<PAGE>


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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                FORM 10-K/A NO. 1

                  FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
           SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)
     |X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
              FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

     |_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
                        FOR THE TRANSITION PERIOD FROM           TO

                       COMMISSION FILE NUMBER : 000-21261

                                  VIATEL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          DELAWARE                                       13-3787366
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
 INCORPORATION OR ORGANIZATION)

   800 THIRD AVENUE, NEW YORK, NEW YORK                  10022
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)              (ZIP CODE)


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 350-9200

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                     COMMON STOCK, PAR VALUE $0.01 PER SHARE

     INDICATE BY CHECK MARK  WHETHER THE  REGISTRANT:  (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),  AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. [X] YES [ ] NO

     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT  FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S  KNOWLEDGE,  IN DEFINITIVE PROXY OR INFORMATION  STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K [ ].

     THE AGGREGATE  MARKET VALUE OF THE VOTING STOCK HELD BY  NON-AFFILIATES  OF
THE REGISTRANT AS OF APRIL 16, 1998 WAS APPROXIMATELY $135,514,594.  AS OF APRIL
16, 1998,  23,078,614 SHARES OF THE REGISTRANT'S  COMMON STOCK, $0.01 PAR VALUE,
WERE OUTSTANDING.

     DOCUMENTS INCORPORATED BY REFERENCE.  NONE.

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



<PAGE>



         The  information  required by Part III (Items 10, 11, 12 and 13) of the
undersigned  Company's  Annual  Report on Form 10-K for the  fiscal  year  ended
December 31, 1997 (the "Annual  Report"),  filed pursuant to Section 13 or 15(d)
of the Securities  Exchange Act of 1934, as amended (the "Exchange Act"), was to
be  incorporated  by reference to the  definitive  Proxy  Statement for the 1998
Annual Meeting of Stockholders  of the Company,  which Proxy Statement was to be
filed  pursuant  to  Regulation  14A  under the  Exchange  Act  within  120 days
following  the end of the  Company's  fiscal  year as  permitted  under  General
Instruction G of Form 10-K  ("Instruction  G").  However,  the definitive  Proxy
Statement will not have been filed within such period. Accordingly,  pursuant to
Instruction  G, the Company  hereby amends Items 10, 11, 12 and 13 of the Annual
Report as follows:

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Information  with  respect  to  executive  officers  of the  Company is
presented in Item 4 of this Report under the caption "Executive  Officers of the
Company."

         MICHAEL J. MAHONEY.  Mr. Mahoney  has served as Chief Executive Officer
of the Company since September 1997, as President of the Company since September
1996 and as a director of the Company  since  1995.  Mr.  Mahoney was also Chief
Operating  Officer  of the  Company  from  September  1996  to  September  1997,
Executive  Vice  President,  Operations  and Technology of the Company from July
1994 to September 1996 and Managing  Director,  Intercontinental  of the Company
from January 1996 to September  1996. From August 1990 to June 1994, Mr. Mahoney
was employed by SITEL  Corporation,  a  teleservices  company,  most recently as
President,  Information  Services  Group.  From August 1987 to August 1990,  Mr.
Mahoney was employed by URIX Corporation,  a manufacturer of  telecommunications
hardware  and  software,  in a variety  of sales and  marketing  positions.  Mr.
Mahoney is 38 years old.

         ALLAN L. SHAW.  Mr. Shaw  has  served as Senior Vice President, Finance
of the Company since  December 1997, as Chief  Financial  Officer of the Company
since January 1996 and Treasurer of the Company since  September  1996. Mr. Shaw
has served as a director  of the  Company  since  June 1996.  Mr.  Shaw was Vice
President,  Finance of the Company from January 1996 to December 1997.  Prior to
becoming the Company's Vice President,  Finance and Chief Financial Officer, Mr.
Shaw  served as  Corporate  Controller  of the  Company  from  November  1994 to
December  1995.  From  August 1987 to November  1994,  Mr. Shaw was  employed by
Deloitte & Touche  LLP,  most  recently  as a Manager.  Mr.  Shaw is a Certified
Public Accountant and a member of the American Institute, United Kingdom Society
and New York State Society of Certified Public Accountants. Mr. Shaw is 34 years
old.

         W. JAMES PEET.  Mr. Peet has served as a director of the Company  since
November 1995. He is Vice President of The Chatterjee Group, an affiliate of S-C
V-Tel Investments, L.P. ("S-C V-Tel") a stockholder of the Company, and has been
associated  with The Chatterjee  Group since August 1991. From June 1985 to July
1991, Mr. Peet was a management  consultant employed by McKinsey & Company.  Mr.
Peet is 43 years old.

