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, 2000.

{X}  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 November 10, 2000,  11,795,857  shares of registrant's  Common Stock,  par
value  $.001 per share,  29,521  shares of the  registrant's  Series B Preferred
Stock,  par value $.001 per share,  and  13,620,472  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. 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 our annual report on Form
10-KSB for the year ended December 31, 1999,  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 our results of
operations,  financial  position and changes  therein for the periods  presented
have  been  included.  The  results  of  operations  for the nine  months  ended
September 30, 2000 may not be indicative of the results that may be expected for
the year ending December 31, 2000.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]


<TABLE>
<CAPTION>

<PAGE>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999

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

                                                                                  September 30,       December 31,
                                                                                      2000               1999
                                                                                 ---------------    ---------------
<S>                                                                              <C>                <C>
ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                                                       $ 23,647,633       $ 26,303,296
    Accounts receivable - net                                                          5,332,149          3,180,748
    Inventory - net                                                                      918,394            262,177
    Other current assets                                                               4,149,931          1,225,490
                                                                                 ---------------    ---------------
                 Total current assets                                                 34,048,107         30,971,711

PROPERTY AND EQUIPMENT - net                                                          43,396,097         28,446,776

INTANGIBLE ASSETS - net                                                               44,393,828         36,660,025

OTHER ASSETS                                                                           6,305,880          1,126,011
                                                                                 ---------------    ---------------
TOTAL ASSETS                                                                       $ 128,143,912       $ 97,204,523
                                                                                 ===============    ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Notes payable - current portion                                                 $ 16,267,563       $ 11,313,343
    Accounts payable and accrued liabilities                                          16,834,621          6,851,249
                                                                                 ---------------    ---------------
                 Total current liabilities                                            33,102,184         18,164,592
LONG-TERM LIABILITIES:
    Notes payable - long-term portion                                                 21,722,196         11,389,937
    Long-term debt (payable to related parties)                                        2,677,434          2,595,634
    Other long-term liabilities                                                          282,494            185,686
                                                                                 ---------------    ---------------
                 Total long-term liabilities                                          24,682,124         14,171,257

MINORITY INTEREST IN SUBSIDIARIES                                                      3,040,298          5,493,394
                                                                                 ---------------    ---------------
                 Total liabilities                                                    60,824,606         37,829,243

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Series "B" Preferred stock; $0.001 par value; 750,000 shares authorized:
     29,521 and  101,374 shares outstanding in 2000 and 1999, respectively.                   29                101
  Series "C" Preferred stock; $0.001 par value; 14,250,000 shares authorized:
     13,620,472 and 9,728,909 shares outstanding in 2000 and 1999, respectively.          13,620              9,729
  Common stock; $0.001 par value; 100,000,000 shares authorized:
     11,389,191 and 11,585,489 shares outstanding in 2000 and 1999, respectively          11,389             11,585
  Additional paid-in capital                                                         126,286,884         95,147,893
  Accumulated deficit                                                                (58,785,595)       (35,764,016)
  Accumulated other comprehensive loss                                                  (207,021)           (30,012)
                                                                                 ---------------    ---------------
                 Total stockholders' equity                                           67,319,306         59,375,280
                                                                                 ---------------    ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $ 128,143,912       $ 97,204,523
                                                                                 ===============    ===============

See notes to consolidated financial statements.

</TABLE>

<PAGE>


<TABLE>
<CAPTION>

CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

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

                                                                         Nine Months         Nine Months
                                                                            Ended               Ended
                                                                        September 30         September 30
                                                                            2000                 1999
                                                                      ------------------   -----------------
<S>                                                                   <C>                  <C>

NET REVENUES FROM SERVICES                                                 $ 24,978,043         $ 6,455,538
                                                                      ------------------   -----------------
COSTS AND EXPENSES:
     Variable cost of services                                               14,580,464           2,371,382
     Salaries, wages and benefits                                            11,620,175           3,697,487
     Selling, general and administrative                                     10,715,344           5,004,380
     Depreciation and amortization                                           10,690,622           3,661,625
     Stock option compensation expense                                          573,508           1,015,101
                                                                      ------------------   -----------------
                   Total costs and expenses                                  48,180,113          15,749,975
                                                                      ------------------   -----------------
OPERATING LOSS                                                              (23,202,070)         (9,294,437)

OTHER INCOME AND (EXPENSES):
     Interest income                                                            791,190              82,458
     Interest expense                                                        (2,662,918)         (3,009,082)
     Net gain (loss) on foreign exchange                                         97,130             (20,186)
                                                                      ------------------   -----------------
                   Total other expense                                       (1,774,598)         (2,946,810)
                                                                      ------------------   -----------------
LOSS BEFORE INCOME TAXES AND MINORITY INTEREST                              (24,976,668)        (12,241,247)

PROVISION FOR INCOME TAXES                                                     (146,007)           (134,774)
                                                                      ------------------   -----------------
LOSS BEFORE MINORITY INTEREST                                               (25,122,675)        (12,376,021)

MINORITY INTEREST IN LOSS OF SUBSIDIARIES                                     2,453,096           1,257,337
                                                                      ------------------   -----------------
NET LOSS                                                                    (22,669,579)        (11,118,684)

NON-CASH REMEASUREMENT OF OPTIONS (see Note 5)                                 (352,000)                  -
                                                                      ------------------   -----------------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS                              $ (23,021,579)      $ (11,118,684)
                                                                      ==================   =================
Net loss per basic and diluted common share                                     $ (1.03)            $ (0.92)
                                                                      ==================   =================
Weighted-average number of common shares:

