U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


[ X ]   QUARTERLY  REPORT UNDER SECTION 12 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999.

[   ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ________.

                          Commission file number 21143

                        CONVERGENCE COMMUNICATIONS, INC.
                        --------------------------------
        (Exact name of small business issuer as specified in its charter)


                Nevada                                           87-0545056
    -------------------------------                          -----------------
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                        Identification No.)

    102 West 500 South, Suite 320
         Salt Lake City, Utah                                      84101
    ------------------------------                                --------
(Address of Principal Executive Offices)                        (Zip Code)

                                 (801) 328-5618
                                 --------------
                           (Issuer's telephone number)

                                 Not Applicable
                                ----------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes  X    No
                                                              ---     ----

As of October 31, 1999,  11,738,277  shares of  registrant's  Common Stock,  par
value $.001 per share,  101,379  shares of the  registrant's  Series B Preferred
Stock,  par value  $.001 per share,  and  6,395,577  shares of the  registrant's
Series C Preferred Stock, par value $.001 per share, were outstanding.



<PAGE>


PART I:  FINANCIAL INFORMATION
         ---------------------


ITEM 1.   FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB

         The  accompanying   unaudited   consolidated  financial  statements  of
Convergence   Communications,   Inc.  (the  "Company")  have  been  prepared  in
accordance with generally accepted  accounting  principles for interim financial
reporting  and  pursuant  to the rules and  regulations  of the  Securities  and
Exchange  Commission.  They do not include all of the  information and footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. These financial statements should be read in conjunction with Note 1
herein and the consolidated  financial  statements and notes thereto included in
the Company's annual report on Form 10-KSB for the year ended December 31, 1998,
which  are  incorporated  herein  by  reference.   The  accompanying   financial
statements have not been examined by independent  accountants in accordance with
generally  accepted auditing  standards,  but in the opinion of management,  all
adjustments  (consisting  of normal  recurring  entries)  necessary for the fair
presentation  of the Company's  results of  operations,  financial  position and
changes  therein for the periods  presented have been  included.  The results of
operations  for the three and nine months  ended  September  30, 1999 may not be
indicative of the results that may be expected for the year ending  December 31,
1999.



                      [THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
--------------------------------------------------------------------------------------------------------------
                                                                             September 30,       December 31,
                                                                                 1999                1998
                                                                           ---------------      --------------
<S>                                                                        <C>                  <C>
ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                                              $      543,510      $    4,315,281
    Accounts receivable - net                                                     624,161             432,868
    Note proceeds due from affiliate                                                    -           5,000,000
    Inventory                                                                     380,973             205,408
    Prepaid license fees                                                                -              57,359
    Other current assets                                                          275,264             115,801
                                                                           ---------------      --------------
                   Total current assets                                         1,823,908          10,126,717

INVESTMENT IN CENTURION                                                           845,955             845,955
PROPERTY AND EQUIPMENT - net                                                   18,351,638           8,524,521
INTANGIBLE ASSETS - net                                                        19,582,353          22,650,040
OTHER ASSETS                                                                      969,087             325,811
                                                                           ---------------      --------------
TOTAL ASSETS                                                               $   41,572,941       $  42,473,044
                                                                           ===============      ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable and accrued liabilities                               $    5,995,340       $   3,603,165
    Notes payable                                                               4,861,599           8,676,722
    Notes payable (payable to related parties)                                  7,165,925                   -
    Foreign bank lines of credit outstanding                                            -              27,281
    Accrued consulting fees (payable to related parties)                          522,240             340,629
    Due to affiliates                                                             835,138           1,074,855
    Unearned revenue                                                              386,568             373,486
                                                                           ---------------      --------------
                   Total current liabilities                                   19,766,810          14,096,138

LONG-TERM LIABILITIES:
    Long-term debt (payable to related parties)                                 6,069,249           1,224,504
    Subordinated exchangeable promissory notes (payable to related parties)    10,000,000          10,000,000
    Notes payable                                                               3,497,500           3,987,268
    Accrued foreign severance                                                     224,286             135,091
                                                                           ---------------      --------------
                   Total long-term liabilities                                 19,791,035          15,346,863

MINORITY INTEREST IN SUBSIDIARIES                                               1,288,180           2,345,517
                                                                           ---------------      --------------
                   Total liabilities                                           40,846,025          31,788,518

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY* :
    Series "B" Preferred stock; $0.001 par value; 750,000 shares authorized:
       101,374 shares issued and outstanding in 1999 and 1998.                        101                 101
    Common stock; $0.001 par value; 100,000,000 shares authorized:
       11,738,277 shares issued and outstanding in 1999 and 1998.                  11,738              11,738
    Additional paid-in capital                                                 27,349,360          26,179,739
    Accumulated deficit                                                       (26,605,221)        (15,486,537)
    Accumulated other comprehensive loss                                          (29,062)            (20,515)
                                                                           ---------------      --------------
                   Total stockholders' equity                                     726,916          10,684,526
                                                                           ---------------      --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 $   41,572,941       $  42,473,044
                                                                           ===============      ==============

*  Retroactively restated for the 1 to 3.5 reverse stock split approved by the Company's shareholders on August 17, 1998.

See notes to consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999, 1998 AND 1997
----------------------------------------------------------------------------------------------------------------------

                                                                    Nine Months       Nine Months       Nine Months
                                                                       Ended             Ended             Ended
                                                                     September 30,     September 30,   September 30,
                                                                        1999             1998               1997
                                                                   ---------------   --------------    ---------------
<S>                                                                <C>               <C>               <C>
NET REVENUES                                                       $    6,455,538    $   1,249,446     $       38,648
COST OF SERVICE                                                         2,371,382        1,073,862             24,106
                                                                   ---------------   --------------    ---------------
GROSS MARGIN                                                            4,084,156          175,584             14,542
OPERATING EXPENSES:
     Professional fees                                                  2,028,151        1,380,187            229,571
     Depreciation and amortization                                      3,661,625        1,673,461            235,903
     Leased license expense                                                66,796          123,447             61,370
     General and administrative                                         6,606,920        2,477,689            490,145
     Stock-based compensation expense                                   1,015,101                -                  -
                                                                   ---------------   --------------    ---------------
                     Total                                             13,378,593        5,654,784          1,016,989
                                                                   ---------------   --------------    ---------------
OPERATING LOSS                                                         (9,294,437)      (5,479,200)        (1,002,447)
OTHER INCOME AND (EXPENSES):
     Interest income                                                       82,458          251,321             34,839
     Interest expense                                                  (3,029,268)        (333,926)          (116,861)
                                                                   ---------------   --------------    ---------------
                     Total                                             (2,946,810)         (82,605)           (82,022)
                                                                   ---------------   --------------    ---------------
NET LOSS BEFORE INCOME TAX AND MINORITY INTEREST                      (12,241,247)      (5,561,805)        (1,084,469)
INCOME TAX                                                                134,774                -                  -
                                                                   ---------------   --------------    ---------------
NET LOSS BEFORE MINORITY INTEREST                                     (12,376,021)      (5,561,805)        (1,084,469)
MINORITY INTEREST IN LOSS OF SUBSIDIARIES                               1,257,337          259,063              8,665
                                                                   ---------------   --------------    ---------------
NET LOSS                                                           $  (11,118,684)   $  (5,302,742)    $   (1,075,804)
                                                                   ===============   ==============    ===============