         PAUL G. PIZZANI.  Mr. Pizzani  has  served as a director of the Company
since April 1996.  Mr.  Pizzani is currently a Managing  Director of Wasserstein
Perella  Emerging  Markets L.P.  where he has been employed since November 1997.
Prior to November 1997, Mr.  Pizzani was associated  with COMSAT  Corporation in
various  capacities  from  November  1985 to  October  1997,  most  recently  as
Treasurer.  COMSAT  International,  Inc.  ("COMSAT"),  an  affiliate  of  COMSAT
Corporation, is a stockholder of the Company. Mr. Pizzani is 38 years old.




<PAGE>


         The number of directors of the Company,  as  determined by the Board of
Directors,  is  currently  seven,  three  directorships  of which are  currently
vacant. The Board of Directors  consists of three classes:  Class A, Class B and
Class C. One of the three classes,  comprising  one-third of the  directors,  is
elected each year to succeed the directors  whose terms are expiring.  Directors
hold office  until the annual  meeting for the year in which their terms  expire
and until their successors are elected and qualified unless, prior to that date,
they have  resigned,  retired or otherwise left office.  In accordance  with the
Company's Amended and Restated  Certificate of Incorporation,  Class B directors
are to be elected at the 1998 Annual Meeting of Stockholders,  Class C directors
are to be  elected  at the 1999  Annual  Meeting  of  Stockholders  and  Class A
directors are to be elected at the 2000 Annual Meeting of Stockholders.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the Exchange Act  requires the  Company's  directors,
certain  officers and persons holding more than 10% of a registered class of the
Company's equity  securities to file reports of ownership and reports of changes
in ownership with the Securities and Exchange  Commission (the "Commission") and
the Nasdaq National  Market.  Directors,  certain  officers and greater than 10%
stockholders are also required by Commission  regulations to furnish the Company
with copies of all such reports that they file. Based on the Company's review of
copies of such  forms  provided  to it,  the  Company  believes  that all filing
requirements  were complied with during the fiscal year ended December 31, 1997,
except for several  filings which the Company  believes should have been made by
Martin  Varsavsky,  the former Chairman of the Board and Chief Executive Officer
of the Company,  and one late filing by Francis J. Mount, Senior Vice President,
Engineering and Network Operations.

ITEM 11. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

         The following table sets forth information concerning  compensation for
services in all capacities awarded to, earned by or paid to, the Company's Chief
Executive Officer and the other most highly  compensated  executive  officers of
the Company,  whose  aggregate cash and cash  equivalent  compensation  exceeded
$100,000 (the "Named Executives"), with respect to the last three fiscal years.



                                        2

<PAGE>

<TABLE>
<CAPTION>



                                                  ANNUAL COMPENSATION               LONG TERM COMPENSATION
                                        ----------------------------------------   --------------------------
                                                                    OTHER
                                                                    ANNUAL         RESTRICTED      SECURITIES
                                                                 COMPENSATION         STOCK        UNDERLYING      ALL OTHER
NAME AND PRINCIPAL POSITION        YEAR    SALARY($)    BONUS($)      ($)(1)         AWARDS ($)      OPTIONS(#)    COMPENSATION
---------------------------        ----    ---------    --------     --------        ----------      ----------    ------------
<S>                                 <C>     <C>          <C>          <C>             <C>              <C>             <C>

Michael J. Mahoney(2),..........   1997     $212,500     $125,000           --                 --           --           $9,500(4)
 President and Chief Executive     1996      166,458      183,129     $102,825           $299,977(3)   253,333               --
 Officer                           1995      123,000      117,607       52,715                 --       23,333               --

Allan L. Shaw(5),...............   1997      140,000       60,000           --                 --       60,666            8,400(4)
 Senior Vice President, Finance    1996      108,333      115,000           --                 --       43,333               --
 Chief Financial
 Officer and Treasurer

Lawrence G. Malone(5),..........   1997      141,750       35,588           --                 --       73,533            8,505(4)
 Senior Vice President Global      1996       98,333       88,147           --                 --       33,333               --
 Sales and Marketing

Sheldon M. Goldman(6),..........   1997      143,750       60,000           --                 --       40,200            9,000(4)
 Senior Vice President, Business   1996       86,354      100,000           --                 --       20,000               --
 Affairs and General Counsel

Martin Varsavsky(2),.............  1997      271,875           --       73,482                 --           --               --
 Chairman and Chief Executive      1996      350,000      200,000       76,476                 --           --               --
 Officer                           1995      329,673      100,000       99,813                 --           --               --

