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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission file number: 000-29391

VIA NET.WORKS, INC.
(Exact name of registrant as specified in its charter)

H. Walaardt Sacrestraat 401-403
1117 BM Schiphol
Amsterdam, The Netherlands
(Address of principal executive offices)

Registrant's telephone number, including area code: +31 20 502 0000

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

None

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

Common stock par value $.001 per share

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such report(s)) and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o    No ý

        As of March 1, 2004, non-affiliates of VIA NET.WORKS, Inc. held an aggregate of 45,837,008 shares of common stock. (For this computation, we have excluded all outstanding shares of our common stock reported as beneficially owned by executive officers and directors of VIA and certain other stockholders; such exclusion shall not be deemed to constitute an admission that any such person is an "affiliate" of VIA.) These shares were worth $44,920,268 on June 30, 2003, based on the closing sale price ($0.98) of our common stock as reported on the NASDAQ SmallCap Market on that date, and were worth $73,339,213 on March 1, 2004, based on the closing sale price ($1.60) of our common stock on that date. As of March 20, 2004, there were outstanding 60,998,057 shares of our common stock, which is comprised of 55,948,057 shares of voting and 5,050,000 shares of non-voting common stock.

DOCUMENTS INCORPORATED BY REFERENCE

        The definitive proxy statement relating to the registrant's Annual Meeting of Shareholders to be held on April 27, 2004, is incorporated by reference in Part III to the extent described therein.

VIA NET.WORKS, INC.

TABLE OF CONTENTS

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Cautionary Note Regarding Forward-Looking Statements

        SOME OF THE INFORMATION CONTAINED IN THIS FORM 10-K, INCLUDING UNDER MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS UNDER PART II, ITEM 7 OF THIS FORM 10-K, CONTAINS FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS RELATE TO FUTURE EVENTS OR OUR FUTURE PERFORMANCE. THESE STATEMENTS INCLUDE BUT ARE NOT LIMITED TO THOSE RELATING GENERALLY TO THE COMPANY'S STRATEGIC AND ONGOING BUSINESS PLAN, ITS SHIFT OF PRODUCT AND SALES STRATEGY AND PROJECTIONS REGARDING FINANCIAL IMPACTS OF SUCH PLANS AND PLANS FOR AND EXPECTED BENEFITS OF FUTURE ACQUISITIONS. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THESE PROJECTIONS. INFORMATION REGARDING THE RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THE RESULTS IN THESE FORWARD-LOOKING STATEMENTS ARE DISCUSSED UNDER "RISK FACTORS" BEGINNING ON PAGE 21 OF THIS FORM 10-K. PLEASE CAREFULLY CONSIDER THESE FACTORS, AS WELL AS OTHER INFORMATION CONTAINED IN THIS FORM 10-K AND IN OUR OTHER PERIODIC REPORTS AND DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-K ARE MADE ONLY AS OF THE DATE OF THIS REPORT. WE DO NOT UNDERTAKE ANY OBLIGATION TO UPDATE OR SUPPLEMENT ANY FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES.

        Unless the context otherwise requires, as used in this Form 10-K, the terms "VIA," "our," "the Company" or "we" refer to VIA NET.WORKS, Inc. and its subsidiaries.

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PART I

ITEM 1    BUSINESS

Overview

        VIA is a provider of Internet-protocol (IP) based business communication solutions to small and medium sized enterprises, or SMEs, in Europe and the United States. Our mission is to be recognized as an expert provider of IP-based business communications solutions for SMEs. We deliver Internet products and services that enhance the productivity of our customers, including web-hosting, Internet access (through dial-up, digital subscriber line, or DSL, services and leased line connectivity), virtual private networks, or VPNs, and Internet and network security services. Because we also offer a voice communications product, we are able to serve our customers as the single source for all of their communications requirements. We have operations in France, Germany, the Netherlands, Portugal, Spain, Switzerland, the United Kingdom and in the United States. In January 2004, we acquired the Amen European group of web-hosting companies, which operates primarily in France, the United Kingdom, Spain and Italy.

        Our sales operations were recently reorganized into two channels: VIA Express and Industry Solutions. VIA Express is organized to market and sell our more basic, lower cost services to small businesses, resellers and IT developers by direct mail and by advertising in a variety of print and online media and a broad range of direct marketing publications. These marketing tools are designed to steer customers to our telephone-based sales and Internet stores. Our Industry Solutions channel, which includes all of our direct sales force professionals, is designed to market and sell a higher-value portfolio of bundled services such as virtual private networks and security products. Industry Solutions will tailor products to targeted markets where overall value is the key difference between competitors rather than the price of each individual service.

Strategy

        Our immediate goal is to generate recurring and positive cash flows on a consolidated basis. We believe that meeting this goal will facilitate our access to financial and capital markets for expansion and growth, demonstrate long-term viability to potential customers and suppliers and enhance employee motivation. In order to do this, we must, among other things, grow our revenue base substantially. We plan to achieve our goal by:

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shifting the focus of our business model from providing primarily Internet access services to offering web-hosting and Internet security services that we can deliver on our own product platforms;



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improving the efficiency of our overall sales efforts;



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seeking opportunities to acquire complementary businesses; and



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continuing to improve operational performance.

        Each of these efforts is discussed in more detail below

Shifting the Focus of Our Business Model

        The first element of our strategy is to shift the focus of our business model from providing primarily dial-up and leased line Internet access services to offering web-hosting and Internet security services that we can deliver on our own product platforms. By the term platform, we mean the mechanism through which we deliver services to our customers, including our internally owned or substantially owned infrastructure, software, hardware and connections. In the past year, we have

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worked to acquire and develop scalable and automated hosting and security service delivery platforms. Currently, these services have attractive margin levels.

        We believe that because we can deliver web-hosting and Internet security services on our own platforms, delivery of these services is more likely to be profitable for us than delivering services that require reliance on third party platforms. By contrast, historically, VIA has generated a significant majority of its revenues by providing customers with various forms of traditional Internet access. We chose not to build out our own access networks, instead relying on third party infrastructure to deliver these services. This strategy allowed us to avoid large capital expenditures and significant debt obligations. At the same time, it also made us dependent upon third party infrastructure and pricing. During 2003, prices continued to erode for dial-up and lease line access, due to the quickening pace of the roll-out of DSL infrastructure and customer preference for DSL services. While the charge for DSL services is roughly the same as for dial-up and lease line access, it delivers less margin to VIA. As result, our revenues have been adversely affected as new and renewing customers seek lower margin and lower cost DSL services or renewals of lease line access at prices substantially lower (in some cases up to 70%) than their initial contract prices.

    Web-hosting Services

        On the web-hosting side, we plan to offer an automated web-hosting service that enables customers to set up, administer and upgrade their accounts online without support from VIA personnel. This self-service approach will reduce our costs of sale and our administrative costs. In January 2004, we acquired the Amen group, a European web-hosting company based in Paris, France, that provides us with a successful model for addressing the self-service web-hosting market. Our approach to this market will be consistent with the Amen model: use of a highly-automated web-sales platform to allow customers to establish, maintain, and upgrade their accounts, and also receive customer service and technical information online. One of the key elements of the Amen acquisition was its technology and infrastructure, which automates the sales, payment and domain name and hosting package account set-up processes. We intend to use the Amen infrastructure as a core element of our approach to this market. The automation of these functions in VIA operations is expected to reduce the administrative and support costs associated with lower-priced web-hosting services. We expect to drive demand by investing more in marketing and advertising and we will invest less in sales and customer care personnel. The Amen group has demonstrated profitable growth over the past 3 years by focusing solely on the shared web-hosting market. The web-hosting market as a whole has experienced significant growth in recent years and market research suggests that this growth will continue. We have begun to roll-out the Amen platform across the VIA footprint and migrate our shared hosting customers to Amen's shared hosting end-to-end automated platform. We expect these efforts to provide cost synergies and yield incremental revenue.

