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                                  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, 1996

     |_|    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                                     13-378366
(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 24, 1997 WAS APPROXIMATELY  $85,339,595.  AS OF APRIL
24, 1997,  22,609,213 SHARES OF THE REGISTRANT'S  COMMON STOCK, $0.01 PAR VALUE,
WERE OUTSTANDING.

     DOCUMENTS INCORPORATED BY REFERENCE.  NONE.

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<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, 1996 (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 1997
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."

     MARTIN VARSAVSKY.  Mr. Varsavsky,  a founder of the Company,  has served as
Chairman of the Board and Chief Executive Officer of the Company since September
1996 and as Chief  Executive  Officer and director of the Company since February
1991. Mr. Varsavsky was also President of the Company from February 1991 through
September  1996. In 1985, Mr.  Varsavsky founded both Urban Capital Corporation,
a commercial real  estate  development   company,  and  Medicorp   Sciences,  a
biotechnology  company  which  conducts  AIDS  research.  Mr. Varsavsky does not
currently  hold  an  officer  position with either Urban Capital  Corporation or
Medicorp  Sciences.  Mr.  Varsavsky  is related by  marriage  to Mr. Juan Manuel
Aisemberg,  a principal  stockholder of the Company.  Mr.  Varsavsky is 37 years
old.

     MICHAEL J. MAHONEY. Mr. Mahoney has served as President and Chief Operating
Officer of the  Company  since  September  1996 and as a director of the Company
since 1995.  Mr.  Mahoney was also  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 Vice  President,  Finance and 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.  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 33 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 principal  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 42 years old.

     PAUL G. PIZZANI.  Mr. Pizzani has served as a director of the Company since
April 1996. He is the Treasurer of COMSAT  Corporation  and has been  associated
with COMSAT Corporation in various capacities since November 1985, most recently
as the Vice President of Finance and Business  Planning of COMSAT  International
Ventures.   COMSAT  International,  Inc.  ("COMSAT"),  an  affiliate  of  COMSAT
Corporation,  is a principal stockholder of the Company. Mr. Pizzani is 37 years
old.

     ANTONIO  CARRO.  Mr.  Carro has served as a director of the  Company  since
August 1996. He is the head of Corporate  Projects of Banco Santander,  where he
has been employed since July 1995. From January 1994 to July 1995, Mr. Carro was
a Managing Director of Airtel, a mobile telephone operator and from January 1985
to December  1993 was employed by McKinsey & Co.  where he was  co-leader of its
European Telecommunications practice. Mr. Carro is 38 years old.

<PAGE>


     The number of  directors  of the  Company,  as  determined  by the Board of
Directors,  is six.  The Board of  Directors  of the  Company  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 A directors are to be elected at the 1997 Annual Meeting of
Stockholders,  Class B directors are to be elected at the 1998 Annual Meeting of
Stockholders  and Class C directors are to be elected at the 1999 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, 1996,
except  for one late  filing  for each of  Morten  Steen-Jorgensen  and Sheldon
M. Goldman.

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
NAME AND PRINCIPAL POSITION                  YEAR      SALARY($)    BONUS($)        ($)(1)       AWARDS ($)     OPTIONS(#)
---------------------------                  ----      ---------    --------       --------      ----------     ----------

<S>                                          <C>        <C>           <C>           <C>            <C>           <C>
Martin Varsavsky,
   Chairman and Chief Executive Officer...   1996       $350,000      $200,000      $ 76,476             --             --
                                             1995        329,673       100,000        99,813             --             --
                                             1994        309,345       200,000            --             --             --

Michael J. Mahoney,
   President and Chief Operating Officer..   1996        166,458       183,129       102,825       $299,997(2)     253,333
                                             1995        123,000       117,607        52,715             --         23,333
                                             1994         59,538(3)     50,000            --             --         23,333

Allan L. Shaw(4),
   Vice President, Finance; Chief          
   Financial Officer and Treasurer........   1996        108,333       115,000            --             --         43,333

Lawrence G. Malone(5),
   Vice President and Managing Director,
   Intercontinental.......................   1996         98,333        88,147            --             --         33,333

Sheldon M. Goldman(6),
   Vice President, Business and Legal
   Affairs................................   1996         86,354       100,000            --             --         20,000


-----------

(1)      The amount reflected for Mr.  Varsavsky (i) for 1996,  includes $67,375
         of housing  allowance  expense and $8,180 of tuition  reimbursement for
         his children's schooling and (ii) for 1995, includes $35,880 of housing
         allowance expense and $47,500 of relocation expense reimbursement.  The
         amount  reflected for Mr. Mahoney (i) for 1996,  represents  $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.