</TABLE>

-----------

(1)      The amount reflected for Mr. Mahoney (i) for 1996,  includes $32,416 of
         tax equalization payments,  $28,227 of relocation expense reimbursement
         associated with Mr. Mahoney's  repatriation from London to New York and
         $9,263 of tax gross ups and (ii) for 1995,  includes $23,834 of housing
         allowance expense.  The amount reflected of Mr. Varsavsky (i) for 1997,
         includes  $43,279 of housing  allowance  expense,  $16,395  for housing
         related expenses and $9,069 of tuition reimbursement for his children's
         schooling, (ii) for 1996, includes $67,375 of housing allowance expense
         and $8,180 of tuition  reimbursement  for his children's  schooling and
         (iii) for 1995,  includes  $35,880 of  housing  allowance  expense  and
         $47,500 of relocation expense reimbursement.
(2)      Mr. Mahoney was appointed as  Chief Executive Officer in September 1997
         following Mr. Varsavsky's resignation.
(3)      Calculated based on a value of $9.00 per share,  the  fair market value
         of the Common Stock on December 31, 1996.
(4)      Represents  matching  contributions under the Company's 401(k) plan.
(5)      The executive was not an executive officer of the Company during  1995.
(6)      Mr. Goldman began his employment with the Company in March 1996.


STOCK OPTION GRANTS

         The following table sets forth information  regarding grants of options
to  purchase  Common  Stock made by the  Company  during  the fiscal  year ended
December 31, 1997 to each of the Named Executives.  No stock appreciation rights
("SARs") were granted during 1997.



                                        3

<PAGE>

<TABLE>
<CAPTION>
                                                                                               
                                                                                               
                                                  OPTION GRANTS IN 1997
                                                                                                  
                                                                                                     
                                                       INDIVIDUAL GRANTS                          POTENTIAL REALIZABLE VALUE
                                      ------------------------------------------------------           AT ASSUMED ANNUAL
                                      NUMBER OF        PERCENT OF                                    RATES OF STOCK PRICE
                                      SECURITIES     TOTAL OPTIONS                                      APPRECIATION FOR
                                      UNDERLYING       GRANTED TO     EXERCISE                           OPTION TERM (3)
                                       OPTIONS        EMPLOYEES IN     PRICE     EXPIRATION         -----------------------    
NAME                                 GRANTED (#)        1997 (1)     ($/SHARE)(2)   DATE              (5%)           (10%)
----                                 -----------       ----------    -----------   -----            --------       --------
<S>                                    <C>              <C>            <C>         <C>                <C>            <C>

Michael J. Mahoney................             --             --          --         --                   --             --
Allan L. Shaw.....................      60,666(4)(5)         14.2%       $9.00    01/01/07          $343,373       $870,174
Lawrence G. Malone................      40,200(4)(5)          9.4         9.00    01/01/07           227,534        576,616
                                        33,333(4)(6)          7.8         6.50    05/27/07           136,259        345,307
Sheldon M. Goldman................      40,200(4)(5)          9.4         9.00    01/01/07           227,534        576,616
Martin Varsavsky..................             --             --          --         --                   --             --

</TABLE>

-----------

(1)      The Company  granted  options  to purchase a total of 428,194 shares of
         Common Stock during 1997.
(2)      The exercise price was equal to the fair market value of  the shares of
         Common Stock underlying the options on the grant date.
(3)      Amounts  reported  in  these  columns  represent  amounts  that  may be
         realized upon exercise of options  immediately  prior to the expiration
         of their term assuming the specified  compounded  rates of appreciation
         (5% and 10%) on the Common  Stock over the term of the  options.  These
         assumptions are based on rules promulgated by the Commission and do not
         reflect  the  Company's  estimate of future  stock price  appreciation.
         Actual  gains,  if any, on the stock option  exercises and Common Stock
         holdings are  dependent  on the timing of such  exercise and the future
         performance  of the Common  Stock.  There can be no assurance  that the
         rates of appreciation assumed in this table can be achieved or that the
         amounts reflected will be received by the option holder.
(4)      In the event of certain Corporate  Transactions (as defined)  involving
         the Company,  all unvested stock options  become fully vested.  See "--
         Stock Incentive Plan." The options granted to Messrs.  Shaw and Goldman
         also vest upon a Change of Control  (as  defined).  See "--  Employment
         Agreements."
(5)      Options vest and became exercisable as to 33.34% on January 1, 1998 and
         will vest and become  exercisable  as to an  additional  33.33% on each
         anniversary thereafter.
(6)      Options vest and become exercisable as to 33.34% on May 27, 1998 and as
         to an additional 33.33% on each anniversary thereafter.