        We plan to target the following web-hosting customers:

Small and Home Office Customers

        Many small and home office customers, or SOHOs, rely on websites and email to keep them connected to their employer, parent company, customers and suppliers and to serve as their main communication base from which they conduct their business. These customers seek a cost-effective, stable and reliable web-hosting platform; and they generally do not have the resources to acquire a dedicated hosting facility. We believe that we can acquire these customers cost effectively through VIA Express and deliver the desired reliability and functionality through our Amen platform.

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SME Customers

        While many SME customers are larger than SOHOs, they also often wish to avoid the cost of dedicated hosting facilities deployed by larger business enterprises. Yet, many SMEs have more complex needs, including regular email, file and data back-up. In addition, we believe that as an SME grows, its technology and infrastructure spending remains limited, but its outsourcing spending continues to increase. We believe this presents a unique opportunity for VIA Express to identify and cost-efficiently sell our web-hosting services to smaller SMEs while Industry Solutions targets larger SMEs.

Smaller hosting providers

        Smaller hosting providers currently compete in a highly fragmented industry. These smaller players often do not have the scale to manage effectively their own hosting infrastructure or to compete on price and feature functionality. With the automated reseller features of the web-hosting platform we have deployed in our hosting-centric U.S. operation, and the ability to create a private label product with the Amen hosting platform, we will be able to offer these companies cost savings and business improvements by utilizing our platform on a reseller or wholesale basis.

Managed dedicated and self-managed dedicated solutions

        As a business evolves and grows, companies often seek increased functionality and security that can be offered with dedicated servers that are physically separated from data from other companies. SMEs continue to adopt web-centric applications, launching ecommerce initiatives and using the web in mission critical business processes. These customers may require managed dedicated or self-managed dedicated hosting solutions. Managed dedicated hosting represents an amount of dedicated server or server space, managed on a constant basis by our employees to ensure constant operability. Self-managed dedicated hosting represents dedicated servers or server space that is customer monitored to ensure constant operability.

    Security Services

        Although we believe that our future growth may be driven by web-hosting services, the Internet security market also offers an attractive opportunity for profitable growth. We have offered managed security solutions to our customers since 1999. Our security portfolio includes managed firewall solutions, including intrusion detection, and anti-virus and anti-spam services. The security market has expanded significantly over the past several years as continued threats are highlighted by news reports and increased public awareness. Large business enterprises have the ability to implement security services and the latest protection software, while SMEs and SOHOs have fewer resources and generally have been less responsive to these threats. SMEs and SOHOs often cannot or do not wish to dedicate resources to updating software and systems on an ongoing basis. We expect to see SMEs and SOHOs increasingly obtain security protection from third party providers like VIA.

        Since 1999, we have offered a range of security solutions, predominately all of which have been centrally managed in our security network operating center, or SecNOC, located in Paris France. SecNOC is fully equipped and staffed to manage thousands of security appliances, or firewalls, remotely around-the-clock. In 2004, we are investigating opportunities to enhance our customer service capabilities by introducing new security technologies such as intrusion detection and prevention, security auditing, content security (offering anti-virus, anti-spam, and website blocking), data encryption and authentication.

        During the second quarter of 2004, we will deploy a new security management platform, which will enable us to manage a distributed security infrastructure from one central location and monitor a multiplicity of security products instead of a single vendor's product. We also expect this application to

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improve how we measure the performance of our security offerings and improve our ability to offer meaningful customer agreements specifying guaranteed levels of service.

Focus on developing more cost-effective and productive sales

        Last year our sales strategy called for (a) focusing our direct sales force on selling bundles of more sophisticated, higher margin services and (b) channeling access and shared web-hosting products to indirect and web-based sales. We recently institutionalized our strategy by re-organizing our sales operations into Industry Solutions and VIA Express channels. In light of this reorganization, for example, we will seek to sell Internet access services as a stand-alone product through VIA Express's indirect and web-based sales processes, because the VIA Express channel can, using automation and lower cost methods, sell and deliver low margin access services. We also intend to use our direct sales force in Industry Solutions to sell Internet access services bundled together with other products and services. The bundled products Industry Solutions will sell will be tailored to specific industry groups in which the overall value proposition is the key differentiator, rather than the price of each service.

        All of our direct sales professionals are now part of Industry Solutions. In support of our new focus, we have changed incentive plans to emphasize multi-product sales and sales of customized solutions. Leveraged compensation plans are being deployed to foster a results-driven sales culture. We have also focused our sales efforts on five industry sectors: communications, IT, manufacturing, retail and business services. These sectors vary slightly depending on demand and viability in each of our local markets. Companies in these sectors have a definable need for the Internet products that we bring to market. We believe potential customers in these sectors will appreciate the combination of technical expertise and in-depth industry knowledge we are developing.

        Our VIA Express group, augmented by our purchase of the Amen group, gives us the platform to increase our market presence for SME customers who feel comfortable with a self-service low cost service. The mission of our VIA Express sales channel is to generate large volume transaction business through:

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Web sales where we plan, design and execute targeted campaigns through direct mail, email as well as through our web site and other Internet media;



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Telesales where we make targeted outbound sales calls to prospective customers as well as answer inbound calls for services or new products; and



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Resellers, agents and referral partners with whom we revenue share or to whom we pay commissions based on the amount and frequency of revenue generated.

        In 2004, we have begun to migrate our shared hosting customer base from multiple labor intensive platforms to Amen's automated shared hosting platform. We expect Amen's scaleable web-hosting platform will enable us to pursue accelerated growth without adding significant costs. We also plan to continue to expand the use of our web sales activities to increase the efficiency of sales of certain of our basic products and to reach a broader potential customer base. Our web sales software, deployed across our operations during 2003, allows customers to select and order a product using the web, and will enable us to automate and standardize the process for managing products, pricing, orders, and other system data. Further development and integration efforts associated with web sales processes with our new billing and customer care system are scheduled to be finalized in the second quarter of 2004. We anticipate the deployment of these automatic ordering and provisioning capabilities will result in decreased order processing time and an enhanced customer experience.

        We believe that our VIA Express sales channel will be the key driver of revenue growth in the next two years.

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Identify appropriate targets for acquisition opportunities

        In 2003 we made back office, network, financial and accounting infrastructure improvements that we believe have positioned us to be able to grow without adding significant incremental costs in back office administration. In order to accelerate that growth, we are actively pursuing acquisitions and partnerships that would complement or enhance our infrastructure, product offerings, sales strategies or customer base. This should allow us to leverage our increased operational capabilities to realize higher margins from acquired revenue. Until 2003, consolidation in the Internet services industry, and particularly the business services market, was slowed by the lack of funding available to major strategic acquirers. This situation has begun to change as enterprise valuations of telecommunication and Internet-based companies have rebounded and a variety of larger companies have completed restructurings or are emerging from bankruptcy. Recent merger and acquisition activity over the past year has included: Tiscali's acquisitions of Airtelnet (Spain), Nextra SpA (Italy), and ISP Eunet (Austria), and Wanadoo (Belgium); PSINet's acquisition of Cybernet (Germany); Global TeleSystems' acquisition of Netcom (UK); GX Networks' acquisition of Pipex (UK); and Clara.net's acquisition of Netscalibur (UK). We anticipate that this consolidation trend will continue as service providers adjust their business and geographic revenue mix, gain scale, expand markets and improve their technology offerings. We plan to participate in this activity as appropriate opportunities arise to maintain and enhance our competitive positioning and gain the desired scale in our operations.

        As discussed above, in January 2004, we completed the acquisition of the European web-hosting company Amen, based in Paris, France. The acquisition of the Amen group to VIA delivers a cash-generating business. In addition, substantially all of Amen's customers pay in advance of service. We are continuing to seek appropriate targets or partners to fit our strategic goals and bring immediate or near-term positive financial impacts to VIA.

Continuing to improve operational performance

        We also will continue to improve our operational performance with focused organizational, back-office platform improvements and personnel changes.

        In 2003, we restructured our workforce from a collection of locally focused operations to a single international functional-based organization. Centralized functional groups responsible for technology and operations, marketing, human resources, communications, finance and legal matters now support our local country managers. Our local country managers are responsible for direct and indirect sales, revenue and certain other related activities. In 2004, we intend to refine reporting, measurement and incentive programs to complete the realignment and refocusing of our country managers.

