U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-KSB

(Mark One)
 [X]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 
1934 [FEE REQUIRED]    

            For Fiscal Year Ended: September 30, 1996

OR

 [ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 
OF 1934 [NO FEE REQUIRED]

For the transition period from                to                   

Commission file number        0-27580                             
 
      AvTel Communications, Inc.
(Name of small business issuer in its charter)
   (Formerly Hi Tiger, International, Inc.)

        Utah                            87-0378021    
State or other jurisdiction of     (I.R.S. Employer
incorporation or organization          Identification No.)

130 Cremona Drive, Suite C, Santa Barbara, CA    93117       (Address of 
principal executive offices)     (zip code)

Issuer's telephone number      (805) 685-0355

Securities registered under Section 12(b) of the Act:  NONE

Securities registered under Section 12(g) of the Act:

Common Stock Par Value $0.001
(Title of class)

     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    

                                        Total pages:   40 
                                        Exhibit Index Page: 20 






Form 10-KSB

     Check if there is no disclosure of delinquent filers pursuant to Item 405 
of Regulation S-B contained in this form, and no disclosure will 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-KSB or any 
amendment to this form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year.  $ 299,315

     As of December 27 1996, there were 7,100,807 shares of the Registrant's 
common stock, par value $0.001, issued and outstanding.  The aggregate market 
value of the Registrant's voting stock held by non-affiliates of the 
Registrant was approximately  $2,382,887 computed at the average bid and asked 
price as of December 20, 1996.


DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference, briefly 
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, 
etc.) into which the document is incorporated:  (1) any annual report to 
security holders; (2) any proxy or information statement; and (3) any 
prospectus filed pursuant to Rule 424(b) or (C) of the Securities Act of 
1933 ("Securities Act"): The Registrant's combined form of Notice of Annual 
Meeting of Shareholders and Proxy Statement for its Annual Meeting of 
Shareholders on February 27, 1997 is incorporated herein by reference into 
Part II, Item 8 and Part III, Item 9-12, inclusive of this Report on Form 
10-KSB.

     Transitional Small Business Disclosure Format (check one):

Yes     ; NO X  


<PAGE>

TABLE OF CONTENTS


Item Number and CaptionPage

PART I

1.  Description of Business                                      4  

2.  Description of Property                                     14

3.  Legal Proceedings                                           15

4.  Submission of Matters to a Vote of Security Holders         15



PART II

5.  Market for Common Equity and Related Stockholder Matters     16

6.  Management's Discussion and Analysis or Plan of 
    Operations                                                   16

7.  Financial Statements                                         19

8.  Changes in and Disagreements With Accountants on 
    Accounting and Financial Disclosure                          19


PART III

9.  Directors, Executive Officers, Promoters and Control 
    Persons; Compliance with Section 16(a) of the Exchange Act    20
 
10. Executive Compensation                                        20

11. Security Ownership of Certain Beneficial Owners and
    Management                                                    20

12. Certain Relationships and Related Transactions                20


13. Exhibits and Reports on Form 8-K                              20






                                                                   
PART I  DESCRIPTION OF BUSINESS
                                                                   
GENERAL

     AvTel Communications, Inc., a Utah corporation ("AvTel" or the "Company") 
is a non-facilities based telecommunications carrier providing a comprehensive 
array of broadband voice and data network services.  The Company was 
incorporated on October 27, 1981, and did not conduct any business operations 
during the seven (7) year period ending September 30, 1993, following which it 
became a development stage company, a status it maintained until February, 
1995 when it acquired, through a subsidiary, The Friendly Net, LLC ("TFN") a 
Utah limited liability company.  

     The acquisition of TFN, an Internet Service Provider ("ISP"), was part of 
a general management strategy to evaluate and acquire business enterprises in 
the telecommunications industry which, in the opinion of management, 
represented opportunities for revenue growth and profitability.  