         Effective  January 1, 1998,  the Company has granted  stock  options to
executive officers as follows: Michael J. Mahoney, 90,000 options at an exercise
price of $5.00 per share and 90,000  options at an  exercise  price of $5.50 per
share; Allan L. Shaw, 60,000 options at an exercise price of $5.00 per share and
60,000  options at an exercise  price of $5.50 per share;  Lawrence  G.  Malone,
27,000  options at an exercise price of $5.00 per share and 60,000 options at an
exercise  price of $5.50 per share;  Sheldon M.  Goldman,  60,000  options at an
exercise  price of $5.00 per share and 60,000  options at an  exercise  price of
$5.50 per share;  and Francis J. Mount,  40,000  options at an exercise price of
$5.00 per share and 60,000 options at an exercise price of $5.50 per share.

         The Company's Compensation Committee has determined that it would be in
the best interest of the Company and its  stockholders to increase the number of
shares available for grant under the Stock Incentive Plan in order to enable the
Company to grant  additional  stock  options to the Company's  senior  executive
officers. If the proposed increase is approved by the Company's  stockholders at
the 1998 Annual Meeting of Stockholders,  the Compensation  Committee intends to
grant to senior  management  additional stock options equal to approximately 12%
of the outstanding Common Stock.



YEAR-END OPTION VALUES

         The  following  table sets forth  information  regarding the number and
year end value of  unexercised  options held at December 31, 1997 by each of the
Named  Executives.  No SARs were exercised by the Named Executives during fiscal
1997.



                                        4
<PAGE>

<TABLE>
<CAPTION>
                                        FISCAL 1997 YEAR-END OPTION VALUES

                                                NUMBER OF SECURITIES               VALUE OF UNEXERCISED
                                               UNDERLYING UNEXERCISED                 "IN-THE-MONEY"
                                                 OPTIONS AT FISCAL                  OPTIONS AT FISCAL
                                                    YEAR-END (#)                       YEAR-END ($)
NAME                                         EXERCISABLE/UNEXERCISABLE        EXERCISABLE/UNEXERCISABLE (1)
----                                         -------------------------        -----------------------------
<S>                                              <C>                               <C> 

Michael J. Mahoney........................        181,980/118,019                       $29,400/$0
Allan L. Shaw.............................         62,443/54,889                            0/0
Lawrence G. Malone........................         45,622/71,244                            0/0
Sheldon M. Goldman........................         26,734/33,466                            0/0
Martin Varsavsky..........................              0/0                                 0/0

------------
</TABLE>

(1)      Options are  "in-the-money"  if the fair market value of the underlying
         securities  exceeds the exercise price of the options.  The amounts set
         forth represent the difference between $5.00 per share, the fair market
         value of the Common Stock issuable upon exercise of options at December
         31,  1997 and the  exercise  price  of the  option,  multiplied  by the
         applicable number of options.


EMPLOYMENT AGREEMENTS

         The  Company  has  executed  new  employment  agreements  with  Messrs.
Mahoney, Shaw and Goldman,  pursuant to which Mr. Mahoney has agreed to continue
to serve as President and Chief Executive  Officer of the Company,  Mr. Shaw has
agreed to continue to serve as Senior Vice President,  Chief  Financial  Officer
and Treasurer of the Company and Mr.  Goldman has agreed to continue to serve as
Senior Vice  President,  Business  Affairs  and General  Counsel for the Company
(collectively,  the "Employment Agreements"). The term of the Mahoney Employment
Agreement  extends  for a  period  of three  years  and the term of the Shaw and
Goldman  Employment  Agreements  extend for a period of two years,  in each case
unless earlier terminated in accordance with the terms thereof.  Pursuant to the
respective  Employment  Agreement,  Mr. Mahoney is entitled to receive an annual
base  salary of  $300,000  (subject to  inflationary  adjustments),  Mr. Shaw is
entitled  to  receive  an annual  base  salary of  $175,000  and Mr.  Goldman is
entitled to receive an annual base salary of $185,000, subject, in each case, to
increases  approved from time to time by the Board. In addition,  Mr.  Mahoney's
Employment  Agreement  provides for an annual cash bonus payment equal to 70% of
his  base  salary  multiplied  by a  bonus  multiple  ranging  from  0.6  to 2.0
determined based upon a comparison of actual versus projected EBITDA and revenue
figures and each of Messrs.  Shaw's and Goldman's  Employment Agreement provides
for an annual cash bonus payment equal to 50% of their base salary multiplied by
a bonus multiple  ranging from 0.6 to 2.0 determined  based upon a comparison of
actual  versus  projected  EBITDA and revenue  figures.  Each of the  Employment
Agreements  also provides that the executive  will be entitled to receive annual
grants of stock options or  restricted  stock in amounts to be determined by the
Board of  Directors  in its sole  and  absolute  discretion  and  provides  that
following  a Change  of  Control  (as  defined  therein),  the  Company  will be
obligated  to pay the  executive  an amount  equal to the  Severance  Amount (as
defined  therein) if the  executive  chooses to  terminate  his  employment  and
include a  non-competition  covenant.  Each of the  Employment  Agreements  also
contains a prohibition on the solicitation of Company employees.