Net loss per basic common share*                                   $        (0.92)   $       (0.47)    $        (0.15)
                                                                   ===============   ==============    ===============
Net loss per diluted common share*                                 $        (0.92)   $       (0.47)    $        (0.15)
                                                                   ===============   ==============    ===============

Weighted-average common shares*
     Basic                                                             12,022,728       11,356,162          7,204,602
                                                                   ===============   ==============    ===============
     Diluted                                                           14,108,533       12,191,132         10,589,750
                                                                   ===============   ==============    ===============


* Retroactively restated for the 1 to 3.5 reverse stock split approved by the Company's shareholders on August 17, 1998.

See notes to consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999, 1998 AND 1997
----------------------------------------------------------------------------------------------------------------------
                                                                    Three Months       Three Months     Three Months
                                                                        Ended             Ended            Ended
                                                                     September 30,     September 30,    September 30,
                                                                        1999               1998              1997
                                                                   ---------------   --------------    ---------------
<S>                                                                <C>               <C>               <C>
NET REVENUES                                                       $    2,310,963    $   1,204,535     $       38,648
COST OF SERVICE                                                           931,577          876,309             24,106
                                                                   ---------------   --------------    ---------------
GROSS MARGIN                                                            1,379,386          328,226             14,542
OPERATING EXPENSES:
     Professional fees                                                    715,548          669,912            138,919
     Depreciation and amortization                                      1,240,640          807,906            187,353
     Leased license expense                                                21,967           40,410             28,884
     General and administrative                                         2,172,790        1,243,215            306,826
     Stock-based compensation expense                                     381,092                -                  -
                                                                   ---------------   --------------    ---------------
                     Total                                              4,532,037        2,761,443            661,982
                                                                   ---------------   --------------    ---------------
OPERATING LOSS                                                         (3,152,651)      (2,433,217)          (647,440)
OTHER INCOME AND (EXPENSES):
     Interest income                                                        3,329           57,166             34,839
     Interest expense                                                  (1,508,433)        (276,797)           (47,348)
                                                                   ---------------   --------------    ---------------
                     Total                                             (1,505,104)        (219,631)           (12,509)
                                                                   ---------------   --------------    ---------------
NET LOSS BEFORE INCOME TAX AND MINORITY INTEREST                       (4,657,755)      (2,652,848)          (659,949)
INCOME TAX                                                                100,000                -                  -
                                                                   ---------------   --------------    ---------------
NET LOSS BEFORE MINORITY INTEREST                                      (4,757,755)      (2,652,848)          (659,949)
MINORITY INTEREST IN LOSS OF SUBSIDIARIES                                 503,381          250,987              3,237
                                                                   ---------------   --------------    ---------------
NET LOSS                                                           $   (4,254,374)   $  (2,401,861)    $     (656,712)
                                                                   ===============   ==============    ===============

Net loss per basic common share*                                   $        (0.35)   $       (0.21)    $        (0.08)
                                                                   ===============   ==============    ===============
Net loss per diluted common share*                                 $        (0.35)   $       (0.21)    $        (0.08)
                                                                   ===============   ==============    ===============

Weighted-average common shares*
     Basic                                                             12,022,728       11,693,557          8,691,374
                                                                   ===============   ==============    ===============
     Diluted                                                           14,120,621       12,528,527          8,691,924
                                                                   ===============   ==============    ===============


* Retroactively restated for the 1 to 3.5 reverse stock split approved by the Company's shareholders on August 17, 1998.

See notes to consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
------------------------------------------------------------------------------------------------------------------------------------
                                                                        Series "A" Preferred Stock     Series "B" Preferred Stock
                                                                       -----------------------------   -----------------------------
                                                           Total          Shares *        Amount          Shares *        Amount
                                                       -------------   -------------   -------------   -------------   -------------
<S>                                                    <C>             <C>             <C>             <C>             <C>
BALANCE, DECEMBER 31, 1996                             $   (661,018)

Reverse acquisition of TIC:
   Exchange of TIC common shares for CCI
   Series "A" Preferred shares                               14,571         685,063     $       685

   Addition of CCI common stock                              86,990

Exchange of CVV common stock for CCI common
   shares and Series "B" Preferred shares                 7,096,500                                         101,374    $        101

Issuance of CCI common stock and Series
   "A" Preferred shares for cash                         10,000,000         150,380             150

Issuance of warrants below fair value                       657,143

Issuance of CCI common stock and Series
   "A" Preferred shares for cash                            300,000           4,083               4

Issuance of options for common shares and
   Series "A" Preferred shares below fair value           1,479,074

Net loss for the year ended December 31, 1997            (4,594,294)
                                                       -------------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 1997                               14,378,966         839,526             839         101,374             101

Comprehensive loss:
   Net loss for the year ended December 31, 1998        (10,230,796)
   Other comprehensive loss consisting of
      foreign currency translation adjustment               (20,515)
                                                       -------------   -------------   -------------   -------------   -------------
      Total comprehensive loss                          (10,251,311)              -               -               -               -

Issuance of CCI common stock and Series
   "A" Preferred shares for cash                          4,956,626          91,180              91

Conversion of Series "A" Preferred shares into
   common shares                                                  -        (930,706)          (930)

Exchange of Telecom common stock for CCI
   common shares                                            600,000

Issuance of options for common shares
   below fair value                                       1,000,245
                                                       -------------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 1998                               10,684,526               -               -         101,374             101

Comprehensive loss:
   Net loss for the nine months ended
      September 30, 1999                                (11,118,684)
   Other comprehensive loss consisting of
      foreign currency translation adjustment                (8,547)
                                                       -------------   -------------   -------------   -------------   -------------
      Total comprehensive loss                          (11,127,231)              -               -               -               -

Stock-based compensation expense activity                 1,015,101

Interest expense from issuance of warrants                  154,520
                                                       -------------   -------------   -------------   -------------   -------------
BALANCE, SEPTEMBER 30, 1999                            $     726,916              -    $          -         101,374    $        101
                                                       =============   =============   =============   =============   =============

*  Retroactively restated for the 1 to 3.5 reverse stock split approved by the Company's shareholders on August 17, 1998.