     The TFN acquisition was accomplished through an agreement, with the 
Company's wholly owned subsidiary, Hi, Tiger, Inc., pursuant to which 260,000 
shares of the Company's $.001 par value common stock ("Common Stock"), options 
to purchase 75,000 shares of Common Stock and $21,000 in cash were exchanged 
for an 80% interest in TFN.  The remaining 20% interest is held by Tree of 
Stars, Inc, a Nevada corporation, whose President and principal shareholder is 
Paul G. Begum, a principal shareholder of the Company and its former President 
and Chairman.  TFN began operations in January, 1995 and, at the time the 
Company acquired its interest, TFN had a value of $106,675, including computer 
equipment and furniture and fixtures with a historical value of $106,675 on 
the date of the exchanges.  Pursuant to certain agreements entered into in 
connection with the Company's acquisition of AvTel Holdings, Inc., a 
California corporation, the Company acquired certain first refusal rights to 
purchase the 20% interest in TFN held by Tree of Stars, Inc.  See "Recent 
Developments - Merger Transaction".

     The TFN transaction was accounted for as a purchase between related 
parties.  Accordingly, assets and liabilities are reflected at their 
historical values.  Shareholder's equity has been restated to reflect shares 
of Common Stock exchanged in the TFN acquisition as outstanding as of January 
1, 1995, when TFN began operations, and income and expense have been presented 
since that date.

     Prior to October 23, 1996, the Company conducted operations under the 
name "Hi, Tiger International, Inc.".  The name change was effected in 
connection with the Company's merger with AvTel Holdings, Inc., a California 
corporation ("AHI").  See "Recent Developments - Merger Transaction".
     The Company's principal offices are located at 130 Cremona Drive, Suite 
C, Santa Barbara, California, 93117.

RECENT DEVELOPMENTS

     Since September 30, 1996, the Company has merged with AvTel Holdings, 
Inc., undergone a complete change in its board of directors and executive 
management, pursued several acquisition and strategic alliances and begun 
development of a sales and operational strategy to position the Company as a 
non-facilities based telecommunications carrier providing a comprehensive 
array of broad band voice and data network services.

MERGER TRANSACTION

     On October 23, 1996, the Company completed a merger transaction (the 
"Merger") in which it acquired 100% of the issued and outstanding capital 
stock of AvTel Holdings, Inc. ("AHI"), a California corporation, formerly 
called "AvTel Communications, Inc.", in exchange for 4,252,508 shares of the 
Company's Common Stock, representing approximately 61% of the Company's issued 
and outstanding Common Stock after giving effect to the Merger and 1,000,000 
shares of newly authorized shares of the Company's Series A Convertible 
Preferred Stock.  The Merger, which was consummated in accordance with the 
terms of an Acquisition Agreement dated August 30, 1996, was approved by the 
Company's shareholders at a special meeting held October 23, 1996.  The 
transaction has been accounted for as a purchase.  Assets and liabilities are 
reflected at their fair market value.

     In connection with the Merger, all previous members of the Company's 
board of directors and executive management resigned and were replaced by new 
directors and executive officers who have considerable previous management 
experience in the telecommunications industry.  The Merger allows the Company 
to avail itself of these management skills, the capital resources available to 
AHI and the customer base and industry relationships that had been established 
and were under development by AHI prior to the merger.

     Since the Merger, the Company has, under its current management team, 
aggressively pursued selective acquisitions, strategic alliances and the 
development and implementation of sales and marketing efforts.

ACQUISITIONS AND STRATEGIC ALLIANCES

     In November, 1996, the Company acquired Silicon Beach Communications, 
Inc. ("SBC"), a privately held California corporation, that serves as an 
Internet Service Provider ("ISP") and provides software development services.  
The acquisition was structured as a stock for stock transaction in which the 
Company issued an aggregate of 115,000 shares of its Common Stock in exchange 
for all the issued and outstanding capital stock of SBC.

     In December, 1996, the Company's wholly owned subsidiary, Hi, Tiger, Inc. 
("HTI"), entered into a letter of intent to acquire all the issued and 
outstanding capital stock of WestNet Communications, Inc. ("WNI"), a Ventura, 
California ISP.  Following completion of  the contemplated acquisition of WNI, 
the Company intends to integrate the customer bases, network facilities and 
other operations of SBC and WNI in order to achieve desired efficiencies and 
economies of scale.  