         For  purposes  of the  Employment  Agreement,  "Change of  Control"  is
defined to mean such time as (i) a "person"  or "group"  (within  the meaning of
Sections  13(d)  and  14(d)(2)  of  the  Exchange  Act),  becomes  the  ultimate
"beneficial  owner" (as defined in Rule 13d-3 of the Exchange  Act) of more than
50% of the  total  voting  power of the  then  outstanding  voting  stock of the
Company on a fully diluted basis or (ii) individuals who at the beginning of any
period of two  consecutive  calendar years  constituted the Board (together with
any new directors  whose election by the Board or whose  nomination for election
by the Company's  stockholders  was approved by a vote of at least two-thirds of
the  members of the Board then  still in office who either  were  members of the
Board at the  beginning  of such  period or whose  election  or  nomination  for
election  was  previously  so  approved)  cease for any reason to  constitute  a
majority of the members of the Board then in office.

                                        5

<PAGE>

         In October 1996, the Company entered into an employment  agreement with
Martin  Varsavsky  with  respect to his  continued  services  to the  Company as
Chairman and Chief  Executive  Officer.  As a result of his resignation as Chief
Executive Officer in September 1997, Mr. Varsavsky's  employment agreement is no
longer effective,  except to the extent of certain  prohibitions on solicitation
of employees and non-competition covenant.

STOCK INCENTIVE PLAN

         The Company has adopted the Amended  Stock  Incentive  Plan (the "Stock
Incentive Plan") under which  "non-qualified" stock options ("NQSOs") to acquire
shares of Common Stock may be granted to employees, directors and consultants of
the Company and "incentive"  stock options  ("ISOs") to acquire shares of Common
Stock may be  granted  to  employees,  including  employee-directors.  The Stock
Incentive  Plan also  provides  for the grant of SARs and  shares of  restricted
Common Stock to the Company's employees, directors and consultants.

         The Stock  Incentive  Plan provides for the issuance of up to a maximum
of  2,566,666  shares  of  Common  Stock and is  currently  administered  by the
Compensation  Committee of the Board. Under the Stock Incentive Plan, the option
price of any ISO may not be less than the fair market value of a share of Common
Stock on the date on which the option is  granted.  The option  price of an NQSO
may be less than the fair  market  value on the date the NQSO is  granted if the
Board of  Directors so  determines.  An ISO may not be granted to a "ten percent
stockholder"  (as such term is defined in Section  422A of the Code)  unless the
exercise  price is at least  110.0% of the fair market value of the Common Stock
and the term of the  option  may not  exceed  five years from the date of grant.
Each option  granted  pursuant to the Stock  Incentive  Plan is  evidenced  by a
written  agreement  executed by the Company and the grantee,  which contains the
terms, provisions and conditions of the grant. Stock options may not be assigned
or  transferred  during the lifetime of the holder  except as may be required by
law or pursuant to a qualified domestic relations order. Common Stock subject to
a restricted stock purchase or bonus agreement is transferable  only as provided
in such  agreement.  The maximum  term of each stock  option  granted to persons
other than ten percent stockholders is ten years from the date of grant.

         For  options to quality  as ISOs,  the  aggregate  fair  market  value,
determined  on the date of grant,  of the shares with  respect to which the ISOs
are  exercisable  for the first time by the grantee during any calendar year may
not exceed $100,000. Payment by option holders upon exercise of an option may be
made in cash or,  with the  consent  of the Board of  Directors,  in whole or in
part,  (i) with shares of Common  Stock,  (ii) by  irrevocable  direction  to an
approved  securities  broker to sell  shares and deliver all or a portion of the
proceeds  to the  Company,  (iii) by  delivery  of a  promissory  note with such
provisions  as the  Board of  Directors  determines  appropriate  or (iv) in any
combination of the foregoing.  In addition, the Board of Directors,  in its sole
discretion,  may  authorize  the  surrender  by an optionee of all or part of an
unexercised stock option and authorize a payment in consideration  thereof of an
amount equal to the  difference  between the aggregate  fair market value of the
shares of Common  Stock  subject to such stock option and the  aggregate  option
price per share of such Common  Stock.  In the Board of  Directors'  discretion,
such  payment  may be made in cash,  shares of Common  Stock with a fair  market
value on the date of surrender  equal to the payment amount or some  combination
thereof.

