AND BACKLOG

CUSTOMERS

The Company has provided services and products to seven of the ten largest
U.S. cellular system operators; large international cellular operators,
including British Telecom, France Telecom, Mannesmann and Korea Mobile Telecom;
companies building or proposing to build PCS systems, including AT&T Wireless
Services, Pacific Bell Mobile Services, NextWave Telecom and DCR; operators of
ESMR systems, including Nextel Communications; and operators of two-way
messaging systems. Many of the Company's major customers have entered into
partnerships with international wireless operators, which has enabled the
Company to receive significant new business from such international wireless
operators. The Company also has established working relationships with two major
telecommunications equipment vendors, pursuant to which the Company provides
services and products on a subcontract basis.

In 1995, Nextel Communications accounted for approximately 14% of LCC's
revenue and was the only customer accounting for 10% or more of the Company's
revenues. The Company has an agreement with Nextel Communications pursuant to
which Nextel Communications is committed to pay a minimum amount until June 2000
for the purchase of RF engineering services and field measurement and analysis
products and to license software products and obtain related maintenance and
other services in connection with the design and operation of its digital mobile
telephone systems in North America, Puerto Rico and the U.S. Virgin Islands.

The Company's existing and targeted customer base includes operators of all
forms of wireless communications services, operating a variety of different
network platforms and access technologies in diverse geographic markets. LCC's
experience includes the following projects:

- LCC has designed analog cellular systems throughout the U.S., including
substantially all of the largest MSAs, as well as in several other
countries.

- LCC has designed TACS/ETACS analog cellular systems in the United Kingdom
and Spain.

- In the U.S., the Company is assisting its cellular customers in
implementing the emerging North American digital cellular standards (i.e.,
TDMA, CDMA and others).

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- The Company has designed, or is currently designing, GSM digital cellular
networks in the U.S., Germany, France, Italy, Spain, Portugal, Malaysia
and other nations.

- The Company is supporting the design and implementation of ESMR systems
throughout the U.S. and in Brazil, Canada, Mexico and China.

- In the U.S., the Company is supporting narrowband PCS clients with
INFLEXION(TM) and REFLEX(TM) standards.

BACKLOG

The Company has entered into long-term contracts with customers for the
provision of the Company's services and products. As of March 31, 1996, the
Company had a total backlog of $180.5 million, consisting of $66.4 million
relating to engineering services, $26.0 million relating to software licenses,
$3.6 million for field measurement and analysis products and $84.5 million
relating to program management services. The Company includes in its backlog
only committed fees or purchase prices specified in contracts which have been
executed by the Company to the extent that the Company contemplates recognition
of the related revenue. The Company believes that its substantial backlog is
relatively unique in the industry, and is attributable principally to contracts
which were entered into in July 1995 and in the first half of 1996. (The Company
did not track its backlog prior to 1996, since prior to receipt of such
contracts the large majority of backlog consisted of annual software license
fees. The Company believes that its backlog as of March 31, 1995 in areas other
than software licenses was substantially less than that for March 31, 1996.)

The principal portion of the Company's present backlog arise from contracts
with Nextel Communications, NextWave Telecom and DCR. These contracts represent
approximately $146.6 million (or 81.1%) of the overall backlog. In addition,
they represented approximately $59.1 million (or 89.0%), $6.5 million (or
25.7%), and $80.0 million (or 94.7%), respectively, of the portions of the total
backlog relating to engineering services, software licenses and program
management services. NextWave Telecom and DCR have flexibility within five-year
periods regarding the timing of ordering and mix of services and products to be
purchased from the Company. The orders under such contracts are also subject to
uncertainties relating to PCS network deployment generally and to matters that
may affect the businesses and financial resources of such customers. Since the
Company's backlog is subject to significant timing uncertainties, the Company
cannot accurately predict the portion of the backlog that will be filled within
the current year, but expects that it will not fill at least $138.4 million of
its overall backlog in 1996. See "Risk Factors -- Changes Adversely Impacting
Demand for the Company's Products and Services -- Delays in Deployment of PCS
Networks," "Risk Factors -- Risks Associated with Strategic Relationships and
Strategic Financing" and Note 19 to the Consolidated Financial Statements. There
can be no assurance that the contracts included in the backlog will actually
generate the specified revenues or that the actual revenues will be generated
within any particular period. See "Risk Factors -- Significant Fluctuations in
Quarterly Results; Uncertainties Relating to Backlog."

SALES AND MARKETING

The Company markets its services and products to operators of wireless
telecommunications networks in North America, Europe, Asia, the Middle East and
Latin America through its 23 member direct sales force based at its headquarters
in Arlington, Virginia. The members of the sales force are compensated based on
factors such as revenues generated compared to revenues forecasted, receivables
collected and the blend of products and services sold. The Company also utilizes
independent distributors and sales agents to supplement its direct sales force
outside the U.S. where business practices or customs make it most effective to
proceed through local companies. The Company utilizes the offices of its German
subsidiary to supplement its European sales efforts and intends to establish
regional sales offices in Brazil and Korea.

The Company's RF engineers and other technical professional staff support
the efforts of the sales force, particularly in connection with the marketing of
engineering services and software products. Customers generally have engineers
involved in their procurement decisions, and the Company's engineers work
closely with the customer's engineers to help them understand the Company's
services and products and their

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<PAGE> 45

advantages compared to those of the competition. Additional business from
existing customers is pursued through the joint efforts of both the sales force
member primarily responsible for sale (who monitors the customer's satisfaction
as work progresses and makes periodic contact with the customer following
completion of work) and of the engineers and other technical staff who have
developed a relationship and worked closely with the customer's engineers, and
understand the customers' needs. This combination gives the Company an advantage
in pursuing the follow-on business.

The Company generates sales leads for new customers through referrals from
existing customers (including referrals to international wireless operators with
which such customers have entered into partnership arrangements) and other
industry suppliers, its reputation in the industry, contacts with bidders for
new wireless licenses and others in the industry and other sources, which
include advertising, use of explanatory literature and publications and
participation in conferences and trade shows. The Company utilizes various
strategies to attract business from new customers, particularly various
arrangements in which Phase 1 services are provided for a reduced fee or with a
success-based contingent arrangement, coupled with a commitment from, or
understanding with, the customer to retain the Company in connection with Phase
2 services and products should the customer be awarded the applicable licenses.
Recently the Company has made two significant strategic investments in customers
in exchange for large contracts, and expects to continue this strategy in the
future. See "Risk Factors -- Risks Associated with Strategic Relationships,
Vendor Financing, and Acquisitions" and Note 19 to the Consolidated Financial
Statements.

In addition to obtaining business directly from wireless network operators,
the Company has also established working relationships with two major
telecommunications equipment vendors, pursuant to which the Company provides RF
engineering services and related products, on a subcontract basis. The Company
is seeking to establish additional relationships with telecommunications
equipment vendors.

Purchases of the Company's services or products by customers often entails
an extended decision-making process for the customer because of the substantial
costs and strategic implications associated with selecting the Company's
services and products. Senior management of the customer is often involved in
this process, given the importance of the decision as well as the risks faced by
the customer if the Company's services and products do not meet the customer's
particular needs. Therefore, large procurements of LCC's services and products
involve lengthy selling cycles, often as long as nine months. See "Risk
Factors -- Dependence on Significant Customers and Large Contracts" and
"-- Lengthy Sales Cycle."

RESEARCH AND DEVELOPMENT

The Company intends to continue developing new services and products and
enhance existing ones to maintain its position as a leader in RF engineering and
wireless network design. The Company is presently developing a number of new
products, including software tools and upgrades of field measurement and
analysis products. The Company's research and development efforts are focused on
making its existing products easier to use, adding functionality, making the
products compatible with different technologies and enabling the products to
interface with other products offered by the Company or other parties. The
Company is in the process of establishing a team of RF engineers, other
technical personnel, management consultants and other specialists who have been
asked to develop services and products specifically for use in connection with
Phase 4. The Company believes that its experience in providing a range of
engineering and wireless network services gives it an advantage in developing
products for use by engineers providing wireless network design services. See
"Risk Factors -- Rapid Technological Changes."

MANUFACTURING AND PRODUCT ASSEMBLY

The Company assembles field measurement and analysis products by obtaining
standard parts and components obtained from a variety of computer and electronic
vendors and specially configuring these components to produce the field
measurement and analysis products. It also engages third party contractors to
assemble certain of these products based on the Company's design specifications.
The proprietary aspects of the Company's systems are primarily in the product
design, the software provided with the equipment and the specific applications
development designed for the customer. Equipment assembly, testing and quality
control

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<PAGE> 46

are performed by the Company at its Arlington, Virginia facility. The Company
currently has six employees conducting manufacturing and product assembly and
ten employees involved in supporting activities, including quality control,
inventory control, shipping and receiving and purchasing. Certain components
used in the Company's products are presently available from limited sources. To
date, the Company generally has been able to obtain supplies of these components
in a timely manner from these sources. The Company began the development and
assembly of its own field measurement and analysis products in early 1992 and
took over performance of the bulk of its development and assembly in 1994. The
Company experienced a stagnant demand for its field measurement and analysis
products during 1994 (reflected in revenues from field measurement and analysis
products for 1995) when it devoted its resources to enhancing its own field
measurement and analysis product development capabilities rather than developing
new products.

COMPETITION

The current market for wireless network design services, related software
tools and field measurement and analysis equipment and program management
services is highly competitive. Many companies offer such services and products,
and the Company believes that the number of other independent firms providing a
combination of these services and products to wireless network operators
throughout the world is increasing.

ENGINEERING SERVICES

LCC's competition in the provision of RF engineering services consists of
(i) companies such as Mobile Systems International, Inc., Moffett, Larson &
Johnson P.C. and Comsearch, Inc., which provide a full range of RF engineering
services (as well as related software), (ii) companies that provide only a
portion of the engineering services, which generally act as a supplement to a
wireless operator's in-house engineering staff, (iii) telecommunications
equipment vendors, which provide RF engineering services through subcontractors
as part of larger turnkey projects, and (iv) the internal staffs of wireless
network operators. The Company believes that it is able to compete effectively
against its competitors based upon its leadership position, pricing, reputation,
experience, ability to provide its customers "one-stop-shopping," ability to
deploy quickly a large number of RF engineers to a project, its databases for
many geographic areas, its technological tools, and its relationships with major
wireless operators. In particular, the Company believes that its existing
customer base gives it a significant advantage in obtaining additional business
for its existing and new products and services.

SOFTWARE TOOLS

LCC's competition for the provision of software tools consists of (i) the
companies that provide the full range of RF engineering services along with
related software, particularly Mobile Systems International, Inc. and Comsearch,
Inc., which compete vigorously with the Company in this area, (ii) a limited
number of companies that have developed software tools but generally do not
provide engineering services and (iii) the internal staffs of wireless network
operators. The Company believes that its experience in providing a range of
engineering and network services gives it an advantage in developing software
tools for use by engineers providing network design services, particularly
because of the experience it receives as a result of the use of the products by
its own engineers. The Company believes that competition depends on such factors
as functionality, price product performance and reputation. The most successful
of the Company's competitors in this area have been European companies, and LCC
has been enhancing the functionality of its software tools in the GSM area to
compete more effectively for European customers. In pursuing international
business the Company has been flexible with the terms of its software licenses
in markets where standard license terms differ from those used in the U.S.

FIELD MEASUREMENT AND ANALYSIS EQUIPMENT

The Company's competition for the provision of field measurement and
analysis products consist of (i) full service companies and equipment vendors,
particularly those specializing in field measurement and analysis products,
principally Safeco Corporation and Comarco, Inc. and (ii) small independent
entrepreneurial companies. As is the case with its software tools, the Company
believes that its experience in providing a range of engineering and network
services gives it an advantage in developing field measurement

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and analysis tools for use by engineers providing network design services,
particularly because of the feedback it receives as a result of the use of the
products by its own engineers. The Company believes that competition depends on
such factors as functionality, price product performance, reputation and
compatibility with software tools. LCC is designing a series of products to make
LCC's field measurement and analysis tools compatible with software products
from other companies.

PROGRAM MANAGEMENT SERVICES

Competition for the provision of program management services is highly
fragmented consisting of (i) equipment vendors that provide program management
services as part of larger turnkey projects, (ii) companies with experience in
project management in other industries, (iii) the internal staffs of wireless
network operators and (iv) small firms that focus on a limited number of the
entire range of activities involved in wireless network deployment and
expansion. The Company believes that competition depends on such factors as
reputation, the ability to perform on schedule and within the customer's budget
and quality expectations, and that its ability to have personnel specifically to
address the requirements of wireless network operations will enable it to
compete effectively in this area.

There can be no assurance that competitive factors will not have an adverse
effect on the Company's business. See "Risk Factors -- Risks from Competition."

SOFTWARE PROTECTION AND TECHNOLOGY LICENSES

The Company regards its software as proprietary and has implemented
protective measures both of a legal and a practical nature to ensure that the
software retains that status. The Company derives protection for its software by
licensing only the object code to customers and keeping the source code
confidential. Like many other companies that license software, the Company does
not have patent protection for its software. It therefore relies upon the
copyright laws to protect against unauthorized copying of the object code of its
software, and upon copyright and trade secret laws for the protection of the
source code of its software. Despite this protection, competitors could copy
certain aspects of the Company's software tools or field measurement and
analysis products, or obtain information which the Company regards as trade
secrets. In addition, the Company enters into confidentiality agreements with
its employees, distributors, and customers, and limits access to and
distribution of its software, documentation, and other proprietary information.
There can be no assurance that the steps taken by the Company to protect its
proprietary rights will be adequate to deter misappropriation of its technology.
Further, there can be no assurance that any patent issued to the Company or the
copyrights registered by the Company can be successfully defended. In any event,
the Company believes that factors such as technological innovation and expertise
and market responsiveness are more important than the legal protections
described above.

EMPLOYEES

As of June 30, 1996, LCC employed 674 full-time employees. The Company
believes that relations with its employees are good. None of its employees is
part of any collective bargaining unit. The Company believes that its future
growth and success will depend upon its ability to attract and retain skilled
and motivated personnel. See "Risk Factors -- Dependence on Key Personnel;
Management of Growth."

FACILITIES

The Company leases approximately 144,000 square feet of office space in
Arlington, Virginia. The Company recently exercised an early termination option
with respect to approximately 55,000 square feet of such office space and
intends to exercise similar options with respect to an additional 65,000 square
feet of space. In connection with such termination, the Company has incurred and
will incur one-time termination costs totalling $1.4 million. The Company
recently entered into a lease with an annual rent beginning at approximately
$2,951,000 for approximately 155,339 square feet of office space in McLean,
Virginia for occupancy during the first quarter of 1997. The term of this lease
is ten years, with two five-year renewal options. The Company also entered into
a lease with an annual rent beginning at approximately $153,700 for

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<PAGE> 48

approximately 10,245 square feet of office space in McLean, Virginia for
occupancy during 1997. The term of this lease is five years with three five-year
renewal options. The Company believes that its new facilities will be adequate
for its needs for the foreseeable future.

LEGAL PROCEEDINGS

The Company is party to various legal proceeding and claims incidental to
its business. The Company does not believe that these matters will have a
material adverse effect on the Company.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names, ages and principal positions of
the members of the Company's Board of Directors and the executive officers of
the Company.

<TABLE>
<CAPTION>
NAME AGE POSITIONS
<S> <C> <C>
Dr. Rajendra Singh................. 41 Chairperson of the Board of Directors
Neera Singh........................ 37 Director
Mark D. Ein........................ 31 Director
Arno A. Penzias.................... 63 Director
Piyush Sodha....................... 37 President, Chief Executive Officer and Director
J. Michael Bonin................... 38 Vice President, Hardware
Kathryn M. Condello................ 40 Vice President, Program Management
Peter A. Deliso.................... 35 Vice President, Corporate Affairs, General Counsel
and Secretary
Richard Hozik...................... 45 Senior Vice President, Treasurer and Chief Financial
Officer
Frank F. Navarrete................. 53 Vice President, Sales and Marketing
Donald R. Rose..................... 41 Senior Vice President, Software
Gerard L. Vincent.................. 42 Senior Vice President, Engineering
</TABLE>

The Company expects that, following the Offering, one additional person
will be elected to the Board of Directors, who will not be an officer, employee
or stockholder of the Company or any of its affiliates.

All officers of the Company are elected to serve in such capacities until
the next annual meeting of the Board of Directors and until their successors are
duly elected and qualified. References below to the Company also include its
predecessors, the Founder Corporation and the Limited Liability Company, which
succeeded to the business of the Founder Corporation in January 1994.

Dr. Rajendra Singh. Dr. Rajendra Singh is the Chairperson of the Board of
the Directors and co-founder of LCC. Dr. Singh was President of the Company from
its formation in 1983 until September 1994, and was Chief Executive Officer from
January 1994 until January 1995, and Treasurer from January 1994 until January
1996. Dr. Singh is also Chairman of the Members Committee of Telcom Ventures and
RF Investors. Dr. Singh also established, developed and directed APPEX Inc., a
billing services firm which was sold to Electronic Data Systems Corporation in
October 1990. Dr. Singh is married to Neera Singh, a Director and, until
immediately prior to the Offering, an executive officer of LCC. Dr. Singh is
also a principal owner of the Founder Corporation. See "Principal and Selling
Stockholders."

Neera Singh. Neera Singh is a co-founder of LCC and has been a Director of
the Company since its inception. Ms. Singh has served as Vice President of the
Company from its formation in 1983 to October 1991 and Executive Vice President
from January 1994 until immediately prior to the Offering. Ms. Singh also has
served as Co-Chairperson of the Company from January 1995 until immediately
prior to the Offering. Ms. Singh is a member of the Members Committee of Telcom
Ventures. Ms. Singh is married to Dr. Rajendra Singh, a Director and former
executive officer of LCC. Ms. Singh is also a principal owner of the Founder
Corporation. See "Principal and Selling Stockholders."

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<PAGE> 49

Mark D. Ein. Mark D. Ein has served as a Director of the Company since
January 1994. Mr. Ein is a Vice President of The Carlyle Group, a private
investment firm and an affiliate of the Carlyle Investors. Mr. Ein is currently
a director of Telcom Ventures, RF Investors, HighwayMaster Communications, Inc.,
a wireless provider to the transportation industry, and various private
companies. Mr. Ein worked for Brentwood Associates, a private equity investment
firm, from 1989 to 1990, and for Goldman, Sachs & Co. from 1986 to 1989.