     In December, 1996, the Company entered into a Master Service Agreement 
with Electric Lightwave, Inc. ("ELI"), a subsidiary of Citizens Utilities.  
Under this agreement, ELI will provide AvTel with Frame Relay facilities on a 
national basis through the ELI network as well as through network to network 
interfaces ("NNI's") with LCI and the Regional Bell Operating Companies.  The 
term of the agreement is three years, is non-exclusive and does not require 
any minimum service commitments by the Company.

     The Company is currently in negotiations with a MCI Communications, 
whereby MCI will provide the Company with its international dedicated 
leased-line facilities for the Company's resale.  This transaction is intended 
to provide revenue growth opportunities with attractive margins.  However, 
while certain operational installations have been completed in anticipation of 
the execution of a definitive agreement, there are no assurances that this 
transaction will be consummated or that, if  completed, the revenue and 
profitability objectives will be achieved.


SALES AND OPERATIONAL STRATEGY

     Prior to the Merger, the Company's sales and operational strategy was 
directed, primarily, at increasing revenues through expansion of the customer 
base for the TFN ISP operations.

     Following the Merger, the Company's new executive management team began 
to develop and implement a comprehensive sales and marketing strategy designed 
to position the Company as a leading provider of broad band network services, 
providing complete inter-networking solutions for small- and mid-size business 
and professional offices and certain personal applications.

     This strategy is based on the assumption that network connectivity for 
these market applications is becoming a critical element in the ability of 
these business, professional and other organizations to improve productivity 
and lower costs through the use of a variety of telecommunications services, 
including branch office, remote office and telecommuter networking as well as 
network access to customers, vendors, financial institutions and the 
Internet.  While management expects that these factors will result in an 
increased market demand for these services, there are no assurances regarding 
the size of such demand or that the Company will be selected to provide its 
services in response to such demand.  See "Industry and Market".

     The implementation of this strategy involves the creation and marketing 
of products and services designed for both business and personal applications, 
namely Business Network Service and Personal Network Services, respectively.  
The Company is developing two distinct sales channels to pursue these market 
opportunities, a channel Sales Division and a Direct Sales Division.  See "The 
Company Sales Strategy"

     While the Company believes that pursuit of this sales and marketing 
strategy will result in monthly, recurring revenues from networking customers 
under multi-year term agreements, this strategy is in its formative stages and 
the Company is recruiting, hiring, training and developing the personnel 
resources necessary to manage and staff the sales and marketing efforts.  
Delays or other difficulties in these recruitment and other activities could 
adversely affect the Company's ability to timely and effectively implement 
these revenue-generating objectives.

INDUSTRY AND MARKET

     Internetworking.  At an increasing rate, business, professional and other 
organizations are seeking to internetwork their LANs and WANs to share 
information and computing resources for applications such as e-mail, 
transaction processing, the sharing of databases, multi-site engineering and 
product development and electronic image transfer.  The communications traffic 
of many organizations has grown steadily during the past two decades leading 
to enterprise-wide networks facilitating rapid and efficient data 
communications between work groups, departments and branch locations.  
Additionally, a shift to enterprise-wide remote access has occurred due to 
increased business mobility, increased telecommuting, reduced cost of WAN 
services and widespread adoption of remote access standards.  Internet and 
remote access devices extend the organization network beyond the branch 
office, bringing remote users closer to the enterprise and permitting 
connection to the corporate LAN so users can work anywhere, any time.  Users 
can access e-mail, databases and servers as if they were in the corporate 
office.

     It is management's opinion that as a result of these shifts, 
internetworking, the method used for interconnecting networks, has been 
undergoing rapid growth over the past ten years.  This has been reflected in 
the significant growth in sales and distribution of routers, remote access 
servers, intranet software and other various components that enable 
internetworking. 