        In 2003, we took major steps to reduce costs and increase operating efficiencies by outsourcing the systems and personnel of our network operations center and certain financial and accounting services, as well as introducing across all our operations a standardized billing, provisioning and customer care platform. We moved certain financial and accounting services from our local operations to a single third party shared service center in one location. This shared service center manages general ledger accounting, accounts payable and receivable, and credit and collections. We have begun to see the benefits of the financial shared service center with improved processes and a tangible improvement in information flows to management. We also expect to see an annual net savings of approximately $1.8 million from the financial shared service center. We completed the finance outsourcing project in January of 2004 and expect to complete the billing project by mid-2004. We expect continued benefits in terms of cost savings and operating efficiencies going forward.

        Last year, we began to rationalize our legacy systems and integrate the systems and the products they support into our updated product offerings and service platforms. One example of this rationalization is the actions we are taking to begin migration of our shared hosting customers from multi-product delivery platforms onto our newly acquired Amen platform.

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        Finally, we are implementing programs targeted at increasing customer retention, a key element of our goal to grow revenues profitably.

Our Target Market

        We specialize in serving the needs of SMEs, who frequently do not have the resources to keep up with rapidly changing technologies, create and update content and secure their communications. We believe that there will be a continuing demand by SMEs to outsource network security, virtual private networking, collaborative and customer relationship applications, as well as sophisticated enterprise-wide applications including intranets, extranets, network management systems and enterprise resource planning systems. As discussed elsewhere in this section, we have particularly focused efforts to sell our bundled, higher-end products on five industry sectors: communications, IT, manufacturing, retail and business services, marketing bundled services targeted to these markets. At the other end of the market, we are focusing on SMEs who are comfortable with a self-service approach and who are seeking a lower-priced dependable Internet-based communications service.

Our Sales Organization

        In January 2004 we announced the reorganization of our sales channels into two units: Industry Solutions and VIA Express. The profile of Industry Solutions and VIA Express may vary country-by-country depending on the maturity of the market, the product and service portfolio the country operation offers, the available partners within a country, some of whom will be national as well as international and the scope and size of the operation.

Industry Solutions

        Industry Solutions encompasses the sale and marketing of a higher-value portfolio of bundled services such as virtual private networks and security products. Industry Solutions seeks to tailor products to specific markets where overall value is the key difference between competitors rather than the price of each individual service. All of our direct sales force professionals are included in Industry Solutions and have been organized into two subgroups: those who will actively pursue new customers and those who will support existing customer relationships including up-selling and enhancing services based upon customer needs. We expect that this focus on meeting existing customer needs will help increase our rate of retention of our customers.

        As in the past, each of our local operating companies will continue to have a direct sales force. We have introduced a new incentive plan for direct and indirect sales in Industry Solutions and have realigned our direct sales to focus on communications, IT, business services, manufacturing and retail industry sectors. We anticipate that this new concentrated focus will permit us to form a deeper understanding of our target market customer needs.

        In 2004, we are continuing our plan to establish a stronger and more structured indirect sales force in each of the countries in which we operate. We intend to focus our indirect sales on:

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Resellers—who will distribute our more commoditized products, including access and shared web-hosting services;



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Lead Referrers—who will be rewarded for referring new business leads to us; and



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Value-added partners—who will enable us to develop value added bundles in the industry markets we are targeting.

        The Industry Solutions sales group will, in large part, continue to implement the sales focus underlying our current strategy. However, it will also specifically target opportunities to push the sale of low-price or commoditized Internet services to our VIA Express sales channel.

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VIA Express

        Our VIA Express channel will market Internet access, hosting, VPN and voice products and services to small businesses, resellers and IT developers primarily by advertising in a variety of print and online media and by mailing a broad range of direct marketing publications, such as promotional pieces, catalogs and customer newsletters. We seek to use these marketing activities to drive customers to our telephone-based sales and Internet stores at an efficient cost. We expect this transactional sales and marketing model to reduce our cost of sales in a highly competitive environment and provide better service to our customers based on market requirements.

        Because we anticipate the majority of sales to occur online, we have invested in and developed a new web sales infrastructure integrated in our websites. The web interface of our recently installed billing system gives us the ability to automate sales, billing and provisioning online. In addition, we intend to implement online customer care and support that will allow customers to maintain their services themselves at any time. We expect this will also reduce the cost of our back office.

Our Products and Services

        We offer a portfolio of communications services created for the business customer that we sell on either a bundled or stand-alone basis. These services are designed, constructed and delivered to give businesses more productive, cost-effective ways to communicate and share critical information. As businesses increase the use of the Internet as a business tool and integrate web-based products and services into their business processes, our services are designed to enhance profits and reduce risk.

        We package our communications services for businesses who need to establish an Internet presence for efficient, effective and secure communications, and we provide for "one-stop" communication service by enabling customers to bundle our voice services product with their services. We also provide services to address more sophisticated Internet requirements. Today, we do not currently offer all of our services in each of our markets. The specific products offered in each market are determined by the needs of the market, competition and local regulations.

Current Portfolio

        We continuously seek to enhance and add to our service portfolio, and currently offer six types of services:

Hosting Services

        Web site hosting offers business customers a presence on the Internet, providing them with enhanced marketing and customer service capabilities, as well as opportunities to increase productivity and eliminate costs. Our web-hosting services are complemented by web site authoring, development and management services. Additionally, our advanced hosting services offer more sophisticated applications such as intranets, extranets and business productivity capabilities, along with mirroring, caching, and clustering services. We also provide domain registration services and search optimization services to further assist our customers to establish and expand their on-line presence.

        We believe our purchase of Amen, who provides low priced web-hosting solutions to the SME market in France, the United Kingdom, Spain and Italy, will allow us to achieve meaningful cost and operational synergies because we can migrate many of our existing shared hosting customers onto Amen's more cost-efficient platform. We also believe that Amen will enhance our ability to enter new geographic markets with superior product offerings at a low incremental investment.

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Security Services

        Our security solutions allow customers to protect their data and intellectual and commercial assets by limiting unauthorized users from accessing their internal network, authenticating users seeking access to proprietary or confidential information, identifying and resolving network vulnerabilities, increasing security for company data transmitted through the Internet and filtering viruses, unsolicited bulk-email and other selected items from business communications.

Connectivity Services

        We provide Internet access through dial-up, dedicated line and other technologies, including integrated services digital network, or ISDN, and DSL. We can tailor the connectivity services for each customer to meet their specific requirements and bundle connectivity with other VIA products. Connectivity services currently represent the majority of our revenues.

Networking Services

        We offer an extended portfolio of Internet protocol-based virtual private network, or IP VPN, solutions designed to meet the networking needs of SMEs across Europe. The portfolio includes three key offerings:

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IP VPN, connects branch offices, partner extranets and remote workers, with security delivered through managed firewalls;



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DSL VPN, provides a cost-effective solution for connecting a large number of sites to a central office using low-cost broadband as the primary form of connectivity over a private network.



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MPLS VPN, utilizes multiprotocol label switching technology to enable customers to prioritize different types of traffic for business critical applications, such as enterprise resource planning or customer relationship management systems.

        Internet-based VPNs can reduce the cost of existing wide area networks by enabling the secure and encrypted transmission of private traffic through the public Internet. Our experts design, provision and manage these solutions for customers, eliminating or reducing the costs of internal network and technical security staff.

        We have bundled the VPN product portfolio with a real-time monitoring application, providing the capability to monitor the availability and performance of a virtual private network and its individual connections and nodes.

        As our networking portfolio draws upon products and services offered by multiple vendors, we are able to offer different technologies to one single customer. For example, a customer could connect its VPN to a small site through the use of a DSL VPN, while ensuring that its foreign headquarters could connect via a high performance MPLS solution. Remote offices could connect to the customer's VPN though use of our Internet VPN, which relies upon a local Internet connection and a firewall application, ensuring secure communications. We believe that this hybrid approach to establishing networking solutions is a key element in our ability to sell these services.