Arno A. Penzias. Arno A. Penzias has been a Director of LCC since July
1996. Dr. Penzias currently is Vice President and Chief Scientist of Lucent
Technologies, Bell Labs Innovations. From 1995 until 1996, Dr. Penzias was Vice
President and Chief Scientist of AT&T Bell Laboratories. From 1981 through 1995,
he was Vice President, Research of AT&T Bell Laboratories. As a scientist, Dr.
Penzias is best known for his contributions to astrophysics, which earned him
the Nobel Prize for Physics in 1978. Dr. Penzias also is currently a member of
the Boards of Directors of Duracell International Inc., a manufacturer of
batteries, and Arthur D. Little, Inc., a consulting company.

Piyush Sodha. Piyush Sodha has been Chief Executive Officer of LCC since
January 1995 and has been President of the Company since September 1994. From
October 1990 through September 1994 he was Chief Operating Officer of the
Company. Mr. Sodha has been a Director since January 1994. Prior to joining LCC,
Mr. Sodha was Director, Product Line Management in the cellular systems division
of Northern Telecom Ltd. from 1987 to 1990. From 1985 to 1987 he was a
consultant in the telecommunications practice at Booz, Allen & Hamilton, and
prior thereto he was Senior Associate Engineer at International Business
Machines Corporation.

J. Michael Bonin. J. Michael Bonin has been Vice President, Hardware
Products, of LCC since July 1993. From 1989 until 1993 he was Director of
Hardware Products for LCC. Prior to joining LCC in 1989, Mr. Bonin was Vice
President and General Manager of T-Line Services, Inc., a digital microwave
communications firm in San Francisco, California. Prior thereto, from 1985 to
1987, Mr. Bonin was principal and founder of a start-up manufacturing division
for an international optical laser company in Irvine, California.

Kathryn M. Condello. Kathryn M. Condello has been Vice President, Program
Management, for LCC since October 1994. From March 1993 until October 1994, Ms.
Condello was Director of Network Services of MCI Communications Wireless Group.
From March 1990 until March 1993, Ms. Condello was Director, Business
Development for Network Building & Consulting, a network development firm
specializing in the acquisition, construction and deployment of wireless
networks. From March 1987 until July 1988, Ms. Condello was Director of Business
Planning for Cellular One/Washington-Baltimore.

Peter A. Deliso. Peter A. Deliso has been LCC's General Counsel since June
1994 and Vice President, Corporate Affairs, and Secretary since January 1996.
From late 1989 until January 1994, Mr. Deliso served as Corporate Counsel for
Mobile Telecommunication Technologies Corp. ("Mtel") and its various domestic
and international subsidiaries. Prior to his employment with Mtel, Mr. Deliso
was with the law firm of Garvey, Schubert & Barer specializing in international,
corporate and securities law.

Richard Hozik. Richard Hozik has been Senior Vice President and Chief
Financial Officer of the Company since November 1995 and Treasurer since January
1996. From October 1992 to October 1995, Mr. Hozik was employed by the J.E.
Robert Companies, a privately held real estate investment and management
company, where he held the position of Senior Vice President and Chief Financial
Officer. From April 1992 to September 1992, Mr. Hozik was the Managing Partner
of Hozik & Associates, a management consulting firm. From March 1982 to March
1992, Mr. Hozik was with GRC International, Inc. (formerly Flow General Inc.)
("GRC"), a publicly traded international technology-based products and services
company, where he served as Vice President, Treasurer and Chief Financial
Officer of GRC and President and Chief Executive Officer of its Biomedical
Group. From 1973 to 1982, Mr. Hozik was with the international public accounting
firm of Arthur Andersen LLP.

Frank F. Navarrete. Frank F. Navarrete has been Vice President, Sales and
Marketing, of LCC since October 1994 and was Director, Business Development of
Telcom Ventures from April 1994 to October 1994.

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<PAGE> 50

From 1992 to 1994, he was Vice President Mexico-Central America for Motorola.
From 1988 to 1992, he was Director Domestic Infrastructure Support-Motorola.
From 1986 to 1988, he was OPS Manager for the North-East Corridor-Motorola. Mr.
Navarrete was Manager Program Management North-East Corridor-Motorola.

Donald R. Rose. Donald R. Rose has been the Senior Vice President, Software
of LCC since August 1996. From October 1990 until August 1996, Mr. Rose was
Senior Vice President, Engineering of the Company, and from 1988 until October
1990, he was Vice President, Engineering of the Company. Before joining the
Company, Mr. Rose was Senior Project Engineer of Los Angeles Cellular Telephone
Co. and a Senior Engineer of Moffet, Larson & Johnson, P.C., a
telecommunications consulting firm.

Gerard L. Vincent. Gerard L. Vincent has been Senior Vice President,
Engineering of LCC since August 1996. From January 1995 to August 1996, Mr.
Vincent was Vice President, Engineering of the Company, and from December 1993
to January 1995, he was Director of Engineering of the Company. Prior to joining
LCC, Mr. Vincent was Director, Department of Cellular Engineering of France
Telecom, from December 1989 to December 1993.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has established an Audit Committee and a
Compensation and Stock Option Committee and has appointed Messrs. Ein and
Penzias as the members of these committees. Following the Offering, the Audit
Committee will examine and consider matters relating to the financial affairs of
the Company, including reviewing the Company's annual financial statements, the
scope of the independent annual audit and internal audits and the independent
accountant's letter to management concerning the effectiveness of the Company's
internal financial and accounting controls. The Compensation and Stock Option
Committee will consider and make recommendations to the Company's Board of
Directors with respect to programs for human resource development and management
organization and succession, approve changes in senior executive compensation,
consider and make recommendations to the Company's Board of Directors with
respect to compensation matters and policies and employee benefit and incentive
plans and administer the Company's stock option plans and ERISA plans, grant
stock options under such stock option plans and exercise all other authority
granted to it to administer such stock option and ERISA plans.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (the "Delaware Law")
empowers a corporation to indemnify its directors and officers and to purchase
insurance with respect to liability arising out of their capacity or status as
directors and officers provided that this provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) arising under Section 174 of the Delaware Law, or (iv) for any transaction
from which the director derived an improper personal benefit. The Delaware Law
provides further that the indemnification permitted thereunder shall not be
deemed exclusive of any other rights to which the directors and officers may be
entitled under the corporation's bylaws, any agreement, vote of stockholders or
otherwise. The Company's Certificate of Incorporation eliminates the personal
liability of directors to the fullest extent permitted by Section 102(b)(7) of
the Delaware Law and provides that to the fullest extent permitted by law, the
Corporation shall fully indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding.

The Company intends to enter into separate indemnification agreements with
each of its directors and executive officers pursuant to which the Company shall
agree, among other things, and subject to certain limited exceptions: (i) to
indemnify them to the fullest extent permitted by law against any liabilities
and

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expenses (including attorneys' fees) reasonably incurred in connection with any
threatened, pending or completed action or other proceeding arising from the
fact that they are each in an Indemnifiable Capacity or because of anything done
or not done by each of them in such Indemnifiable Capacity, and (ii) to advance
funds to cover any such expenses no later than thirty days after demand. An
Indemnifiable Capacity is defined as the fact that the person is or was a
director or executive officer of the Company, or, while a director or executive
officer of the Company, is or was serving at the request of the Company as a
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another corporation, partnership, joint venture, sole
proprietorship, trust, nonprofit entity, employee benefit plan or other
enterprise.

The effect of the foregoing is to require the Company to indemnify the
officers and directors of the Company for any claim arising against such persons
in their official capacities if such person acted in good faith and in a manner
that he or she reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Certificate of Incorporation. The Company is not
aware of any threatened litigation or proceeding that may result in a claim for
such indemnification.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation awarded to, earned by, or
paid to the Chief Executive Officer of the Company and each of the Company's
four most highly compensated executive officers whose salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 1995 (collectively, the
"Named Officers"):

<TABLE>
<CAPTION>
ANNUAL COMPENSATION(6)
---------------------------------------------------
NAME AND FISCAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(4) COMPENSATION(5)
<S> <C> <C> <C> <C>
Dr. Rajendra Singh...................... 1995 --(2) --(2) --(2)
Chairperson(1)(2)
Piyush Sodha............................ 1995 $213,000 $ 140,000 --
President and Chief Executive
Officer(1)
Neera Singh............................. 1995 $360,000 -- $ 5,000
Co-Chairperson and Executive Vice
President(3)
Donald R. Rose.......................... 1995 $111,000 $1,501,000 $ 5,000
Senior Vice President, Engineering
J. Michael Bonin........................ 1995 $130,000 $ 55,000 $ 2,000
Vice President, Hardware
George H. Sampson....................... 1995 $123,000 $ 54,000 $ 2,000
Senior Vice President, Software(7)
</TABLE>

- ---------------

(1) Dr. Rajendra Singh was the Chairperson of the Board of Directors and Chief
Executive Officer of the Company until January 3, 1995 and he currently
holds the position of Chairperson of the Board of Directors. Mr. Piyush
Sodha was the President and Chief Executive Officer of the Company during
most of 1995.

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<PAGE> 52

(2) Dr. Singh received no compensation from the Company for services rendered to
the Company during the three days of fiscal year 1995 during which he was
employed by the Company as its Chief Executive Officer.

(3) Effective upon the Offering, Ms. Singh will no longer be an officer of the
Company and will no longer receive compensation as an employee of the
Company.

(4) Includes annual distributions in 1995 under the LLC Membership Plan of
approximately $140,000 to Mr. Sodha, $1,448,000 to Mr. Rose (of which
$1,100,000 was deferred in 1995 from a previous year's distribution),
$5,000 to Mr. Bonin and $39,000 to Mr. Sampson. Upon conversion of the LLC
Membership Plan in connection with the Offering, such distributions will no
longer be made. See "Certain Transactions -- Conversion of Interests Under
LLC Option Plan and LLC Membership Plan into Stock Options."

(5) Includes payments by the Company for life insurance (in all cases less than
$500 per individual) and contributions to the Company's 401(k) Plan.

(6) All amounts are rounded to the nearest $1,000. The amount of perquisites and
other personal benefits, securities or other property has been omitted
because the applicable amount of such compensation is less than $50,000 or
10% of the total annual salary and bonus reported for each Named Officer.

(7) As of August 15, 1996, Mr. Sampson is no longer an employee of the Company.

OPTION GRANTS

No options were granted to the Named Officers during the period presented.
Options will be granted to certain Named Officers and other executive officers
as described below under "Management -- Stock Plans."

EMPLOYMENT AGREEMENTS

The Company entered into an offer letter with Mr. Piyush Sodha when he was
hired on October 1, 1990. The letter provides for continued employment until
terminated at will by either party with ninety days' prior written notice. Mr.
Sodha has indicated an intention to terminate this employment letter (but not
his employment). None of the Company's executive officers has an employment
agreement with the Company other than agreements terminable at will.

AGREEMENT WITH DIRECTOR

The Company has entered into an agreement with one of its directors, Arno
Penzias, pursuant to which the Company has agreed to compensate Mr. Penzias for
his services as a director as follows: (i) an annual fee of $20,000, (ii) a fee
of $1,000 for each meeting of the Board of Directors he attends, (iii) an annual
fee of $2,000 for each Committee on which he serves (he presently serves on the
Audit Committee and the Compensation and Stock Option Committee) and (iv) an
annual fee of $3,000 for any committee which he chairs (at present he does not
serve as chairman of any committees). In addition, the Company has agreed to
grant Mr. Penzias options under the Directors Plan. Such options are subject to
vesting over a three year period and to the other terms and conditions of the
Directors Plan.

STOCK PLANS

1996 EMPLOYEE STOCK OPTION PLAN

The Employee Plan provides for the grant of options that are intended to
qualify as "incentive stock options" under Section 422 of the Code, to employees
of the Company or any of its subsidiaries, as well as the grant of
non-qualifying options to employees and any other individuals whose
participation in the Employee Plan is determined to be in the best interests of
the Company. The Employee Plan authorizes the issuance of up to 3,224,000 shares
of Class A Common Stock pursuant to options granted under the Employee Plan
(subject to anti-dilution adjustments in the event of a stock split,
recapitalization or similar transaction). The Compensation and Stock Option
Committee of the Board of Directors will administer the Employee Plan and will
grant options to purchase Class A Common Stock.

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<PAGE> 53

The option exercise price for incentive stock options granted under the
Employee Plan may not be less than 100% of the fair market value of the Class A
Common Stock on the date of grant of the option (or 110% in the case of an
incentive stock option granted to an optionee beneficially owning more than 10%
of the outstanding Class A Common Stock). The option exercise price for
non-incentive stock options granted under the Employee Plan may not be less than
par value of the Class A Common Stock on the date of grant of the option. The
maximum option term is 10 years (or five years in the case of an incentive stock
option granted to an optionee beneficially owning more than 10% of the
outstanding Class A Common Stock). Options may be exercised at any time after
grant, except as otherwise provided in the particular option agreement. There is
also a $100,000 limit on the value of Class A Common Stock (determined at the
time of grant) covered by incentive stock options that first become exercisable
by an optionee in any year. The maximum number of shares of Class A Common Stock
subject to options that can be awarded under the Employee Plan to any person is
1,000,000 shares.

Payment for shares purchased under the Employee Plan may be made either in
cash or, if permitted by the particular option agreement, by exchanging shares
of Class A Common Stock with a fair market value equal to the option exercise
price and cash for any difference. Options may, if permitted by the particular
option agreement, be exercised by directing that certificates for the shares
purchased be delivered to a licensed broker as agent for the optionee, provided
that the broker tenders to the Company cash or cash equivalents equal to the
option exercise price plus the amount of any taxes that the Company may be
required to withhold in connection with the exercise of the option.

Options granted under the Employee Plan are not transferable (other than by
will or the laws of descent and distribution) and may be exercised only by the
optionee during his or her lifetime. If any optionee's employment with the
Company terminates by reason of death or permanent and total disability or the
optionee dies within 30 days after a termination other than for cause (or within
180 days after a termination of employment due to disability), the optionee's
options, whether or not then exercisable, may be exercised within 180 days after
such death or disability unless otherwise provided in the option agreement (but
not later than the date the option would otherwise expire). If the optionee's
employment terminates for any reason other than cause, death or disability,
options held by such optionee will terminate 30 days after such termination
unless otherwise provided in the option agreement or approved by the
Compensation and Stock Option Committee (but not later than the date the option
would otherwise expire). If the optionee's employment terminates for cause,
options held by such optionee will terminate on such termination unless
otherwise provided in the option agreement or approved by the Compensation and
Stock Option Committee (but not later than the date the option would otherwise
expire). If the optionee is not an employee, the Compensation and Stock Option
Committee will provide in the option agreement when the option will terminate.

The Board of Directors may amend the Employee Plan with respect to shares
of Class A Common Stock as to which options have not been granted. However, the
Company's stockholders must approve any amendment that would (i) materially
change the requirements as to eligibility to receive options; (ii) materially
increase the benefits accruing to participants who are considered "insiders" for
purposes of Rule 16b-3 of the Securities and Exchange Act of 1934; or (iii)
increase the number of shares that may be sold pursuant to options granted under
the Employee Plan (except for adjustments upon changes in capitalization).

It is anticipated that, in connection with the Offering, options to
purchase approximately 590,000 shares of Class A Common Stock at the Offering
price will be granted to approximately 265 employees. Options granted will vest
with respect to one-third of the shares subject to the options on each of the
first three anniversaries of the date of grant. The options will expire no later
than the tenth anniversary of the date of grant.

It is also anticipated that, in connection with the Offering, options to
purchase approximately up to an aggregate of 2,160,000 shares of Class A Common
Stock will be issued to certain employees of the Company and three individuals
employed by Telcom Ventures. These options will replace options granted by the
Limited Liability Company under the LLC Option Plan adopted in March 1996 and
phantom membership

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<PAGE> 54

awards under the LLC Membership Plan adopted in 1994. The exercise price for
options replacing options under the LLC Option Plan is intended to be equivalent
to the exercise price of the options granted under the LLC Option Plan ($9.70 to
$12.00 per share, or approximately 61% to 86% of the Offering price) and is
intended to be for equivalent equity percentage ownership. The number of options
and option exercise prices for options replacing phantom membership interests
previously granted under the LLC Membership Plan will be 1,343,150 and 25% of
the initial offering price of the Class A Common Stock ($4.00 per share) which
was calculated under a conversion formula intended to maintain comparable value
with phantom membership awards under the LLC Membership Plan. See "Certain
Transactions -- Conversion of Interests under LLC Option Plan and LLC Membership
Plan into Stock Options."

1996 DIRECTORS STOCK OPTION PLAN

The Company's 1996 Directors Stock Option Plan (the "Directors Plan")
provides for the "formula" grant of options that are not intended to qualify as
"incentive stock options" under Section 422 of the Code to Dr. Rajendra Singh,
Neera Singh and directors of the Company who are not officers or employees of
the Company or any subsidiary of the Company (each an "Eligible Director"). The
Directors Plan authorizes the issuance of up to 60,000 shares of Class A Common
Stock and 250,000 shares of Class B Common Stock (for directors eligible to hold
Class B Common Stock, such as Dr. Rajendra Singh and Neera Singh), pursuant to
options granted under the Directors Plan (subject to anti-dilution adjustments
in the event of a stock split, recapitalization or similar transaction). The
option exercise price for options granted under the Directors Plan will be 100%
of the fair market value of the shares of Common Stock on the date of grant of
the option. Under the Directors Plan, each Eligible Director who is not eligible
to hold shares of Class B Common Stock (such as Mark Ein and Arno Penzias) will
be granted an initial option to purchase 10,000 shares of Class A Common Stock
in connection with the Offering or on later commencement of service. Each
Eligible Director who is eligible to hold shares of Class B Common Stock and who
is a director as of the time of the Offering (Dr. Rajendra Singh and Neera
Singh) will be granted an initial option to purchase 35,000 shares of Class B
Common Stock in connection with the Offering, and an additional option to
purchase 22,500 shares of Class B Common Stock as of each of the next four
annual meetings of the stockholders of the Company if the Eligible Director
continues to be an Eligible Director. Options granted with respect to Class A
Common Stock will become immediately exercisable with respect to directors who
were directors of the Company prior to July 1, 1996 (Mark Ein) and will become
exercisable with respect to one-third of the shares of Class A Common Stock that
are subject to the options on each of the first three anniversaries of the date
of grant subject to acceleration of vesting on a change of control (as defined
in the Directors Plan) with respect to directors who become directors of the
Company after July 1, 1996 (Arno Penzias). Such options will expire no later
than the tenth anniversary of the date of grant. Options granted with respect to
Class B Common Stock will become exercisable immediately following the date of
grant, and will expire no later than the fifth anniversary of the date of grant.