     Basic and diluted                                                       22,355,824          12,022,728
                                                                      ==================   =================

</TABLE>

See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

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

                                                                         Three Months         Three Months
                                                                            Ended               Ended
                                                                         September 30         September 30
                                                                             2000                 1999
                                                                      ------------------   -----------------
<S>                                                                   <C>                  <C>

NET REVENUES FROM SERVICES                                                  $ 9,126,110         $ 2,310,963
                                                                      ------------------   -----------------
COSTS AND EXPENSES:
     Variable cost of services                                                5,582,604             931,577
     Salaries, wages and benefits                                             4,826,527           1,343,793
     Selling, general and administrative                                      3,190,291           1,586,697
     Depreciation and amortization                                            3,804,771           1,240,640
     Stock option compensation expense                                           63,141             381,092
                                                                      ------------------   -----------------
                   Total costs and expenses                                  17,467,334           5,483,799
                                                                      ------------------   -----------------
OPERATING LOSS                                                               (8,341,224)         (3,172,836)

OTHER INCOME AND (EXPENSES):
     Interest income                                                            366,162               3,329
     Interest expense                                                        (1,001,221)         (1,488,246)
     Net gain (loss) on foreign exchange and other                                7,410                   -
                                                                      ------------------   -----------------
                   Total other expense                                         (627,649)         (1,484,918)
                                                                      ------------------   -----------------
LOSS BEFORE INCOME TAXES AND MINORITY INTEREST                               (8,968,873)         (4,657,754)

PROVISION FOR INCOME TAXES                                                      (51,860)           (100,000)
                                                                      ------------------   -----------------
LOSS BEFORE MINORITY INTEREST                                                (9,020,733)         (4,757,755)

MINORITY INTEREST IN LOSS OF SUBSIDIARIES                                       925,641             503,381
                                                                      ------------------   -----------------
NET LOSS                                                                     (8,095,092)         (4,254,374)

NON-CASH REMEASUREMENT OF OPTIONS (see Note 5)                                 (352,000)                  -
                                                                      ------------------   -----------------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS                               $ (8,447,092)       $ (4,254,374)
                                                                      ==================   =================
Net loss per basic and diluted common share                                     $ (0.35)            $ (0.35)
                                                                      ==================   =================
Weighted-average number of common shares:

     Basic and diluted                                                       24,087,956          12,022,728
                                                                      ==================   =================

</TABLE>

See notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>

CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND YEAR ENDED DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------

                                                                            Preferred Stock
                                                            -----------------------------------------------
                                                                     Series "B"            Series "C"             Common Stock
                                                              --------------------------------------------- -----------------------
                                                  Total          Shares     Amount      Shares       Amount     Shares      Amount
                                               -----------     ---------  ---------   ----------   --------- ----------- ----------
<S>                                            <C>             <C>        <C>         <C>          <C>       <C>          <C>
BALANCE, DECEMBER 31, 1999                      59,375,280       101,374        101    9,728,909       9,729  11,585,489     11,585
Comprehensive loss:
  Net loss for nine months ended Sept 30, 2000 (22,669,579)
  Other comprehensive loss consisting of
    foreign currency translation adjustment       (177,009)
                                               -----------     ---------  ---------   ----------   --------- ----------- ----------
      Total comprehensive loss                 (22,846,588)             -          -            -           -           -         -

Acquisition of Metrotelecom stock for
    CCI common shares                            1,000,000                                                       121,212        121
Acquisition of treasury stock                            -       (71,853)     $ (72)                            (328,510)      (329)
Non-cash remeasurement of options                        -
Exercise of shareholder stock options           29,186,722                             3,891,563     $ 3,891
Exercise of employee stock options                     241                                                        11,000         11
Issuance of options for common shares
    below fair value                               603,651
                                               -----------     ---------  ---------   ----------   --------- ----------- ----------
BALANCE, SEPTEMBER 30, 2000                   $ 67,319,306        29,521       $ 29   13,620,472    $ 13,620  11,389,191   $ 11,389
                                               ===========     =========  =========   ==========   ========= =========== ==========
</TABLE>


See notes to consolidated financial statements.

                                  (Continued)
<PAGE>

<TABLE>
<CAPTION>

CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND YEAR ENDED DECEMBER 31, 1999
BALANCE, DECEMBER 31, 1999 (Continued)

                                                                                 Accumulated
                                                    Additional                   Other Compre-
                                                     Paid-in       Accumulated   hensive Income
                                                     Capital        Deficit        (Loss)
                                                 -------------   ------------   --------------
<S>                                              <C>             <C>            <C>



BALANCE, DECEMBER 31, 1999                          95,147,893    (35,764,016)        (30,012)
Comprehensive loss:
    Net loss for nine months ended Sept 30, 2000                  (22,669,579)
    Other comprehensive loss consisting of
      foreign currency translation adjustment                                      $ (177,009)
                                                 -------------   ------------   --------------
      Total comprehensive loss                              -     (22,669,579)       (207,021)