         The Stock Incentive Plan provides that outstanding options,  restricted
shares of Common Stock or SARs vest in their entirety and become exercisable, or
with respect to restricted stock, are released from restrictions on transfer and
repurchase  rights,  in the event of a "Corporate  Transaction." For purposes of
the Stock Incentive Plan, a Corporate  Transaction includes any of the following
stockholder-approved  transactions to which the Company is a party: (i) a merger
or consolidation in which the Company is not the surviving entity,  other than a
transaction  the  principal  purpose  of which  is to  change  the  state of the
Company's  incorporation,  or a transaction in which the Company's  stockholders
immediately prior to such merger or consolidation  hold (by virtue of securities
received  in  exchange  for  their  shares  in the  Company)  securities  of the
surviving entity  representing more than 50.0% of the total voting power of such
entity  immediately  after such  transaction;  (ii) the sale,  transfer or other
disposition of all or substantially  all of the assets of the Company unless the
Company's  stockholders  immediately  prior  to such  sale,  transfer  or  other
disposition hold (by virtue of securities  received in exchange for their shares
in the Company)  securities  of the purchaser or other  transferee  representing
more than 50.0% of the total voting power of such entity  immediately after such
transaction;  or (iii) any reverse  merger in which the Company is the surviving
entity but in which the Company's stockholders  immediately prior to such merger
do not hold (by virtue of their shares in the Company held immediately  prior to

                                        6

<PAGE>



such transaction)  securities of the Company representing more than 50.0% of the
total voting power of the Company immediately after such transaction.

         The Company has filed with the Commission a  Registration  Statement on
Form S-8 covering the shares of Common Stock  underlying  options  granted under
the Stock Incentive Plan.

COMPENSATION OF DIRECTORS

         Non-employee  directors receive an annual fee of $12,000, a meeting fee
of $1,000 for every board  meeting  attended  and each  committee  meeting  held
separately  and  a  $500  fee  for  each  board  meeting  or  committee  meeting
participated  in by telephone.  Directors who are also  employees of the Company
are not  separately  compensated  for  serving  on the Board of  Directors.  All
directors are reimbursed for out-of-pocket  expenses.  Under the Stock Incentive
Plan,  the  Company  may,  from  time  to  time  and  in the  discretion  of the
Compensation Committee, grant options to directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The Board of Directors did not have a Compensation  Committee  prior to
the  establishment  of one in January 1996. As a result,  prior to such time the
entire  Board of  Directors,  including  Mr.  Mahoney,  made all  determinations
concerning  compensation  of  executive  officers.  The  current  members of the
Compensation Committee are Messrs. Peet, Pizzani and Mahoney. Mr. Mahoney is the
Company's President and Chief Executive Officer.  None of the executive officers
of the Company currently serves on the compensation  committee of another entity
or any other  committee of the board of directors of another  entity  performing
functions similar to the Compensation Committee.  No interlocking  relationships
exist between the Company's Board of Directors or its Compensation Committee and
the board of directors or compensation committee of any other company.

         SHAREHOLDERS AGREEMENTS.  S-C V-Tel and Martin Varsavsky are parties to
a  shareholders'  agreement  (the  "S-C  V-Tel  Shareholders  Agreement")  which
provides that, in certain instances,  if Mr. Varsavsky and Juan Manuel Aisemberg
propose to sell 20.0% or more of the aggregate  number of shares of Common Stock
beneficially  owned by them to any  person or  "group"  (within  the  meaning of
Section  13(d) or 14(d)(2)  of the  Exchange  Act),  they shall cause S-C V-Tel,
COMSAT and certain  other  stockholders  to have the right to sell its shares of
Common Stock in such a  transaction  on a pro rata basis with Messrs.  Varsavsky
and Aisemberg for the same  consideration per share and on the same terms as Mr.
Varsavsky.

         On April 5, 1994,  Messrs.  Varsavsky and Aisemberg and COMSAT  entered
into  a  shareholders'   agreement  (as   subsequently   amended,   the  "COMSAT
Shareholders  Agreement").  Pursuant  to the  terms of the  COMSAT  Shareholders
Agreement,  so long as  COMSAT  beneficially  owns at least  10.0%  (subject  to
certain  adjustments) of the issued and outstanding  shares of Common Stock on a
fully diluted basis, COMSAT is entitled to representation on the Company's Board
of Directors in proportion to its percentage  ownership of Common Stock, subject
to a minimum of one seat, and to designate one member of an Executive  Committee
of the  Board  of  Directors,  if any  such  committee  is  established.  COMSAT
currently holds less than 10.0% of the outstanding Common Stock.

