Subject: Offer To Exchange Options

EXHIBIT (a)(3)

FROM: PRISCILLA LU
SUBJECT: OFFER TO EXCHANGE OPTIONS
DATE: July 12, 2001

IMPORTANT NEWS Please read immediately! This offer expires August 8, 2001!

I am pleased to announce that the Board of Directors has approved the offer to all eligible employees who hold stock options outstanding under the interWAVE Communications International Ltd. 1999 Option Plan (the "1999 Option Plan"), and the interWAVE Communications International Ltd. 2001 Supplemental Stock Plan (the "2001 Stock Plan"), granted after August 1, 1999, the opportunity to exchange outstanding unexercised stock options ("Old Options") for the promise to grant new options ("New Option(s)"), to be granted in the future. This offer expires at 9:00 p.m. Pacific Daylight Time on August 8, 2001.

interWAVE Communications International, Ltd. ("interWAVE" or "we") is making this offer upon the terms and conditions described in the enclosed Offer to Exchange, this memorandum, the Election Form and the Notice to Change Election From Accept to Reject. Please read these documents carefully before you make any decisions regarding the offer. We also strongly encourage you to consult your tax and financial advisors before making any decision about the offer.

If you elect to participate in this exchange, your Old Options will be cancelled and you will receive a promise to grant a New Option ("Promise to Grant New Option"). The New Option will be for the same number of shares (split-adjusted) as your Old Option, less any exercised shares. You must make your election by completing and returning the enclosed Election Form during the period beginning on July 12, 2001 and ending at 9:00 p.m., Pacific Daylight Time, August 8, 2001, unless extended by us (the "Expiration Date"). If you turn in the Election Form after this date, it will not be accepted, or if you fail to turn it in, you will be deemed to have elected not to accept the offer. interWAVE will e-mail a confirmation of receipt within 48 hours of receiving your Election Form (this receipt does not constitute acceptance of the options for exchange).

The main features of the offer include the following: ? You are eligible to participate in this exchange if you are an employee of interWAVE or one of our sub ...