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Voice Services

        In 2003, we completed the introduction of our resold voice services in seven European markets to further support our position as a business communications provider to the SME market. We offer this service in our European operations through contractual arrangements that we have with telecommunications services providers operating in these markets. There are certain differences in the voice services that we provide compared with incumbent telecommunications services providers. Our voice service includes dedicated account management and does not require additional equipment. We also offer online service management tools for displaying and managing call costs and central billing for customers with multiple operations using the service.

        We offer our customers a single bill for data and voice solutions. We recently commenced the deployment of our customer portal that will enable our voice customers to generate a wide range of reports, view their call statistics and billing details and configure fraud alerts (including notification by text message or email). We anticipate that this portal, which will be made available to all resold voice services during the second quarter of 2004, will enhance our value proposition and differentiates our resold voice services from many of our competitors.

Professional Services

        Many of our customers do not have the internal resources or personnel to design or maintain Internet functions. As businesses increasingly rely on the Internet for mission-critical business applications, they are frequently choosing to outsource their IT management. Our professional services include network and system design, web design, web site development and maintenance, VPN and Internet security design and implementation, and other Internet-related services.

Extended Portfolio

        We are continuously reviewing our product portfolio to ensure that our products fit within our core competencies, demonstrate a high demand from our target business customer base and can be offered in a cost-effective and profitable manner. As part of this ongoing review, we assess potential strategic alliances, acquisitions and other business combinations and relationships with managed IP solutions providers to enhance our product portfolio.

Our Competition

        Over the past three years, we have seen significant changes in the circumstances of many of our direct competitors. Due to continuing consolidation, the size of our average competitor has increased. We see our competitors grouped into six major types:

Hosting Service Providers

        Many hosting service providers have been acquired by telecommunications providers or retreated from our markets for financial reasons. The remaining hosting service providers that are of scale continue to grow, while the market for hosting, especially in Europe continues to expand. We believe we can compete effectively in this area by leveraging our broad SME customer base and our ability to bundle security, connectivity and networking services. In addition, our AMEN acquisition will allow us to achieve operational efficiencies and access additional markets at low incremental costs. We intend to leverage the success of the Amen marketing strategy to reach our target customers in other countries. We also distinguish ourselves by the fact that we are able to provide one invoice for a full suite of core business products, including voice, hosting and security.

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Security Service Providers

        In 2003, specialized security service providers continued to emerge, particularly in our larger markets. Providing security solutions and managed security offerings, these companies have tapped into the need for businesses to protect their networks and information. Security services providers have focused primarily upon the larger business customer. We seek to compete in this area by leveraging our ability to bundle security services with a broad portfolio of connectivity, networking and hosting services. Further, we seek to offer security solutions that are more in tune with the needs of an SME. In some instances, we may partner, rather than directly compete, with security services providers. This allows us to augment our security portfolio.

Telecommunications Service providers

        Most of the major international and national incumbent telecommunications providers offer Internet services in one or more of our markets, either directly or through subsidiaries or alliances. Generally, these telecommunications providers focus on consumer dial-up Internet access and large corporate accounts, because these customer bases generate high volume data traffic. Many of these competitors have also begun to focus on the SME market in recent years. Some have established dedicated teams to develop channels in order to penetrate the SME marketplace and provide a direct approach to this customer base. Due to their market presence, we are often at a disadvantage when competing against these providers. To address this, we focus upon the industry specific needs of SMEs. We believe that our emphasis on (a) providing SMEs quality service and a high level of customer care, (b) understanding the customers' needs and our local markets, (c) maintaining flexibility in our service offerings and (d) our ability to provide "one-stop shopping" differentiates us from major telecommunications services providers.

Internet Service Providers

        Many of the large Internet service providers were either acquired by telecommunications providers or retreated from our markets for financial reasons. The remaining few large Internet service providers in our markets have either shifted their focus to access services and wholesale distribution or are attempting to sell more managed service offerings covering access, web-hosting and security needs. The small Internet services providers in our markets have a limited range of services and geographic reach and have historically focused on consumer dial-up Internet access. By combining local market expertise with an international network and a wide range of services designed for SME customers, we believe we are able to compete effectively with both large and small Internet services providers. Few providers are left in this space with our current geographic footprint and product mix.

Information Technology Service Providers

        In our markets, information technology, or IT, services providers focus primarily on the delivery of complete ebusiness and local area networking solutions for larger size business customers. Some of the large providers have expanded their offerings to include the ongoing management of Internet infrastructure to deliver these solutions, primarily hosting and security services. Small IT services providers primarily derive their business from local community customers, but the majority of small IT services providers do not provide managed Internet infrastructures services such as access, security and hosting: Thus, we view them as potential partners in the sale of our services. We currently have partnerships with local IT services providers in many of our markets.

Cable Television Companies

        Cable operators in some of our markets now offer Internet access services integrated with television programming and telephone services offerings. Their existing customers are primarily residential and their physical networks are largely limited to residential areas. While these companies

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are expanding into the SME markets, we do not believe they can offer currently a comparable range and quality of services given their historical focus in the residential market.

Our Network

        Our network is connected to the Internet by multiple peering arrangements at major commercial Internet exchanges and through transit agreements from multiple major carriers. Our network dynamically routes traffic over the network of the provider best able to deliver the data in the most efficient manner. Direct connections to multiple major carriers and Internet exchanges assure reliable service levels, protecting against traffic congestion and network outages.

        The local networks of our European operations are connected to our international network via redundant traditional local area and wide area networks or high-capacity fiber and co-location of routers. Where co-location is not an option, our local operations access our international network through high-speed data communications facilities. Through an outsourcing partner we provide network monitoring 24 hours per day, 365 days per year. Our technical and customer support staff provide individualized support for our customers' business-critical Internet solutions.

        Our network connects to Tier 1 Internet transit providers and major public peering locations in London, Frankfurt, Amsterdam and Madrid, where we have co-located routers. A substantial number of our operating companies have established peering relationships with other local or regional Internet services providers. In peering relationships, Internet services providers agree to carry each other's traffic on their networks to improve performance and reduce congestion and costs. We establish on an ongoing basis additional peering relationships with international Internet services providers. Peering relationships can take the form of either public peering or private peering. Public peering takes place at a physical location, usually a network access point, designed for the exchange of Internet traffic between private Internet services providers. Private peering involves an agreement between two Internet service providers allowing traffic to pass between each other's networks at private connection points without having to traverse the public Internet and public peering points. We supplement the peering arrangements with transit services for which we pay compensation to certain providers.

        In 2002 and early 2003, we terminated agreements and operations for the U.S. based network following the sale of our operations in Latin America. In place of the dedicated network, we currently utilize transit agreements in Europe to provide managed Internet services to our customers.

        In 1999, we acquired a 20-year pan-European backbone from iaxis Limited. In September 2001, we entered into a replacement agreement with a European subsidiary of Dynegy Inc. at no further cost to VIA after Dynegy acquired the business of iaxis out of its insolvency proceedings. In January 2003, Dynegy announced the sale of its European network and operations to an affiliate of Klesch & Company, a London-based private equity firm specializing in European restructurings. Crisscross Communications Limited, formerly known as Dynegy United Kingdom Communications Limited, continued to provide the services until June 2003, following its application for insolvency proceedings in May 2003. We are currently monitoring the insolvency proceedings to determine if a third party will assume the operation of this network. We acquired alternative services prior to the suspension of service by CrissCross and experienced no material service degradation to our customers.

Company History and Recent Turnaround Efforts

        VIA was founded in 1997 to be an international Internet services provider with a footprint in the European and Latin American markets. From 1997 through our initial public offering in February 2000, we raised approximately $540 million in equity capital which allowed us to acquire 26 separate Internet service providers in 14 countries. In the midst of our rapid build-out and integration of our newly acquired operations, market conditions for Internet services providers deteriorated significantly. In addition, our rapid growth led to poor execution of the integration of two of our largest country operations, which caused and exposed material weaknesses in our legacy systems and internal controls.