Payment for shares purchased under the Directors Plan may be made either in
cash or by exchanging shares of Class A Common Stock with a fair market value
equal to the option exercise price and cash or certified check for any
difference. Options may be exercised by directing that certificates for the
shares purchased be delivered to a licensed broker as agent for the optionee,
provided that the broker tenders to the Company cash or cash equivalents equal
to the option exercise price plus the amount of any taxes that the Company may
be required to withhold in connection with the exercise of the option.

Options granted under the Directors Plan are not transferable (other than
by will or the laws of descent and distribution) and may be exercised only by
the optionee during his or her lifetime. If any optionee's service as a director
with the Company terminates by reason of death or permanent and total
disability, the optionee's options, whether or not then exercisable, may be
exercised within 180 days after such death or disability (but not later than the
date the option would otherwise expire). If the optionee's service as a director
terminates for any reason other than death or disability, options held by such
optionee will terminate 60 days after such termination (but not later than the
date the option would otherwise expire).

The Board of Directors may amend the Directors Plan with respect to shares
of Common Stock as to which options have not been granted but no more than once
in a six month period other than to comport with

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<PAGE> 55

changes in applicable Federal laws. However, the Company's stockholders must
approve any amendment that would (i) change the requirements as to eligibility
to receive options; (ii) materially increase the benefits accruing to
participants under the Directors Plan; or (iii) materially increase the number
of shares of Common Stock that may be sold pursuant to options granted under the
Directors Plan (except for adjustments upon changes in capitalization).

EMPLOYEE STOCK PURCHASE PLAN

Under the Company's Employee Stock Purchase Plan, 360,000 shares of Class A
Common Stock are available for purchase by eligible employees of the Company
(subject to anti-dilution adjustments in the event of a stock split,
recapitalization or similar transaction). The Employee Stock Purchase Plan
permits eligible employees to elect to have a portion of their pay deducted by
the Company to purchase shares of Class A Common Stock of the Company. In the
event there is any increase or decrease in shares of Class A Common Stock
without receipt of consideration by the Company (for instance, by a
recapitalization or stock split), there may be a proportionate adjustment to the
number and kinds of shares that may be purchased under the Employee Stock
Purchase Plan. Generally, payroll deductions and other payments will be
accumulated during the period specified by the Compensation and Stock Option
Committee (the "Payroll Deduction Period").

The Employee Stock Purchase Plan will be administered by the Compensation
and Stock Option Committee. The Compensation and Stock Option Committee will
have the authority to interpret the Employee Stock Purchase Plan, to prescribe,
amend and rescind rules relating to it, and to make all other determinations
necessary or advisable in administering the Employee Stock Purchase Plan, all of
which determinations will be final and binding.

Any employee of the Company or any of its subsidiaries may participate in
the Employee Stock Purchase Plan, except the following, who are ineligible to
participate: (i) an employee who has been employed by the Company or a
participating affiliate for less than six months as of the beginning of a
Payroll Deduction Period; (ii) an employee whose customary employment is for
less than five months in any year; (iii) an employee whose customary employment
is 20 hours or less per week; and (iv) an employee who, after exercising his or
her rights to purchase stock under the Employee Stock Purchase Plan, would own
stock (including stock that may be acquired under any outstanding options)
representing five percent or more of the total combined voting power of all
classes of stock of the Company. An employee must be employed on the last day of
the Payroll Deduction Period in order to acquire stock under the Employee Stock
Purchase Plan unless the employee has retired, died or become disabled.

An eligible employee may become a participant in the Employee Stock
Purchase Plan by completing an election to participate in the Employee Stock
Purchase Plan authorizing the Company to have deductions made from pay on each
pay day following enrollment in the Employee Stock Purchase Plan. The deductions
will be credited to the employee's account under the Employee Stock Purchase
Plan. An employee may not during any Payroll Deduction Period change his or her
percentage of payroll deduction for that Payroll Deduction Period, nor may an
employee withdraw any contributed funds other than by terminating participation
in the Employee Stock Purchase Plan (as described below). A participating
employee who is not an executive officer subject to Section 16 under the
Exchange Act (a "Section 16 officer"), may terminate payroll deductions or
contributions for the remainder of a Payroll Deduction Period.

Rights to purchase shares of Class A Common Stock will be deemed granted to
participating employees as of the first trading day of each Payroll Deduction
Period. The purchase price for each share (the "Purchase Price") will be
established by the Compensation and Stock Option Committee, but will not be less
than 85% of the fair market value of the shares of Class A Common Stock on the
first or last trading day of such Payroll Deduction Period, whichever is lower.

No employee may purchase shares of Class A Common Stock in any year under
the Employee Stock Purchase Plan and all other "employee stock purchase plans"
of the Company and any subsidiary having an aggregate fair market value in
excess of $25,000, determined as of the first trading date of the Payroll
Deduction Period.

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<PAGE> 56

On the last trading day of the Payroll Deduction Period, a participating
employee will be credited with the number of whole shares of Class A Common
Stock purchased under the Employee Stock Purchase Plan during such period.
Shares of Class A Common Stock purchased under the Employee Stock Purchase Plan
will be held in the custody of an agent (the "Agent"). The Agent may hold the
shares of Class A Common Stock purchased under the Employee Stock Purchase Plan
in stock certificates in nominee names and may commingle shares held in its
custody in a single account or stock certificate, without identification as to
individual employees. An employee may, however, instruct the Agent to have all
or part of such shares reissued in the employee's own name and have the stock
certificate delivered to the employee.

In the event the total number of shares of Class A Common Stock reserved
for issuance at the conclusion of the Payroll Deduction Period is insufficient
to cover the number of shares to be purchased by all participating employees
during the same Payroll Deduction Period, then each participating employee will
be (i) credited with a pro rata portion of the available shares, and (ii)
refunded all monies in excess of those required to purchase the shares credited
the employee.

A participating employee will be refunded all monies in his or her account,
and his or her participation in the Employee Stock Purchase Plan will be
terminated, if: (i) the employee elects to terminate participation by delivering
a written notice to that effect to the Company; (ii) the employee ceases to be
employed by the Company or a participating subsidiary except on account of
death, disability, retirement; (iii) the Board of Directors elects to terminate
the Employee Stock Purchase Plan; or (iv) the employee ceases to be eligible to
participate in the Employee Stock Purchase Plan, provided, however, that a
participating employee who is a Section 16 officer does not have the discretion
to voluntarily terminate participation in the Employee Stock Purchase Plan
during a Payroll Deduction Period. If a participating employee terminates
employment on account of death, disability or retirement, the participating
employee will have the following alternatives: (i) refund of all monies in his
or her account, or (ii) purchase of shares of Class A Common Stock on the last
day of the Payroll Deduction Period with the amounts then accumulated in his or
her account (absent a timely election, the participating employee (or his or her
legal representative) will be deemed to have elected to receive a refund);
provided, however, that a participating employee who is a Section 16 officer
does not have the discretion to receive a refund.

No participating employee (or his or her legal representative in the case
of death) may assign his or her rights to purchase shares of Class A Common
Stock under the Employee Stock Purchase Plan, whether voluntarily, by operation
of law or otherwise.

The Board of Directors may, at any time, amend the Employee Stock Purchase
Plan in any respect; provided, however, that without approval of the
stockholders of the Company no amendment shall be made (i) increasing the number
of shares that may be made available for purchase under the Employee Stock
Purchase Plan, (ii) changing the eligibility requirements for participating in
the Employee Stock Purchase Plan or (iii) impairing the vested rights of
participating employees.

The Board of Directors may terminate the Employee Stock Purchase Plan at
any time and for any reason or for no reason, provided that such termination
shall not impair any rights of participants that have vested at the time of
termination. In any event, the Employee Stock Purchase Plan shall without
further action of the Board of Directors, terminate at the earlier of (i) ten
years after the adoption of the Employee Stock Purchase Plan by the Board of
Directors and (ii) such time as all shares of Class A Common Stock that may be
made available for purchase under the Employee Stock Purchase Plan have been
issued.

1994 INCENTIVE COMPENSATION PLAN

The Company has adopted the 1994 Incentive Compensation Plan (the
"Compensation Plan"). Under the Compensation Plan, the Compensation and Stock
Option Committee may, from time to time, in its sole discretion, grant awards to
those employees of the Company whose responsibilities and decisions, in the
opinion of the Compensation and Stock Option Committee, affect the long-term
sustained growth and profitability of the Company. Each incentive award entitles
the recipients thereof to receive a cash payment on the date specified in the
corresponding award agreement. To date, all incentive awards granted are payable
on the third anniversary of the grant thereof. At the discretion of the
Compensation and Stock Option

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<PAGE> 57

Committee, participating employees may borrow a portion of the total amount of
their incentive awards. The Compensation Plan has no termination date, although
the Board of Directors may, in its sole discretion, terminate the Compensation
Plan at any time, provided such termination does not adversely affect the rights
of participants with respect to awards previously granted.

401(K) PLAN

The Company maintains a retirement plan (the "401(k) Plan") intended to
qualify under Sections 401(a) and 401(k) of the Code (although it has not
requested a determination letter from the Internal Revenue Service (the "IRS")
as to the tax-qualified status thereof). The 401(k) Plan is a defined
contribution plan that covers employees of the Company at least 21 years of age,
who have been employed by the Company for at least one year. Employees may
contribute up to 15% of their annual wages (subject to an annual limit
prescribed by the Code) as pretax, salary deferral contributions. The Company
may, in its discretion, match employee contributions up to a maximum of 3% of
annual wages. The Company's contributions to the 401(k) Plan for the year ended
December 31, 1995 and the six months ended June 30, 1996 were approximately
$419,000 and $225,000, respectively. As of June 30, 1996, 466 of the Company's
current employees were participants in the 401(k) Plan. In 1994, the Company
requested a compliance statement pursuant to the IRS voluntary compliance
resolution program with respect to the correction of an operational defect in
the 401(k) Plan resulting from the 401(k) Plan's recordkeeper's
nondiscrimination tests. The IRS is currently reviewing the request.

CERTAIN TRANSACTIONS

The following is a summary of certain transactions and relationships among
the Company and its associated entities, and among the directors, executive
officers and stockholders of the Company and its associated entities.

THE MERGER

In connection with the Offering, LCC International will become the
corporate successor to the Limited Liability Company. Immediately prior to the
consummation of the Offering, the Limited Liability Company will be merged with
and into LCC International. LCC International will be the surviving company in
the Merger, and the separate existence of the Limited Liability Company will
cease. As a result of the Merger, LCC International will own all of the assets
and rights and be subject to all of the obligations and liabilities of the
Limited Liability Company, including under the Credit Facility and the
Exchangeable Notes. Because the Merger is intended to qualify as tax-free under
Section 351 of the Code, the tax basis of the assets held by LCC International
after the Merger will be the same as the tax basis of the assets held by the
Limited Liability Company immediately before the Merger, and LCC International
will add to its holding period for certain assets the period for which the
Limited Liability Company held such assets.

In connection with the Merger, 11,250,751 shares of Class B Common Stock
will be issued to RF Investors, 85,233 shares of Class B Common Stock will be
issued to the Founder Corporation and 28,411 shares of Class A Common Stock will
be issued to TC Group. Immediately prior to the Merger, Telcom Ventures will
transfer its membership interest in the Limited Liability Company to RF
Investors in return for a membership interest in RF Investors of 99% (the
remaining membership interests of 0.75% and 0.25% will be held directly by the
Founder Corporation and TC Group, respectively). It is presently intended that
subsequent to the Offering the Founder Corporation and TC Group will contribute
their shares of Common Stock to RF Investors. As a result of the Merger, RF
Investors and the Founder Corporation will own Class B Common Stock which will
represent upon consummation of the Offering 94.4% of the combined voting power
of both classes of Common Stock. See "Risk Factors -- Control of the Company by
RF Investors" and "Description of Capital Stock."

Pursuant to the Merger, LCC International will be required to indemnify
Telcom Ventures, RF Investors, the Founder Corporation, the Carlyle Investors
and TC Group against any liability for obligations and liabilities associated
with the Limited Liability Company's operations. LCC International will bear all
of the costs incurred by the Limited Liability Company and such entities,
including transfer taxes and related fees, in connection with the Merger.

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CONVERSION OF INTERESTS UNDER LLC OPTION PLAN AND LLC MEMBERSHIP PLAN INTO STOCK
OPTIONS

In March 1996, the Limited Liability Company adopted the LLC Option Plan.
Under the LLC Option Plan, options to purchase membership interests in the
Limited Liability Company were made available for grants to employees at an
exercise price based on the fair market value of the Limited Liability Company
at the time the options were granted, as determined by the Limited Liability
Company. In connection with the Offering, the options granted under the LLC
Option Plan (none of which have been exercised) will be replaced by stock
options granted under the Employee Plan which have an option exercise price
equivalent to the current exercise price of the options granted under the LLC
Option Plan ($9.70 to $12.00 per share, or approximately 61% to 86% of the
Offering price). 930,000 shares have been reserved under the Employee Plan to
replace options granted under the LLC Option Plan. See "Management -- Stock
Plans."

In 1994, the Company adopted the LLC Membership Plan. Under the LLC
Membership Plan, the Company has issued awards entitling the holders thereof to
participate in distributable profits of the Limited Liability Company as
determined by its members' committee. In connection with the Offering, all
phantom membership awards will be converted into options under the Employee Plan
and each participant's right to participate in distributable profits will
automatically terminate. The number of options and the option exercise prices
for options replacing phantom membership interests previously granted under the
LLC Membership Plan was calculated under a conversion formula, intended to
maintain comparable value, generally using 25% of the fair market value of the
shares of Class A Common Stock subject to the options at the time of conversion
($4.00 per share). Approximately 1,343,150 shares have been reserved under the
Employee Plan to replace options granted under the LLC Membership Plan. See Note
13 to the Consolidated Financial Statements.

CORPORATE OPPORTUNITY

The Company and Telcom Ventures Group will enter into the Intercompany
Agreement, effective upon the Offering. Such agreement has been negotiated in
connection with the Offering and does not necessarily represent an arms' length
transaction due to the control of the Company by the Telcom Ventures Group.
Under the Intercompany Agreement, Telcom Ventures, RF Investors, the Founder
Corporation and the Singh Family Group have agreed that, until the earlier of
(i) the date on which the Telcom Ventures Group no longer possesses voting
control of the Company or (ii) the occurrence of certain termination events
specified in the Formation Agreement among the Telcom Ventures Group, none of
them will, directly or indirectly, participate or engage, other than through the
Company, in any of the Company's traditional business activities, defined as (i)
the provision of cellular radio frequency engineering and network design
services to the wireless telecommunications industry, (ii) the provision of
program management services or deployment or construction related consulting
services to the wireless telecommunications industry and (iii) the manufacture,
sale, license, distribution or servicing of any radio network planning software
tools or drive test field measurement and analysis equipment which are used by
LCC in connection with LCC services described in the foregoing clauses (i) or
(ii). The foregoing prohibition does not apply to services provided to third
parties in which any member of the Telcom Ventures Group holds or is considering
the acquisition of an investment where the provision of services is incidental
to such member's investment or to the ownership by any member of the Telcom
Ventures Group of up to 5% of the outstanding securities of any entity as long
as no member of the Telcom Ventures Group participates in the management of such
entity. Under the Intercompany Agreement, each of the Carlyle Investors (but not
its affiliates) has also agreed not to invest in any entity whose primary
business is to compete with the Company in its traditional business activities
(excluding program management) until the earlier of (i) the date on which such
Carlyle Investor no longer owns directly or indirectly, an interest in the
Company or (ii) the occurrence of certain termination events specified in the
Formation Agreement among the Telcom Ventures Group.

In consideration of the foregoing agreements of the Telcom Ventures Group,
the Company has agreed that, if any opportunity to invest in or acquire a third
party the value of which could reasonably be deemed to exceed $1 million (an
"Investment Opportunity") is presented to the Company that it wishes to refer to
a third party, the Company must give written notice to Telcom Ventures of such
Investment Opportunity. Telcom Ventures has five business days following its
receipt of the notice to inform the Company of its desire to pursue the
Investment Opportunity. If Telcom Ventures does not wish to pursue the
Investment

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Opportunity, or fails to provide timely notice to the Company of its interest,
the Company may refer the Investment Opportunity to any third party.

ADVANCES TO AND FROM TELCOM VENTURES AND RELATED PARTIES

The Limited Liability Company was capitalized in January 1994 with a
contribution of $16.7 million from Telcom Ventures in exchange for a 99%
interest in the Limited Liability Company. Telcom Ventures' capital contribution
consisted of $6.4 million in the form of assets, net of liabilities assumed,
formerly employed by the Founder Corporation and affiliates in the Company's
business, which were transferred to the Limited Liability Company at their
respective carrying values, and $10.3 million in cash received by Telcom
Ventures from the Carlyle Investors. The Founder Corporation and TC Group (on
behalf of the Carlyle Investors) received 0.75% and 0.25% interests in the
Limited Liability Company.

Since January 1, 1995, the Company made loans totaling $15.3 million to
Telcom Ventures at a variable interest rate of prime plus 3.0%, escalating at
0.25% increments at various intervals over the term of the debt. Prior to the
Offering, the amount of such advances, along with accrued interest thereon, will
be dividended to Telcom Ventures and used to repay the loans.

Immediately following the Offering, the Company will make a loan of $3.5
million to Telcom Ventures from proceeds of the Offering to assist Telcom
Ventures in paying certain taxes due in connection with the MCI Note Assumption.
Such loan will be repayable over five years, with equal annual principal
payments over the term of the loan. Interest will accrue at the rate of LIBOR
plus 1.75% and be payable annually. Such loan will be senior indebtedness of
Telcom Ventures. Upon the sale by Telcom Ventures or any of its affiliates
(defined as each entity controlling, controlled by or under common control with,
Telcom Ventures, each natural person that controls Telcom Ventures and each
member of Telcom Ventures as of the date of the loan) of shares of Common Stock
resulting in Telcom Ventures and such affiliates, in the aggregate, owning less
than 25% of the outstanding Common Stock, the Company may declare the loan to be
due and payable.

During 1995, the Company converted outstanding receivables in the amount of
$1.4 million owed by Corporacion Mobilcom S.A. de C.V. (d/b/a Tricom), a company
in which Dr. Rajendra Singh and members of his family holds an 15.0% indirect
interest and of which the Carlyle Investors own through Telcom Ventures
approximately 4.5%, into promissory notes. The notes bear interest at
approximately 16.5% per annum, payable monthly. The principal amount and all
accrued interest was due in January 1996 and currently remain outstanding. The
Company expects payments to be made on these notes from capital contributions to
be made by the shareholders of this entity during 1996, including Dr. Singh and
such members of his family.