Acquisition of Metrotelecom stock for
    CCI common shares                                  999,879
Acquisition of treasury stock                              400
Non-cash remeasurement of options                      352,000       (352,000)
Exercise of shareholder stock options               29,182,831
Exercise of employee stock options                         230
Issuance of options for common shares
    below fair value                                   603,651
                                                 -------------   ------------   --------------
BALANCE, SEPTEMBER 30, 2000                      $ 126,286,884   $(58,785,595)     $ (207,021)
                                                 =============   ============   ==============
</TABLE>

See notes to consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>

CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

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

                                                                  Nine Months      Nine Months
                                                                     Ended            Ended
                                                                   September 30   September 30
                                                                     2000             1999
                                                                 --------------   --------------
<S>                                                              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                      $(22,669,579)    $(11,118,684)
    Adjustments to reconcile net loss to net cash used in
       operating activities:
          Depreciation and amortization                             10,690,622        3,661,625
          Provision for bad debts                                      795,088          238,289
          Minority interest in loss of subsidiaries                 (2,453,096)      (1,057,337)
          Issuance of options for common shares below fair value       603,651        1,015,101
          Amortization of discount on notes payable                  1,661,862          588,525
          Issuance of warrants below fair value                              -          154,520
          Change in assets and liabilities, net of effects
            of acquisitions:
            Accounts receivable                                     (2,295,839)        (430,957)
            Due from affiliates                                              -        5,000,000
            Inventory                                                 (656,217)        (176,419)
            Other current assets                                    (2,877,908)        (102,104)
            Other assets                                            (4,934,028)        (643,278)
            Accounts payable and accrued liabilities                 6,445,939        2,678,949
            Due to affiliates                                         (122,356)        (240,874)
            Other long-term liabilities                                 96,807           89,195
                                                                 --------------   --------------
                 Net cash used in operating activities             (15,715,054)        (343,449)
                                                                 --------------   --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash paid in Metrotelecom acquisition, net                      (3,417,851)               -
    Purchases of property and equipment                            (18,120,577)     (10,940,574)
                                                                 --------------   --------------
                 Net cash used in investing activities             (21,538,428)     (10,940,574)
                                                                 --------------   --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net proceeds from exercise of employee stock options                   241                -
    Increase in minority interest from issuance of subsidiary
    common stock                                                             -          200,000
    Net proceeds from issuance of Series "C" Preferred Stock        29,186,722                -
    Proceeds from related party note                                         -       11,935,422
    Payments on related party borrowings and outstanding debt         (539,893)      (8,569,771)
    Proceeds from promissory notes                                   6,418,025        4,335,000
    Payments on promissory notes                                      (454,167)        (383,334)
                                                                 --------------   --------------
                 Net cash provided by financing activities          34,610,928        7,517,317
                                                                 --------------   --------------

EFFECT OF EXCHANGE RATES ON CASH                                       (13,109)          (5,065)
                                                                 --------------   --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (2,655,663)      (3,771,771)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                    26,303,296        4,315,281
                                                                 --------------   --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $ 23,647,633        $ 543,510
                                                                 ==============   ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the period for interest                         $ 347,963        $ 276,236
                                                                 ==============   ==============
    Cash paid during the period for income taxes
      (including prepaid)                                            $ 183,522         $ 86,133
                                                                 ==============   ==============
</TABLE>


See notes to consolidated financial statements.


<PAGE>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2000

(Unaudited)

1.       Basis of Presentation
         ---------------------

         Convergence  Communications,  Inc.  and  subsidiaries  is a provider of
integrated  broadband  communications  and  Internet  services  through  its own
metropolitan area networks.  We operate in recently  deregulated and high growth
markets,  principally  Mexico,  Central  America and the Andean  region of South
America.  We offer  business  entities,  governmental  agencies and  residential
customers high-speed broadband data connections, high-speed and dial-up Internet
access,  voice and video  services.  Our  networks use  technology  based on the
Internet  Protocol,   or  "IP",  and  asynchronous   transfer  mode,  or  "ATM",
technology.

         From our  inception,  we have focused on  providing  telecommunications
services  using  high-speed  transmission  networks  within and across  national
borders.   We  intend  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.

         Our consolidated  financial  statements include the accounts of our all
wholly- and majority-owned subsidiaries, as well as Chispa Dos, Inc. ("Chispa"),
the holding  entity of  Cablevisa,  S.A.,  Multicable  S.A.  and  Cybernet de El
Salvador S.A. We own 32.6% of the capital stock of Chispa, but we have operating
control  and  hold 50% of the  Board  of  Directors  seats  of  Chispa.  We have
eliminated  all   significant   intercompany   accounts  and   transactions   in
consolidation.  All  capitalized  terms  not  defined  in this  report  have the
meanings  given  them in our  annual  report on Form  10-KSB  for the year ended
December 31, 1999.