(2)      Calculated  based  on a value of $9.00 per share, the fair market value 
         of the Common Stock on December 31, 1996.

(3)      Mr. Mahoney began his employment with the Company in July 1994.

(4)      Mr. Shaw  was  not an executive  officer of  the Company during 1995 or 
         1994.

(5)      Mr. Malone  was  not an executive officer of the Company during 1995 or
         1994.

(6)      Mr. Goldman began his employment with the Company in March 1996.

</TABLE>



                                        3

<PAGE>



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, 1996 to each of the Named Executives.  No stock appreciation rights ("SARs")
were granted during 1996.

<TABLE>
<CAPTION>
                                               OPTION GRANTS IN 1996
                                                                                               
                                                       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 (#)        1996 (1)     ($/SHARE)(2)     DATE             (5%)          (10%)   
----                                 -----------     --------------  ------------  -----------    ----------     ---------- 
<S>                                    <C>                <C>          <C>         <C>             <C>           <C>
                                                                                                
Martin Varsavsky..................              -              -           -            -                  -              - 
Michael J. Mahoney................     133,000(4)(5)         16.2%      $ 5.85      01/01/06        $489,311     $1,240,011 
                                       120,000(5)(6)         14.6        12.00      10/23/01         905,608      2,294,989 
Allan L. Shaw ....................      43,333(5)(7)          5.3         5.85      01/01/06         159,424        404,011 
Lawrence G. Malone................      33,333(5)(7)          4.1         5.85      01/01/06         122,633        310,777 
Sheldon M. Goldman................      20,000(5)(8)          2.4         5.85      03/01/06          73,581        186,468 
                                                                                                                            
                                                                                                
-----------

(1)      The  Company  granted  options to purchase a total of 822,265 shares of
         Common Stock during 1996.

(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)      Options to purchase  77,296 shares of Common Stock were  exercisable at
         December 31, 1996.  The remaining  56,037 options will vest in 1997 and
         1998 if certain objective criteria are met.

(5)      In the event of certain Corporate Transactions (as defined herein), all
         unvested  stock  options  become  exercisable,  unless  assumed  by the
         successor corporation or its parent company.

(6)      Options  vest  and become exercisable as to 25% on October 23, 1997 and
         as to an additional 25% on each anniversary thereafter.

(7)      Options  vested and became  exercisable as to 33.34% on January 1, 1997
         and will vest and become exercisable as to an additional 33.33% on each
         anniversary thereafter.

(8)      Options vested and become exercisable as to 33.34% on March 1, 1997 and
         will vest and become  exercisable  as to an  additional  33.33% on each
         anniversary thereafter.

</TABLE>


                                        4

<PAGE>

YEAR-END OPTION VALUES

     The following  table sets forth  information  regarding the number and year
end value of unexercised  options held at December 31, 1996 by each of the Named
Executives. No SARs were exercised by the Named Executives during fiscal 1996.

<TABLE>
<CAPTION>
                                        FISCAL 1996 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>

Martin Varsavsky..........................              0/0                               $0/$0
Michael J. Mahoney........................        113,591/186,408                    400,206/216,024
Allan L. Shaw.............................         23,704/32,962                      74,668/103,830
Lawrence G. Malone........................         18,055/25,278                      56,873/79,626
Sheldon M. Goldman........................            0/20,000                           0/62,997

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

(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 $9.00 per share, the fair market
         value of the Common Stock issuable upon exercise of options at December
         31,  1996 and the  exercise  price  of the  option,  multiplied  by the
         applicable number of options.

</TABLE>

EMPLOYMENT AGREEMENTS

     The  Company  has  executed  employment  agreements  with  each of  Messrs.
Varsavsky and Mahoney,  which became effective on October 23, 1996,  pursuant to
which Mr.  Varsavsky agreed to continue to serve as Chairman and Chief Executive
Officer  and Mr.  Mahoney  agreed to continue  to serve as  President  and Chief
Operating  Officer of the Company  until  October 23, 1999 and October 30, 1999,
respectively,  unless earlier  terminated in accordance  with the terms of their
respective  employment  agreement.  The annual base salary under such agreements
will be reviewed annually but cannot be less than $350,000 for Mr. Varsavsky and
$200,000  for Mr.  Mahoney  (in each  instance as adjusted  for  inflation).  In
addition,  each  employment  agreement  also  provides  for an annual cash bonus
payment equal to the  executive's  base salary  multiplied  by a bonus  multiple
ranging  from 0.6 to 1.9  determined  based upon a comparison  of actual  versus
projected  EBITDA and revenue figures.  Each employment  agreement also provides
that the respective 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.