REGISTRATION RIGHTS

It is anticipated that, concurrently with the Offering, the Company, RF
Investors and MCI will enter into one or more registration rights agreements
which will relate to the Class A Common Stock issuable upon conversion of Class
B Common Stock or in the MCI Conversion, respectively. RF Investors and MCI have
or will have certain "demand" rights to require the Company to register their
Common Stock for sale and may register shares on a "piggyback" basis in
connection with most registered public offerings of securities of the Company.
RF Investors and MCI will be entitled to registration rights that would, among
other things, permit each of them to submit three demand registration requests
to the Company (and one of the RF Investors' demands may be exercised by the
Carlyle Investors following a distribution of shares of Common Stock by RF
Investors to Carlyle). See "Description of Capital Stock -- Certain
Relationships Between the Founder Corporation and the Carlyle Investors
Affecting the Company." Generally, the Company is required to use "best efforts"
to file a registration statement with the Commission within 90 days of receiving
such a request. However, once a year, the Company may defer a registration
request from RF Investors or MCI for a period of up to 90 days if the Board of
Directors makes a good faith determination that it would be "seriously
detrimental" to the Company to file a registration statement within the time
period otherwise required. The Company will pay all expenses (other than
underwriters' discounts and commissions) in connection with such registrations.

The Company intends to file a registration statement under the Securities
Act with respect to the 3,894,000 shares of Common Stock available upon exercise
of options under the Employee Plan, the Directors Plan and the Employee Stock
Purchase Plan.

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<PAGE> 60

CARLYLE OPTION DESIGNEE STOCK OPTIONS

The Company has reserved 85,000 shares of Class A Common Stock (subject to
anti-dilution adjustments in the event of a stock split, recapitalization or
similar transaction) for issuance pursuant to options to be granted to the
Carlyle Option Designees (the "Carlyle Option Designee Stock Options"). The
option exercise price for the Carlyle Option Designee Stock Options will be 100%
of the fair market value of the Class A Common Stock on the date of grant of the
option. The applicable Carlyle Option Designees will be granted an initial
option to purchase 25,000 shares of Class A Common Stock in connection with the
Offering, and an additional option to purchase 15,000 shares of Class A Common
Stock on each of the next four anniversaries of the initial date of grant.
Options granted will vest immediately. The options will expire no later than the
fifth anniversary of the date of grant.

THE EXCHANGEABLE NOTES

Since January 1, 1995, the Company has paid MCI approximately $2.0 million
in interest under the LCC Note. The Company presently intends to exercise its
option in August 1997 to cause the Exchangeable Notes to be exchanged for Class
A Common Stock. Immediately prior to the Merger the Company intends to assume
the Telcom Note. See "The MCI Notes, MCI Note Assumption and MCI Conversion" and
"The Merger."

FUTURE TRANSACTIONS WITH OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS

The Company has adopted a policy prior to the Offering pursuant to which it
will not permit future loans or other material transactions between the Company
and its officers, directors or principal stockholders, or affiliates of any of
them, for other than bona fide business purposes or on terms less favorable than
could reasonably be obtained from third parties, other than those involving the
performance or renewal of existing arrangements, unless approved by a majority
(or all, if there are two or fewer) of the independent directors of the Company
who have no interest in such transaction.

PROVISION OF SERVICES AND PRODUCTS TO TELCOM VENTURES AND PARTIES RELATED
THERETO

The Company provides engineering services and software products to Telcom
Ventures and various other companies owned, in part, by Telcom Ventures or its
members. Revenues earned since January 1, 1995 for such services and products
were approximately $4.4 million through June 30, 1996. Trade accounts receivable
from these related parties were approximately $2.2 million at June 30, 1996.

The Limited Liability Company shares office space and office equipment with
Telcom Ventures. The Limited Liability Company has allocated such costs between
the Limited Liability Company and Telcom Ventures on a usage basis as it has
deemed appropriate. Since January 1, 1995, the aggregate amount of such cost
allocated to Telcom Ventures was approximately $191,000 through June 30, 1996.
The amount of such costs owed to the Company is included as part of the loans
totaling $14.1 million made by the Company to Telcom Ventures as of June 30,
1996. Concurrently with the Offering, the Company and Telcom Ventures will enter
into an overhead and administrative services agreement. Pursuant to the overhead
and administrative services agreement, certain management personnel and other
employees of the Company will provide certain administrative services,
principally related to human resource management functions and, until the first
quarter of 1997, to administration of accounts payable and accounts receivable
systems and provisions of general office support services, to Telcom Ventures
and Telcom Ventures will sublease office space from the Company. Telcom Ventures
will be obligated to pay the Company a monthly fee for such administrative
services and office space based on a reasonable estimate of the Company's cost
of providing same. While this agreement is not the result of arm's length
negotiations, it is designed to reimburse the Company for its costs in providing
such services (including costs of personnel), and the Company believes that the
terms of such agreements are reasonable.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth, (i) as of the date hereof, as adjusted to
reflect the Merger and (ii) following the sale of Class A Common Stock by the
Selling Stockholder, certain information with respect to stock ownership of (a)
all persons known by the Company to be beneficial owners of five percent or more
of its outstanding Common Stock, (b) each of the Company's directors and (c) all
directors and executive officers as a group. Unless otherwise indicated, each of
the stockholders has sole voting and investment power with respect to the shares
shown as beneficially owned by them.

<TABLE>
<CAPTION>
PRE-OFFERING POST-OFFERING
------------------------- -------------------------
AMOUNT AND PERCENT OF AMOUNT AND PERCENT OF
NATURE OF COMMON NUMBER OF NATURE OF COMMON
NAME AND ADDRESS BENEFICIAL STOCK SHARES BEING BENEFICIAL STOCK
OF BENEFICIAL OWNER(1) OWNERSHIP OUTSTANDING OFFERED OWNERSHIP OUTSTANDING
<S> <C> <C> <C> <C> <C>
RF Investors(2)(4)................ 11,250,751 99.0% 2,500,000 8,750,751 62.0%
c/o 2300 Clarendon Blvd.
Arlington, Virginia 22201
Founder Corporation(3)(4)......... 11,335,984 99.8 2,500,000 8,835,984 62.6
c/o 2300 Clarendon Blvd.
Arlington, Virginia 22201
Rajendra Singh(3)(4)(5)(6)........ 11,335,984 99.8 2,500,000 8,905,984 62.9
c/o 2300 Clarendon Blvd.
Arlington, Virginia 22201
Neera Singh(3)(4)(5)(6)........... 11,335,984 99.8 2,500,000 8,905,984 62.9
c/o 2300 Clarendon Blvd.
Arlington, Virginia 22201
Mark D. Ein(6)(8)................. -- -- -- 10,000 *
c/o The Carlyle Group
1001 Pennsylvania Ave., NW
Washington, DC 20004
Arno A. Penzias(6)................ -- -- -- -- --
c/o Lucent Technologies/Bell
Labs
700 Mountain Ave.
Murray Hill, NJ 07974-0636
Piyush Sodha(7)(9)................ -- -- -- 181,720 1.3
c/o 2300 Clarendon Blvd.
Arlington, Virginia 22201
All Directors, and Executive
Officers as a Group (11
Persons)(10).................... 11,395,395 100.0 -- 9,601,405 64.6
</TABLE>

- ---------------
* Less than 0.1%.

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- ---------------

(1) Unless otherwise noted, the Company believes that all of such shares are
owned of record by each individual named as beneficial owner and that such
individual has sole voting and dispositive power with respect to the shares
of Common Stock owned by each of them.

(2) Does not include the 85,233 shares of Class B Common Stock held by the
Founder Corporation or the 28,411 shares of Class A Common Stock held by TC
Group.

(3) Represents all outstanding shares of the Class B Common Stock, of which
85,233 shares are held by the Founder Corporation and the remainder of
which are held by RF Investors, a subsidiary of Telcom Ventures. Telcom
Ventures is owned 75% by the Founder Corporation and 25% by the Carlyle
Investors. The Founder Corporation is owned by the Singh Family Group. Dr.
Rajendra Singh and Neera Singh are the sole directors and executive
officers of the Founder Corporation. Does not include the 28,411 shares of
Class A Common Stock held by TC Group.

(4) The holders of the 85,233 shares of Class B Common Stock and 28,411 shares
of Class A Common Stock described in note 2 above intend to transfer such
shares to RF Investors following the Offering.

(5) The Post-Offering column includes options to acquire 70,000 shares of Class
B Common Stock that will be granted to Dr. Rajendra Singh and Neera Singh
and which are exercisable within 60 days of the date of the consummation of
the Offering.

(6) Director.

(7) Director/Executive Officer.

(8) Includes options to acquire 10,000 shares of Class A Common Stock that will
be granted to Mr. Ein and which are exercisable within 60 days of the date
of the consummation of the Offering. Mr. Ein is a Vice President of The
Carlyle Group, an affiliate of the Carlyle Investors. Mr. Ein disclaims
beneficial ownership of the shares of Common Stock owned indirectly by the
Carlyle Investors through its 25% ownership of RF Investors and its
ownership of TC Group, and any shares of stock issuable upon the exercise
of Carlyle Option Designee Stock Options.

(9) Consists entirely of shares issuable upon the exercise of stock options
that will be exercisable within 60 days of consummation of the Offering.

(10) Includes the shares held by RF Investors, the Founder Corporation and TC
Group and director and executive officer stock options which are
exercisable within 60 days of the date hereof, but does not include any
shares of stock issuable upon exercise of Carlyle Option Designee Stock
Options.

As of the date of this Prospectus, there are no agreements or other
arrangements or understandings known to the Company concerning the voting of the
Common Stock or otherwise concerning control of the Company other than those
described below. See "Description of Capital Stock -- Certain Relationships
Between the Founder Corporation and Carlyle Investors Affecting the Company."
There are no pre-emptive rights applicable to the Common Stock. See "Description
of Capital Stock."

DESCRIPTION OF CAPITAL STOCK

The following summary description of the capital stock of the Company is
based, in part, on the provisions of the Certificate of Incorporation and
Bylaws. The authorized capital stock of the Company consists of 70 million
shares of Class A Common Stock, 20 million shares of Class B Common Stock, and
10 million shares of preferred stock, par value $0.1 per share (the "Preferred
Stock").

COMMON STOCK

The Company has two classes of authorized Common Stock, Class A Common
Stock, which is being offered hereby, and Class B Common Stock. The Class A
Common Stock has one vote per share. The Class B Common Stock, which may be
owned only by Telcom Ventures and certain of its affiliates or a successor
thereof, has ten votes per share.

All outstanding shares of Class A Common Stock and Class B Common Stock
are, and all shares of Class A Common Stock and Class B Common Stock to be
outstanding upon consummation of the Offering will be, validly issued, fully
paid and nonassessable.

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<PAGE> 63

After the Offering and the Merger, RF Investors (together with the Founder
Corporation) will own all the outstanding shares of Class B Common Stock, which
will represent 94.4% of the combined voting power of both classes of Common
Stock. As a result, RF Investors will have the ability to elect all of the
Company's directors and will continue to control the Company. See "Risk
Factors -- Control of the Company by RF Investors." The Class B Common Stock,
which has effective control of the Company, is not being offered by this
Prospectus. Except as otherwise required by law, shares of Class A Common Stock
and Class B Common Stock vote together on all matters, including the election of
directors.

The Company may not issue any Class B Common Stock at any time after the
completion of the Offering except pursuant to any stock option plan adopted by
the Board of Directors and approved by the stockholders and except with respect
to stock dividends declared on Class B Common Stock. Each outstanding share of
Class B Common Stock may, at the option of the holder thereof, at any time, be
converted into one share of Class A Common Stock. Each share of outstanding
Class B Common Stock shall convert into one share of Class A Common Stock
immediately upon transfer to any holder other than the following (an "Eligible
Class B Stockholder"): (i) Telcom Ventures, one or more subsidiaries thereof or
any successor to Telcom Ventures or one or more subsidiaries thereof, (ii) the
Founder Corporation or any successor thereto, or (iii) any one or more of Dr.
Rajendra Singh, Neera Singh, other members of the immediate family of Dr.
Rajendra and Neera Singh or their lineal descendants, spouses of lineal
descendants or lineal descendants of spouses, or any trusts for the benefit of
any of the foregoing. If the shares of Class B Common Stock held by the Eligible
Class B Stockholders in the aggregate constitute 10% or less of the outstanding
shares of Common Stock, each share of Class B Common Stock shall immediately
convert into one share of Class A Common Stock. Each share of outstanding Class
B Common Stock which is held by any Eligible Class B Stockholder shall
immediately convert into one share of Class A Common Stock at such time as such
holder is no longer an Eligible Class B Stockholder.

Holders of Common Stock will have no cumulative voting rights and no
preemptive, subscription, or sinking fund rights. Subject to preferences that
may be applicable to any then outstanding Preferred Stock, holders of Common
Stock will be entitled to receive ratably such dividends as may be declared by
the Board of Directors out of funds legally available therefor. See "Dividend
Policy." In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock will be entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
then outstanding Preferred Stock.

PREFERRED STOCK

The Certificate of Incorporation authorizes the Board of Directors to
issue, from time to time and without further stockholder action, one or more
series of Preferred Stock, and to fix the relative rights and preferences of the
shares, including voting powers, dividend rights, liquidation preferences,
redemption rights and conversion privileges. The issuance of Preferred Stock may
have the effect of delaying, deferring or preventing a change in control of the
Company without further action by the stockholders. Preferred Stock issued with
voting, conversion or redemption rights may adversely affect the voting power of
the holders of Common Stock, and could discourage any attempt to obtain control
of the Company. As of the date of this Prospectus, the Board of Directors has
not authorized any series of Preferred Stock, and there are presently no
agreements or understandings for the issuance of any shares of Preferred Stock.

CERTAIN RELATIONSHIPS BETWEEN THE FOUNDER CORPORATION AND CARLYLE INVESTORS
AFFECTING THE COMPANY

The RF Investors and Telcom Ventures limited liability company agreements
provide that, for as long as the Carlyle Investors collectively own at least 5%
of the total membership interests of Telcom Ventures, Telcom Ventures shall vote
any and all shares of the Company held by it, and shall cause RF Investors to
vote any and all shares held by it, from time to time: (i) to elect as directors
of the Company two persons recommended by the Carlyle Investors and (ii) not
take any of the following actions without the consent of the Carlyle Investors:
(a) approve any amendment to the Certificate of Incorporation or the Bylaws of
the Company; (b) approve the incurrence by the Company of any debt (or the
granting of security relating to the incurrence of debt) if as a result of such
incurrence, the debt to equity ratio of the Company exceeds 6:1, or, if

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as a result of such debt incurrence, the total outstanding debt of the Company
exceeds $50 million plus or minus, as the case may be, the cumulative net income
or net losses of the Company after January 1994; (c) approve any new affiliated
party transactions in excess of $150,000 or of modifications to existing
transactions, subject to certain limited exceptions; (d) approve appointment of
independent accountants of the Company other than one of the "big six"
accounting firms; or (e) approve certain events relating to bankruptcy or
insolvency of the Company.

The RF Investors and Telcom Ventures limited liability company agreements
provide for various rights of the Carlyle Investors to cause the distribution to
the Carlyle Investors of Common Stock held by RF Investors. Following the third
anniversary of the closing of the Offering, the Carlyle Investors will have the
right to cause the distribution to the Carlyle Investors (by RF Investors and
then Telcom Ventures), of up to the Carlyle Investors' indirect proportionate
interest in the shares of Common Stock then held by RF Investors which is in
excess of 10% of the Common Stock then outstanding (treating Class A Common
Stock and Class B Common Stock as a single class of Common Stock for this
purpose). The Carlyle Investors' initial indirect proportionate interest in RF
Investors is 25%, which interest will be recalculated following any
non-proportional distribution to the Carlyle Investors. Following the fifth
anniversary of the closing of the Offering, the Carlyle Investors will have the
right to cause the distribution to the Carlyle Investors (by RF Investors and
then Telcom Ventures), of up to the full amount of the Carlyle Investors' then
indirect proportionate interest in the shares of Common Stock, so long as the
Common Stock remaining held by RF Investors would leave RF Investors with at
least 51% of the voting power of the Common Stock then outstanding. Upon the
first distribution to the Carlyle Investors, the Carlyle Investors will have the
right to exercise one of the three rights held by RF Investors to demand
registration of shares of Common Stock under the Securities Act. "Certain
Transactions -- Registration Rights." The ability of the Carlyle Investors to
require distributions of Class A Common Stock or demand a registration thereof
would be subject to a determination by an investment banker reasonably
acceptable to RF Investors and the Carlyle Investors that such action would not
materially adversely impact the market for the Common Stock.

CARLYLE OPTION DESIGNEE STOCK OPTIONS

The Company has reserved 85,000 shares of Class A Common Stock (subject to
anti-dilution adjustments in the event of a stock split, recapitalization or
similar transaction) for issuance pursuant to options to be granted to the
Carlyle Option Designees. The option exercise price for the Carlyle Option
Designee Stock Options will be 100% of the fair market value of the Class A
Common Stock on the date of grant of the option. The applicable Carlyle Option
Designees will be granted an initial option to purchase 25,000 shares of Class A
Common Stock in connection with the Offering, and an additional option to
purchase 15,000 shares of Class A Common Stock on each of the next four
anniversaries of the initial date of grant. Options granted will vest
immediately. The options will expire no later than the fifth anniversary of the
date of grant.

ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS AND STOCKHOLDER NOMINATIONS
OF DIRECTORS

The Bylaws establish an advance notice procedure with regard to the
nomination, other than by the Board of Directors, of candidates for election as
directors (the "Nomination Procedure") and with regard to certain matters to be
brought before an annual meeting of stockholders of the Company (the "Business
Procedure"). The Nomination Procedure requires that a stockholder give prior
written notice, in specified form, of a planned nomination to the Board of
Directors to the Secretary of the Company. Any person who is not so nominated
will not be eligible for election as a director under the Nomination Procedure.
Under the Business Procedure, a stockholder seeking to have any business
conducted at an annual or special meeting must give prior written notice, in
specified form, to the Secretary of the Company. If business is not properly
brought before such meeting in accordance with the Business Procedure, such
business will not be transacted at such meeting. Although the Bylaws do not give
the Board of Directors any power to approve or disapprove stockholder
nominations for the election of directors or any other business desired by
stockholders to be conducted at an annual or special meeting, the Bylaws (i) may
have the effect of precluding a nomination for the election of directors or
precluding the conduct of business at a particular meeting if the proper
procedures

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are not followed or (ii) may discourage or deter a third party from conducting a
solicitation of proxies to elect its own slate of directors or otherwise
attempting to obtain control of the Company, even if the conduct of such
solicitation or such attempt might be beneficial to the Company and its
stockholders.