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 and Series C
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.       Operating Segment Information
         -----------------------------

         We make key financial  decisions based on certain  operating results of
our  subsidiaries  and revenue types.  Our operating  segment  information is as
follows for the nine months ended September 30, 2000 and 1999:

<TABLE>
<CAPTION>

         NET REVENUES FROM SERVICES BY SUBSIDIARY:

         DIAL UP INTERNET ACCESS                        September 30,         September 30,
                                                            2000                   1999
                                                      ------------------     -----------------
         <S>                                          <C>                    <C>
         Intervan (in Mexico)                      $            342,450   $                 -
         GBnet (in Central America)                             327,723                     -
         Inter@net (in Venezuela)                               747,126
         Chispa Dos (in El Salvador)                             40,843               825,206
         MetroTelecom (in Guatemala)                            669,832
         Parent Company, elim. and others                         4,665                59,256

                                                                                    -
                                                      ------------------     -----------------
              Consolidated total                   $          2,132,639   $           884,462
                                                      ==================     =================

         HIGH SPEED DATA                                September 30,         September 30,
         INTERNET ACCESS                                    2000                   1999
                                                      ------------------     -----------------
         Intervan (in Mexico)                      $          8,297,782   $                 -
         GBnet (in Central America)                           2,507,667                     -
         Inter@net (in Venezuela)                                79,911                13,701
         Chispa Dos (in El Salvador)                            667,780                16,541
         MetroTelecom (in Guatemala)                            468,819                     -
         Parent Company, elim. and others                         8,885                     -
                                                      ------------------     -----------------
              Consolidated total                   $         12,030,844   $            30,242
                                                      ==================     =================

         CABLE TELEVISION                               September 30,         September 30,
                                                            2000                   1999
                                                      ------------------     -----------------
         Intervan (in Mexico)                      $                  -   $                 -
         GBnet (in Central America)                                   -                     -
         Inter@net (in Venezuela)                                     -                     -
         Chispa Dos (in El Salvador)                          4,768,958             4,845,420
         MetroTelecom (in Guatemala)                            643,654                     -
         Parent Company, elim. and others                             -                     -
                                                      ------------------     -----------------
              Consolidated total                   $          5,412,612   $         4,845,420
                                                      ==================     =================

         OTHER (primarily equipment rents,              September 30,         September 30,
         installation & advertising)                        2000                   1999
                                                      ------------------     -----------------
         Intervan (in Mexico)                      $          3,226,440   $                 -
         Gbnet (in Central America)                             394,508                     -
         Inter@net (in Venezuela)                                49,941                24,975
         Chispa Dos (in El Salvador)                            840,670               666,974
         MetroTelecom (in Guatemala)                            698,473
         Parent Company, elim. And others                       191,916                 3,465
                                                      ------------------     -----------------
              Consolidated total                   $          5,401,948   $           695,414
                                                      ==================     =================

         TOTAL REVENUES                                 September 30,         September 30,
                                                            2000                   1999
                                                      ------------------     -----------------
         Intervan (in Mexico)                      $         11,866,672   $                 -
         GBnet (in Central America)                           3,229,898                     -
         Inter@net (in Venezuela)                               876,978               863,882
         Chispa Dos (in El Salvador)                          6,318,251             5,588,191
         MetroTelecom (in Guatemala)                          2,480,778                     -
         Parent Company, elim. And others                       205,466                 3,465
                                                      ------------------     -----------------
              Consolidated total                   $         24,978,043   $         6,455,538
                                                      ==================     =================

         OPERATING (LOSS)                               September 30,         September 30,
                                                            2000                   1999
                                                      ------------------     -----------------
         Intervan (in Mexico)                      $         (6,209,952)   $                 -
         GBnet (in Central America)                          (2,518,343)                     -
         Inter@net (in Venezuela)                            (1,520,542)             (632,127)
         Chispa Dos (in El Salvador)                         (2,590,777)           (1,024,905)
         MetroTelecom (in Guatemala)                         (1,244,334)                     -
         Parent Company, elim. and other                     (9,118,122)           (7,637,405)
                                                      ------------------     -----------------
              Consolidated total                   $       (23,202,070)   $       (9,294,437)
                                                      ==================     =================
</TABLE>


5.       Series C Option Exercise
         ------------------------

         We received  approximately  $29.2 million in July and  September,  2000
from the  exercise  of options  that we  granted  in October  1999 to a group of
shareholders  who invested $109.5 million in us, in the form of equity and debt,
in October  1999 (see the  section  entitled  "Subsequent  Financings  and Other
Transactions"  in our report on Form 10-KSB for the year ended December 31, 1999
for a more detailed  description)  and issued  3,891,563  shares of our Series C
preferred stock in exchange for the $29.2 million.

         In conjunction with this equity transaction, the original July exercise
date was extended to September for a portion of those options.  The modification
of the  original  option  term  requires us to  remeasure  the fair value of the
options.  Accordingly,  we recognized  $352,000 of non-cash  remeasurement  as a
reduction in our net loss  attributable to common  shareholders  for the quarter
ended September 30, 2000.

6.       Recently Issued Accounting Standards
         ------------------------------------

         In December 1999, the Securities and Exchange  Commission  issued Staff
Accounting  Bulletin ("SAB") 101, Revenue  Recognition in Financial  Statements.
SAB 101  establishes  accounting and reporting  standards for the recognition of
revenue.  It states that revenue  generally is realized or realizable and earned
when all of the  following  criteria  are met:  (1)  persuasive  evidence  of an
arrangement  exists;  (2) delivery has occurred or services have been  rendered;
(3) the seller's price to the buyer is fixed or determinable;  (4) collection is
reasonably assured.  Effective January 1, 2000, we adopted SAB 101. The adoption
of SAB 101 did not have a material impact on our financial statements.

In June 1998, SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging
Activities"  was  issued.  SFAS No. 133  establishes  accounting  and  reporting
standards for derivative instruments and hedging activities. It requires that an
entity  recognize all derivative  assets or liabilities in the balance sheet and
measure  those  instruments  at fair value.  SFAS No. 133 is  effective  for the
Company's financial statements for the year beginning January 1, 2001. We do not
believe  that  SFAS  No.  133  will  have a  material  impact  on our  financial
statements.