See notes to consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

                                   CONTINUED
------------------------------------------------------------------------------------------------------------------------------------
                                                              Common Stock              Additional                      Accumulated
                                                       ----------------------------      Paid-in       Accumulated     Other Compre-
                                                         Shares *         Amount         Capital         Deficit        hensive Loss
                                                       -------------   -------------   -------------   -------------   -------------
<S>                                                    <C>             <C>             <C>             <C>             <C>
BALANCE, DECEMBER 31, 1996                                  428,571    $        429                    $   (661,447)

Reverse acquisition of TIC:
   Exchange of TIC common shares for CCI
   Series "A" Preferred shares                             (428,571)           (429)   $     14,315

   Addition of CCI common stock                           1,041,494           1,041          85,949

Exchange of CVV common stock for CCI common
   shares and Series "B" Preferred shares                   450,563             451       7,095,948

Issuance of CCI common stock and Series
   "A" Preferred shares for cash                            228,658             229       9,999,621

Issuance of warrants below fair value                                                       657,143

Issuance of CCI common stock and Series
   "A" Preferred shares for cash                             24,284              24         299,972

Issuance of options for common shares and
   Series "A" Preferred shares below fair value                                           1,479,074

Net loss for the year ended December 31, 1997                                                            (4,594,294)
                                                       -------------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 1997                                1,744,999           1,745      19,632,022      (5,255,741)

Comprehensive loss:
   Net loss for the year ended December 31, 1998                                                        (10,230,796)
   Other comprehensive loss consisting of
      foreign currency translation adjustment                                                                          $    (20,515)
                                                       -------------   -------------   -------------   -------------   -------------
      Total comprehensive loss                                    -               -               -     (10,230,796)        (20,515)

Issuance of CCI common stock and Series
   "A" Preferred shares for cash                            600,504             600       4,955,935

Conversion of Series "A" Preferred shares into
   common shares                                          9,307,060           9,307          (8,377)

Exchange of Telecom common stock for CCI
   common shares                                             85,714              86         599,914

Issuance of options for common shares
   below fair value                                                                       1,000,245
                                                       -------------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 1998                               11,738,277          11,738      26,179,739     (15,486,537)        (20,515)

Comprehensive loss:
   Net loss for the nine months ended September 30, 1999                                                (11,118,684)
   Other comprehensive loss consisting of
      foreign currency translation adjustment                                                                                (8,547)
                                                       -------------   -------------   -------------   -------------   -------------
      Total comprehensive loss                                    -               -               -     (11,118,684)         (8,547)

Stock-based compensation expense activity                                                 1,015,101

Interest expense from issuance of warrants                                                  154,520
                                                       -------------   -------------   -------------   -------------   -------------
BALANCE, SEPTEMBER 30, 1999                              11,738,277    $     11,738    $ 27,349,360    $(26,605,221)   $    (29,062)
                                                       =============   =============   =============   =============   =============

*  Retroactively restated for the 1 to 3.5 reverse stock split approved by the Company's shareholders on August 17, 1998.

See notes to consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999, 1998 AND 1997
---------------------------------------------------------------------------------------------------------------

                                                                  Nine Months      Nine Months    Nine Months
                                                                     Ended            Ended          Ended
                                                                  September 30,   September 30,   September 30,
                                                                     1999             1998            1997
                                                                 -------------    ------------   --------------
<S>                                                              <C>              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                     $(11,118,684)    $(5,302,742)   $  (1,075,804)
    Adjustments to reconcile net loss to net cash used in
       development activities:
           Depreciation and amortization                            3,661,625       1,673,461          235,903
           Minority interest in loss of subsidiaries               (1,057,337)       (259,063)          (8,665)
           Stock-based compensation expense                         1,015,101               -                -
           Amortization of discount on notes payable                  588,525         244,508                -
           Imputed interest expense for warrants                      154,520               -                -
           Change in assets and liabilities:
              Accounts receivable - net                              (192,668)         27,435                -
              Due from affiliates                                   5,000,000          76,523          (40,127)
              Inventory                                              (176,419)         18,064                -
              Prepaid license fees                                     57,359         (41,759)         (44,567)
              Other current assets                                   (159,463)         11,688                -
              Other assets                                           (643,278)       (289,420)         585,396
              Accounts payable and accrued liabilities              2,484,256         710,822         (338,186)
              Accrued consulting fees                                 181,611          (7,407)               -
              Due to affiliates                                      (240,874)        146,913          100,000
              Unearned revenue                                         13,082               -                -
              Accrued foreign severance                                89,195               -                -
                                                                 -------------    ------------   --------------
                   Net cash provided by (used in) operating
                      activities                                     (343,449)     (2,990,977)        (586,050)
                                                                 -------------    ------------   --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Investment in Centurion                                                 -               -       (1,648,455)
    Reverse acquisition of WCCI                                             -               -           56,582
    Acquisition of CVV (net of cash acquired)                               -               -         (200,000)
    Acquisition of interests in Chispa Dos (net of cash acquired)           -      (2,341,074)               -
    Acquisition of IAN (net of cash acquired)                               -        (961,412)               -
    Purchases of property and equipment                           (10,940,574)     (1,605,959)               -
                                                                 -------------    ------------   --------------
                   Net cash used in investing activities          (10,940,574)     (4,908,445)      (1,791,873)
                                                                 -------------    ------------   --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common stock                                  -       3,161,661        1,800,686
    Proceeds from issuance of Series A preferred stock                      -       1,794,965        8,199,314
    Increase in minority interest from issuance of subsidiary
        common stock                                                  200,000               -                -
    Proceeds from related party note                               11,935,422          60,510           58,960
    Payments on related parties borrowings                            (52,500)              -         (175,319)
    Payments on foreign bank line of credit                           (27,281)              -                -
    Proceeds from promissory notes                                  3,746,475               -        2,985,600
    Payments on promissory notes                                   (8,284,799)              -       (2,253,217)
                                                                 -------------    ------------   --------------
                   Net cash provided by financing activities        7,517,317       5,017,136       10,616,024
                                                                 -------------    ------------   --------------

EFFECT OF EXCHANGE RATES ON CASH                                       (5,065)           (579)               -
                                                                 -------------    ------------   --------------
NET INCREASE (DECREASE) IN CASH                                    (3,771,771)     (2,882,865)       8,238,101
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                    4,315,281       6,171,515            8,902
                                                                 -------------    ------------   --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                       $    543,510     $ 3,288,650    $   8,247,003
                                                                 =============    ============   ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the period for interest                     $    276,236     $         -    $           -
                                                                 =============    ============   ==============
    Cash paid during the period for income tax                   $     86,133     $         -    $           -
                                                                 =============    ============   ==============

See notes to consolidated financial statements.
</TABLE>


<PAGE>


CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 1999
(Unaudited)


1.       Basis of Presentation
         ---------------------
         Convergence Communications,  Inc. (the "Company") is a provider of data
and video telecommunications  service to business and residential customers over
metropolitan area networks ("MAN") in Latin American.