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In response, our board of directors implemented a turnaround plan beginning in 2002 to reduce our cash utilization and operating losses, and improve our internal controls and processes. Under this plan, we sold or closed our Latin American and some of our European operations. We also suspended development of an enterprise-wide provisioning, billing and customer service platform, established tighter budgetary and capital expenditure controls and continued headcount reductions. In our United Kingdom and German operations, we engaged in system remediation and data validation projects, made a series of significant organizational changes, and ceased providing service in Germany to our service intensive, low-margin customer base. These and other actions led to significant reductions in our cash used and improvements in our operating results and internal controls.

        In November 2002, our new Chief Executive Officer, Rhett Williams, assembled an experienced senior management team, initiated a comprehensive strategic review of our operations and began the development of a business plan to position us for a sustainable and profitable future. The two key components of the Strategic Plan, which was adopted by the board of directors in March 2003, are improving operational performance and profitably growing revenues.

        In 2003, we improved operational performance with the following actions:

•

Outsourced our key network management functions to provide us with better monitoring and management capabilities, scope and scale;



•

Outsourced certain accounting, credit and collections and other financial back-office services to Accenture to improve the flow of internal financial information and the efficiency and economy of our finance operations;



•

Substantially completed the phased introduction of a new standardized billing and customer care platform; and



•

Replaced non-performing managers and sales staff with more experienced professional staff.

        In order to pursue new revenue growth during 2003, we engaged in a range of activities, including:

•

Implemented a company-wide initiative to reduce customer churn through standardization of churn measurements, programmed communications and new customer retention sales incentives;



•

Improved the quality of our sales force by replacing non-performing sales professionals with more experienced professionals, established robust sales management and instituted talent development and training programs;



•

Began to shift certain of our low margin business to a more efficient channel, supported by actions such as the development of a web sales tool to better automate and standardize the process for managing orders and the pricing and other system data of lower priced base services;



•

Introduced new virtual private networking, or VPN, and voice products to enhance our product portfolio; and



•

Began to refocus our sales and marketing teams on specific targeted industry groups with tailored bundles of products and services.

        We previously stated our target of achieving the point of positive cash flows in 2004. Although the first full year of our Strategic Plan yielded significant improvements in operations, the revenues have not grown as anticipated due to a number of factors, including unanticipated higher price erosion in some of our service offerings and the slowness of certain of our operations in closing new product sales opportunities. As a result we now expect to reach the point of positive cash flows from our current consolidated operations in mid-2005. This is dependent upon the achievement of new and incremental revenues, which we anticipate generating from our new sales and product strategy.

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Our Operations

        In 2002, we sold our operations in Argentina, Austria, Brazil, Ireland and Mexico. In 2003, we sold VIA NET.WORKS Italy. These operations are accounted for as discontinued operations and have been excluded from the financial results from continuing operations, as well as the financial results for the comparative prior periods. The following table shows the revenue contribution from each of our continuing operations in the Europe and the Americas reporting segments. As of December 31, 2003 we owned 100% of all our operations.

VIA Operations

        Additional financial information about our market segments appears in the table labeled "Reportable Segment Financial Information" in Item 7, "Management's Discussion and Analysis of Results of Operations and Financial Condition" and is incorporated herein by reference. Our headquarters is currently located in Amsterdam in the Netherlands.

Our Employees

        At March 1, 2004, we employed 454 people on a full-time equivalent basis. Our headquarters staff is comprised of 53 employees and 401 of our employees are located in our local operations. Of our total employees, 153 are involved in sales and marketing, 80 are employed in customer care, 120 are involved in technical and engineering functions and the remaining 102 are devoted to finance, legal, strategic planning and other administrative functions. Some of our operating companies are parties to collective bargaining agreements. We believe that we have satisfactory relations with our employees and continue to work to better such relations.

Legal and Regulatory Issues

General

Intellectual Property and Proprietary Rights

        We rely on trademark and copyright law, laws restricting unfair trade practices, laws relating to trade secret protection and confidentiality or license agreements with our employees, customers, partners and others to protect our intellectual property rights. All of the countries in which we operate are signatories to international treaties relating to the protection of intellectual property. Nonetheless, in many of these countries, the courts have not had the opportunity to address the legal issues within the Internet context to the same degree as United States courts. It is therefore uncertain whether the intellectual property of our non-U.S. operations will be subject to a lesser or different degree of protection than generally afforded in the United States.

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        In Europe and in the United States, we pursue the registration of trademarks for marks that we believe are particularly unique and that will be used in our business over a long period of time. In the United States, we have a registered trademark for our logo and the name "VIA NET.WORKS". In the European Union, we have a registered Community Trade Mark, or CTM, for our logo together with the name "VIA NET.WORKS". We hold trademarks and registrations for other marks in some other countries as well.

        As a part of our acquisition of Amen, we acquired rights in certain Amen trademarks. Amen has registered trademarks in France and Spain for certain of its marks. We are currently in the process of pursuing a CTM registration for certain Amen marks. To the extent we are unable to receive registration status either pursuant to a CTM registration or in-country registrations, we may be restricted in our use of certain Amen trademarks in certain of our countries.

        Except as noted above, to date we have not pursued the registration of the trademark VIA NET.WORKS, or variations of this mark. Consequently, a competitor with senior rights in a mark similar to ours may be able to argue successfully that we should be barred from continuing to use our mark, or our competitors may adopt product or service names similar to ours, thereby impeding our ability to build brand identity and possibly leading to customer confusion. Defending trademark infringement litigation and policing unauthorized use of our marks is also difficult and expensive. For more information regarding difficulties we may have in protecting our brand names, please see RISK FACTORS later in ITEM 1 of this Form 10-K.

        We actively seek to protect our marks against similar and confusing marks of third parties by using our local law firms and management teams to identify applications to register trademarks, filing oppositions to third parties' applications for trademarks and if necessary, bringing lawsuits against infringing parties. We also continue to assess the strength of our marks and brands as a part of our overall marketing strategy.

        As a part of our acquisition of Amen, we acquired the rights to a fully automated operating platform used to support Amen's customers. Certain components of this platform were developed by Amen and as such are proprietary to Amen. Third parties could challenge Amen's rights in these components. To the extent a third party successfully claimed that VIA did not have the legal right to use of all or part of the platform, VIA would incur significant costs to either acquire the rights to use the infringing components or to replace the infringing components with alternative components, either through licensing from a third party or independently developed by VIA, its subsidiaries or each of their agents, please see RISK FACTORS later in ITEM 1 of this Form 10-K.

Regulatory Matters

        No uniform body of law specific to the regulation of Internet services or Internet services providers exists in Europe or the United States. However, many local laws, which are not specific to Internet services and uses of the Internet, apply to the provision of our services generally. The enforcement of these laws may fall within the powers and duties of a number of regulatory bodies. As a new and important medium for communication and business transactions, the Internet is undergoing considerable legal and regulatory scrutiny worldwide. New laws and regulations regarding the Internet have been proposed or are currently being considered in many countries in which we operate, covering issues such as user privacy and information security, wire tapping, obscenity and child protection, defamation, taxation, and intellectual property rights. At the same time, the application of existing laws to communications and the transaction of business through the Internet are being clarified and refined. We cannot predict what impact future judicial, legislative or regulatory changes will have on the industry in general or our operating results specifically, or whether local regulatory bodies will question our compliance with applicable regulations.

        For example, due to the global nature of the Internet, it is possible that, although the equipment and software used to provide our services is based in Europe and the United States and the

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transmission of content through the Internet by us and our users would originate primarily in these regions, the governments of countries in other regions might attempt to regulate the content contained in or transmitted using our services or prosecute us for violations of their laws. As content produced by our users or us is available over the Internet in countries all around the world, these countries may also claim that we are required to qualify to do business in their jurisdictions. Any application of existing laws and regulations from jurisdictions in which we currently do not conduct business, or the application of existing laws and regulations to the Internet and other on-line services, could have a material adverse effect on our business, results of operations and financial condition.

        Further, future regulatory developments might impede the growth of the Internet, impose taxes or other costly technical requirements, create uncertainty in the market or in some other manner have a material adverse effect on our business, financial conditions or results of operations.