7.       Subsequent Event
         ----------------

         Minority  Interest  Purchases - In October 2000, we purchased  minority
interests from three parties. The minority interests we purchased were for 5% of
our Mexican operating subsidiary,  5% of our Venezuelan operating subsidiary and
10% of our  Panamanian  operating  subsidiary.  We  acquired  the stock from the
minority  parties in exchange for a $175,000 cash payment and the issuance of an
aggregate of 406,666 shares of our common stock.

         Intervan  Restructuring - In October 2000, we restructured  our Mexican
operating  subsidiaries  in connection  with our application for certain Mexican
telecommunications  licenses  ("Intervan  Restructuring").  Under those types of
licenses, the voting control of the licensee must be held by Mexican citizens or
entities.  Mexican law provides,  however,  that licenses may be organized  with
both  voting  and  non-voting  shares.   Therefore,   under  the  terms  of  the
restructuring we sold 51% of the voting control (representing  approximately 10%
of the  corporation's  stock  on an  economic  interest  basis)  of our  Mexican
operating  subsidiary  to one of our  executives  who is a Mexican  citizen.  We
retained the remaining 49% voting control (and approximately 90% of the economic
interest)  in the  corporation,  along with the right to veto  certain  types of
fundamental corporate business transactions. The executive's purchase of the 51%
voting control interest was financed through a loan from us which bears interest
on a deferred  basis at a rate of 12% per annum and which is due in one  payment
in 2010. We are currently evaluating the accounting for this transaction,  which
may include our accounting for this transaction under the equity method.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS

         The  following   discussion  and  analysis  relates  to  our  financial
condition and results of operations for the nine months ended September 30, 2000
and 1999. This  information  should be read in conjunction with our consolidated
financial  statements and the notes related thereto appearing  elsewhere in this
report.


<PAGE>
         OVERVIEW

         We are a  provider  of  telecommunications  services  to  business  and
residential customers over Metropolitan Area Networks ("MANs") in Latin America.
From our inception, we have focused on providing  telecommunications services in
emerging markets,  primarily in Latin America,  using a high speed  transmission
network  within and across  national  borders.  We intend 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 our  business  strategy,  we  expect to  continue  to expand
through additional significant  acquisitions and strategic alliances. We believe
that additional attractive  acquisition  opportunities  currently exist in Latin
America and we are continually evaluating these opportunities.  Certain of these
transactions,  if  consummated,  may be material to our operations and financial
condition.  Those  acquisitions  may not be  successfully  integrated  into  our
business operations or result in projected benefits.

H.       MATERIAL CHANGES IN RESULTS OF OPERATIONS

Nine months ended September 30, 2000 compared to the nine months ended September
30, 1999:

         Revenues.  Our revenues for the nine months  ended  September  30, 2000
totaled $24.97  million,  compared to $6.45 million for the same period in 1999,
an increase in revenues of $18.52 million (or 287%).  The following  table shows
our revenues by operating  subsidiary  for the first three  quarters of 2000 and
1999:

    TOTAL REVENUES                    SEPTEMBER 30,              SEPTEMBER 30,
    (in thousands)                        2000                       1999
                                   -------------------       -------------------
    Intervan (1)                       $  11,867                          -
    GBNet (1)                              3,229                          -
    Inter@net                                877                     $  864
    Chispa                                 6,318                      5,588
    MetroTelecom (2)                       2,480                          -
    Parent Company, elim. & others           205                          3
                                      -----------                   ----------
         Consolidated total             $ 24,978                    $ 6,455
                                      ============                  ==========
-----------------

(1)      Intervan and GBNet subsidiaries were acquired in December 1999.
(2)      MetroTelecom subsidiary was acquired in April 2000.
(3)

The 287% increase in revenues was primarily  attributable to our acquisition and
ownership  of the  Intervan,  GBNet and  MetroTelecom  entities  during the nine
months ended  September  30, 2000.  Our  customer  base has  increased to almost
50,000  subscribers as of September 30, 2000,  compared to approximately  30,000
customers as of September  30, 1999,  indicating a subscriber  base  increase of
67%.

         Variable Cost of Services. Variable cost of services consists primarily
of bandwidth,  interconnect  and cable  programming  charges.  The cost of these
services totaled $14.58 million for the nine months ended September 30, 2000, an
increase  of $12.2  million  over  September  1999.  Of total  variable  cost of
services for the nine months ended  September 30, 2000,  $8.8 million related to
our Intervan  operations in Mexico, $2.1 million related to our GBNet operations
in  Central  America,  $0.5  million  related  to our  Inter@net  operations  in
Venezuela, $2.1 million related to our Chispa operations in El Salvador and $0.9
million  related to our  MetroTelecom  operations in Guatemala.  The significant
increase in variable cost of services reflects growth in our revenues, including
completing significant acquisitions in December 1999 and April 2000.

         Salaries,  Wages and Benefits. Our salaries, wages and benefits totaled
$11.6 million for the nine months ended  September 30, 2000, an increase of $7.9
million over the nine months ended  September  30, 1999.  We had a total of over
750 employees at September 30, 2000,  compared to 311 employees at September 30,
1999. The increase in headcount  reflects both the normal  increases  associated
with our maturing  operations and the employees we acquired  during the month of
December 1999 with our purchases of Intervan and GBnet,  which had approximately
190 and 52 employees,  respectively. The increase also reflects the employees we
hired in April 2000 with our purchase of MetroTelecom,  which had  approximately
175 employees at September 30, 2000.