         The  consolidated  financial  statements  of the  Company  include  the
accounts  of the  Company's  subsidiaries,  including  (i) a 44.03%  interest in
Chispa Dos, Inc.  ("Chispa")  which is a holding company for three  subsidiaries
that provide multi-channel  television and Internet services in El Salvador (the
"El Salvador Entities");  (ii) a 100% interest in Interamerican  Telecom,  Inc.,
the parent company of Interamerican Net de Venezuela, S.A. ("Inter@net"),  which
is providing Internet services in Venezuela;  (iii) a 78.14% interest in Caracas
Viva Vision TV, S.A. ("CVV"), a local multi-point  distribution service ("LMDS")
wireless  communications  system in Venezuela,  (iv) a 100% interest in Wireless
Communications  Holding - Guatemala,  S.A.  ("WCH -  Guatemala"),  a corporation
which holds LMDS license  rights in  Guatemala,  (v) a 100% interest in Sociedad
Television  Interactiva,  S.A. ("TISA"), a corporation that intends to operate a
wireless  telecommunications  system  in  Costa  Rica,  (vi) a 90%  interest  in
Wireless  Communications  Panama,  S.A. ("WC - Panama"),  which is acting as the
operating  company  for an  LMDS  system  in  Panama,  (vii) a 95%  interest  in
Convergence Communications de Mexico, S.A. ("CCI Mexico"), which will act as the
operating company for a telecommunications system in Mexico and which owns fiber
optic  network  capacity  in  Mexico  City,  (viii)  an 80%  interest  in WCI de
Argentina   ("WCIA"),   which   holds  a  value   added   license   to   provide
telecommunications  services  in  Argentina,  (ix) a 94.9%  interest in Auckland
Independent  Television Services,  Ltd. ("AITS"),  which holds license and lease
rights in two multi-channel, multi-point distribution service ("MMDS") channels,
and (x) a 100% interest in Transworld  Wireless  Television,  Inc.  ("TWTV"),  a
corporation that holds four MMDS channels and a leased transmitter in Park City,
Utah.  All  significant   intercompany   accounts  and  transactions  have  been
eliminated in  consolidation.  All capitalized  terms not defined in this report
have the meanings  given them in the Company's  annual report on Form 10-KSB for
the year ended December 31, 1998.

2.       Net loss per common share and common share equivalent
         -----------------------------------------------------
         Net loss per common share and common share  equivalents  is computed by
both the basic method,  which uses the weighted  average number of common shares
and the common stock  equivalents on a voting basis for the Series "B" preferred
stock  outstanding,  and the diluted method,  which includes the dilutive common
shares from stock options and warrants,  as calculated  using the treasury stock
method.

3.       Use of Estimates in Preparing Financial Statements
         --------------------------------------------------
         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

4.       Debt Obligations
         ----------------
         December  1998  Convertible  Notes  - In  December  1998,  the  Company
borrowed $5 million from each of FondElec  Essential  Services  Growth Fund L.P.
("FondElec") and Internexus,  S.A.  ("Internexus")  (see the Company's report on
Form  10-KSB  for  the  year  ended  December  31,  1998  for  a  more  detailed
description).  In  October  1999,  (i)  FondElec  exchanged  the $5  million  of
principal  represented  by its note into 666,666  shares of the Company's  newly
designated  Series C Convertible  Preferred Stock (the "Series C Stock") and was
paid $419,178 of accrued  interest in cash,  and (ii)  Internexus  exchanged the
principal and accrued interest on its note,  totaling  $5,419,178,  into 722,556
shares of Series C Stock.  Under the terms of the December  notes,  FondElec and
Internexus  each received  warrants to acquire  227,311  shares of the Company's
common  stock.   The  warrants  are  accompanied  by  demand  and   "piggy-back"
registration  rights.  See Items 2 and 5 below and the Company's  report on Form
8-K  dated   November  2,  1999  for  a  more  detailed   description  of  these
transactions.

         FondElec and Internexus are shareholders of the Company,  and, pursuant
to agreements among the Company and certain of its shareholders,  a designee for
each of  FondElec  and  Internexus  currently  sits on the  Company's  Board  of
Directors.

         El Salvador Acquisition Note Refinancing - In May 1999, Chispa obtained
a  long-term  loan from a third party  lender  totaling  $4,335,000,  of which a
portion  ($3,607,134)  was used to pay the second  note  payable  payment to the
sellers of the El Salvador Entities. The loan is due in May 2004, bears interest
at LIBOR plus 4.75% quarterly and has mandatory annual payments.  In conjunction
with the third party loan, a loan that  FondElec made to Chispa in the amount of
$4,769,497 was refinanced  under the same terms as the third party loan,  except
that the FondElec loan was subordinated to the third party lender's position and
the due date for the  FondElec  loan was  changed to  January  1, 2000,  with an
annual renewal until the third party lender is repaid (see the Company's  report
on Form  10-QSB  for  the  quarter  ended  June  30,  1999  for a more  detailed
description of these loan transactions).

         Under the terms of the loans,  the Company is required to refrain  from
engaging in certain types of business activities (including sales of its assets,
mergers or other fundamental corporate  transactions) without the consent of the
lenders.  The loans are  secured by the assets and capital  stock of  Cablevisa,
S.A.  de C.V.  and  Multicable,  S.A.  de C.  V.,  which  are the two  companies
providing telecommunications service to subscribers in El Salvador.

         MetroNet  Transaction  Loan - The Company  financed the purchase of the
MetroNet  acquired  network  capacity  agreement  through a $2,615,925 loan from
FondElec and a $2,550,000 loan from Internexus (see the Company's report on Form
10-QSB for the quarter ended June 30, 1999 for a more detailed description).  In
October  1999,  the  Company  repaid the amounts  due under the  FondElec  loan,
together with accrued interest totaling $489,698,  and Internexus  exchanged the
amounts of its loan  principal and interest  totaling  $3,027,357,  into 403,648
shares of the Company's  Series C Stock (see Item 5 below).  In conjunction with
the MetroNet  transaction loans,  FondElec and Internexus also received warrants
to acquire  49,053 and 47,817  shares,  respectively,  of the  Company's  common
stock.  The warrants are  accompanied  by demand and  "piggy-back"  registration
rights.

         FondElec Loan  Transaction - On August 6, 1999, the Company borrowed $1
million from FondElec  (see the Company's  report on Form 10-QSB for the quarter
ended June 30,  1999 for a more  detailed  description).  In October  1999,  the
Company repaid the principal and $24,932 of accrued interest (see Item 5 below).
In  connection  with the loan,  FondElec  also  acquired  five-year  warrants to
purchase  10,688 shares of the Company's  common shares at an exercise  price of
$7.50 per  share.  The  warrants  are  accompanied  by demand  and  "piggy-back"
registration rights.