        The regulatory framework in each of the major markets in which we provide services is described further below.

European Union

Overview

        All of our European operations, except our Swiss operations, are located in member countries of the European Union. Within the European Union, the European Commission, in co-ordination with the Council of Ministers and the European Parliament, can enact legislation by way of "decisions" or "regulations" that are enforceable directly in each of the member states. More commonly, it adopts "directives" that require member states to enact laws within their own countries by implementing the principles and rules established in the directive. Although the directives' legal mandates are binding on member states, member states have discretion as to the method of implementation. As a result, the European regulatory environment is characterized by differing and sometimes conflicting rules and regulations at the local level regarding licensing, electronic commerce, data protection, data interception and other areas.

        The European Union adopted a new package of five communications directives on February 14, 2002, or the "New Regulatory Framework'. This replaced the existing regulatory framework with less detailed rules aligned more closely to general competition law. All E.U. member states were required to implement the New Regulatory Framework by July 25, 2003 although some were late in doing so. The new framework should lead to a reduction in the regulatory rules that affect us and more generally should lead to greater competition in the market. Therefore, we expect that the new package should eventually reduce our costs of regulatory compliance.

Data Protection

        In October 1995, the European Union adopted the "directive on the protection of individuals with regard to the processing of personal data and the free movement of such data". This directive imposes restrictions on the use and processing of personal data and gives European Union citizens rights regarding their personal data. Member states of the European Union were required to implement the directive into national laws by October 24, 1998. All countries in which we operate within the European Union have enacted the directive other than France, which has existing laws that deal with the protection of personal information.

        The data protection directive affects companies like us that collect information from individuals in European Union member states. In particular, companies with facilities located in member states or that have equipment in member states for the purpose of processing data will not be allowed to send personal information to countries outside of the European Union that do not maintain adequate standards of privacy and data protection. The directive does not define what standards of privacy are "adequate." Based on negotiations concluded in 2000, the European Commission determined that the

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self-regulatory arrangement established by the U.S. Department of Commerce known as the "safe-harbor principles" provided "adequate protection," but only for data transferred to those companies that voluntarily agree to adhere to those principles. The Commission has made similar adequacy decisions regarding transfers to Switzerland.

        VIA has not adopted the safe harbor principles. Like many other U.S. based organizations, VIA has chosen to provide adequate safeguards in various other manners, including the use of contractual relationships in which consent to use data is obtained.

        The newly enacted "Privacy and Electronic Communications Directive" concerns the processing of personal data and the protection of privacy in the electronic communications sector. This Directive, which required implementation by member states by October 31, 2003, contains provisions concerning security and confidentiality of electronic communications, use of traffic data, and unsolicited commercial communications (including spam), and provides greater clarification for VIA and other service providers such as VIA within the European Union specifically regarding the use of personal data.

        We will continue to review our data protection obligations, specifically with respect to our outsourcing of certain finance and administration functions outside of the European Union.

Content Regulation and Liability

        In 2000, the European Union adopted the Electronic Commerce Directive, which was to have been implemented by January 17, 2002. The Directive provides that an Internet service provider will not be liable for information it hosts unless the provider has actual knowledge that the information or activity is illegal, or is aware of facts or circumstances from which the illegal information or activity is apparent, so long as the Internet service provider acts promptly to remove or disable access to the information upon becoming aware that it is illegal. In addition, an Internet service provider providing access to networks or transmitting information over a network that is provided by its customers will not be liable for that information provided that the Internet services provider does not initiate the transmission, select the recipient of the transmission or select or modify the transmitted information. Subject to certain conditions, Internet service providers will also not be held liable for the automatic, intermediate and temporary storage of that information, also known as caching. The Directive provides that member states shall not impose a general obligation on the above-mentioned providers to (a) monitor the information that they transmit or store or (b) seek facts or circumstances indicating illegal activity. However, member states may establish monitoring obligations in certain specific cases in order to detect and prevent certain types of illegal activities. Because this area of law is still developing there is uncertainty in some of our operating markets about the potential liability of providers for content carried on their networks. We expect this uncertainty to diminish as the operation of the new rules at national level in member states is clarified.

Access to Content

        Germany has enacted legislation that would require Internet services providers to establish technical means to permit German authorities to intercept data traffic of identified customers. The ordinance became effective in January of 2002, but compliance is subject to certain transition periods. A technical directive is anticipated to deal with the technical application and execution of the ordinance.

        In the United Kingdom, the Regulation of Investigatory Powers Act, or RIPA, came into force in October 2000. RIPA extended existing interception law to encompass all communications service providers (including Internet service providers). The law permits the United Kingdom Secretary of State to require a communication service provider to maintain a reasonable intercept capability. However, there is still uncertainty as to whether the government or the industry will bear the costs of this capability.

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        In France, pursuant to Law n^o 2001-1062, telecommunications operators (including Internet access providers) could be required to retain certain technical information for the purpose of communication of such data to judicial authorities, at the request of the latter, in connection with the investigation and prosecution of criminal offences. Likewise, pursuant to Law n^o 86-1067, Internet access providers and hosting service providers could be required to retain the information that may render possible the identification of a person who participated in the creation of the contents of the services they provide for the purpose of communication of such data to judicial authorities. The exact categories of retained data and duration of its retention will be specified in future decrees.

Online Contracting

        The Electronic Commerce Directive also required member states to enact legislation providing greater clarification for the enforceability of online transactions. This legislation, as enacted, should increase confidence in engaging in online transactions. Other legislation, such as the Electronic Signatures Act enacted in the Netherlands in 2003, continues to refine the legal framework supporting the growth of e-commerce.

Licensing Requirements

        The New Regulatory Framework enacted by the European Union has now removed the requirement to license the provision of communications services and networks. The conditions in all such licenses have been replaced by regulations and guidelines that are applicable to VIA and all industry players. There is no need to obtain a license, although some reporting continues to be required, for example on revenue and other figures. Payments for a license, is being replaced by an administrative charge related to revenue.

        Within the UK the Communications Act has implemented the EU requirement for a uniform regulatory system for all communications markets. The system is administered by the newly established United Kingdom Office of Communications (OFCOM), which took over responsibility from the existing regulators at the end of 2003. It has also taken over joint responsibility for competition investigations in the communications sector, alongside the Office of Fair Trading. Certain additional conditions apply only where a service or network provider has been found to have significant market power, or SMP, in a relevant market. SMP is similar to the anti-trust or competition law concept of market dominance.

        During the first half of 2003, OFTEL, the regulatory agency preceding OFCOM in the United Kingdom, began a series of market reviews intended to identify which operators have SMP in a range of telecommunications and broadcasting markets. Broadly, British Telecom, or BT retains SMP in many markets and is regulated with additional conditions. In certain markets other operators have SMP. However VIA does not have SMP and therefore is not subject to additional conditions.

Voice Licensing Requirements

        VIA provides resold voice services in France, Germany, the Netherlands, Portugal, Spain, Switzerland and the United Kingdom. France does not require VIA to obtain a license or register with any regulatory agency in order to provide the VIA resold voice services. The remaining countries either require a license to resell the voice services currently provided by VIA or registration with applicable regulatory agencies of VIA's intent to provide these services. In Germany, the Netherlands, Portugal, Spain, Switzerland and the United Kingdom, VIA has either obtained the relevant licenses required to provide resold voice services in these countries or where registration is required instead of obtaining a license, it has registered with the relevant regulatory agency, stating its intention to sell resold voice services.

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RISK FACTORS

        In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, set forth below are cautionary statements identifying important factors that could cause actual events or results to differ materially from any forward-looking statements made by or on behalf of us, whether oral or written. We wish to ensure that any forward-looking statements are accompanied by meaningful cautionary statements. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that could cause actual events or results to differ materially from our forward-looking statements. Please refer also to "Cautionary Note Regarding Forward-Looking Statements" on page 1 of this annual report on Form 10-K.