         VOTING  AGREEMENT.  S-C  V-Tel  and  COMSAT  are  parties  to a  voting
agreement (the "Voting Agreement"),  pursuant to which, at all times that either
S-C V-Tel or COMSAT is entitled to nominate  directors to the Company's Board of
Directors,  the other party is required to vote its respective  shares of Common
Stock in favor of the first party's  nominees.  The Voting Agreement  remains in
effect until the earlier of the  dissolution of the Company or the date on which
either S-C V-Tel or COMSAT no longer owns any shares of Common Stock.  See "Item
13. Certain  Relationships  and Related  Transactions -- S-C V-Tel  Investments,
L.P.," and "Item 13. Certain  Relationships  and Related  Transactions -- COMSAT
Investments,  Inc." for a description of the registration rights held by each of
S-C V-Tel and COMSAT.




                                        7

<PAGE>



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The  following  table  sets forth  certain  information  regarding  the
beneficial  ownership of the Common  Stock,  as of April 16,  1998,  by (i) each
person known to the Company to own  beneficially  more than 5% of the  Company's
outstanding  shares of Common Stock,  (ii) each  director of the Company,  (iii)
each of the Named Executives,  and (iv) all executive  officers and directors of
the Company,  as a group. All information  with respect to beneficial  ownership
has been furnished to the Company by the respective stockholders of the Company.


<TABLE>
<CAPTION>

                                                                        AMOUNT AND NATURE      PERCENTAGE
                                                                          OF BENEFICIAL           OF
NAME AND ADDRESS                                                          OWNERSHIP (1)          CLASS
----------------                                                        -----------------      ----------

<S>                                                                       <C>                    <C>

Martin Varsavsky
Parque Empresarial Edificio 2,
c/o Beatriz De Bobadilla
14,5 Ofic. B
Madrid, Spain.........................................................          5,859,666          25.4%

The Capital Group Companies
333 South Hope Street
Los Angeles, CA  90071(2).............................................          2,882,700          12.5

COMSAT Investments, Inc.
6560 Rock Spring Drive
Bethesda, MD  20817(3)................................................          2,140,539           9.3

S-C V-Tel Investments, L.P.
888 Seventh Avenue
New York, NY  10106(3)................................................          1,698,272           7.4

FMR Corp.
82 Devonshire Street
Boston, MA  02109.....................................................          1,644,200           7.1

Morgan Stanley, Dean Witter, Discover & Co.
1585 Broadway
New York, NY  10036...................................................          1,244,246           5.4

Michael J. Mahoney(4).................................................            230,313           1.0

Allan L. Shaw(4)......................................................             67,443            *

Lawrence G. Malone(4).................................................             56,733            *

Sheldon M. Goldman(4)(5)..............................................             34,733            *

W. James Peet.........................................................                  -            -

Paul G. Pizzani.......................................................                  -            -

All directors and executive
     officers as a group (7 persons)(6)...............................            389,222           1.7%

</TABLE>

-----------

   *     Represents  beneficial  ownership  of  less  than 1% of the outstanding
         shares of Common Stock.

(1)      Beneficial  ownership is determined in accordance with the rules of the
         Commission.  In computing the number of shares  beneficially owned by a
         person and the percentage ownership of that person,  shares  of  Common


                                        8

<PAGE>



         Stock  subject to options  and  warrants  held  by  that  person   that
         are currently  exercisable or  exercisable  within 60 days of April 16,
         1998 are  deemed  outstanding.  Such  shares,  however,  are not deemed
         outstanding  for the purpose of computing the  percentage  ownership of
         any other  person.  Except as indicated in the footnotes to this table,
         the stockholder named in the table has sole voting and investment power
         with respect to the shares set forth opposite such stockholder's name.
(2)      The amount reported reflects shares held by a subsidiary of The Capital
         Group   Companies   solely  as  the   investment   manager  of  various
         institutional  accounts.  The  Capital  Group  Companies  do  not  have
         investment power or voting power over any of these shares.
(3)      Does not include  7,557,939  shares of Common Stock which COMSAT may be
         deemed to beneficially  own as a result of certain voting  arrangements
         contained in the COMSAT Shareholders Agreement.
(4)      Includes shares of Common Stock which these  individuals have the right
         to acquire  through the exercise of options within 60 days of April 16,
         1998,  as follows:  Michael J. Mahoney  181,980;  Allan L. Shaw 62,443;
         Lawrence G. Malone 56,733; and Sheldon M. Goldman 26,733.
(5)      Includes  1,000  shares  owned  by  Mr.  Goldman's  wife.  Mr.  Goldman
         disclaims  "beneficial  ownership" of such shares within the meaning of
         Rule 13d-3 under the Exchange Act.
(6)      Includes vested and exercisable options  to  purchase 327,889 shares of
         Common Stock which were granted pursuant to the Stock Incentive Plan.


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


S-C V-TEL INVESTMENTS, L.P.