         Internexus  Loan  Transactions  - On September 3, 1999,  and October 1,
1999,  the  Company  borrowed  $1  million  and  $500,000,   respectively,  from
Internexus  (see the  Company's  report on Form 8-K dated  October 6, 1999 for a
more detailed description).  In October 1999, Internexus converted the principal
and $20,301 of accrued  interest under the loans into 202,707 shares of Series C
Stock (see Item 5 below). In connection with the loans, Internexus also acquired
five-year warrants to purchase 7,516 shares of the Company's common shares at an
exercise  price of $7.50 per share.  The warrants are  accompanied by demand and
"piggy-back" registration rights.

5.       CVV Financial Results
         ---------------------
         The Company  owns  approximately  78% of the stock of CVV, a Venezuelan
corporation  that acts as the operating  company for a multi-channel  television
system in Caracas,  Venezuela.  The Company reports the operating results of CVV
on a consolidated  basis.  During the four months  immediately  proceeding April
1999, CVV has generated losses of  approximately  $25,000 per month. On July 28,
1999 (after repeated requests by the Company for CVV's financial information for
the period  covered by this  report),  Donald  Williams,  the  president of CVV,
notified the Company that CVV's monthly  financial  information was current only
through  April 1999,  and declined to release any operating  information  to the
Company.  The Company is currently pursuing two arbitration  proceedings against
Mr.  Williams.  See the  Company's  annual  report on Form 10-KSB for the period
ended  December 31, 1998. As a result,  the financial  information  set forth in
this report does not include actual  operating  result  information for CVV. The
Company has, however,  included estimates for CVV's operating results during the
period,  based on its historical  operating results.  The Company believes CVV's
operations are not material to its consolidated financial operations.


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS

         The  following   discussion  and  analysis  relates  to  the  financial
condition  and results of  operations  of the Company for the nine months  ended
September 30, 1999 and 1998. This information should be read in conjunction with
the Company's  consolidated  financial  statements and the notes related thereto
appearing elsewhere in the document.



A.       OVERVIEW
         --------
         The Company is a provider of data and video telecommunications services
to business  and  residential  customers  over MANs in Latin  America.  From its
inception, the Company has focused on providing  telecommunications  services in
emerging markets,  primarily in Latin America,  using a high speed  transmission
network within and across national borders. The Company intends to capitalize on
the rapidly growing demand for telecommunications services in countries emerging
from  developing  and  state-controlled  economies  and where  there is  growing
liberalization  of  regulations  governing the  provision of  telecommunications
services.

         As part of the Company's business  strategy,  it expects to continue to
expand through additional significant  acquisitions and strategic alliances. The
Company believes that additional attractive acquisition  opportunities currently
exist in Latin America and it is  continually  evaluating  these  opportunities.
Certain of these transactions,  if consummated, may be material to the Company's
operations and financial  condition.  Those acquisitions may not be successfully
integrated  into the  Company's  business  operations  or  result  in  projected
benefits.

B.       MATERIAL CHANGES IN RESULTS OF OPERATIONS
         -----------------------------------------
Nine months ended September 30, 1999 compared to the nine months ended September
30, 1998:

         For the nine months ended  September 30, 1999, the Company had revenues
of  $6,455,538  as compared to  $1,249,446  for the same period in 1998,  for an
increase of  $5,206,092.  The increase is primarily  related to the inclusion of
the full nine months of revenues  from the El Salvador  Entities  and  Inter@net
operations (1998 includes  revenues from the El Salvador  Entities from July 17,
1998 and  Inter@net  from  August 17,  1998),  which were  acquired in the third
quarter of 1998.

         The Company's cost of service increased $1,297,520, from $1,073,862 for
the nine months ended September 30, 1998, to $2,371,382 in 1999. The increase is
primarily  related to the  additional  revenues the Company  earned in 1999. The
Company's  gross margin was $4,084,156  for the nine months ended  September 30,
1999, compared to $175,584 for the same period in 1998.

         Operating  expenses for the nine months ended  September  30, 1999 were
$13,378,593 compared to $5,654,784 for 1998, for an increase of $7,723,809. This
increase  was  primarily  due to an increase in general and  administrative  and
professional  fees related to the  Company's  acquisitions,  the addition of new
employees,  the  additional  depreciation  and  amortization  from the Company's
acquired operations and the recognition of stock-based  compensation expense for
options with exercise  prices below fair market value.  The Company's  operating
loss was  $9,294,437 for the nine months ended  September 30, 1999,  compared to
$5,479,200 for the nine months ended September 30, 1998.

         Interest  income  for the nine  months  ended  September  30,  1999 was
$82,458,  compared to  $251,321  in 1998.  The  $168,863  decrease is  primarily
related  to  the  lower  cash  balances  in  1999.  Interest  expense  increased
$2,695,342  from  $333,926  for the nine  months  ended  September  30,  1998 to
$3,029,268  for the nine months ended  September 30, 1999.  The increase was due
primarily to the interest  expense from the debt used to acquire the El Salvador
Entities  ("Chispa  Acquisition  Debt") and the fiber optic network  capacity in
Mexico City the Company  acquired in June 1999 (see the Company's report on Form
8-K dated  September 23, 1999 for a more detailed  description),  the accrual of
interest expense for the subordinated  exchangeable promissory notes the Company
issued in  December  1998 and the  recording  of imputed  interest  expense  for
warrants issued in conjunction with the December 1998 notes.

         Income tax expense was $134,774 for the nine months ended September 30,
1999,  which was  related to the El Salvador  Entities.  There was no income tax
expense in 1998.  Minority  interest in loss of subsidiaries  was $1,257,337 for
the nine months  ended  September  30,  1999,  compared to $259,063 for the nine
months ended  September  30, 1998 for an increase of $998,274.  The increase was
primarily  due to the  recording  of the  minority  interest for the El Salvador
Entities for a full nine months in 1999.

         As a  result  of the  foregoing,  the  Company's  net loss for the nine
months ended  September 30, 1999 was  $11,118,684,  compared to  $5,302,742  for
1998, for an increase of $5,815,942.

Nine months ended September 30, 1998 compared to the nine months ended September
30, 1997:

         For the nine months ended  September 30, 1998, the Company had revenues
of $1,249,446,  which includes  revenues from the El Salvador  acquisitions from
July 17, 1998 and the Inter@net  acquisition from August 17, 1998. This compares
to revenues of $38,648 for the nine months ended  September  30, 1997.  The 1997
revenues were generated from the  multi-channel  television  service provided in
Caracas,  Venezuela  by CVV,  for the  period  from  August  17,  1997  (date of
acquisition)  to  September  30,  1997.  The cost of service for the nine months
ended September 30, 1998 was $1,073,862, compared to $24,106 for the nine months
ended September 30, 1997.

         Operating  expenses for the nine months ended  September  30, 1998 were
$5,654,784  compared to $1,016,989  for the same period in 1997, for an increase
of  $4,637,795.  This  increase  was  primarily  due to  costs  associated  with
negotiating and completing the Acquisitions,  start-up expenses  associated with
the  Company's  current   telecommunications   projects  and  the  depreciation,
amortization and lease expense from the Company's  telecommunications assets and
subscriber  rights.  The Company's  operating  loss was  $5,479,200 for the nine
months ended  September 30, 1998,  compared to $1,002,447 for the same period in
1997.