LIMITATION OF LIABILITY

The Certificate of Incorporation provides that to the fullest extent
permitted by law, no director of the Company will be liable to the Company or
its stockholders for monetary damages for any breach of fiduciary duty as a
director. The Delaware Law permits such limitation of liability except for (i)
any breach of the director's duty of loyalty to the Company or its stockholders;
(ii) acts or omissions not in good faith or involving intentional misconduct or
a knowing violation of law; (iii) approval of certain unlawful dividends or
stock purchases or redemptions; and (iv) any transaction from which the director
derived an improper personal benefit. In appropriate circumstances, equitable
remedies such as an injunction or other forms of non-monetary relief would
remain available under Delaware Law.

SECTION 203 OF DELAWARE LAW

The Company will be subject to the provisions of Section 203 of Delaware
Law ("Section 203"). Under Section 203, a Delaware corporation may not engage in
a business combination with an interested stockholder for a period of three
years after the date such person became an interested stockholder, unless (i)
prior to such date, the board of directors approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder; (ii) upon consummation of the transaction which resulted
in such person becoming an interested stockholder, the interested stockholder
owned at least 85% of the corporation's voting stock outstanding at the time the
transaction commenced (excluding the number of outstanding shares owned by (a)
persons who are directors and officers and (b) employees through certain
employee stock plans); or (iii) subsequent to such date, the business
combination is approved by the board of directors and authorized by the
affirmative vote of at least two-thirds of the outstanding voting stock that is
not owned by the interested stockholder. Section 203 defines the term "business
combination" to encompass a wide variety of transactions with or caused by an
interested stockholder, including certain types of mergers, consolidations,
asset transfers and other transactions resulting in a financial benefit to the
interested stockholder. "Interested stockholder" means a person who owns 15% or
more of the corporation's outstanding voting stock, or an affiliate and
associate of such person who has owned 15% or more of the corporation's voting
stock within a three-year period immediately prior to the date of such
determination.

LISTING

The Class A Common Stock offered hereby has been approved for listing on
the Nasdaq National Market under the symbol "LCCI," subject to official notice
of issuance.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Class A Common Stock is American
Stock Transfer & Trust Company.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no established public market for the
Class A Common Stock. After the consummation of the Offering, substantial sales
of Class A Common Stock could adversely affect the price of the Class A Common
Stock in the public market.

Upon completion of the Offering, 14,114,395 shares of Common Stock will be
outstanding (assuming no exercise of the Over-Allotment Option), none of which
will be freely transferable without restriction or further registration under
the Securities Act, other than the 5,250,000 shares of Class A Common Stock
offered hereby. As of the completion of the Offering, the Company's existing
stockholders will continue to own an aggregate of 8,864,395 shares of Common
Stock, assuming no exercise of the Over-Allotment Option. All of

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such shares of Common Stock are deemed to be "restricted securities" as that
term is defined in Rule 144, promulgated under the Securities Act.

In general, under Rule 144, a person (or persons whose shares are
aggregated with shares held by another person) who is not an affiliate of the
Company and who has satisfied a two-year holding period may, under certain
circumstances, sell within any three-month period a number of restricted
securities which does not exceed the greater of one percent of the shares
outstanding or the average weekly trading volume during the four calendar weeks
preceding the notice of sale required by Rule 144. In addition, Rule 144
permits, under certain circumstances, the sale of restricted securities, without
any quantity limitations, by a person who is not an affiliate of the Company and
who has satisfied a three-year holding period. Under Rule 144, RF Investors, the
Founder Corporation and TC Group may be deemed to have acquired more than two
years ago the Common Stock held by them and accordingly, each may be able to
commence public sale of any of its Common Stock pursuant to Rule 144 beginning
90 days after the Offering, except as provided by its "lock-up" agreement with
the Underwriters described below. MCI may be able, at the time of the MCI
Conversion (anticipated to be in August 1997), to commence public sale pursuant
to Rule 144 of the Common Stock received by MCI.

The Selling Stockholder, the Founder Corporation, the TC Group and
executive officers and directors of the Company have agreed not to, directly or
indirectly, sell, offer, contract to sell, grant any option to purchase or
otherwise dispose of any of their shares of Common Stock for a period of 180
days from the date of this Prospectus, without the prior written consent of DLJ,
notwithstanding any Rule 144 exemption which may be available to such
stockholder. Subject to such "lock-up" arrangements, which may be terminated
earlier at the discretion of DLJ, commencing 180 days after the date of this
Prospectus there may be 8,864,395 restricted shares of Common Stock available
for sale pursuant to Rule 144. The Company intends to file one or more
registration statements under the Securities Act with respect to the
approximately 3,894,000 shares of Common Stock available upon exercise of
options under the Employee Plan, the Employee Stock Purchase Plan and the
Directors Plan. Finally, RF Investors has and upon the MCI Conversion MCI will
have certain "demand" rights to require the Company to register their Class A
Common Stock for sale and to register shares on a "piggyback" basis in
connection with most registered public offerings of securities of the Company.
RF Investors and MCI are or will be entitled to registration rights that would,
among other things, permit each of RF Investors and MCI to submit three demand
registration requests to the Company (and one of the RF Investors demands may be
exercised by the Carlyle Investors following a distribution of shares of Common
Stock by RF Investors to Carlyle -- see "Description of Capital Stock -- Certain
Relationships Between the Founder Corporation and Carlyle Investors Affecting
the Company"). Generally, the Company is required to use "best efforts" to file
a registration statement with the Commission within 90 days of receiving such a
request. However, once a year, the Company may defer a demand registration
request for a period of up to 90 days if the Board of Directors makes a good
faith determination that it would be "seriously detrimental" to the Company to
file a registration statement within the time period otherwise required. See
"Certain Transactions -- Registration Rights."

66
<PAGE> 67

UNDERWRITING

Subject to the terms and conditions contained in the Underwriting Agreement
(the "Underwriting Agreement"), the Underwriters named below have severally
agreed to purchase from the Company and the Selling Stockholder, and the Company
and the Selling Stockholder have agreed to sell to the Underwriters, an
aggregate of 5,250,000 shares of Class A Common Stock at the Offering price per
share, less the underwriting discounts and commissions set forth on the cover of
this Prospectus. The number of shares of Class A Common Stock that each
Underwriter has agreed to purchase is set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation....................... 1,472,000
Alex. Brown & Sons Incorporated........................................... 1,472,000
Oppenheimer & Co., Inc. .................................................. 736,000
Bear, Stearns & Co. Inc. ................................................. 65,000
Cowen & Company........................................................... 65,000
Dean Witter Reynolds Inc. ................................................ 65,000
Deutsche Morgan Grenfell/C.J. Lawrence Inc. .............................. 65,000
Dresdner Kleinwort Benson North America LLC............................... 65,000
A.G. Edwards & Sons, Inc. ................................................ 65,000
Goldman, Sachs & Co. ..................................................... 65,000
Merrill Lynch & Co. ...................................................... 65,000
J.P. Morgan Securities Inc. .............................................. 65,000
Morgan Stanley & Co. Incorporated......................................... 65,000
Prudential Securities Incorporated........................................ 65,000
Salomon Brothers Inc...................................................... 65,000
Smith Barney Inc. ........................................................ 65,000
UBS Securities LLC........................................................ 65,000
Anderson & Strudwick Incorporated......................................... 33,000
Robert W. Baird & Co. Incorporated........................................ 33,000
EVEREN Securities Inc. ................................................... 33,000
Fahnestock & Co. Inc. .................................................... 33,000
Gerard Klauer Mattison & Co., LLC......................................... 33,000
Janney Montgomery Scott Inc............................................... 33,000
Johnston, Lemon & Co. Incorporated........................................ 33,000
Ladenburg, Thalmann & Co. Inc. ........................................... 33,000
Lara, Millard & Associates, Ltd. ......................................... 33,000
Legg Mason Wood Walker Incorporated....................................... 33,000
McDonald & Company Securities, Inc. ...................................... 33,000
Ragen MacKenzie Incorporated.............................................. 33,000
Rauscher Pierce Refsnes, Inc. ............................................ 33,000
Redwine & Company Inc. ................................................... 33,000
Robinson-Humphrey Company, Inc. .......................................... 33,000
Roney & Co., L.L.C. ...................................................... 33,000
Ryan, Beck & Co. ......................................................... 33,000
Sands Brothers & Co., Ltd. ............................................... 33,000
Unterberg Harris.......................................................... 33,000
Wheat First Securities Inc. .............................................. 33,000
---------
Total........................................................... 5,250,000
</TABLE>

The Underwriting Agreement provides that the obligation of the several
Underwriters to purchase and accept delivery of the shares of Class A Common
Stock offered hereby are subject to approval of certain legal matters by their
counsel and to certain other conditions. If any shares of Class A Common Stock
are

67
<PAGE> 68

purchased by the Underwriters pursuant to the Underwriting Agreement, all such
shares (other than shares covered by the Over-Allotment Option) must be
purchased by the Underwriters.

The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

The Underwriters have advised the Company that they propose to offer the
shares of Class A Common Stock to the public initially at a price to the public
set forth on the cover page of this Prospectus and to certain dealers (who may
include the Underwriters) at such price, less a concession not to exceed $0.67
per share. The Underwriters may allow, and such dealers may re-allow, a
concession not in excess of $0.10 per share to any other Underwriter and certain
other dealers. After the Offering, the Offering price and other selling terms
may be changed by the Underwriters.

The Company and the Selling Stockholder have granted to the Underwriters
the Over-Allotment Option to purchase up to an aggregate of 787,500 additional
shares (412,500 shares from the Company and 375,000 shares from the Selling
Stockholder) of Class A Common Stock at the Offering price net of underwriting
discounts and commissions, solely to cover over-allotments. The Over-Allotment
Option may be exercised at any time within 30 days after the date of this
Prospectus. To the extent that the Underwriters exercise the Over-Allotment
Option, each of the Underwriters will be committed, subject to certain
conditions, to purchase a number of option shares proportionate to such
Underwriter's initial commitment as indicated in the preceding table and the
Company and Selling Stockholder will have committed to sell such shares to the
Underwriters. If purchased, the Underwriters will sell such additional 787,500
shares on the same terms on which the 5,250,000 shares are being offered.

The Underwriters have requested that the Selling Stockholder and the other
stockholder and executive officers and directors of the Company agree not to
offer, sell, transfer, contract to sell, grant any option to purchase or
otherwise dispose of any Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or, in any manner, transfer all or
a portion of the economic consequences associated with the ownership of Common
Stock or cause to be filed with the Commission a registration statement with
respect thereto, for a period of 180 days after the date of this Prospectus
without prior written consent of DLJ. See "Shares Eligible for Future Sale."

The Class A Common Stock has been approved for listing on the Nasdaq
National Market under the symbol "LCCI," subject to official notice of issuance.

Certain Underwriters and their affiliates have engaged in and may in the
future engage in commercial banking and investment banking transactions with the
Company and its affiliates in the ordinary course of business.

The Underwriters have informed the Company that they do not expect sales to
discretionary accounts by the Underwriters to exceed five percent of the total
number of shares of Class A Common Stock offered by them.

At the request of the Company, up to 320,000 shares of Common Stock offered
hereby have been reserved for sale to certain individuals, including directors
and employees of the Company and of other entities with whom directors of the
Company are affiliated, and members of their families. The price of such shares
to such persons will be Offering price. The number of shares available to the
general public will be reduced to the extent such persons purchase reserved
shares. Any shares not so purchased will be offered hereby to the general public
at the Offering price.

The Company has an agreement with Mr. Jack Markell pursuant to which Mr.
Markell provided certain consulting and financial advisory services to the
Company, including assisting the Company with respect to the Offering. Pursuant
to this agreement, Mr. Markell will be entitled to receive a fee equal to 0.25%
of the proceeds received by the Company and RF Investors from the Offering.

Prior to the Offering, there has been no public market for the shares of
Class A Common Stock. The initial price to the public for the shares of Class A
Common Stock will be determined by negotiation among

68
<PAGE> 69

the Company, the Selling Stockholder and the Representatives. Among the factors
considered in determining the initial price to the public include the history of
and the prospects for the industry in which the Company competes, the past and
present operations of the Company, the historical results of operations of the
Company, the prospects for future earnings of the Company, the recent market
prices of securities of generally comparable companies and the general condition
of the securities markets at the time of the Offering.

LEGAL MATTERS

The validity of the shares of Class A Common Stock offered hereby and
certain other legal matters regarding the shares of Class A Common Stock will be
passed upon for the Company by Hogan & Hartson L.L.P., Washington, D.C. Certain
legal matters in connection with the Offering will be passed upon for the
Underwriters by Paul, Weiss, Rifkind, Wharton & Garrison, New York, New York.

EXPERTS

The consolidated financial statements and Schedule of the Company as of
December 31, 1995 and December 31, 1994, and for each of the years in the three
year period ended December 31, 1995, included in this Prospectus, and in the
Registration Statement have been included herein and in the Registration
Statement in reliance upon the reports by KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein and in the Registration
Statement, and upon the authority of said firm as experts in accounting and
auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-1 under the Securities Act with respect to the
shares of Class A Common Stock being offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules to the Registration Statement. For further information
about the Company and the Class A Common Stock offered hereby, reference is made
to the Registration Statement and to the exhibits and schedules filed therewith.
The statements contained in this Prospectus with respect to the contents of an
agreement or other document referred to herein are not necessarily complete and,
in each instance, reference is made to a copy of such contract or document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by reference to the provisions of the relevant documents. The
Registration Statement, including the exhibits and schedules thereto, may be
inspected at the Public Reference facilities of the Commission located at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the offices of the Commission located at 500 West Madison Street, Room 1400,
Chicago, Illinois 60661, and at 7 World Trade Center, Suite 1300, New York, New
York 10048; and copies of such material can be obtained upon request and payment
of the appropriate fee from the Public Reference Section of the Commission
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission maintains a World Wide Web site (http://www.sec.gov) that
contains material regarding issuers that file electronically with the
Commission. This Registration Statement has been so filed and may be obtained at
such site.

69
<PAGE> 70

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Independent Auditors' Report.......................................................... F-2
Consolidated Statements of Operations of LCC, L.L.C. and Subsidiaries for the years
ended December 31, 1993, 1994 and 1995 and six months ended June 30, 1995 and
1996................................................................................ F-3
Consolidated Balance Sheets of LCC, L.L.C. and Subsidiaries as of December 31, 1994
and
1995 and June 30, 1996.............................................................. F-4
Consolidated Statements of Members' Capital of LCC, L.L.C. and Subsidiaries for the
years
ended December 31, 1993, 1994 and 1995 and six months ended June 30, 1996........... F-5
Consolidated Statements of Cash Flows of LCC, L.L.C. and Subsidiaries for the years
ended December 31, 1993, 1994 and 1995 and six months ended June 30, 1995 and
1996................................................................................ F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

- ---------------
* LCC International, Inc. (LCCI) was formed on June 4, 1996 and was capitalized
on June 13, 1996 with $150. Financial statements of LCCI have not been
presented herein because LCCI has no significant assets, liabilities (actual
or contingent), or operations and such financial statements are, therefore,
not material to this Registration Statement or investors' understanding of the
Offering.

F-1
<PAGE> 71

INDEPENDENT AUDITORS' REPORT

The Members' Committee
LCC, L.L.C. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of LCC, L.L.C.
and Subsidiaries (the "Company") as of December 31, 1994 and 1995, and the
related consolidated statements of operations, members' capital, and cash flows
as of and for each of the years in the three year period ended December 31,
1995. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of LCC, L.L.C.
and Subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the years in the three year period
ended December 31, 1995 in conformity with generally accepted accounting
principles.