         Pursuant to the terms of a stock purchase  agreement,  dated  September
30, 1993 (as subsequently  amended,  the "S-C V-Tel Stock Purchase  Agreement"),
S-C V-Tel  purchased  1,695,532  shares of Common  Stock on  October 1, 1993 and
2,739  shares of Common  Stock on December  15, 1993 for an  aggregate  purchase
price of $5.0 million (the "S-C V-Tel Shares"). The terms of the S-C V-Tel Stock
Purchase  Agreement  provide that,  among other  things,  beginning on April 16,
1997, S-C V-Tel has the right to demand registration under the Securities Act of
1933, as amended (the  "Securities  Act") of the S-C V-Tel  Shares.  Such demand
right must be exercised  for at least  30.0%,  and no more than 70.0% of the S-C
V-Tel  Shares  then owned by S-C V-Tel.  No  earlier  than six months  after the
effective date of its first demand registration,  S-C V-Tel may request a second
demand  registration  for any remaining  S-C V-Tel Shares.  The expenses of such
demand  registrations,  excluding any  underwriter's  commissions  and discounts
relating to the sale of the S-C V-Tel  Shares,  will be paid by the Company.  In
addition,  if the Company  proposes to register any of its securities  under the
Securities Act, S-C V-Tel has the right, on up to four occasions,  to include in
such registration a maximum of 33-1/3% of the S-C V-Tel Shares it then owns. The
expenses of any such  "piggy-back"  registration,  excluding  any  underwriter's
commissions  and discounts  relating to the sale of the S-C V-Tel Shares and the
fees  and  disbursements  of S-C  V-Tel's  legal  counsel,  will  be paid by the
Company.  S-C V-Tel is entitled to sell or transfer any of the S-C V-Tel Shares,
without the  consent of the  Company,  provided  that the  transferee  is not in
competition  with, or does not otherwise have interests adverse to, the Company.
See "Item 10. Executive  Compensation -- Compensation  Committee  Interlocks and
Insider  Participation -- Shareholders  Agreements" for a description of certain
tag-along rights of S-C V-Tel.

COMSAT INVESTMENTS, INC.

         Pursuant  to the terms of a stock  purchase  agreement,  dated April 5,
1994  (as  subsequently  amended,  the  "COMSAT  Purchase  Agreement"),   COMSAT
purchased  2,140,539 shares of Common Stock for a purchase price of $8.0 million
(the "COMSAT Shares").  Pursuant to the terms of the COMSAT Purchase  Agreement,
COMSAT has been granted the same demand and piggyback registration rights as S-C
V-Tel.  The COMSAT  Purchase  Agreement  further  provides  that  COMSAT may not
transfer any COMSAT Shares to any transferee  without first offering such shares
to the Company if,  following such transfer,  such transferee would own 20.0% or
more of the then  outstanding  shares of Common Stock.  In addition,  COMSAT has
agreed  that it will not acquire  more than 30.0% of the shares of Common  Stock
outstanding at any time except in certain  circumstances  relating to changes in
the percentage of the outstanding Common Stock owned by Mr. Varsavsky.  Prior to
the  sale  of all or  substantially  all of the  assets  of the  Company  or the
consolidation or merger of the Company with any person in


                                        9

<PAGE>



which the Company is not the  surviving  entity,  COMSAT has  certain  rights to
invest in any joint  venture  proposed by the Company.  See "Item 10.  Executive
Compensation -- Compensation  Committee Interlocks and Insider  Participation --
Shareholders  Agreements"  for a  description  of certain  voting rights held by
COMSAT.



                                       10

<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Registrant  has duly caused this  Amendment  to the
Report to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City and State of New York, on the 28th day of April, 1998.

                                 VIATEL, INC.

                                 By:  MICHAEL J. MAHONEY*
                                     -------------------------------------------
                                     Michael J. Mahoney
                                     President and Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities indicated on the 28th day of April, 1998.

          SIGNATURE                                  TITLE(S)
          ---------                                  --------


       MICHAEL J. MAHONEY*            President, Chief Executive Officer
----------------------------------    and Director (Principal Executive Officer)
       Michael J. Mahoney                                 



       ALLAN L. SHAW*                 Senior Vice President, Finance; Chief
----------------------------------    Financial Officer; Treasurer (Principal
       Allan L. Shaw                  Financial and Accounting Officer) and
                                      Director



       PAUL G. PIZZANI*               Director
----------------------------------
       Paul G. Pizzani



       W. JAMES PEET*                 Director
----------------------------------
       W. James Peet



*By: /s/ SHELDON M. GOLDMAN
     ------------------------------
     Sheldon M. Goldman
     Attorney-in-fact




                                       11