         Interest  income  for the nine  months  ended  September  30,  1998 was
$251,321,  compared to $34,839  for the same period in 1997,  for an increase of
$216,482. The increase was primarily due to higher cash balances related to cash
received  for equity  investments  in August 1997 and  February  1998.  Interest
expense increased $217,065 from $116,861 for the nine months ended September 30,
1997, to $333,926 for the same period in 1998. The increase was due primarily to
interest  associated  with the notes  payable  related  to the El  Salvador  and
Inter@net acquisitions.

         Minority  interest in loss of  subsidiaries  was  $259,063 for the nine
months ended September 30, 1998, compared to $8,665 for the same period in 1997,
for an  increase  of  $250,398.  The  increase  primarily  relates  to the  loss
attributable to the minority shareholder's interest in Chispa Dos.

         As a  result  of the  foregoing,  the  Company's  net loss for the nine
months ended September 30, 1998 was  $5,302,742,  compared to $1,075,804 for the
nine months ended September 30, 1997, for an increase in net loss of $4,226,938.

C.       LIQUIDITY AND CAPITAL RESOURCES
         -------------------------------
         The telecommunications  industry is capital intensive. In order for the
Company to successfully compete, it will require substantial capital to continue
to develop its  networks  and meet the funding  requirements  of its  operations
(including  losses  from  operations),  as well as to  provide  capital  for its
acquisitions and business development  initiatives.  The Company expects that it
will  spend  over  $200  million  over the next  two  years to meet its  capital
requirements as it implements its business plan.

         Since  inception,  the Company has funded its cash  requirements at the
parent  company  level through debt and equity  transactions.  The proceeds from
these transactions were primarily used to fund the Company's investments in, and
acquisition of, start-up network operations, to provide working capital, and for
general  corporate  purposes,  including  the  expenses  incurred in seeking and
evaluating  new  business   opportunities.   The  Company's  foreign  subsidiary
interests  have been  financed by the Company  through a  combination  of equity
investments and shareholder loans from the Company.

         As of September 30, 1999, the Company had current assets of $1,823,908,
compared to  $10,126,717  as of December 31, 1998, for a decrease of $8,302,809.
The decrease in current  assets was primarily due to a decrease in note proceeds
due from  affiliate and a decrease in cash. The note proceeds due from affiliate
was received in the form of cash in the first week of January 1999 and then cash
totaling  $8,771,771  was  used  to  make  capital   expenditures  and  purchase
inventory,  pay accounts payable and pay corporate expenses  associated with the
development  of the  Company's  telecommunications  operations  during  the nine
months ended September 30, 1999.

         The Company had current  liabilities of $19,766,810 as of September 30,
1999,  compared to  $14,096,138  as of  December  31,  1998,  for an increase of
$5,670,672.  The  increase  in current  liabilities  was due to an  increase  in
accounts payable for equipment purchases and operating expenses,  an increase in
accrued  liabilities for accrued interest on the Company's  December 1998 notes,
an increase in related party accrued consulting and an increase in related party
notes payable in conjunction with the MetroNet  transaction and two bridge notes
from  current  shareholders  (see  Note  4  above).  Long  term  debt  increased
$4,444,172,  from  $15,346,863  at December 31, 1998 to $19,791,035 at September
30,  1999.  The  increase was due  primarily  to the  refinancing  of the Chispa
Acquisition Debt through FondElec,  a shareholder in the Company and Chispa, and
a third party commercial lender.

         The Company's principal sources of funds are its available resources of
cash and cash equivalents.  At September 30, 1999, the Company had cash and cash
equivalents of $543,510. The cash flow generated by the Company's operations and
projected  network  launches  will  not be  sufficient  to cover  the  Company's
projected  operating expenses,  general and administrative  expenses and capital
expenditures. The Company also expects acquisitions will constitute a major part
of its  business  strategy,  so it is likely the  Company  will seek  additional
financing in the future for these purposes.

         The  Company's  ability to provide  the  services  contemplated  by its
business  plan  will  be  dependent  upon  the  Company  obtaining   substantial
additional  sources of funds. As noted below, the Company has recently completed
a $109.5 million private equity and credit facility financing. While the Company
believes that it may be able to obtain financing  through  additional  equity or
debt financing or otherwise,  no assurances can be given that any such financing
will be available, or that the Company will be able to obtain any such financing
on favorable  terms.  Also, the actual amount and timing of the Company's future
capital  requirements  may differ  materially  from its  current  estimates.  In
particular,  the accuracy of the  Company's  estimates is subject to changes and
fluctuations  in  the  Company's  revenues,   operating  costs  and  development
expenses,  which  can  be  affected  by  its  ability  to  (1)  effectively  and
efficiently manage the build-out of the MANs in each of its markets,  (2) obtain
infrastructure contracts,  rights-of-way,  licenses,  interconnection agreements
and other regulatory  approvals  necessary to complete and operate the MANs, (3)
negotiate favorable  contracts with suppliers,  including large volume discounts
on purchases of capital  equipment and (4) access  markets,  attract  sufficient
numbers of customers and provide and develop  services for which  customers will
subscribe.  The Company's  revenue and costs are also dependent upon a number of
factors  that are not  within  its  control,  such as  political,  economic  and
regulatory  changes,  changes in technology,  increased  competition and various
factors such as strikes, weather, and performance by third parties in connection
with our  operations.  Due to the  uncertainty of these  factors,  the Company's
actual revenues and costs may vary from expected amounts, possibly to a material
degree,  and those  variations are likely to affect the Company's future capital
requirements.  In  addition,  if  the  Company  expands  its  operations  at  an
accelerated  rate or  consummates  acquisitions,  its funding  needs will likely
increase,  possibly to a significant degree, and it would, therefore, expend its
capital  resources  sooner than  currently  expected.  If the Company's  capital
resources prove to be insufficient,  it will need to raise additional capital to
execute its current business plan and to fund expected operating losses, as well
as to consummate  future  acquisitions  and exploit  opportunities to expand and
develop its businesses.

         To the extent the Company  acquires  the amounts  necessary to fund its
business  plan  through the  issuance  of equity  securities,  the  then-current
shareholders  of the Company may  experience  dilution in the value per share of
their equity securities. The acquisition of funding through the issuance of debt
could result in a substantial portion of the Company's cash flow from operations
being  dedicated to the payment of principal and interest on that  indebtedness,
and could  render the  Company  more  vulnerable  to  competitive  and  economic
downturns.  Financing  could also be obtained by the Company's  subsidiaries  or
affiliates from third parties,  although there can be no assurance the Company's
subsidiaries or affiliates will be able to obtain the financing required to make
planned capital  expenditures,  provide working capital or meet other cash needs
on terms which are economically acceptable to the Company.