WE HAVE A HISTORY OF NEGATIVE CASH FLOW AND WE MAY NEVER ACHIEVE POSITIVE
CASH FLOW

        For the year ended December 31, 2003, we experienced a net loss from continuing operations of $24.2 million. While we have significantly reduced our negative cash flow, we will not be able to continue to support our operations, deliver quality customer service, and improve our financial reporting infrastructure without material increases in revenues. Our immediate goal is to generate recurring and positive cash flows on a consolidated basis. This goal, however, is predicated on the assumption that we can increase revenues and continue to reduce costs. If we are unable to increase our revenues or otherwise reduce our costs and investment expenditures, we will continue to experience negative cash flow.

WE ARE IMPLEMENTING A NEW BUSINESS PLAN, WHICH MAY NOT BE SUCCESFUL

        In March 2003, we adopted a new business plan for 2003-2005. We have implemented many initiatives in 2003 from the Strategic Plan and will continue to do so in 2004-2005. This Strategic Plan calls for a fundamental shift in our business model from a focus on dial-up and leased line Internet access services to web-hosting and Internet security services. It also involves a fundamental shift in our operational approach through outsourcing a number of administrative functions. The Strategic Plan may not succeed, may result in increased costs, and may not provide anticipated increased revenues.

We have outsourced certain functions, and our providers may not deliver the anticipated level of service and functionality and may have substantial technological or operational weaknesses.

        We have outsourced certain key network, IT, finance and administration systems and processes to third party vendors. We cannot be assured that these third parties will be able to deliver the anticipated and desired results. These third parties may not provide the anticipated level of service and functionality and may have substantial technological or operational weaknesses. This may increase our costs, which will negatively affect our results of operations. Our use of these outsource providers requires us to rely on the contractual relationships we maintain with them and we will not be able to control directly their quality of service or level of cooperation. As a result, we may lose a certain degree of day-to-day control over the outsourced functions and we will be dependant on continued adherence to contractual service descriptions and service level agreements. We may experience disputes with outsourcing providers to enforce our rights or address service issues. These issues may affect negatively our ability to deliver quality service to our customers and deliver accurate financial reporting on our operations.

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The success of our product development plans depends on our ability to identify vendors and others who can provide quality and dependable service and to successfully negotiate agreements with these vendors and providers so that we can deliver the products and services profitably to our customers.

        Our product development plans call for the introduction of more sophisticated products and services as well as products that will enhance our ability to serve as a single-source provider of communications solutions. When we launch new products and services, we typically partner with technology vendors and other third party providers. The development and success of our new products and services depends on our ability to identify vendors and providers who can provide quality and dependable service. In addition, we must successfully negotiate satisfactory agreements with these vendors and providers so that we can deliver the products and services profitably to our customers. Our success with new products and services and existing products and services also depends on our ability to integrate sale, provisioning and billing for these products and services into our sales force training and into our other systems and processes. Our goal of generating recurring and positive cash flows on a consolidated basis depends, in part, on successfully introducing new products and services. Once products and services are launched we must aggressively build market share in order to achieve the anticipated revenue forecasted for the new products and services. If we are unsuccessful in our marketing efforts, encounter any significant delays in introducing new products and services, or are unable to successfully sell new products and services once they have been introduced, our financial performance will be negatively impacted.

Our sales force reorganization into VIA Express and Industry Solutions requires us to upgrade our direct sales force, recruit reseller candidates and provide them with necessary back-office solutions, and build or acquire end-to-end automated customer acquisition, order entry, provisioning and billing solutions.

        Our new sales strategy requires that we focus our direct sales force on selling more sophisticated, higher margin, value-added services and channel our more basic products such as access and shared web-hosting to indirect and web-based sales. As a part of the new emphasis on our VIA Express channel, we may reduce our direct sales force in certain country operations. The termination of sales staff, efforts to recruit new sales professionals and the training of our sales force may distract us from generating or impair our ability to generate new revenues. As a result, our operating results may suffer. As we reorganize our sales force, we may experience higher turnover and the loss of more key salespersons than anticipated. Our sales strategy also calls for enhancing our indirect and automated web sales capabilities. This component of our strategy depends on successfully identifying and recruiting capable reseller candidates and delivering back-office solutions enabling them to maximize sales opportunities, as well as address customer support issues. For web-based sales, our strategy depends on building or acquiring end-to-end automated customer acquisition, order entry, provisioning and billing solutions. If we fail to successfully implement and execute any one or more of these components, our sales strategy may not succeed and our operating results will be negatively impacted.

We may not be able to keep up with rapid technological and other competitive changes affecting our industry.

        The markets in which we compete are characterized by rapid consolidation of competitors, changing technology, evolving industry standards, frequent enhancements to existing services and products, the introduction of new services and products and changing customer demands. These market characteristics are heightened by the emerging nature of the Internet and the trend for companies from many industries to offer Internet-based products and services. In addition, the widespread adoption of new Internet, networking, or telecommunications technologies or other technological changes could require us to incur substantial expenditures to modify or adapt our services or infrastructure. Our future success will depend on our ability to respond to changing technologies on a timely and cost-effective basis. Our operating results may be adversely affected if we cannot successfully develop, introduce, or market new services and products. In addition, if we fail to anticipate or respond

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adequately to changes in technology and customer preferences, or any significant delays in other product development efforts, such failure could have a material adverse effect on our business, financial condition and operating results.

RESTRUCTURING OF OUR ORGANIZATION, CONSOLIDATION OF EXISTING FUNCTIONS AND ADDITIONAL EMPLOYEE RESPONSIBILITIES MAY RESULT IN OUR INABILITY TO RETAIN OR RECRUIT KEY PERSONNEL

        In 2004, we plan to continue our efforts to reduce costs. These efforts include, but are not limited to, continuing initiatives to reduce customer churn through standardization of churn measurements, programmed communications and new customer retention sales incentives, replacing non-performing sales professionals and refocusing our sales force, and refining our web sales tool to automate and standardize orders, pricing and other system data related to access services. Many of these measures will consolidate existing functions and require employees to take on additional responsibilities. In addition, these measures may result in greater organizational uncertainty, low morale and a higher than anticipated employee turnover. Over the past two years, we have experienced significant management turnover. Our success also depends on attracting and retaining key management, many of whom may be difficult to replace. If we are unable to find suitable replacements for any one or more of these key employees, our ability to implement these measures and the success of our Strategic Plan may be negatively impacted. There can be no assurances that our operations will not suffer from unanticipated employee departures or from our inability to quickly engage qualified replacements.

OUR ACQUISITION STRATEGY MAY NOT ACHIEVE THE FAVORABLE RESULTS WE ARE SEEKING

        With significant improvements achieved in operations, we now seek to enhance our product portfolio and sales efforts by exploring the opportunity for acquisitions. A proactive acquisition program brings with it certain risks, including the following:

•

While we have established a small team of internal resources, we expect that broader participation from management will be required in the course of the due diligence, negotiation and post-closing activities as suitable targets are identified. Senior management may be distracted from normal executive responsibilities and implementation of the Strategic Plan. This may slow the pace of operational improvements and other, revenue generating, activities;



•

We may face significant integration issues in connection with acquisitions. This may distract senior management, create unanticipated costs and may cause the quality of our services to suffer, resulting in the loss of customers and revenue; and



•

We will seek to build legal protections into acquisition agreements. However, we may purchase undisclosed liabilities or experience lower than projected operating results in newly acquired companies, which could adversely affect our future operating results.

WE MAY NOT REALIZE THE ANTICIPATED FINANCIAL OR COMMERCIAL BENEFITS FROM THE ACQUISITION OF THE AMEN GROUP

        In January of 2004, we acquired a group of European-based web-hosting companies with operations in France, Italy, Spain and the United Kingdom, the "Amen Group." We may experience difficulties associated with integrating the Amen Group's businesses and systems that would result in greater than anticipated costs. There may be delays in transitioning internal and industry knowledge from the Amen Group to our personnel, which could distract management, increase costs and restrict revenue opportunities. The Amen Group business model may be subject to unforeseen price reductions in response to competition, which could reduce revenue without a corresponding reduction in cost.