     Mr.  Varsavsky's  employment  agreement  also  provides  that upon  certain
terminations of employment (including certain terminations following a Change in
Control, as defined therein), the Company will be obligated to pay Mr. Varsavsky
an amount equal to the  Severance  Amount (as defined  therein).  Mr.  Mahoney's
employment  agreement  provides that following a Change in Control,  the Company
will be obligated to pay him an amount equal to the Severance Amount (as defined
therein) if he chooses to terminate his employment.  Each of Messrs. Varsavsky's
and  Mahoney's   employment   agreement   also  include  a  prohibition  on  the
solicitation of employees and a non-competition covenant.

     In each of Messrs. Varsavsky's and Mahoney's employment agreements, "Change
in 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


                                        5
<PAGE>

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.


STOCK INCENTIVE PLAN

     The Company has adopted the 1993 Flexible 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
stock to the Company's employees, directors and consultants.

     The Stock  Incentive  Plan  provides for the issuance of up to a maximum of
1,833,333  shares  of  Common  Stock  and  is  currently   administered  by  the
Compensation Committee.  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
such transaction)  securities of the Company representing more than 50.0% of the
total voting power of the Company immediately after such transaction.


                                        6
<PAGE>




     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  Messrs.   Varsavsky  and  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  Operating  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 Mr.  Varsavsky  are  parties  to a
shareholders' agreement (the "S-C V-Tel Shareholders  Agreement") which provides
that, in certain  instances,  if Mr. Varsavsky and Mr. Aisemberg propose to sell
20.0% or more of the  aggregate  number of shares of Common  Stock  collectively
owned by them,  S-C V-Tel has the  right to sell its  shares of Common  Stock in
such a transaction on a pro rata basis with Messrs.  Varsavsky and Aisemberg and
certain of the Company's  other  stockholders,  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.  In  addition,  in  certain
instances,  if Mr.  Varsavsky  proposes  to sell  10.0% or more of the shares of
Common  Stock  which he owns,  COMSAT has the right to sell its shares of Common
Stock in such a transaction  on a pro rata basis with Mr.  Varsavsky and certain
of the Company's other stockholders, for the same consideration per share and on
the same terms as Mr. Varsavsky.

     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 24, 1997, 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.

                                             Amount and Nature     Percentage
                                               of Beneficial           of
Name And Address                               Ownership (1)         Class
----------------                               -------------         -----

Martin Varsavsky
Parque Empresarial Edificio 2,
c/o Beatriz De Bobadilla
14,5 Ofic. B
Madrid, Spain..............................          6,068,167          26.8%

COMSAT Investments, Inc.
6560 Rock Spring Drive
Bethesda, MD  20817(2).....................          2,140,539           9.5

S-C V-Tel Investments, L.P.
888 Seventh Avenue
New York, NY  10106........................          1,698,272           7.5

FMR Corp.
82 Devonshire Street
Boston, MA  02109..........................          1,978,900           8.8

Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, PA  15258......................          1,396,000           6.2

Michael J. Mahoney(3)......................            169,702            *

Allan L. Shaw(3)...........................             30,925            *

Lawrence G. Malone(3)......................             19,722            *

Sheldon M. Goldman(3)(4)...................             13,666            *

Antonio Carro..............................                  -            -

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

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

All directors and executive
     officers as a group (11 persons)(5)...          6,333,441          28.0%


-----------

   *     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
         Stock  subject to options  and  warrants  held by that  person that are
         currently  exercisable or exercisable  within 60 days of April 24, 1997
         are deemed outstanding. Such shares, however, are not


                                        8

<PAGE>



         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)      Does not include  6,694,240  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.

(3)      Includes  shares of Common Stock which the executive  officers have the
         right  to  acquire  through  the  exercise  of  options  within 60 days
         of  April 24, 1997, as follows:  Michael J. Mahoney  121,369;  Allan L.
         Shaw 25,925; Lawrence G. Malone 19,722; and Sheldon M. Goldman 6,666.

(4)      Includes 1,000 shares owned by Mr. Goldman's wife.


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 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.

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 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.



                                       9

<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 24th day of April, 1997.

                          VIATEL, INC.

                          By:  MARTIN VARSAVSKY*
                               -------------------------------------------------
                               Martin Varsavsky
                               Chairman of the Board 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 24th day of April, 1997.

           SIGNATURE                            TITLE(S)


       MARTIN VARSAVSKY*              Chairman of the Board and Chief
-------------------------------       Executive Officer (Principal Executive
       Martin Varsavsky               Officer)
                                      

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

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


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

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

       ANTONIO CARRO*                 Director
-------------------------------
       Antonio Carro


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




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