     As the computing paradigm migrates to client-server architectures, 
enterprise-wide networks are the enablers that allow those technologies to be 
implemented by organizations.  However, many organizations are significantly 
challenged to manage the multi-provider contacts for network planning, network 
design, equipment deployment, WAN services, administration, billing, support 
and maintenance.  AvTel has recognized the opportunity to bridge the gap 
between telecom and computer providers and simplify networking complexities by 
becoming a single point of contact. 

     Network Provisioning.  It is management's opinion that a fundamental 
change is occurring in business technology applications.  Communications 
requirements such as bandwidth availability and network design are replacing 
computer requirements such as processor speed, memory or operating systems as 
the delimitating factors for business applications.  Video conferencing, 
remote patient diagnostics with medical imaging, tele-commuting are all 
business applications in which the success of the deployment is defined by the 
available bandwidth.  The ultimate realization of this trend is the World-Wide 
Web ("WWW") and WWW applications developed with Internet-specific tools such 
as SUN Microsystems' Java.  These Web applications are computer platform and 
operating system independent but depend entirely upon connectivity and 
bandwidth for successful deployment and execution.

     As a result, connectivity is becoming one of the most important factors 
in enhancing business productivity and customer service.  Large corporations 
have historically created private wide area networks through leased dedicated 
data lines.  However, dedicated point-to-point facilities have several 
deficiencies:

          Leased lines are very expensive
          Remote offices and telecommuters are omitted
          Leased lines are not suited for unscheduled and asynchronous 
communications

     As a result, small and medium size companies that have sought the 
benefits of internetworking have been required to use modems and dial-up 
telephone lines which are generally too slow to handle today's applications.

     Growing demands for high-speed capabilities have given way to the 
emergence of new carrier-based data communication services to overcome the 
deficiencies of both dedicated leased and dial-up lines.  WAN solutions vary 
substantially depending on an organization's size and communications needs.  
Traditionally, wideband digital transmission circuits (such as T1 and DS-1 
were leased from public carriers to provide voice, fax and data communications 
links between larger offices and low speed leased lines (such as DS-O) for 
branch office connectivity.  For some applications, however, this has proven 
expensive and inefficient because the entire bandwidth capacity is dedicated 
24 hours per day, whether or not it is used.

     The birth of "packet" based services such as X.25 were developed to 
address the issue of allocation and utilization.  Today, "fast packet" 
networking technologies such as Frame Relay and Asynchronous Transfer Mode 
("ATM") have emerged as an integrated, cost-effective, flexible WAN solution.  
These networks allow for "bandwidth on demand" between any two endpoints on a 
WAN.  While ATM is not generally available through public carriers, Frame 
Relay services are now widely offered throughout the United States and are 
increasing in demand. 

THE COMPANY

     Strategy.  The Company intends to be a leading provider of broadband 
network services, providing complete internetworking solutions for small to 
mid-size offices.  The Company 's services will be sold through a network of 
value added resellers and a direct sales force focused on select vertical 
markets.

     Wide Area Network connectivity for small to medium size offices is fast 
becoming a critical element in each organizations' infrastructure.  These 
enterprises require branch office, remote office and telecommuter networking 
as well as network access to customers, vendors and the internet.  As a 
result, management believes that tremendous demand has been created for 
flexible, cost-effective internetworking solutions.  AvTel sees these primary 
market trends in the internetworking arena:

     Demand for WAN connectivity for small to medium size offices is 
increasing
     Capabilities of server integrated internetworking are increasing
     Outsourcing of network services is increasing

     Management believes that there are significant opportunities created by 
all three trends in becoming an affordable, single source provider of 
integrated voice and data internetworking solutions.  The Company intends to 
market a variety of products and services tailored around its PointStream 
point-to-point facilities, FrameLink Frame Relay facilities, and internet 
service through its subsidiaries, The Friendly Net and Silicon Beach, 
providing customers with access through 1+, 0+, 800#, PPP, SLIP, frame relay, 
T1, T3, ISDN and virtual network sharing.