         Selling, General and Administrative Expenses. We incurred SG&A expenses
of $10.7 million during the nine months ended September 30, 2000, an increase of
$5.7 million  compared to the nine months ended September 30, 1999. The increase
in  SG&A  expenses  reflects  growth  in our  operations,  including  completing
significant  acquisitions  in  December  1999  and  April  2000,  as well as the
increased development of our networks. The increase in SG&A reflects:

     o    Consulting  and legal fees,  which  totaled  $2.9 million for the nine
          months ended  September  30, 2000,  compared with $1.6 million for the
          nine months ended September 30, 1999.

     o    Travel,  advertising  and promotion  costs increased $1.9 million to a
          total of $2.9  million for the nine months ended  September  30, 2000,
          compared to only $1.0 million for the nine months ended  September 30,
          1999. This increase in expenses is the result of the rapid development
          of our operations into Central America, Mexico and Venezuela.

     o    Other  operating  expenses  such  as  contract  labor,  rents,  office
          expenses,  utilities,  etc., increased approximately $1.9 million as a
          result of acquisitions and increased operations.

     o    On a consolidated basis, we recorded a provision for doubtful accounts
          of $0.8 million for the nine months ended September 30, 2000, compared
          to $0.2  million for the nine  months  ended  September  30, 1999 as a
          result of acquisitions, increased operations and payments in arrears.

         Stock  Compensation  Expense.  We incurred non-cash stock  compensation
expense in the nine  months  ended  September  30,  2000 of $0.6  million,  $0.4
million less than that recorded in the nine months ended September 30, 1999.

         Depreciation  and  Amortization.   Our  depreciation  and  amortization
expense  totaled  $10.7  million in the nine months  ended  September  30, 2000,
representing  an increase of $7.0 million  over the nine months ended  September
30, 1999. The increase  reflects the amortization of intangible  assets relating
to our three  acquisitions  in December 1999 and April 2000.  Additionally,  the
increase reflects the depreciation  expense from network assets obtained through
acquisitions and foreign subsidiary network asset purchases.

         Interest Income & Interest Expense.  Our interest income increased $0.7
million for the nine months ended September 30, 2000, compared to less than $0.1
million for the nine months ended September 30, 1999. Interest expense decreased
$0.3 million for the nine months ended  September 30, 2000.  For the nine months
ended  September  30, 1999,  interest  expense  activity was greater  because it
included  imputed  interest for warrants issued in conjunction with the December
1998 Notes and the interest  expense  pertaining to the 1999 FondElec  loan. The
average interest rate recorded on our indebtedness  outstanding  during the nine
months  ended  September  30,  2000  was  approximately   10.75%,   compared  to
approximately 10.0% for the nine months ended September 30, 1999.

         Provision for Income Taxes. We recorded a provision for income taxes of
$0.14 million during the nine months ended September 30, 2000, compared to $0.13
million for the nine months ended September 30, 1999.  Intervan,  which operates
in Mexico, recognized the majority of this income tax expense.

         Net Loss.  We incurred a net loss of $23.0  million for the nine months
ended  September  30, 2000,  an increase of $11.9  million  compared to the same
period in 1999. The principal reasons for the increased loss were:

     o    a $7.9 million increase in salary and benefits expense attributable to
          acquisitions and as a result of growth in our operations.

     o    a $7.0 million increase in depreciation and amortization  expense as a
          result of acquisitions and the build-out of our networks.

     o    a $5.7  million  increase  in SG&A  expenses  due to the growth in our
          operations and as a result of acquisitions.

     o    the above  increases  were  offset by a $6.3  million  increase in net
          revenues over variable cost of services and a decrease in net interest
          expense of $1.1  million.  Minority  interest in loss of  subsidiaries
          also offset the increase by $1.2 million.

Nine months ended September 30, 1999 compared to the nine months ended September
30, 1998:

         During the nine  months  ended  September  30,  1999,  we had  recently
completed our development activities and commenced planned principal operations.
We were still in the  development  stage during the nine months ended  September
30, 1998.

         Revenues.  Our revenues for the nine months  ended  September  30, 1999
totaled  $6.45  million,  compared  to $1.25  million  for 1998,  an increase in
revenues of $5.2 million (or 416%).  The  following  table shows our revenues by
operating subsidiary for the first nine months of 1999 and 1998:

         TOTAL REVENUES                    SEPTEMBER 30,          SEPTEMBER 30,
         (in thousands)                         1999                  1998
                                         ---------------------- ----------------
         Inter@net(1)                           $  864                $ 147
         Chispa (1)                              5,588                1,051
         Parent Company, elim. & others              3                   51
                                              ---------              --------
              Consolidated total               $ 6,455               $1,249
                                              =========              ========
----------------

(1)  Inter@net  and Chispa  were both  acquired in the third  fiscal  quarter of
     1998. -

The  increase  in  revenues  for the nine months  ended  September  30, 1999 was
primarily attributable to having our ownership interests in Inter@net and Chispa
during the full nine months ended September 30, 1999.

         Variable Cost of Services.  Our variable cost of services  totaled $2.3
million in the nine months ended September 30, 1999, an increase of $1.3 million
over the same period in 1998. The increase is due to our ownership  interests in
Inter@net and Chispa during the full nine months ended September 30, 1999.