KPMG PEAT MARWICK LLP
Washington, DC

March 15, 1996, except for note 19
which is as of May 17, 1996

F-2
<PAGE> 72

LCC, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1993, 1994, AND 1995
AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Service revenues.......................... $30,712 $41,063 $64,016 $29,249 $39,281
Product revenues.......................... 29,595 34,992 40,445 17,311 21,083
------- ------- ------- ------- -------
Total revenues................................. 60,307 76,055 104,461 46,560 60,364
------- ------- ------- ------- -------
Cost of revenues:
Cost of service revenues.................. 21,087 29,185 45,682 21,431 26,103
Cost of product revenues.................. 16,026 21,299 25,455 11,550 14,719
------- ------- ------- ------- -------
Total cost of revenues......................... 37,113 50,484 71,137 32,981 40,822
------- ------- ------- ------- -------
Gross profit................................... 23,194 25,571 33,324 13,579 19,542
------- ------- ------- ------- -------
Operating expenses:
Sales and marketing....................... 4,146 4,987 5,823 2,934 3,041
General and administrative................ 5,799 8,802 10,108 4,977 5,965
Non-cash compensation (note 13)........... -- 3,255 4,646 2,372 3,599
Depreciation and amortization............. 1,838 2,020 3,699 1,351 2,522
------- ------- ------- ------- -------
Total operating expenses....................... 11,783 19,064 24,276 11,634 15,127
------- ------- ------- ------- -------
Operating income............................... 11,411 6,507 9,048 1,945 4,415
------- ------- ------- ------- -------
Other income (expense):
Interest income........................... 243 496 625 394 332
Interest expense.......................... (97) (717) (2,818) (1,034) (1,627)
Other..................................... (231) 721 1,027 195 1,670
------- ------- ------- ------- -------
Total other income (expense)................... (85) 500 (1,166) (445) 375
------- ------- ------- ------- -------
Income before income taxes..................... 11,326 7,007 7,882 1,500 4,790
Provision for income taxes (note 9)............ 829 2,037 3,142 758 1,769
------- ------- ------- ------- -------
Net income..................................... $10,497 $ 4,970 $ 4,740 $ 742 $ 3,021
======= ======= ======= ======= =======
Pro forma income data (unaudited) (note 3):
Income before income taxes................ $ 7,882 $ 4,790
Pro forma provision for income taxes (note
9)...................................... 3,153 1,916
------- -------
Pro forma net income (unaudited).......... $ 4,729 2,874
======= =======
Pro forma net income per share (unaudited):.... $ .36 $ .21
======= =======
Weighted average number of common shares and
common share equivalents (unaudited):........ 15,579 15,579
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-3
<PAGE> 73

LCC, L.L.C. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1995 AND JUNE 30, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
JUNE 30,
1996
1994 1995 -----------
------- ------- (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (note 4)........................ $18,469 $ 6,571 $ 5,431
Short-term investments.................................... 453 778 739
Receivables, net of allowance for doubtful accounts of
$2,796, $3,131, and $4,275 at December 31, 1994 and
1995,
and June 30, 1996, respectively:
Trade accounts receivable............................ 14,363 28,293 29,457
Due from related parties and affiliates (notes 5 and
8)................................................. 5,901.. 2,938 3,422
Notes receivable from affiliate (note 5)............. -- 1,382 1,398
Unbilled receivables (note 3)........................ 6,807 6,096 9,594
Inventory (note 6)........................................ 4,572 4,949 5,583
Prepaid expenses and other current assets................. 1,656 300 1,097
------- ------- -------
Total current assets........................................... 52,221 51,307 56,721
Property and equipment, net (note 7)........................... 4,019 5,440 5,340
Software development costs, net of accumulated amortization of
$131, $1,058, and $1,807 at December 31, 1994 and 1995 and
June 30, 1996, respectively.................................. 1,797 3,745 4,486
Notes receivable (note 19)..................................... -- -- 6,650
Investments in joint ventures (note 8)......................... 321 1,403 2,057
Other assets (note 19)......................................... 228 146 5,427
------- ------- -------
$58,586 $62,041 $80,681
======= ======= =======
LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
Note payable (notes 10 and 20)............................ $ -- $10,000 $20,000
Accounts payable.......................................... 2,308 2,170 4,775
Accrued expenses (note 13)................................ 10,780 11,137 12,862
Deferred revenue.......................................... 1,706 3,137 3,069
Income taxes payable (note 9)............................. 2,775 6,312 7,701
Due to related parties and affiliates (notes 2 and 5)..... 2,700 73 137
Other current liabilities................................. 449 829 1,230
------- ------- -------
Total current liabilities...................................... 20,718 33,658 49,774
Convertible subordinated debt (note 11)........................ 20,000 20,000 20,000
Obligations under Incentive Plans, net of current portion (note
13).......................................................... 3,342 8,623 12,441
Other liabilities.............................................. 588 4 600
------- ------- -------
Total liabilities.............................................. 44,648 62,285 82,815
Commitments and contingencies (notes 12, 13, 14, and 15).......
Members' capital............................................... 13,938 (244) (2,134)
------- ------- -------
$58,586 $62,041 $80,681
======= ======= =======
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-4
<PAGE> 74

LCC, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF MEMBERS' CAPITAL
YEARS ENDED DECEMBER 31, 1993, 1994, AND 1995
AND SIX MONTHS ENDED JUNE 30, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
NOTES
ADDITIONAL RECEIVABLE
COMMON PAID-IN RETAINED MEMBERS' FROM MEMBER
STOCK CAPITAL EARNINGS CAPITAL (NOTE 5) TOTAL
-------- ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1992......... $ 13 $ 71 $ 9,347 $ -- $ -- $ 9,431
Dividends paid........................ -- -- (7,658) -- -- (7,658)
Net income............................ -- -- 10,497 -- -- 10,497
------- ------- ------- ------- ------- -------
Balances at December 31, 1993......... 13 71 12,186 -- -- 12,270
Net assets retained by LCC,
Incorporated by Telcom Ventures upon
its formation (note 2).............. (13) (71) (4,233) -- -- (4,317)
Capital contributed to LCC, L.L.C. by
Telcom Ventures upon its formation,
net (note 2)........................ -- -- (6,351) 16,690 -- 10,339
Dividends paid........................ -- -- -- (9,285) -- (9,285)
Net income (note 2)................... -- -- (1,602) 6,572 -- 4,970
Cumulative foreign currency
translation adjustment.............. -- -- -- (39) -- (39)
------- ------- ------- ------- ------- -------
Balances at December 31, 1994......... -- -- -- 13,938 -- 13,938
Loan to member (note 5)............... -- -- -- -- (9,382) (9,382)
Dividends paid........................ -- -- -- (9,500) -- (9,500)
Net income............................ -- -- -- 4,740 -- 4,740
Cumulative foreign currency
translation adjustment.............. -- -- -- (40) -- (40)
------- ------- ------- ------- ------- -------
Balances at December 31, 1995......... -- -- -- 9,138 (9,382) (244)
Loan to member (unaudited)............ -- -- -- -- (4,754) (4,754)
Net income (unaudited)................ -- -- -- 3,021 -- 3,021
Cumulative foreign currency
translation adjustment
(unaudited)......................... -- -- -- (157) -- (157)
------- ------- ------- ------- ------- -------
Balances at June 30, 1996
(unaudited)......................... $ -- $ -- $ -- $ 12,002 $ (14,136) $ (2,134)
======== ======== ========= ========= ========= ==========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-5
<PAGE> 75

LCC, L.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1994, AND 1995
AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
-------------------
1993 1994 1995 1995 1996
-------- ------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income....................................... $ 10,497 $ 4,970 $ 4,740 $ 742 $ 3,021
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization............... 1,838 2,020 3,699 1,351 2,522
Provision for doubtful accounts............. 556 2,083 622 206 1,565
Loss (income) from investments in joint
ventures, net............................. 33 (181) (732) (143) (753)
Gain on disposition of joint venture, net... -- -- -- -- (514)
Changes in operating assets and liabilities:
Trade, unbilled, and other
receivables........................... (17,953) (9,513) (12,260) (4,227) (8,211)
Accounts payable and accrued expenses... 3,522 3,609 216 (2,170) 4,330
Inventory............................... (955) (2,245) (377) (35) (634)
Other current assets and liabilities.... (1,652) 3,987 4,077 375 (1,427)
Other noncurrent assets and
liabilities........................... (101) 3,273 4,772 2,687 (1,023)
-------- ------- -------- -------- -------
Net cash (used in) provided by operating
activities......................................... (4,215) 8,003 4,757 (1,214) (1,124)
-------- ------- -------- -------- -------
Cash flows from investing activities:
Decrease (increase) in short-term investments,
net............................................ 2,313 (89) (325) (484) 39
Purchases of property and equipment.............. (1,882) (2,403) (4,222) (2,382) (1,437)
Purchase of investment held as agent for
affiliate...................................... (15,253) -- -- -- --
Increase in capitalized software................. -- (1,927) (2,876) (1,315) (1,727)
Investment in joint ventures..................... (23) (150) (350) (250) (787)
Issuance of notes receivable from uncombined
affiliate...................................... (3,096) -- -- -- (5,150)
Proceeds from sale of joint venture.............. -- -- -- -- 3,800
Other............................................ 102 -- -- -- --
-------- ------- -------- -------- -------
Net cash (used in) provided by investing
activities......................................... (17,839) (4,569) (7,773) (4,431) (5,262)
-------- ------- -------- -------- -------
Cash flows from financing activities:
Decrease in outstanding checks in excess of bank
balances....................................... (886) -- -- -- --
Borrowing under line of credit/note.............. 30,399 -- 10,000 10,000 10,000
Proceeds from subordinated debt.................. -- 20,000 -- -- --
Distributions and loans to member................ -- (4,850) (9,382) (5,310) (4,754)
Payments of dividends............................ (7,658) (9,285) (9,500) (9,500) --
-------- ------- -------- -------- -------
Net cash provided by (used in) financing
activities......................................... 21,855 5,865 (8,882) (4,810) 5,246
-------- ------- -------- -------- -------
Net (decrease) increase in cash and cash
equivalents........................................ (199) 9,299 (11,898) (10,455) (1,140)
Cash and cash equivalents at beginning of period..... 9,369 9,170 18,469 18,469 6,571
-------- ------- -------- -------- -------
Cash and cash equivalents at end of period........... $ 9,170 $18,469 $ 6,571 $ 8,014 $ 5,431
======== ======= ======== ======== =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest.................................... $ 85 $ 717 $ 2,372 $ 766 $ 676
Income taxes................................ 965 261 506 90 380
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

F-6
<PAGE> 76

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996

(1) DESCRIPTION OF OPERATIONS

The Company is a leading provider of integrated services and products
relating to the design and engineering of wireless communications systems. The
services and products provided by the Company are as follows:

SERVICES

Engineering and design services -- The Company provides engineering and
design services for cellular phone system operators, personal communication
system (PCS) operators and other wireless communication system providers.
These services are predominately provided on a time-and-material or
fixed-price contract basis.

Program management services -- The Company provides program management
services related to the build-out of wireless communications systems.

PRODUCTS

Software products -- The Company develops and markets proprietary
software and data, which support the design and operation of wireless
communications systems.

Hardware products -- The Company designs, assembles and sells field
measurement equipment used in the implementation, testing and maintenance of
wireless communications systems.

The Company operates in a highly competitive environment subject to rapid
technological change and emergence of new technologies. Future revenues are
dependent upon the re-engineering of existing wireless communications systems,
introduction of existing wireless technologies into new markets, the entrance of
new wireless providers into existing markets and the introduction of new
technologies. Although the Company believes that its services and products are
transferable to emerging technologies, rapid changes in technology could have an
adverse financial impact on the Company.

The Company's existing and potential customer base is diverse and includes
start-up companies and foreign enterprises. Although the Company believes that
the diversity of its customer base minimizes the risk of incurring material
losses due to concentrations of credit risk, it may be exposed to a declining
customer base in periods of market downturns, severe competition, or
international developments.

(2) FORMATION OF LIMITED LIABILITY COMPANY

LCC, L.L.C. is the successor to the business formerly conducted by LCC,
Incorporated and certain of its affiliates. The transactions pursuant to which
LCC, L.L.C. was formed are described below.

On January 3, 1994, LCC, Incorporated and certain of its affiliates, Telcom
Solutions, Incorporated, LCC International Corporation, and Eurofon,
Incorporated (herein collectively referred to as LCC, Incorporated and
affiliates) and their shareholders consummated a transaction pursuant to which
certain affiliates of The Carlyle Group acquired a 25.0 percent interest in
Telcom Ventures, L.L.C. (Telcom Ventures), a newly formed limited liability
company for $38,000,000.

Upon the consummation of this transaction, substantially all the assets and
liabilities of LCC, Incorporated and affiliates were transferred to Telcom
Ventures at their carrying value. LCC, Incorporated and affiliates retained
assets totaling $4,317,000, which consisted of certain related party notes
receivable, investments in certain joint ventures, and a 20.0 percent limited
partnership interest in Eurofon, Incorporated & Co. KG. (EKG).

F-7
<PAGE> 77

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LCC, L.L.C., a Delaware limited liability company, was formed on January 4,
1994, as the successor entity to LCC, Incorporated and affiliates. In
conjunction with the formation of LCC, L.L.C., Telcom Ventures made a capital
contribution of $16,690,000 to LCC, L.L.C. in exchange for a 99.0 percent
interest in LCC, L.L.C. Telcom Ventures' capital contribution consisted of
$6,351,000 of the net assets and liabilities formerly employed by LCC,
Incorporated and affiliates, which were transferred to LCC, L.L.C. at their
carrying values, and $10,339,000 of the Carlyle Group's contribution to Telcom
Ventures. Upon the formation of LCC, L.L.C., Telcom Ventures retained an
investment in Wireless Ventures of Brazil, Inc. totaling $15,253,000 which had
been held by LCC, Incorporated and affiliates on behalf of its shareholders and
the Carlyle Group as of December 31, 1993.

In connection with such transactions, a total of $1,602,000 was required to
be paid to certain employees. LCC, Incorporated recorded this amount as an
expense in 1994 prior to the formation of LCC, L.L.C. This liability was
transferred to LCC, L.L.C. upon its formation. At December 31, 1994, the
remaining unpaid amounts associated with the termination and cancellation of the
Plan of $1,000,000 is included in due to related parties and affiliates within
the accompanying consolidated balance sheet. Such amount was paid in 1995.

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.

CASH EQUIVALENTS

Cash equivalents include all highly liquid investments purchased with
original maturities of three months or less.

SHORT-TERM INVESTMENTS

Short-term investments consist of certificates of deposit and other highly
liquid investments with maturity dates of more than three months from the date
of acquisition. Investments are carried at cost plus accrued interest which
approximates their market value.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially expose the Company to concentration
of credit risk consist primarily of trade receivables. The Company sells its
services and products globally. Generally, the Company does not require
collateral or other security to support customer receivables. The Company
performs ongoing credit evaluations of its customers' financial condition and
maintains reserves for potential credit losses. The Company had the following
significant concentrations of trade receivables from customers located outside
the United States at December 31, 1994 and 1995:

<TABLE>
<CAPTION>
1994 1995
------ ------
(IN THOUSANDS)
<S> <C> <C>
Latin America............................................... $3,049 $5,293
Europe...................................................... 4,802 3,070
Middle East................................................. 279 1,550
Asia Pacific................................................ 2,006 5,644
</TABLE>

F-8
<PAGE> 78

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INVENTORY

Inventory, net of allowance for obsolete and slow moving inventory,
consists of parts and accessories for field measurement and test equipment and
is stated at the lower of cost, determined on an average cost basis, or market
value.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less an allowance for
depreciation. Replacements and major improvements are capitalized; maintenance
and repairs are charged to expense as incurred.

Depreciation is calculated using the straight-line method over the
estimated useful lives of the assets which range from three to seven years. The
costs of leasehold improvements are capitalized and amortized using the
straight-line method over the shorter of their useful lives or the terms of the
respective leases.

RESEARCH AND DEVELOPMENT EXPENDITURES

The Company capitalizes software development costs, principally wages and
contractor fees, when incurred, after establishing the commercial and
technological feasibility of the product. These costs are amortized using the
greater of the ratio of current product revenue to total current and anticipated
product revenue or the straight-line method over the software's estimated
economic life, generally ten to forty-eight months. During 1993, 1994, and 1995
the company recognized software amortization costs of approximately $0, $131,000
and $927,000, respectively.

The Company periodically performs an evaluation of the net realizable value
of its capitalized software development costs. This evaluation requires
considerable judgment by management with respect to certain external factors
including, but not limited to, anticipated future revenues, estimated product
economic life, and changes in technology. No capitalized software development
costs were written off in 1993 or 1994. Approximately $130,000 of software
development costs were written off in 1995.

All other research and development expenditures are expensed in the period
incurred. The amount of other research and development costs was $512,000,
$477,000 and $479,000 in 1993, 1994 and 1995, respectively.

INVESTMENTS IN JOINT VENTURES

The Company uses the equity method of accounting for its investments in,
advances to and the earnings and losses of its joint ventures.

REVENUE RECOGNITION

The Company's principal sources of revenue are engineering and design
services, program management services, sales of field measurement and testing
equipment and software license agreements. The Company recognizes revenue from
long-term fixed price contracts using the percentage-of-completion method, based
on individual contract costs incurred to date compared with total estimated
contract costs. Anticipated contract losses are recognized as soon as they
become known and estimable. The Company recognizes revenue from software
licenses either at the time the software is delivered and accepted or ratably
over the contract term depending on the nature of the license arrangement.
Revenue on sales of field measurement and testing equipment is recognized at the
time the merchandise is shipped. Revenue from consulting and other software
related services is recognized as such services are rendered. Revenue from post
contract customer support (maintenance) agreements is recognized ratably over
the period during which the services are to be

F-9
<PAGE> 79

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

performed. Revenue earned but not yet billed is reflected as unbilled
receivables in the accompanying consolidated balance sheets. The Company expects
substantially all unbilled receivables to be billed and collected in one year.

INCOME TAXES

As a limited liability company, the Company is not directly subject to U.S.
Federal income taxes. Instead, the members are responsible for Federal income
taxes on their proportionate share of taxable income. Members are also entitled
to a proportionate share of tax deductions and credits.

Generally, the Company is not subject to U.S. state and local income taxes
as the majority of states recognize the flow-through nature of a limited
liability company. This practice follows the U.S. Federal tax rules and,
accordingly, the members are taxed by the states based upon their allocated
taxable income or loss. States which do not recognize the limited liability
company as a flow-through entity require the Company to be taxed as if it were a
corporation. Where this is the case, the Company has established a provision for
these income taxes.

Certain of the Company's international operations are subject to local
income taxation. Currently, the Company is subject to taxation on income from
certain operations in Europe, Latin America, the Far East, the Middle East and
the non-U.S. portions of North America where the Company has established branch
offices or has performed significant services that constitute a "permanent
establishment" for tax reporting purposes. Foreign taxes account for a
significant portion of the provision for income taxes as reflected in the
Company's consolidated statements of operations (see note 9). The foreign taxes
paid or accrued by the Company represent a potential credit for the members
against their federal income taxes. Where applicable, these credits are
allocated to the members based upon their proportionate membership interests in
the Company.

PRO FORMA INCOME DATA (UNAUDITED)

In connection with the Company's planned initial public offering of Class A
Common Stock, the Company intends to convert to a Subchapter C corporation under
the Internal Revenue Code of 1986, as amended (the IRC). Accordingly, the
accompanying pro forma information has been prepared as if the Company was
treated as a Subchapter C corporation for Federal and state income tax purposes
from January 1, 1995.

Pro forma income per share information has been computed by dividing pro
forma net income by the pro forma weighted average number of common shares and
common share equivalents outstanding. Common share equivalents include all
outstanding stock options after applying the treasury stock method and the
Company's and Telcom Ventures' convertible subordinated debt. Common stock
options granted during the 12-month period preceding the date of the Company's
initial public offering have been included in the calculation of weighted
average common shares outstanding for all periods presented based on a per share
price of $16.

FOREIGN CURRENCY TRANSLATION

Gains and losses on translation of the accounts of the Company's foreign
operations where the local currency is the functional currency are accumulated
and included in the cumulative foreign currency translation adjustment within
the accompanying consolidated statement of members' capital. Foreign currency
transaction gains and losses are recognized currently in the consolidated
statements of operations.

PERVASIVENESS OF ESTIMATES

The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of

F-10
<PAGE> 80

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimated.

UNAUDITED INTERIM INFORMATION

The unaudited interim information for the six months ended June 30, 1995
and 1996, has been prepared in accordance with generally accepted accounting
principles for interim financial information and with instructions to Article 10
of Regulation S-X. In the opinion of management, such information contains all
adjustments, consisting only of normal recurring adjustments, considered
necessary for a fair presentation of such periods. The operating results for the
six months ended June 30, 1996 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996.

RECLASSIFICATION OF PRIOR-YEARS' BALANCES

Prior-years' balances have been reclassified to conform with the
current-year presentation.