     Principal Sources of Revenues.  Management anticipates that the Company's 
sales strategy will generate recurring monthly revenues from the following 
primary sources:

     The sale of bandwidth under multi-year contracts;
     The sale of network management services under multi-year 
contracts;
     The sale of internet access, and
     The sale of value-added services such as data warehousing, 
website publishing and hosting, and network design and consultation. 


     In addition, management believes that the Company revenues will be 
generated from the sale of voice services such as long distance, 800 numbers, 
calling cards and voicemail.


     Management believes that it has developed a sound sales strategy and that 
attractive market opportunities exist which should enable the Company to 
generate, grow and sustain revenues through sales of its products and 
services.  However, these sales and marketing strategies have been developed 
following the Merger in October, 1996 and have not yet been fully implemented 
through, among other things, the recruitment, hiring and training of 
additional management and other personnel necessary to staff the Company's 
sales and marketing function and the negotiation and completion of additional 
contracts and agreements with customers and vendors.  

     The Company's near term efforts in these areas will be focused on 
"ramping up" its capabilities and resources in sales and marketing which 
efforts will result in salary, recruitment and related expenses and other 
expenses to establish suitable arrangements with agents, value-added resellers 
and other resources for the sale and distribution of the Company's products 
and services.

     It is anticipated that the development and implementation of these sales 
and marketing capabilities through both internal and external resources will 
result in expenditures for salaries, recruitment expenses, technical support, 
trade shows, advertising and other SG&A ("Sales, general and administrative") 
items that will exceed, both in absolute terms and as a percentage of 
revenues, similar expenses incurred by the Company in fiscal year 1996.  
Moreover, management expects that much of this effort will take place before 
the results, namely increased revenues, are recognized.  Accordingly, the 
Company will be operating at a loss for financial reporting purposes until 
such time as the Company is recognizing revenues in sufficient volumes to 
offset these and other expense items.  There are no assurances that the 
development and implementation of these sales and marketing capabilities will 
be accomplished in sufficient time or with sufficient success to produce the  
desired levels of revenues for the Company's products and services  Further, 
the execution of this strategy will require the Company to utilize its working 
capital to fund this activity.  

     Management believes that the Company's existing sources of capital will 
be adequate to support initial, limited implementation of its sales and 
marketing strategy.  However, the complete execution of this strategy is 
likely to require additional capital resources and there are no assurances 
that such resources will be available in sufficient amounts on a timely basis 
and under terms and conditions acceptable to the Company.  See "Management's 
Discussion and Analysis - Liquidity and Capital Resources"


MARKETING STRATEGY  

     AvTel is focused on the business customer and will primarily target 
small- to mid-size business "units" currently equipped with local area 
networks and the small-office/home-office ("SOHO") workforce.  To pursue these 
groups, AvTel will utilize Direct Sales, Value Added Resellers and other 
alternative sales channels.  Marketing efforts will also include participation 
in major telecommunications trade shows, advertising in trade journals, the 
publishing of newsletters and technical articles, and seminars for AvTel's 
non-direct sales channels.  AvTel will market two distinct portfolios of 
bundled services under the categories of Business Network and Personal Network 
Services.

     Direct Sales.  AvTel will employ a direct sales force to target niche 
industries that have specific internetworking needs.  This group will be 
deployed nationally and will be responsible for generating revenues on a 
geographic basis. 

     Value Added Resellers.  The computer industry today includes nearly 
100,000 VARs. AvTel will specifically target those VARs that provide 
network and internetworking services, predominantly in vertical markets.  By 
utilizing the relationship already developed between the VAR's and their 
customers, AvTel seeks to gain an immediate foothold with those customers over 
competing broadband service providers.  AvTel will provide full training, 
sales and technical support to its network of VARs.  It is anticipated that 
the VARs will receive discounts on AvTel products (for VAR markups) as well as 
participation in the monthly recurring income AvTel receives from their 
customers.  This unique structure will provide a true partnership in growth 
between AvTel and the VAR network. 

     Network Integrators.  AvTel is pursuing relationships with network 
integrators to provide turnkey network connectivity solutions to their 
customers under its "Platinum Partnership" program. 