         Salaries,  Wages and Benefits. Our salaries, wages and benefits totaled
$3.7 million for the nine months ended  September  30, 1999, an increase of $2.9
million from the same period in 1998. We  maintained  311 employees at September
30,  1999,  compared to 199  employees at  September  30, 1998.  The increase in
headcount  reflects  increases in our employee  count as our foreign  operations
were developed.

         Selling, General and Administrative Expenses. We incurred SG&A expenses
of $5.0 million in the nine months ended September 30, 1999, an increase of $1.7
million  (or 53%)  compared  to the same  period in 1998.  The  increase in SG&A
expenses  reflects growth in our operations,  including  completing  significant
acquisitions  in the third  quarter  of 1998 and  increased  development  of our
networks. The increase in SG&A reflects:

     o    Consulting  and legal fees,  which  totaled  $1.6 million for the nine
          months ended  September  30, 1999,  compared with $1.3 million for the
          same period in 1998 for an increase of $0.3 million.

     o    Travel,  advertising  and  promotion  costs  increased  to about  $1.0
          million compared to less than $0.5 million for the same period in 1998
          for an increase  of $0.5  million.  The  increase in travel was due to
          researching potential business offerings in Central America.

     o    Certain  operating  expenses  such as contract  labor,  rents,  office
          expenses,  utilities,  etc., increased approximately $0.9 million as a
          result of our  acquisitions  in El Salvador and Venezuela in the third
          fiscal quarter of 1998.

         Stock  Compensation  Expense.  We incurred non-cash stock  compensation
expense in the nine months ended  September 30, 1999  totaling $1.0 million.  We
had no non-cash stock compensation expense in the same period of 1998.

         Depreciation  and  Amortization.   Our  depreciation  and  amortization
expense  totaled  $3.7  million for the nine months  ended  September  30, 1999,
representing  an increase of $2.0  million  compared to the same period in 1998.
The increase relates primarily to the amortization of intangible assets relating
to acquisitions.

         Interest Income & Interest Expense.  Our interest income decreased $0.2
million for the nine  months  ended  September  30,  1999,  compared to interest
income of $0.3 million for the nine months ended  September  30, 1998.  Interest
expense increased $2.7 million for the nine months ended September 30, 1999. The
nine months  ended  September  30, 1999  interest  expense  activity was greater
because it included imputed interest for warrants issued in conjunction with the
December  1998 Notes and the interest  expense  pertaining  to the 1999 FondElec
loan.  The  significant  increase in interest  expense  also  resulted  from the
interest on debt issued to complete  acquisitions in the third fiscal quarter of
1998.

         Net Loss.  We  incurred a net loss of $11.1  million in the nine months
ended  September  30, 1999,  an increase of $5.8 million over the same period in
1998. The principal reasons for the increased loss were:

     o    the $2.9 million increase in salary, wages and benefit expenses due to
          the growth in our operations and as a result of acquisitions in 1998

     o    the $1.7  million  increase in SG&A  expenses due to the growth in our
          operations and as a result of acquisitions in 1998

     o    the $1.0  million  increase  in  stock-based  compensation  expense to
          attract key management

     o    the $2.0 million increase in our depreciation and amortization expense
          on intangible assets as a result of acquisitions in 1998

     o    the $2.8 million  increase in net interest expense as a result of debt
          related to acquisitions and financing of operational growth.

     o    the above  increases  were  offset by a $3.9  million  increase in net
          revenues over variable cost of services.  Minority interest in loss of
          subsidiaries also offset the increase by $1.0 million

Liquidity and Capital Resources

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

         We will continue to make significant  capital  expenditures in the next
several years in connection with building our networks,  the further development
of our  operations in Mexico,  Venezuela and Central  America,  and new customer
accounts (for which we install our equipment on customer premises). We intend to
meet  our  capital  requirements  during  the  remainder  of  year  2000  from a
combination of the following:

     o    unused  proceeds from the July and September  2000 exercise of options
          issued to the investors in connection  with our October 1999 financing
          transactions.

     o    borrowings  under  the  definitive  vendor  financing  agreement  with
          Alcatel

         We  anticipate  that we  will  require  up to $14  million  during  the
remaining  three months of fiscal 2000 for capital  expenditures  related to the
continued  expansion of our existing  telecommunications  business,  and that we
will require significant amounts thereafter.

         During  the  nine  months  ended  September  30,  2000,  our  operating
activities used $15.7 million,  compared with using $0.3 million during the nine
months ended September 30, 1999. Our investing  activities consisted of the $3.4
million  net  cash  component  pertaining  to the  MetroTelecom  acquisition  in
Guatemala and $18.1 million capital expenditures for network construction.  Both
of these  activities  combined for a total of $21.5  million used for  investing
activities  during the nine months ended  September 30, 2000. This $21.5 million
activity compared to the $10.9 million used for capital expenditures for network
equipment and Mexico  fiber-optic  network capacity during the nine months ended
September 30, 1999.

         Our financing  activities  in the nine months ended  September 30, 2000
provided $34.6 million which  consisted  primarily from the $29.2 million in net
proceeds due to the issuance of 3,891,563  shares of Series C Preferred Stock to
our  shareholders,  $6.4 million of network  equipment  purchases and debt issue
cost were  financed  with  Alcatel  offset by  repayments  of amounts  owed to a
third-party bank and amounts owed to repay the Inter@net  acquisition debt. This
$34.6  million  activity  compared to the $7.5 million  that was  provided  from
proceeds  from  related  party notes and  borrowing  activity  (net of payments)
during the quarter ended September 30, 1999.