(4) CASH AND CASH EQUIVALENTS

At December 31, cash and cash equivalents consisted of the following:

<TABLE>
<CAPTION>
1994 1995
------- ------
(IN THOUSANDS)
<S> <C> <C>
Cash in banks.............................................. $ 2,495 $1,402
Overnight repurchase agreements............................ 7,998 1,158
Short-term commercial paper................................ 7,976 4,011
------- ------
$18,469 $6,571
======= ======
</TABLE>

(5) RELATED PARTY TRANSACTIONS

During 1994 and 1995, the Company provided engineering services and
software products to Telcom Ventures and various other companies owned, in part,
by Telcom Ventures or its members, as well as the Telemate joint venture (see
note 8). Revenues earned during 1994 and 1995 for services and products provided
to these customers were approximately $11.3 million and $3.5 million,
respectively. Trade accounts receivables from these related parties were $5.2
million and $2.2 million at December 31, 1994 and 1995, respectively, and are
included in due from related parties in the accompanying consolidated balance
sheets. Also during calendar 1995, program management services were provided to
the Company by the Koll Joint Venture (see note 8).

During 1994 and 1995, the Company made certain payments on behalf of Telcom
Ventures and its members which consisted primarily of payroll services, fringe
benefit payments, facility related charges, business insurances and foreign tax
payments. At December 31, 1994 and 1995, outstanding amounts associated with
these payments totaling $568,000 and $311,000, respectively, are included in due
from related parties and affiliates within the accompanying consolidated balance
sheets.

At December 31, 1994, due to related parties and affiliates included
certain amounts due to a member of Telcom Ventures as well as approximately
$1,286,000 due to Telcom Ventures for the "excess working capital" transferred
to the Company upon its formation, as defined in the agreement executed between
LCC, Incorporated and its affiliates and the Carlyle Group in January 1994 (see
note 2). These balances were paid in 1995.

F-11
<PAGE> 81

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Notes receivable consists of two promissory notes due from an entity owned
approximately 4.5 percent by a 100 percent-owned subsidiary of Telcom Ventures
and approximately 15.0 percent by a member of Telcom Ventures. The notes bear
interest at approximately 16.5 percent and are payable monthly. Late payments
are subject to an additional charge of 2.0 percent on the entire unpaid
principal balance and any outstanding interest. All outstanding principal is due
in 1996. Interest income recorded on the notes was $104,000 for the year ended
December 31, 1995. The Company expects payment to be made on these notes from
capital contributions to be made by the shareholders of this entity during 1996,
including Telcom Ventures and the member of Telcom Ventures.

In May 1995, the Company entered into a revolving promissory note with
Telcom Ventures under which it had advanced $9,382,000 to Telcom Ventures as of
December 31, 1995. The note bears a variable interest rate of prime plus 3.0
percent, escalating at .25 percent increments at various intervals over the term
of the debt. At December 31, 1995, the note carried an interest rate of prime
plus 3.25 percent or 11.75 percent. Outstanding principal together with all
accrued interest is due May 30, 2001. The note is reflected as a reduction of
members' capital in the accompanying statements of members' capital.

(6) INVENTORY

At December 31, 1994 and 1995, inventory consisted of the following:

<TABLE>
<CAPTION>
1994 1995
------ ------
(IN THOUSANDS)
<S> <C> <C>
Field measurement and test equipment........................ $3,568 $4,450
Parts and accessories....................................... 1,004 840
------ ------
4,572 5,290
Less -- reserve for obsolete and slow moving inventory...... -- 341
------ ------
$4,572 $4,949
====== ======
</TABLE>

(7) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1994 and 1995, consisted of the
following:

<TABLE>
<CAPTION>
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Computer equipment........................................ $ 7,840 $ 9,760
Furniture and office equipment............................ 2,595 3,145
Purchased computer software............................... 802 2,174
Leasehold improvements.................................... 629 1,003
Vehicles.................................................. 229 235
------- -------
12,095 16,317
Less accumulated depreciation and amortization............ 8,076 10,877
------- -------
$ 4,019 $ 5,440
======= =======
</TABLE>

Beginning in 1995, purchased computer software includes the external costs
of the conversion of the Company's financial information system.

F-12
<PAGE> 82

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(8) INVESTMENTS IN JOINT VENTURES

The Company's investments in joint ventures at December 31, 1994 and 1995,
consisted of the following:

<TABLE>
<CAPTION>
1994 1995
---- ------
(IN THOUSANDS)
<S> <C> <C>
Telemate S.A. ............................................... $102 $ 886
Koll Telecommunications, L.L.C. ............................. 219 517
---- ------
$321 $1,403
==== ======
</TABLE>

The Company had a 50.0 percent interest in Telemate S.A. (Telemate), which
provides consulting services in connection with the implementation and operation
of mobile communications systems in certain countries in Europe, Asia and Latin
America. The Company provides design engineering services and software products
to Telemate. Revenues earned related to these services were approximately
$1,900,000, $4,420,000, and $1,797,000 in 1993, 1994, and 1995, respectively.
Due from related parties and affiliates included approximately $1,221,000 and
$554,000, due from Telemate for the years ended December 31, 1994 and 1995,
respectively.

The unaudited condensed financial statements of Telemate as of and for the
years ended December 31, 1993, 1994, 1995, were as follows:

<TABLE>
<CAPTION>
1993 1994 1995
------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
CONDENSED STATEMENTS OF OPERATIONS
Revenues.......................................... $3,821 $11,623 $16,567
Cost and expenses................................. 3,877 11,165 15,255
------ ------- -------
Net (loss) income................................. $ (56) $ 458 $ 1,312
====== ======= =======
CONDENSED BALANCE SHEETS
Current assets.................................... $3,613 $ 6,398 $ 8,220
Noncurrent assets................................. 748 2,916 3,376
Current liabilities............................... 2,527 5,261 5,334
Noncurrent liabilities............................ 153 -- 369
Stockholders' equity.............................. 1,681 4,053 5,893
</TABLE>

The Company sold its investment in Telemate in January 1996 (see note 19).

The Company's investments also include a 33 1/3 percent interest in Koll
Telecommunications Services, L.L.C. (Koll), which was formed in October 1994
with two other unrelated entities. Koll provides site acquisition and
construction management services to operators of wireless communications
systems. The Company's interest in Koll was received in exchange for a cash
investment of $150,000. During 1995, the Company contributed an additional
$350,000. Operating costs and expenses of the Company include services provided
by Koll, in the amount of $537,000 in 1995.

F-13
<PAGE> 83

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unaudited condensed financial statements of Koll as of and for the
three months ended December 31, 1994 and the 12 months ended December 31, 1995
were as follows:

<TABLE>
<CAPTION>
1994 1995
----- ------
(IN THOUSANDS)
<S> <C> <C>
CONDENSED STATEMENTS OF OPERATIONS
Revenues.................................................... $ 160 $3,017
Cost and expenses........................................... 216 2,908
----- ------
Net (loss) income........................................... $ (56) $ 109
===== ======
CONDENSED BALANCE SHEETS
Current assets.............................................. $ 297 $1,841
Noncurrent assets........................................... 44 82
Current liabilities......................................... 97 726
Stockholders' equity........................................ 244 1,197
</TABLE>

(9) INCOME TAXES

U.S. state and local income tax expense is generated from activities
conducted in the several states that do not recognize the limited liability
company as a flow-through entity and, therefore, require the Company to be taxed
as if it were a corporation. Foreign income tax expense is generated from
business conducted in countries where the Company has established branch offices
or has performed significant services that constitute a "permanent
establishment" for tax reporting purposes.

Income tax expense consists of the following:

<TABLE>
<CAPTION>
1993 1994 1995
---- ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
U.S. -- state and local.............................. $ -- $ -- $ 345
---- ------ ------
North America........................................ -- 105 20
Latin America........................................ 29 617 831
Europe............................................... 584 973 481
Middle East.......................................... 87 18 310
Asia Pacific......................................... 129 324 1,155
---- ------ ------
Foreign.............................................. 829 2,037 2,797
---- ------ ------
Total................................................ $829 $2,037 $3,142
==== ====== ======
</TABLE>

The unaudited pro forma provisions for income taxes presented in the
consolidated statements of operations for the year ended December 31, 1995 and
the interim period ended June 30, 1996, represents an estimate of the taxes that
would have been recorded had the Company been a Subchapter C corporation as of

F-14
<PAGE> 84

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

January 1, 1995. The unaudited pro forma provisions for income taxes for the
year ended December 31, 1995, and the three month period ended June 30, 1996,
consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1995 1996
------------ ---------
(IN THOUSANDS)
<S> <C> <C>
Pro forma (unaudited):
Federal.......................................... $ 736 $ 543
State............................................ 604 366
Foreign.......................................... 1,813 1,007
------ -------
Total pro forma....................................... $3,153 $ 1,916
====== =======
</TABLE>

A reconciliation of the statutory Federal income tax rate and the unaudited
pro forma effective rate for the year ended December 31, 1995, and the six month
period ended June 30, 1996, follows.

DECEMBER 31, JUNE 30,
1995 1996
------------ -----------
PRO FORMA PRO FORMA
------------ -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Statutory federal income tax rate............................ 35.0% 35.0%
Effect of:
State and local income taxes, net of federal tax
benefit................................................. 5.0 5.0
Foreign................................................. 23.0 21.0
Tax credits, net........................................ (23.0) (21.0)
----- -----
Effective tax rate........................................... 40.0% 40.0%
===== =====
</TABLE>

(10) NOTE PAYABLE

In May 1995, the Company entered into a $15,000,000 financing facility with
Nomura Holding America Inc. At December 31, 1995, $10,000,000 had been drawn
against the facility. At each six-month anniversary of issuance while the
facility remains outstanding, the original interest rate of prime plus 3.0
percent will increase by .25 percent. At December 31, 1995, the facility carried
an interest rate of prime plus 3.25 percent or 11.75 percent. All unpaid
principal and interest due under the facility is payable no later than May 30,
1997. The facility was secured by the pledging of substantially all of the
Company's assets and Telcom Ventures' membership interest in the Company and was
guaranteed by Telcom Ventures.

The financing facility contained certain covenants restricting additional
indebtedness and payment of dividends, as well as requiring the maintenance of
certain financial ratios. At December 31, 1995, the Company was in violation of
certain of these covenants. However, subsequent to year-end, the Nomura facility
was purchased by Chase Manhattan Bank, N.A. (Chase) and the obligation to Nomura
was satisfied (see note 19).

(11) CONVERTIBLE SUBORDINATED DEBT

In June 1994, the Company issued to a third-party investor a $20,000,000
convertible Subordinated Note Due 2000 (the Subordinated Note). The Subordinated
Note bears interest at a rate equal to the higher of 6.8 percent, payable
semiannually or an amount which approximates their return had they converted
into a membership interest from the date when the Subordinated Note was issued.
The entire principal amount of the Subordinated Note is due in June 2000. Upon
the occurrence of certain specified events (including any merger of the Company
with another company or any sale of substantially all of the Company's assets),
the Subordinated Note will automatically be exchanged for an 8.0 percent
membership interest in the Company.

F-15
<PAGE> 85

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition, the investor has the right to exchange the Subordinated Note for an
8.0 percent membership interest in the Company: (1) at any time during the
45-day period commencing on the third through fifth anniversaries of the
issuance of the Subordinated Note; (2) in the event the Company effects a public
offering; and (3) upon the occurrence of certain other specified events. The
Company has the right to exchange the Subordinated Note for an 8.0 percent
membership interest in the Company: (1) in the event the Company effects a
public offering; (2) if the investor does not exchange the Subordinated Note
during the 45-day period commencing on the third through fifth anniversaries of
the issuance of the Subordinated Note; and (3) upon the occurrence of certain
other specified events.

In June 1994, Telcom Ventures issued a $30,000,000 convertible Subordinated
Note Due 2000 (the Telcom Ventures Subordinated Note) to the same investor. Upon
the occurrence of certain specified events (including any merger of the Company
with another company or any sale of substantially all of the Company's assets),
the Telcom Ventures Subordinated Note will automatically be exchanged for a 12.0
percent membership interest in the Company. In addition, the investor has the
right to exchange the Telcom Ventures Subordinated Note for a 12.0 percent
membership interest in the Company: (1) at any time during the 45-day period
commencing on the third through fifth anniversaries of the issuance of the
Telcom Ventures Subordinated Note; (2) in the event the Company effects a public
offering; and (3) upon the occurrence of certain other specified events. Telcom
Ventures has the right to exchange the Telcom Ventures Subordinated Note for a
12.0 percent membership interest in the Company: (1) in the event the Company
effects a public offering; (2) if the investor does not exchange the Telcom
Ventures Subordinated Note during the 45-day period commencing on the third
through fifth anniversaries of the issuance of the Telcom Ventures Subordinated
Note; and (3) upon the occurrence of certain other specified events. The Company
has fully and unconditionally guaranteed the obligations of Telcom Ventures
under the Telcom Ventures Subordinated Note.

(12) HEALTH AND RETIREMENT PLANS

The Company has a defined contribution profit sharing plan under Section
401(k) of the IRC that provides for voluntary employee contributions of 1.0 to
15.0 percent of compensation for substantially all employees. The Company makes
a matching contribution of 50.0 percent of an employee's contribution up to 6.0
percent of each employee's compensation. Company contributions and other
expenses associated with the plan were approximately $194,000, $383,000, and
$419,000 for the years ended December 31, 1993, 1994, and 1995, respectively.

The Company is self-insured for group health, life, and short and long-term
disability claims below certain specified limits.

(13) INCENTIVE PLANS

PHANTOM MEMBERSHIP PLAN

In April 1994, the Company adopted the Phantom Membership Plan (the Phantom
Membership Plan). Under the Phantom Membership Plan, the Members Committee is
authorized to grant awards (Phantom Membership Awards) to those employees of the
Company whose responsibilities and decisions, in the Members Committee's
opinion, affect the long-term sustained growth and profitability of the Company.

Each Phantom Membership Award entitles the recipient thereof to receive, no
later than May 1 of each year, an annual award based on a specified percentage
of the Company's net earnings for the preceding fiscal year. The Phantom
Membership Plan also includes a long-term award. Under the long-term award, once
a Phantom Membership Award is fully vested, the recipient has the right to
require the Company to purchase, and the Company has the right to require such
recipient to sell, all or any portion of the recipient's Phantom Membership
Award. The purchase price is equal to the specified percentage relating to such
Phantom

F-16
<PAGE> 86

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Membership Award multiplied by the portion of the Phantom Membership Award being
purchased, multiplied by the then-current "deemed fair market value" of the
Company or, for certain employees, the fair market value as determined by
appraisal. As defined in the Phantom Membership Plan, "deemed fair market value"
is equal to 14 times the Company's income before interest and taxes for the
calendar year preceding the date of the calculation. In general, Phantom
Membership Awards become fully vested on either the third or fifth anniversary
of the grant thereof, as determined by the recipient in his or her discretion at
the time his or her Phantom Membership Award is granted.

In the event of a public offering of the Company's securities under the
Securities Act of 1933, each fully vested outstanding Phantom Membership Award
is automatically converted into a number of shares of the Company's capital
stock equal to the specified percentage relating to such Phantom Membership
Award, multiplied by the total number of shares of the Company's capital stock
to be issued and outstanding immediately following the closing of the public
offering. In the event of the acquisition by third party of 75 percent or more
of the outstanding membership interest or assets of the Company, each fully
vested and outstanding Phantom Membership Award is converted into a membership
interest equal to the specified percentage relating to such Phantom Membership
Award, multiplied by the total membership interests to be issued and outstanding
immediately prior to the closing of the transaction (assuming conversion in full
of all Phantom Membership Awards which are then outstanding and fully vested).

As of December 31, 1994 and 1995, 44 and 40 employees, respectively, had
been granted Phantom Membership Awards, and the aggregate Applicable Percentage
of all outstanding Phantom Membership Awards was 6.5 percent and 6.4 percent,
respectively. Compensation expense related to the annual award feature of the
Phantom Membership Plan was $530,000 and $608,000 for 1994 and 1995,
respectively, the liability for which is included in accrued expenses in the
accompanying consolidated balance sheets. Non-cash compensation related to the
long-term award feature of the Phantom Membership Plan was $3,255,000 and
$4,646,000 for 1994 and 1995, respectively, the liability for which is included
in obligation under incentive plans in the accompanying consolidated balance
sheets. Prior to 1995, certain Awards under the Phantom Membership Plan were
recognized over the estimated service period of the employee. The Company has
changed the method of accounting for the awards to reflect compensation expense
over the vesting period to better match the expense with the period earned by
the employee. All periods presented have been revised to reflect this change in
accounting.

INCENTIVE COMPENSATION PLAN

In September 1994, the Company adopted an Incentive Compensation Plan (the
Incentive Compensation Plan). Under the Incentive Compensation Plan, the Members
Committee is authorized to grant awards (Incentive Awards) to those employees of
the Company whose responsibilities and decisions, in the Members Committee's
opinion, affect the long-term sustained growth and profitability of the Company.

Each Incentive Award entitles the recipient thereof to receive a cash
payment on the date specified in the corresponding award agreement. To date, all
Incentive Awards granted under the Incentive Compensation Plan are payable on
the third anniversary of the grant thereof. At the discretion of the Members
Committee, participating employees may borrow a portion of the total amount of
their Incentive Awards.

As of December 31, 1994 and 1995, 20 and 60 employees, respectively, had
been granted Incentive Awards under the Incentive Compensation Plan.
Compensation expense accrued in connection with the distribution of the value of
vested Incentive Awards was $87,000 and $635,000 for the years ended December
31, 1994 and 1995, respectively, which has been included in obligations under
incentive plans, net of current portion in the accompanying consolidated balance
sheets.

F-17
<PAGE> 87

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(14) LEASE COMMITMENTS

The Company leases office facilities and certain equipment, principally in
the United States, under operating leases expiring on various dates over the
next eight years. The lease agreements include renewal options and provisions
for rental escalations based on the Consumer Price Index and require the Company
to pay for executory costs such as taxes and insurance. The lease agreements
also allow the Company to elect an early out provision by giving notice and
paying certain lease termination penalties.

Benefits associated with a rent abatement period and certain lease
incentives for office facilities are reflected ratably over the period of the
lease. The total deferred rent benefit was approximately $1,870,000 and
$1,434,000 at December 31, 1994 and 1995, respectively.

In November 1995, the Company gave notice of early lease termination to one
of its landlords and recorded the lease termination penalty thereon in its
calendar 1995, financial statements. In May 1996, the Company entered into
10-year and 5-year facility lease agreements effective March 1, 1997 and July 1,
1997, respectively. Future minimum rental payments related to these leases, as
well as the termination payments for existing leases, are included in the
balances below (see note 19).