     Other Alternative Channels.  AvTel will partner with vendors of software 
applications such as medical billing, distance learning, corporate training 
and financial services which require network connectivity.  By partnering with 
AvTel, software developers will be enabled to provide turnkey solutions for 
their customers while AvTel gains a foothold  in connectivity provisioning in 
select vertical markets.

     PRODUCTS.  The Company has identified a suite of voice and data 
communications products and services to provide its customers which include 
bandwidth, internet access, data warehousing, network management services, 
website creation and hosting, national and international long distance, 800 
service, voice mail and calling cards.  These services are intended to, among 
other things, enable customers to enhance their internal computer networks and 
access external computer networks and the Internet.

     Bandwidth.  Under its PointStream and FrameLink product lines, the 
Company provides customers with frame relay and private line connectivity for 
speeds ranging from 56kbps to full T1 and T3 for national and international 
data traffic.  

     The Company's dedicated service is tailored around its PointStream 
program which includes digital private line services using high capacity 
digital circuits to carry voice, data and video transmissions from point to 
point in flexible configurations.  PointStream includes different standardized 
transmission speeds and circuit capacities ranging from a DS-0 circuit 
(64kbps) to a DS-3 circuit (44.736kbps).  These varying speeds allow for a 
private line digital channel for connecting various telecommunications 
equipment such as personal computers and fax machines, or a more robust 
connection for multiple data transmissions, access to the Internet and 
interconnection of LAN's or linking customer locations to other customer 
locations.

     The Company's Frame Relay service is tailored around its FrameLink 
program, which is designed to meet the requirements of high speed data 
communications such as Client-Server, LAN-to-LAN and internet transport.  
Frame Relay is a fast packet transport alternative to dedicated circuits which 
allows flexible allocation and efficient utilization of bandwidth among 
multiple network sites.  It is best suited for "bursty" data applications, 
versus those requiring a constant data stream.  By providing bandwidth on 
demand, frame relay improves utilization efficiency and supports a broader 
range of communications applications.  The Company offers customers data rates 
ranging from 56 kbps to 1.536 kbps.

INTERNET SERVICES
     Corporate and individual internet users are offered access through an 
AvTel-owned ISP, newly-created AvTel POP or resale of a third-party 
provisioner.  AvTel's internet access offers the complete range of internet 
connectivity ranging from subscription dial-up SLIP/PPP accounts through full 
T1, T3, ISDN and frame relay.

DATA WAREHOUSING
     AvTel currently provides data warehousing services for corporate and 
individual users.  Warehousing services, whether  hosting a web page or 
warehousing corporate databases, are offered based on individual needs.  
Customer charges are determined by the amount of storage space and bandwidth 
utilized during specific time intervals.

NETWORK MANAGEMENT SERVICES
     The Company provides technical support for provisioning, billing, 
monitoring and servicing the telecommunications networks it markets.  The 
Company intends to provide management and monitoring seven days a week, 
24-hours a day, and to provide real-time alarm, status and performance 
information for each circuit on the Company's network.

WEBSITE PUBLISHING
     Website creation packages allow users to create personal and corporate 
websites on the World Wide Web.  The Company has developed a variety of 
proprietary applications enabling immediate, user-friendly personal 
development of website pages and applications for individual and corporate 
use.  Corporate users of the company's applications include news and media 
companies, direct mail and on-line shopping organizations. AvTel additionally 
employs a Website Development Group capable of  developing advanced, 
high-resolution websites and associated applications Internet and intranet 
environments.

HARDWARE/SOFTWARE
     The Company provides a complete line of hardware and software packages to 
enable internetworking for its corporate customers.  Additionally, high speed 
modems and co-location servers are  available to individual and corporate 
users seeking to use the Company's Network Operation Center as a secure, 
central processing location on an outsource basis.

NETWORK DESIGN
     AvTel provides network design services for its corporate customers to 
include voice, data and video applications across frame relay, dedicated and 
dial-up networks.  The Company builds and manages public and private Intranet, 
WAN and GAN networks.