         As of  September  30,  2000,  we had current  assets of $34.0  million,
compared to $31.0 million as of December 31, 1999,  for a small increase of $3.0
million.  As of September 30, 2000, we had current liabilities of $33.1 million,
including  the  current  portion  of  acquisition  debt of  $16.3  million.  The
significant  increase in current liabilities is due to the significant growth in
our foreign operations  combined with the due dates of certain  acquisition debt
now falling within the current repayment period.

         The  cash  flow  generated  by  our  foreign  operations  will  not  be
sufficient  to cover our planned  significant  operational  growth in the coming
fiscal year.  Our ability to provide the services  contemplated  by our business
plan will be dependent on our efforts to obtain  substantial  additional sources
of funds to finance our business plan.

         We have the ability to  moderate  our  capital  spending  and losses by
varying  the  number  and  extent of our  market  build out  activities  and the
services  we offer in our  various  markets.  If we elect to slow the speed,  or
narrow the focus,  of our business  plan,  we will be able to reduce our capital
requirements  and losses.  The actual  costs of building out and  launching  our
markets would depend on a number of factors,  however,  including our ability to
negotiate  favorable  prices for purchases of network  equipment,  the number of
customers and the services for which they  subscribe,  the nature and success of
the services that we may offer, regulatory changes and changes in technology. In
addition,  actual  costs and  revenues  could vary from the amounts we expect or
budget,  possibly materially,  and such variations are likely to affect how much
additional financing we will need for our operations.  Accordingly, there can be
no assurance  that our actual  financial  needs will not exceed the  anticipated
amounts available to us, including from new, third parties, described above.

         To the extent we acquire the  amounts  necessary  to fund our  business
plan through the issuance of equity securities,  our shareholders 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
our cash flow from  operations  being  dedicated to the payment of principal and
interest  on  that  indebtedness,   and  could  render  us  more  vulnerable  to
competitive and economic  downturns.  Our  subsidiaries or affiliates could also
obtain  financing  from  third  parties,  but  there  can  be no  assurance  our
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 us.

D.       SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
----------------------------------------------------------

         Certain statements contained in "Management's  Discussion and Analysis"
constitute  forward-looking  statements  concerning  our  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 our  results  of  operations  are the  potential  risk of  delay  in
implementing our business plan; the political, economic and legal aspects of the
markets  in  which  we  operate;   competition;  and  our  need  for  additional
substantial financing. We have no control over some of these factors.

         The factors  described in this report could cause our actual  operating
results  to  differ  materially  from  those  expressed  in any  forward-looking
statements made by or on behalf of us. 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 we  undertake  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 our  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 our report on Form
10-QSB for the quarter ended June 30, 2000 and our report on Form 10-KSB for the
year ended December 31, 1999.

ITEM 2.       CHANGES IN SECURITIES

         In July and September  2000,  we issued a total of 3,891,563  shares of
our Series C Convertible  Preferred  Stock to five  investors for  approximately
$29.2 million upon their exercise of certain  options we granted them in October
1999 in  connection  with a $109 million  equity and debt  financing  round.  In
October 2000,  we issued a total of 406,666  shares of our common stock to three
parties in exchange for their  respective  minority  ownership rights in certain
operating subsidiaries.

         In each case, we believe (and received  representations  and warranties
to the effect) that (i) the investor was an "accredited investor",  as that term
is defined  under the  Securities  Act of 1933,  as amended  (the  "Act"),  (ii)
acquired the securities for investment purposes, and without a view to resale or
distribution in violation of the federal  securities  laws, (ii) understood that
the  securities  were  subject  to severe  restrictions  on  resale  or  further
disposition,  and that any such disposition  would be subject to the disposition
qualifying for an exemption from registration or the securities being registered
under  the Act,  and (iv)  understood  that the  certificates  representing  the
securities  would bear  restrictive  legends  typically  placed on  unregistered
securities.

         In July 2000,  we canceled  328,510  common  shares and 71,853 Series B
preferred  shares under the terms of the settlement.  See our report on Form 8-K
filed on July 7, 2000 for a more detailed description.

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

                                      None.

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

         In October  2000,  we received the written  consent from the holders of
approximately  88.7% of the voting power of our outstanding capital stock for an
amendment to our articles of incorporation increasing the total authorized share
of stock of the Corporation  from 115,000,000 to 125,000,000 with the 10,000,000
share increase  designated to preferred  stock. On October 16, 2000, we filed an
Information  Statement on Schedule 14C with the Commission  which  described the
transaction,  the  reasons  for it,  the  number  of  shares  consenting  to the
transaction, the percentage of the voting power of our securities represented by
those shares,  and that the number of shares  consenting to the  transaction was
sufficient to authorize the transaction at any duly called and convened  meeting
of our shareholders.

ITEM 5.       OTHER INFORMATION

                                      None.

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

          A.       EXHIBITS.
                                      None.

         B.       REPORTS ON FORM 8-K

                                      None.


<PAGE>

                                   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 14, 2000                    BY   /s/ JERRY SLOVINSKI
                                                 -------------------
                                                 Jerry Slovinski
                                                 Chief Financial Officer