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WE MAY NOT REALIZE THE ANTICIPATED FINANCIAL AND COMMERCIAL BENEFITS OF OUTSOURCING SOME OF OUR FINANCIAL AND ADMINISTRATIVE FUNCTIONS AND AS A RESULT MAY SUFFER MATERIAL LOSS

        In the past, we have experienced operational difficulties with efforts to upgrade or deploy new back office systems. Our decision to outsource certain network, IT, finance and administration systems to a shared service center may result in unanticipated difficulties such as loss or impairment of data integrity.

        Our outsourcing providers provide their own personnel to manage the outsourced functions. This results in a reduction of our own organizational competencies and may create problems in coordinating these functions with the continued implementation of our Strategic Plan. We may also experience delays in response or failure to maintain software and system upgrades. Outsourcing providers may not meet our requirements and their personnel may fail to provide quality service. As a consequence, our overall costs may rise. If we experience difficulties with a provider, we may wish to bring the outsourced services back in-house or terminate our relationship with the provider and procure a different provider. As the number of providers is limited, it may be difficult or even impossible to transfer to another provider. Further, because our outsourcing plans call for a significant reduction in staff we may lack the ability in the short term to return the services in-house. Contractual difficulties may also impede our ability to terminate the outsourcing relationship. This may lead to costly and distracting disputes and litigation.

FAILURE TO ATTRACT AND RETAIN SENIOR MANAGEMENT AND CERTAIN OTHER KEY EMPLOYEES MAY ADVERSELY AFFECT OUR ABILITY TO CONDUCT OUR BUSINESS

        Our future success depends on the continued service and performance of our senior management and certain other key employees. In the past, we have been dependent on certain specialized systems personnel to operate, maintain and upgrade our systems. In an effort to reduce our costs, we have outsourced many of these responsibilities to outside personnel, who may be less experienced and less knowledgeable than our former employees. We reduced the number of our employees from 575 at December 31, 2002, excluding the Italian operation, to 411at December 31, 2003 and expect to make further reductions in the future. These reductions and our reliance on outside personnel may impair our ability to attract and retain senior management and certain other key employees. Our inability to attract and retain senior management and certain other key employees could adversely affect our business, financial condition and operating results.

IF DEMAND FOR OUR PRODUCTS AND SERVICES DOES NOT INCREASE AS WE EXPECT, OUR ABILITY TO INCREASE OUR REVENUES WILL BE NEGATIVELY AFFECTED

        If the demand for our current and planned Internet services fails to develop, or develops more slowly than we anticipate, we may not be able to increase our revenues at the rate we have projected. Obstacles to demand for our products and services include:

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public concern about the economic viability of Internet services providers and the Internet industry in general;



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failure of regulators to take adequate steps to prevent incumbent and larger telecommunications providers from monopolizing the market;



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lack of developed infrastructure to support Internet applications and access to broadband services; and



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limited access to Internet services.

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        In particular, we depend on increasing demand for Internet services by SMEs. Demand by SMEs is dependent on the extent to which they and their customers and suppliers adopt the Internet as a means of doing business, and they utilize Internet technologies to deal with internal business processes. Demand will also depend on whether there is a continuing economic downturn, which may result in reduced spending by SMEs on Internet products and services. Furthermore, as competition reduces prices for Internet access in many of our markets, we are increasingly dependent on our ability to sell higher profit margin services such as security services, web-hosting, and ecommerce solutions. Finally, an increasing number of Internet services providers are going out of business in our key markets. This results in customer reluctance to rely on businesses such as ours for critical business functions.

COMPETITION FOR CUSTOMERS IN OUR MARKETS MAY CAUSE US TO REDUCE OUR PRICES OR INCREASE SPENDING, WHICH MAY NEGATIVELY AFFECT OUR REVENUES AND
OPERATING RESULTS

        Some of our competitors have greater market presence, brand recognition and financial, technical and personnel resources than we have. Although our competitors and their resources vary depending on the market and the country, these competitors may include local and regional Internet services providers, telecommunications companies and cable companies. Some of our competitors, in particular the telecommunications companies, have large existing networks and customer bases. Increasing competition may create pressure to reduce our prices while at the same time improving our products and services. There is no assurance that the price and performance of our services and products will be superior relative to the services and products of our competitors. As a result, we may experience a loss of competitive position that could result in lower prices, fewer customer orders, reduced revenues, reduced profit margins and loss of market share.

OUR BRAND NAMES AND TRADEMARKS ARE DIFFICULT AND COSTLY TO PROTECT AND AS A RESULT WE MAY BECOME INVOLVED IN TRADEMARK INFRINGEMENT LITIGATION

        We are aware of other companies using or claiming to have rights to use trademarks that are similar to our marks and variations of those marks, including the VIA NET.WORKS mark. The protective steps we have taken may be inadequate to deter misappropriation of our proprietary information. We may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. The users of these or similar marks may be found to have senior rights if they were ever to assert a claim against us for trademark infringement. If an infringement suit were instituted against us, even if groundless, it could result in substantial litigation expenses. Failure to protect our intellectual property adequately could harm our brand and affect our ability to compete effectively. Further, defending our intellectual property rights could result in the expenditure of significant financial and managerial resources, which could adversely affect our business, financial condition and operating results.

        We are currently engaged in litigation with a third party telecommunications provider in Spain, who opposed the Spanish Trademarks and Patents Official Agency's granting the Spanish Amen Group company the trademark "Amen." The Spanish Trademarks and Patents Official Agency granted and authorized the Spanish Amen Group company the use of the trademark "Amen" within Spain. Nevertheless, the third-party telecommunications provider has appealed this decision. If this appeal were to be successful, we could be forced to cease using the Amen mark and may be required to pay damages, although we believe that any such damages would be immaterial.

FLUCTUATIONS IN THE EXCHANGE RATE BETWEEN THE U.S. DOLLAR AND THE VARIOUS CURRENCIES IN WHICH WE CONDUCT BUSINESS MAY AFFECT OUR OPERATING RESULTS

        We record the revenues and expenses of our local operations in their local currencies and translate these amounts into U.S. dollars for purposes of reporting our consolidated results. As a result,

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fluctuations in foreign currency exchange rates may adversely affect our revenues, expenses and results of operations as well as the value of our assets and liabilities. Fluctuations in foreign currency exchange rates may also adversely affect the comparability of period-to-period results. For example, if the average value of the Euro decreases in relation to the U.S dollar during a quarterly period as compared to the prior period, each Euro will convert to fewer U.S dollars during that quarterly period than the prior period and we will report lower revenue growth than what would have been calculated in local currencies for that period. In addition, we hold foreign currency balances that will create foreign exchange gains or losses, depending upon the relative values of the foreign currency at the beginning and end of the reporting period, affecting our net income and earnings per share. In projecting future operating results, we make certain assumptions about the fluctuation of the home currencies of our operations. If these assumptions turn out to be materially inaccurate, our actual operating results may be materially different from our projections.

REGULATORY AND ECONOMIC CONDITIONS IN THE COUNTRIES WHERE WE OPERATE ARE UNCERTAIN, AND MAY DECREASE DEMAND FOR OUR SERVICES, INCREASE OUR COSTS, OR OTHERWISE REDUCE OUR BUSINESS PROSPECTS

        Our operating companies are located in countries with rapidly changing regulatory and economic conditions that may affect the Internet services industry. New laws or regulations pertaining to the Internet or telecommunications, or the application or interpretation of existing laws and regulations, could decrease demand for our services, increase our costs, or otherwise reduce our profitability or business prospects. Examples of the types of laws and regulations that could adversely affect us include laws that:

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impose taxes on transactions made over the Internet;



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impose telecommunications access fees on Internet services providers or other increases in access, transit or general telecommunications costs



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prohibit the transmission of various types of information and content over the Internet;



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impose requirements that Internet services providers protect users' privacy, monitor content, or permit government interception of data traffic; and



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increase the likelihood or scope of competition from telecommunications or cable companies.

        For example, a number of European countries have enacted legislation that requires Internet services providers to establish technical means to permit national authorities to intercept data traffic of identified customers. The application of these laws to Internet services providers