VOICE AND LONG DISTANCE SERVICES
     AvTel offers voice transmission over frame relay products enabling 
interoffice voice communications at significantly reduced costs to the user.  
The Company intends to provide customers with discounted national and 
international long distance services,  cost-competitive 800 numbers for 
corporate and individual accounts, and intends to offer a variety of advanced, 
intelligent voice mail services.


COMPETITION

     The broadband services marketplace is experiencing an evolution, both in 
definition and participants.  Technology advancements, telecommunications 
reform and the commercialization of the Internet have all contributed to 
transforming the once traditional telephone and cable arenas.  Long distance 
companies, Regional Bell Operating Companies ("RBOCs"), internet service 
providers, competitive access providers (CAPs) and cable companies are 
building, upgrading and acquiring network capacity to pursue and accommodate 
projected demand.  Each of these business groups represent additional 
competition for the markets the Company pursues.

     The Company operates in a highly competitive environment.  In most 
markets, the Company's principal competitors will be the RBOCs or GTE 
Corporation and long distance carriers.  The Company believes that these 
companies generally benefit from their long-standing relationships with 
customers, substantial technical and financial resources and federal and state 
regulations that could provide them with increased pricing flexibility as 
competition heightens.  In addition, in many metropolitan areas, competitors 
may include Competitive Local Exchange Carriers ("CLECs") and CAPs.  National 
internet providers such as UUNET and PSINet are also offering data 
connectivity.  Potential competitors could also include cable television 
companies, utilities, and wireless communications providers.  Consolidation of 
the telecommunications companies and the formation of strategic alliances 
within the telecommunications industry, as well as the development of new 
technologies, could give rise to significant new competitors to the Company.  

     The RBOC's, GTE Corporation and many of the CLEC's, CAP's and other 
participants in the telecommunications market have substantially greater 
technical and financial resources than those available to the Company and as a 
result these companies may from time to time represent a formidable 
competitive presence.

     The principal competitive factors in the markets for the Company's 
products and services are price, quality, features, performance, reliability 
and customer support.  AvTel believes it presently competes favorably in all 
of these areas.
     
EMPLOYEES

     The Company currently has 25 full-time employees.  The Company intends to 
increase this number over the next 12 months.  None of the employees are 
employed pursuant to a collective bargaining agreement.  The Company considers 
its relationship with its employees good.  In connection with its recent 
strategic acquisitions, sales and marketing plans, the Company expects to 
significantly increase its employment force in the near term and also expects 
to implement certain Company-wide policies and practices regarding the 
protection and value-enhancement attributes of intellectual property 
interests.  See - "Recent Developments"


                                                                 

ITEM 2. DESCRIPTION OF PROPERTY
                                                                  

     The Company leases facilities in three locations.  The Company's 
corporate location is approximately 1,500 square feet and is located at 130 
Cremona Drive, Suite C, Santa Barbara, CA 93117.  The Company leases these 
facilities on a month-to-month basis for a monthly rent of $1.65 per square 
foot.  The Friendly Net L.L.C. office location is approximately 1,100 square 
feet and is located at 350 West Broadway, Suite 111, Salt lake City, UT 
84101.  TFN's office lease is rented on a month-to-month basis at a monthly 
rate of $1,000.  Silicon Beach Communications, Inc., office location is 
approximately 3,441 square feet and is located at 104 West Anapamu, Suite C, 
Santa Barbara 93101.  SBC leases this space under a 5 year lease at a monthly 
rate of $4,645.  In addition, the Company and its subsidiaries operate  
Points-of-Presence (POPs) for the purpose of creating local access points to 
its network backbone.  Only one of these locations, Provo, Utah, requires 
monthly rent in addition to what is listed above, with 20 square feet of space 
at a monthly rate of $100.00.



                                                                   
ITEM 3.  LEGAL PROCEEDINGS
                                                                   

     The Company is currently not a party to any legal proceedings, nor have 
any legal proceedings been threatened against the Company or its properties 
which may have a material or adverse effect on the Company's assets or 
financial performance.