         The  Company  has  taken  steps  which it  believes  will  improve  its
short-term and ongoing liquidity and cash flow, including the following:

         - On October 15, 1999,  the Company  entered into an agreement with six
accredited  investors for a $109.5 million  private  equity and credit  facility
financing package.  On October 18, 1999, the Company closed the first portion of
these  transactions and sold 4,400,000 shares of its Series C Preferred stock to
three of the  accredited  investors  for a total  of $33  million  in cash.  The
Company also exchanged approximately $15 million of debt it previously issued to
two of the accredited  investors into  1,995,577  shares of Series C Stock.  See
Note 4 above and Items 2 and 5 below.

         - The Company is currently conducting a formal bid and proposal process
for the selection of a technology  partner that would provide a vendor financing
package for the Company's capital equipment,  professional  engineering services
and systems integration expenditures.

D.       THE YEAR 2000 ISSUE
         -------------------
         The  Company  has  completed  a  review  of its  computer  systems  and
operations  to determine  the extent to which its systems will be  vulnerable to
potential  errors and failures as a result of the "year 2000" problem.  The year
2000  problem  results  from the use of  computer  programs  which were  written
employing only two digits (rather than four digits) to define  applicable years.
On  January  1,  2000,  any  clock  or  date  recording   mechanism,   including
date-sensitive  software which uses only two digits to represent the year, could
recognize a date using "00" as the year  "1900",  rather the year  "2000".  This
could  result in system  failures or  miscalculations,  causing  disruptions  of
operations,  including,  among other  things,  a temporary  inability to process
transactions,  send invoices,  provide services or engage in similar activities.
These failures,  miscalculations,  and disruptions could have a material adverse
effect on the Company's business, operations and financial condition.

         The Company has  concluded,  based on its review of its  operations and
computer systems, that its significant computer programs and operations will not
be materially  affected by the year 2000 problem and that the programs that will
be  affected  can be  properly  modified  or  replaced  by the end of 1999 at an
estimated cost of approximately  $100,000.  Under a reasonably likely worst-case
scenario,  the Company's  computer  systems and  operations  could be materially
affected  by the year  2000  problem.  In  addition  to its own  operations  and
computer  systems,  the Company  relies on  operations  and computer  systems of
third-party customers,  financial  institutions,  vendors and other parties with
and through which it conducts business (such as national telephone systems under
the  Company's  interconnect  agreements,   and  the  owners  of  communications
backbones utilized by the Company).

         The Company intends to prioritize its year 2000 efforts to protect,  to
the extent possible,  its business and operations.  The Company's first priority
will be to protect its  mission-critical  operations--such  as those systems and
applications that are vital to the provision by the Company of voice,  video and
data switching,  processing and transport services to customers--from  incurring
material service  interruptions  that could occur as the result of the year 2000
transition.  To this end,  the Company  has  attempted  to identify  any element
within its  business  operations  (including  elements  relating  to third party
relationships)  that could be  impacted  by the year 2000 date  change,  and has
attempted to determine  the risks to its  continuing  business  operations  as a
result of an adverse effect resulting from that date change.

         The Company  generally  requires  that its key  vendors  and  suppliers
warrant in writing that they are year 2000 ready.  The Company has  purchased or
acquired most of its  mission-critical  systems from such  third-party  vendors.
Unfortunately,  like other  telecommunications  providers  (and, in  particular,
telecommunications  providers  operating  outside  of the  United  States),  the
Company's  products and services are dependent  upon third parties which may not
be fully year 2000 compliant.  The Company has attempted to identify the vendors
and third-parties  with which it has contractual  relationships  that may not be
year 2000 compliant by the end of 1999, and has adopted  contingency plans which
it  believes  will  mitigate  any  adverse  impact  to its  business  operations
resulting  from  those  vendors'  or  third-parties'  inability  to  perform  in
accordance with their contractual  obligations.  These contingency plans include
the  preparation  and use of backup  copies  of  financial  records,  installing
portable  diesel  generators,  determining the  availability  and reliability of
alternate networks,  and scheduling  additional phone center,  network operating
center, and repair personnel.

         Although the Company's  efforts to be Year 2000  compliant are intended
to  minimize  the  adverse  effects of the Year 2000 issue on its  business  and
operations,  the  actual  effects  of the issue  will not be known  until  2000.
Difficulties in implementing the remediation or prevention  phases or failure by
the Company's major vendors,  third party network service  providers,  and other
material service providers and customers to adequately  address their respective
Year 2000 issues in a timely manner could have a material  adverse effect on the
Company's business, results of operations, and financial conditions.

E.       SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
         -------------------------------------------------
         Certain statements contained in "Management's  Discussion and Analysis"
constitute  forward-looking  statements  concerning  the  Company's  operations,
economic performance and financial  condition.  Because those statements involve
risks and  uncertainties,  actual  results  may  differ  materially  from  those
expressed or implied by those forward-looking statements.

         In addition,  any statements that express or involve  discussions as to
expectations,  beliefs,  plans,  objectives,  assumptions  or  future  events or
performance  are  not  historical   facts  and  may  be   forward-looking   and,
accordingly,  those statements involve estimates,  assumptions and uncertainties
which could cause actual results to differ  materially  from those  expressed in
the  forward-looking  statements.  Accordingly,  those types of  statements  are
qualified in their entirety by reference to, and are accompanied by, the factors
discussed  throughout  this  report.  Among the key  factors  that have a direct
bearing on the Company's  results of operations  are the potential risk of delay
in implementing the Company's  business plan; the political,  economic and legal
aspects  of the  markets in which the  Company  operates;  competition;  and the
Company's need for additional substantial financing.  The Company has no control
over some of these factors.

         The factors  described in this report could cause the Company's  actual
operating   results  to  differ   materially   from  those   expressed   in  any
forward-looking  statements  of the Company made by or on behalf of the Company.
Persons  reviewing  this report,  therefore,  should not place undue reliance on
those  forward-looking  statements.  Further, to the extent this report contains
forward-looking  statements,  they speak only as of the date of this report, and
the Company undertakes no obligation to update any forward-looking  statement or
statements to reflect the occurrence of  unanticipated  events.  New factors may
emerge from time to time,  and it is not possible for  management to predict all
of such  factors.  Further,  management  cannot  assess  the impact of each such
factor  on the  Company's  business  or the  extent  to  which  any  factor,  or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.


PART II: OTHER INFORMATION
         -----------------
ITEM 1.       LEGAL PROCEEDINGS

         See the section entitled "Legal  Proceedings" in the Company's  reports
on Form 8-K dated November 2, 1999,  Form 10-QSB for the quarters ended June 30,
1999 and March 31,  1999 and the  Company's  report on Form  10-KSB for the year
ended December 31, 1998.