Future minimum rental payments under non-cancelable operating leases,
excluding executory costs, are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
1996........................................................... $ 4,688
1997........................................................... 3,103
1998........................................................... 3,130
1999........................................................... 3,192
2000........................................................... 3,256
Thereafter..................................................... 21,922
-------
$ 39,291
=======
</TABLE>

Rent expense under operating leases was approximately $2,035,000,
$2,761,000, and $3,545,000 for the years ended December 31, 1993, 1994, and
1995, respectively.

(15) CONTINGENCIES

The Company is party to various legal proceedings and claims incidental to
their business. Management does not believe that these matters will have a
material adverse effect on the consolidated results of operations or financial
condition of the Company.

The Company has fully and unconditionally guaranteed the obligations of
Telcom Ventures under the Telcom Ventures Subordinated Note (see note 11).

(16) GEOGRAPHIC DATA

The Company maintains subsidiaries in France and Germany. These entities
primarily operate in the country in which they are domiciled. The remaining
sales to Europe and principally all of the export sales to Latin America, Middle
East-Africa and Asia-Pacific are U.S. services and products.

F-18
<PAGE> 88

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Export sales by geographic region are as follows:

<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
North America.................................... $ 231 $ 1,260 $ 3,330
Latin America.................................... 5,229 5,990 8,200
Europe........................................... 23,605 17,400 9,290
Middle East-Africa............................... 667 850 3,310
Asia-Pacific..................................... 5,102 5,570 16,730
------- ------- -------
Total export sales............................... $34,834 $31,070 $40,860
======= ======= =======
</TABLE>

Revenues generated from one customer were approximately $6.6 million, $14.0
million and $14.7 million, or 11.0 percent, 18.0 percent, and 14.0 percent of
total revenues for 1993, 1994, and 1995, respectively.

(17) QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
1994
----------------------------------------------------
1ST 2ND 3RD 4TH FULL
QUARTER QUARTER QUARTER QUARTER YEAR
------- ------- ------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues...................................... $14,880 $15,940 $20,710 $24,525 $ 76,055
Operating income.............................. 594 543 2,877 2,493 6,507
Income before income taxes.................... 607 513 3,599 2,288 7,007
Net income.................................... 186 135 2,751 1,898 4,970

<CAPTION>
1995
1ST 2ND 3RD 4TH FULL
QUARTER QUARTER QUARTER QUARTER YEAR
------- ------- ------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues...................................... $21,140 $25,420 $25,137 $32,764 $104,461
Operating income.............................. 1,118 827 1,310 5,793 9,048
Income before income taxes.................... 906 594 897 5,485 7,882
Net income.................................... 536 206 376 3,622 4,740
</TABLE>

(18) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amount and estimated fair value
of the Company's financial instruments in accordance with SFAS No. 107
"Disclosure about Fair Value of Financial Instruments".

<TABLE>
<CAPTION>
1994 1995
------------------- -------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Assets:
Notes receivable from affiliate.................... $ -- $ -- $ 1,382 $ 1,382
Notes receivable from member....................... -- -- 9,382 9,382
Liabilities:
Note payable....................................... -- -- 10,000 10,000
Convertible subordinated debt...................... 20,000 20,000 20,000 20,000
Off balance sheet -- letters of credit.................. 300 303 441 450
</TABLE>

The carrying amounts of financial instruments, including cash and cash
equivalents, accounts and notes receivable and accounts payable approximated
fair value as of December 31, 1994 and 1995, because of the relatively short
duration of these instruments.

F-19
<PAGE> 89

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES RECEIVABLE FROM MEMBER -- the carrying value of the notes receivable
from member approximated the fair value as the receivable is treated as a deemed
distribution to owners.

CONVERTIBLE SUBORDINATED DEBT -- the carrying value of the convertible
subordinated debt approximated fair value as of December 31, 1994 and 1995,
based upon the Company's borrowing activities and assessment of current prices
offered for similar loans.

LETTERS OF CREDIT -- the fair value of letters of credit was estimated
based on fees currently charged for similar agreements or the estimated cost to
terminate or settle the obligations.

Financial guarantees are conditional commitments issued by the Company to
guarantee the payment of certain liabilities of unconsolidated affiliates. As of
December 31, 1994 and 1995, one such guarantee was outstanding, which was issued
to support a borrowing arrangement (see note 11). The Company's exposure for
this guarantee is equal to the contractual amount of the guarantee of
$30,000,000 at December 31, 1994 and 1995.

(19) SUBSEQUENT EVENTS

In January 1996, the Company sold its 50.0 percent interest in Telemate and
granted certain distribution rights for the Company's software and hardware
products for $3,800,000. Approximately $1,400,000 of the proceeds were received
for the Company's investment in Telemate, resulting in a gain of approximately
$514,000, which was recognized by the Company in its calendar 1996 first quarter
results. The remaining proceeds of $2,400,000 were recorded as deferred revenue
and are being amortized to income over the 24 month life of the distribution
agreement.

In March 1996, the Company adopted an Employee Option Plan for certain key
executives under which the Members' Committee may grant options for up to an
aggregate 6 percent interest in the Company. The options were granted in March
1996 at an exercise price generally equal to fair market value at time of grant
and generally become exercisable at 20.0 percent a year over a five-year period.
Unexercised options generally expire ten years after issuance.

In March 1996, the Nomura Facility (see note 10) was purchased by Chase.
Also in March, additional draws aggregating $10.0 million were made by the
Company, resulting in a total outstanding balance under the facility of $20.0
million. The terms and conditions of the Nomura Facility remained intact with
the exception of interest rate which was subsequently revised such that interest
on the loans will accrue at the announced prime commercial lending rate of Chase
plus .25%. The additional $10.0 million draws were used to fund two investments
in customers. One investment consists of loans aggregating $6.5 million. The
loans are convertible into shares of non-voting common stock at the Company's
option, upon the satisfaction of certain conditions. In connection with this
investment, the Company obtained a commitment from the customer to purchase
services and products aggregating $65.0 million over the next five years. The
other investment consists of an equity investment of $5.0 million. In connection
with this investment, the Company obtained a commitment from the customer for
the purchase of services and products aggregating $55.0 million over the next
five years.

In May 1996, the Company entered into 10-year and 5-year facility lease
agreements effective March 1, 1997 and July 1, 1997, respectively. The lease
agreements contain renewal options for up to three five-year periods. The lease
agreements also provide for the Company to pay real estate taxes and certain
other operating costs of the properties. Lease termination costs associated with
the current facility leases of $1.4 million were recorded in the calendar 1995
financial statements. Future lease payments associated with the new lease are
included in future minimum rental payments in note 14.

(20) REFINANCING OF NOTE PAYABLE (UNAUDITED)

In June 1996, the Company entered into a new three year revolving credit
and five year term loan facility with Chase which replaced the March 1996
facility (see note 19). Under the facility, Chase has extended (1) a revolving
credit facility in an aggregate principal amount not to exceed the lesser of
$12.5 million or

F-20
<PAGE> 90

LCC, L.L.C. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

80 percent of the Company's receivables which are deemed "eligible" as a basis
for obtaining credit and (2) a term loan in the amount of $7.5 million. Interest
on the loans will accrue at the Company's election at either (1) a variable rate
determined with reference to the higher of (a) the Federal Funds rate plus 1/2
of 1 percent, and (b) the announced prime lending rate of Chase or (2) a fixed
rate determined with reference to the London Interbank Market. In addition, an
interest margin will be added to the variable rate or fixed rate (as applicable)
based on the Company's cash flow leverage ratio, as periodically determined.

At June 30, 1996, the Company was in violation of certain financial ratios
required to be maintained under its agreement with Chase. The Company has
obtained a waiver of such covenant violations from Chase. At June 30, 1996, the
Company has classified the note payable as a current liability in the
accompanying consolidated balance sheet.

F-21
<PAGE> 91

GLOSSARY OF TERMS

"A-block auction" -- An auction held by the FCC to award 30 MHz PCS
licenses for 51 MTAs. The A-block auction, held in conjunction with the B-block
auction, was concluded in March 1995, and licenses were awarded on June 23,
1995.

"alphanumeric" -- A message or other type of readout containing both
letters ("alphas") and numbers ("numerics"). In cellular, "alphanumeric memory
dial" is a special type of dial-from-memory option that displays both the name
of the individual and that individual's phone number on the cellular phone
handset. The name also can be recalled by using the letters on the phone keypad.
By contrast, standard memory dial recalls numbers from number-only locations.

"AMPS" -- Advanced Mobile Phone Service. The United States analog cellular
standard.

"analog" -- A method of storing, processing and transmitting information
through the continuous variation of a signal.

"antenna" -- A device for transmitting and/or receiving signals.

"B-block auction" -- An auction held by the FCC to award 30 MHz PCS
licenses for 51 MTAs. The B-block auction, held in conjunction with the A-block
auction, was concluded in March 1995, and licenses were awarded on June 23,
1995.

"base station" -- A fixed site with network equipment that is used for RF
communications with mobile stations, and is part of a cell, or a sector within a
cell, and is backhauled to an MTSO or other part of a cellular system.

"Broadband PCS" -- High frequency, next generation wireless services.

"BTA" -- Basic Trading Area. A service area designed by Rand McNally and
adopted by the FCC to promote the rapid deployment and ubiquitous coverage of
PCS and providers. There are 493 BTAs in the United States.

"C-block auction" -- An auction held by the FCC to award 30 MHz PCS
licenses for 493 BTAs to entrepreneurial businesses having gross revenues of
less than $125 million in each of the last two years and total assets of less
than $500 million. Bidding credits and installment payment options were granted
to small businesses having average gross revenues for the preceding three years
of less than $40 million. The C-block auction was concluded in May 1996.
Licenses have not yet been awarded.

"CDMA" -- Code Division Multiple Access. A digital wireless transmission
technology for use in cellular telephone communications, PCS and other wireless
communications systems. CDMA is a spread spectrum technology in which calls are
assigned a pseudo random code to encode digital bit streams. The coded signals
are then transmitted over the air on a frequency between the end user and a cell
site, where they are processed by a base station. CDMA allows more than one
wireless user to simultaneously occupy a single RF band.

"cell" -- The basic geographic unit of a cellular system.

"cellular network" -- A telephone system based on a grid of "cells"
deployed at 800 MHz. Each cell contains transmitters, receivers and antennas,
and is connected to switching gear and control equipment.

"cell-splitting" -- Adding a cell to overlap coverage of an existing site,
which adds capacity to the area served by that existing site.

"channel" -- A single path, either RF or voice, for transmitting electrical
signals.

"CTIA" -- Cellular Telecommunications Industry Association. An industry
group in North America comprised primarily of cellular telephone service
companies and, recently, some PCS license holders.

"D-block auction" -- An auction to be held by the FCC to award 10 MHz PCS
licenses for 493 BTAs. In March 1996, the FCC proposed rule changes for the
D-block auction, and final rules have not been announced. The FCC has stated its
intention to commence the D-block auction in the summer of 1996.

"DCS" -- Digital Communications Service. A GSM-based system in the PCS
band.

"digital" -- A method of storing, processing and transmitting information
through the use of distinct electronic or optical pulses that represent the
binary digits 0 and 1. Digital transmission/switching technolo-

G-1
<PAGE> 92

gies employ a sequence of discrete, distinct pulses to represent information, as
opposed to the continuously variable analog signal.

"digital protocols" -- Methodologies that serve to manage the communication
for digital signal transmission. CDMA and TDMA are examples of high level
digital protocols.

"E-block auction" -- An auction to be held by the FCC to award 10 MHz PCS
licenses for 493 BTAs. In March 1996, the FCC proposed rule changes for the
E-block auction, and final rules have not been announced. The FCC has stated its
intention to commence the E-block auction in the summer of 1996.

"ESMR" -- Enhanced Specialized Mobile Radio is a radio communications
system that employs digital technology with a multi-site configuration that
permits frequency reuse but used in the SMR frequencies, offering enhanced
dispatch services to traditional analog SMR users.

"ETACS" -- Enhanced Total Access Cellular System. The European analog
cellular standard.

"F-block auction" -- An auction to be held by the FCC to award 10 MHz PCS
licenses for 493 BTAs. Under current rules, the auction would be open only to
entrepreneurial businesses (having gross revenues of less than $125 million in
cash in each of the last two years and total assets of less than $500 million)
or businesses owned by minorities and/or women. In March 1996, the FCC proposed
rule changes for the F-block auction, including making the rules race- and
gender-neutral. Final rules have not been announced. The FCC has stated its
intention to commence the F-block auction in the summer of 1996.

"FCC" -- Federal Communications Commission. The government agency
responsible for regulating telecommunications in the United States.

"frequency" -- The number of cycles per second, measured in hertz, of a
periodic oscillation or wave in radio propagation.

"Global Positioning System" -- A satellite-based network provided by the
U.S. government which allows the user thereof to pinpoint precisely his or her
location at any place in the world.

"GSM" -- Global System for Mobile Communications. A distributed open
networking architecture standard for digital wireless systems world-wide.

"hand-off" -- The act of transferring communication with a mobile unit from
one base station to another. A hand-off transfers a call from the current base
station to the new base station.

"hertz: -- A measurement of electromagnetic energy, equivalent to one
"wave" or cycle per second.

"iDEN" -- Integrated Dispatch Enhanced Network. iDEN is a technology and a
network solution for providing communications services in the SMR spectrum.

"INFLEXION" -- A technology for providing voice narrowband PCS developed by
Motorola.

"infrastructure equipment" -- Fixed infrastructure equipment consisting of
base stations, base station controllers, antennas, switches, management
information systems and other equipment making up the backbone of the wireless
communication system that receives, transmits and processes signals from and to
subscriber equipment and/or between wireless systems and the public switched
telephone network.

"IS-136" -- North American Interim Standard-digital TDMA system
specification.

"KHz" -- Kilohertz (one thousand hertz).

"LMDS" -- Local Multipoint Distribution System. A system that delivers
video programming services over microwave channels received by subscribers with
a special antenna. Operates at a higher frequency, has more spectrum allocated
to it, and has more channel capacity than MMDS.

"MHz" -- megahertz (millions of hertz).

"microcells" -- Cell sites with small coverage radius. Antenna heights are
generally low, being 40 feet in height or less.

"microcell site" -- comprised of a microcell base station and electrical
and transmission termination equipment. This equipment provides the radio
interface between the PCS network and the customer's handset, and differs from
the mini base station in its reduced physical dimensions and included integrated
antennas. These units are the size of a medium-sized suitcase, allowing mounting
on walls and poles.

G-2
<PAGE> 93

"MMDS" -- Multichannel multipoint distribution system. A system that
delivers video programming services over microwave channels received by
subscribers with a special antenna. Sometimes referred to as "wireless cable
systems".

"MTA" -- Major Trading Area. A PCS area designed by Rand McNally and
adopted by the FCC. There are 51 MTAs in the United States.

"MTSO" -- Mobile Telephone Switching Office. The central computer that
connects a cellular phone call to the public telephone network. The MTSO
controls the entire system's operations, including monitoring calls, billing and
handoffs.

"Narrowband PCS" -- Identifier given by the FCC for PCS spectrum in the 900
Mhz frequency range. 50/50 KHz (paired), 50/12.5 KHz (paired) and 50 KHz
(unpaired) were recently auctioned by the FCC and purchased by companies such as
PageNet, Inc., Mtel, AT&T Corporation, and MobileComm. Narrowband PCS is
expected to provide advanced data and voice communications for devices
traditionally known as radio pagers, including acknowledgment and two-way paging
capability.

"network equipment" -- The fixed infrastructure consisting of base
stations, base station controllers, mobile switching centers and related
information processing control points that manages communications between the
mobile unit and the public switched telephone network.

"PCS" -- Personal Communications Services. FCC terminology describing
intelligent, digital wireless, personal two-way communications systems.

"PCS 1900" -- 1900 MHz GSM-based digital cellular radio technology.

"Public Switched Telephony Network" -- The wireline telephone network.

"REFLEX(TM)" -- Two way narrowband PCS protocol developed by Motorola.

"RF" -- Radio frequency. Frequencies of the electromagnetic spectrum that
are associated with radio wave propagation.

"SMR" -- Specialized Mobile Radio, referring to systems that serve
non-public special mobile communication markets (for example, taxi cabs). Recent
FCC rulings have permitted these operators to offer cellular-like services to
the public.

"switch" -- A central facility capable of routing calls from one point to
another. Usually a point of connection to the PSTN.

"TDMA" -- Time Division Multiple Access. A digital wireless transmission
technology that converts analog voice signals into digital data and puts more
than one voice channel on a single RF channel by separating the users in time.

"UNIX" -- A multiuser, multitasking operating system.

"uplink" -- The radio path from a handset or mobile user to the cell site.

"wireless" -- A radio-based system allowing transmission of telephone
and/or data signals through the air without a physical connection, such as a
metal wire or fiber optic cable.

"wireless local loop" -- A system that eliminates the need for a wire loop
connecting users to the public switched telephone network, which is used in
conventional wired telephone systems, by transmitting voice messages over radio
waves for the "last mile" connection between the location of the customer's
telephone and a base station connected to the network equipment.

G-3
<PAGE> 94

- ------------------------------------------------------
- ------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE TO WHICH IT
RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 8
The Company........................... 17
The Merger............................ 17
The MCI Notes, MCI Note Assumption,
MCI Conversion...................... 18
Use of Proceeds....................... 18
Dividend Policy....................... 19
Dilution.............................. 20
Capitalization........................ 21
Selected Consolidated Financial
Data................................ 22
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 24
Business.............................. 32
Management............................ 48
Certain Transactions.................. 57
Principal and Selling Stockholders.... 61
Description of Capital Stock.......... 62
Shares Eligible for Future Sale....... 65
Underwriting.......................... 67
Legal Matters......................... 69
Experts............................... 69
Additional Information................ 69
Index to Financial Statements......... F-1
Glossary of Terms..................... G-1
</TABLE>

---------------------

UNTIL OCTOBER 19, 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON
STOCK OFFERED HEREBY, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATIONS OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

- ------------------------------------------------------
- ------------------------------------------------------

5,250,000 SHARES

LOGO

LCC INTERNATIONAL, INC.
CLASS A
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

ALEX. BROWN & SONS
INCORPORATED

OPPENHEIMER & CO., INC.
SEPTEMBER 24, 1996

- ------------------------------------------------------
- ------------------------------------------------------