ITEM 2.       CHANGES IN SECURITIES

         In conjunction with the equity financing  described in Item 5 below, on
October 12, 1999, the Company's Board of Directors designated the Series C Stock
as a new series of the Company's  authorized  preferred  stock.  The certificate
designating  the rights and preferences of the Series C Stock was filed with the
Nevada Secretary of State's Office on October 13, 1999 and declared effective on
October 14, 1999.

         The Series C Stock  consists of 14,250,000  shares of preferred  stock,
par value $.001 per share, and has the following general rights and preferences:

         - It votes with the  outstanding  shares of the Company's  common stock
and Series B Preferred  Stock (unless  otherwise  required by law),  and has one
vote per share.

         - It  is  convertible  into  shares  of  the  Company's  common  stock,
initially on a one-for-one  basis. The conversion ratio is subject to adjustment
for fundamental corporate transactions. Conversion is generally optional, but is
mandatory upon the occurrence of a Disposition Event.

         - It has a  liquidation  preference  which is superior to the Company's
common shares,  but subordinate to the Company's  Series B Preferred  Stock. The
initial liquidation preference is $7.50 per share.

         - It is not redeemable.

         - Its holders are entitled to receive cash  dividends or  distributions
of property  when, as and if declared by the Board of Directors.  If the Company
declares a dividend or distribution on its common stock, it is required to pay a
dividend or distribution to the holders of the Series C Stock in an amount equal
to what they would have received had the holders  converted their Series C Stock
into common stock.

         - Its holders have a preemptive  right to purchase  their prorata share
of any new securities issued by the Company.  The preemptive rights do not apply
to  issuances  of stock to  management  or  employees,  any  merger  or  similar
transaction approved by the Board of Directors,  to securities issued in a stock
split or  dividend,  or  certain  other  transactions  approved  by the Board of
Directors.  The  preemptive  rights  terminate on the effective date of a public
offering meeting certain size requirements.

         See the  Company's  report on Form 8-K dated  November  2, 1999 and the
exhibit thereto for a more detailed description of the Series C Stock.

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

                                      None.

ITEM 4.       MATTERS SUBMITTED TO A VOTE OF THE COMPANY'S SHAREHOLDERS

                                      None.

ITEM 5.       OTHER INFORMATION

         Equity and Debt Financing - On October 18, 1999, the Company closed the
first portion of a $109.5 million private equity and credit  facility  financing
package with six accredited investors.  At the closing, the Company received $33
million  in cash from the sale of  4,400,000  shares of its  Series C Stock from
three of the six accredited investors and exchanged approximately $15 million of
debt it previously  issued to two of the  accredited  investors  into  1,995,577
shares of Series C Stock.  Two of these parties are  obligated to purchase,  for
cash,  an  additional  2,666,666  shares of Series C Stock for $20  million at a
second closing that will be held after the parties  receive  clearance under the
Hart-Scott-Rodino  Antitrust  Improvement  Act of 1976,  as  amended  (the  "HSR
Laws").  The parties expect  clearance under the HSR Laws from the Department of
Justice and the Federal  Trade  Commission  in November  1999.  Another party is
obligated to purchase 666,666 shares of Series C Stock for $5 million in cash if
it joins in the execution of the Agreement by November 19, 1999.

         Under the terms of the agreement, one of the parties also agreed to (i)
invest,  at the second closing,  $5.25 million  dollars in Chispa,  a controlled
subsidiary of the Company  which  conducts  telecommunications  operations in El
Salvador,  for approximately 32.64% of the outstanding stock of Chispa, and (ii)
to  negotiate  in good  faith  with the  Company  the  terms of a joint  venture
pursuant   to  which   each   party   will   invest  $5   million   to   conduct
telecommunications  operations  in the Republic of Colombia.  The same  investor
also entered into a long-term $26 million credit facility with  InterAmerica Net
de Venezuela,  S.A., the Company's wholly-owned Venezuelan operating subsidiary.
See the Company's  report on Form 8-K dated November 2, 1999 for a more detailed
description of these transactions.



ITEM 6.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

          A.       EXHIBITS.
                   --------
Exhibit No.                                  Exhibit
-----------                                  -------

   10.14         Participation   Agreement,   dated  October  15,  1999,   among
                 Telematica   EDC,   C.A.,    TCW/CCI   Holding   LLC,   Glacier
                 Latin-America  Ltd.,  the  International  Finance  Corporation,
                 FondElec Essential Services Growth Fund, L.P.,  Internexus S.A.
                 (collectively, the "Investors"), the Company and other parties

   10.15         Option Agreement, dated October 18, 1999, among the Company and
                 the Investors

   10.16         Form of Series C Warrant,  dated October 18, 1999, as issued in
                 favor of each Investor

   10.17         CCI Shareholders' Agreement,  dated October 18, 1999, among the
                 Company, the Investors, and other parties

   10.18         Amended  and  Restated  Registration  Rights  Agreement,  dated
                 October 18, 1999,  among the Company,  the  Investors and other
                 parties

   10.24         Unofficial   English   Translation   of   Venezuela   Financing
                 Agreement,  dated October 18, 1999, between a Subsidiary of the
                 Company and one of the Investors

   27.1          Financial Data Schedule


         B.       REPORTS ON FORM 8-K
                  -------------------
         The  Company  filed two  reports  on Form 8-K  since the  filing of the
Company's report on Form 10-QSB for the quarter ended June 30, 1999.

      1.         On  October  6, 1999,  the  Company  filed a report on Form 8-K
                 describing  loans  totaling  $1.5  million it had secured  from
                 Internexus.

      2.         On  November 2, 1999,  the  Company  filed a report on Form 8-K
                 describing  a private  equity  and debt  financing  transaction
                 involving six accredited investors.


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                CONVERGENCE COMMUNICATIONS, INC.


Date:  November 15, 1999                        BY    /s/ JERRY SLOVINSKI
                                                   -----------------------------
                                                      Jerry Slovinski
                                                      Chief Financial Officer

<PAGE>


Exhibit No.                                  Exhibit
-----------                                  -------

   10.14         Participation   Agreement,   dated  October  15,  1999,   among
                 Telematica   EDC,   C.A.,    TCW/CCI   Holding   LLC,   Glacier
                 Latin-America  Ltd.,  the  International  Finance  Corporation,
                 FondElec Essential Services Growth Fund, L.P.,  Internexus S.A.
                 (collectively, the "Investors"), the Company and other parties

   10.15         Option Agreement, dated October 18, 1999, among the Company and
                 the Investors

   10.16         Form of Series C Warrant,  dated October 18, 1999, as issued in
                 favor of each Investor

   10.17         CCI Shareholders' Agreement,  dated October 18, 1999, among the
                 Company, the Investors, and other parties

   10.18         Amended  and  Restated  Registration  Rights  Agreement,  dated
                 October 18, 1999,  among the Company,  the  Investors and other
                 parties

   10.24         Unofficial   English   Translation   of   Venezuela   Financing
                 Agreement,  dated October 18, 1999, between a Subsidiary of the
                 Company and one of the Investors

   27.1          Financial Data Schedule