                                                                 
ITEM 4.  SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
                                                                   
     Subsequent to September 30, 1996, the holders of the Company's $0.001 par 
value common stock approved the Company's acquisition of 100% of the issued 
and outstanding capital stock of AHI pursuant to an Acquisition Agreement 
dated August 30, 1996.  The transaction, described in the Company's 
Information Statement dated October 3, 1996, was approved by the shareholders 
at a special meeting on October 23, 1996.

PART II

ITEM 5. 
MARKET FOR COMMON EQUITY AND 
RELATED STOCKHOLDER MATTERS
                                                                   

     The stock is traded over-the-counter on the Electronic Bulletin Board 
with the trading symbol "AVCO" (formerly "HITI").  The following high and low 
bid information was provided by a market  maker on the NASD'S OTC Bulletin 
Board.  The quotations provided reflect inter-dealer prices, without retail 
mark-up, mark-down or commission and may not represent actual transactions.  
At December 20, 1996, the bid and ask quotations for the Company's Common 
Stock as quoted on the OTC Bulletin Board were $0.50 and $0.875.


          1995                         HIGH BID               LOW BID

     First Quarter  (12/31/94)     $ 0.75                 $ 0.625
     Second Quarter (03/31/95)     $ 0.6875               $ 0.6875
     Third Quarter  (06/30/95)     $ 0.6875               $ 0.5625
     Fourth Quarter (09/30/95)     $ 0.5                  $ 0.5

          1996                         HIGH BID               LOW BID

     First Quarter  (12/31/95)     $ 0.50                 $ 0.50
     Second Quarter (03/31/96)     $ 0.875                $ 0.50
     Third Quarter  (06/30/96)     $ 1.437                $ 0.75
     Fourth Quarter (09/30/96)     $ 1.00                 $ 1.00


     The number of shareholders of record of the Company's common stock as of 
September 30, 1996 was approximately 180.

     The Company has not paid any cash dividends to date and does not 
anticipate paying dividends in the foreseeable future.  It is the present 
intention of management to utilize all available funds for the development of 
the Company's business.


                                                                   
ITEM 6. MANAGEMENT'S DISCUSSION AND 
ANALYSIS OR PLAN OF OPERATIONS
                                                                   
General

     The following discusses the financial position and results of operations 
of the Company and its consolidated subsidiary, The Friendly Net (a Utah 
Limited Liability Company), which have been combined and accounted for as a 
purchase between related parties.

Liquidity and Capital Resources

     In prior years, the Company generally has needed working capital 
principally to fund its current operations and accounts receivable.  Generally 
the Company has had adequate funds for its activities and, from time to time 
in the past, has relied on short-term borrowings and the issuance of 
restricted common stock to fund current operations.  Although there were no 
formal commitments from banks or other lending sources for lines of credit or 
similar short-term borrowings, the Company had been able to borrow any 
additional working capital from a principal shareholder or other related 
entities.  The Company's current management does not anticipate using these 
sources for the Company's future capital needs.  Consistent with current 
management's intentions to develop and execute AvTel's business, sales and 
marketing strategies, it is anticipated that the Company's needs for capital 
will, in the near term, exceed funds generated from operations.  The Company 
has, as a result of the Merger acquired access to the capital resources of AHI 
and, while these funds will be employed to support some level of the business 
and other strategies, other capital resources will be required by the Company.

     Management is exploring a range of alternative solutions to these 
expected capital needs, including secured and unsecured debt, capital 
equipment leases to facilitate the anticipated growth in AvTel's sales, 
marketing and technical support staff, issuance of the Company's debt or 
equity securities, or any combination of the foregoing.  There are no 
assurances that the additional funds necessary to implement management's 
objectives will be available or if available that they will be in sufficient 
amounts and under terms and conditions acceptable to the Company.  If these 
funds are not available in sufficient amounts or at the times and under terms 
acceptable to the Company, management would be required to significantly 
curtail, restrict or delay the execution of some parts of this business 
strategy and such actions could have a material adverse effect on the 
Company's ability to execute its business plan and strategy. 

     The increase in liquidity and capital resources during the past two years 
reflects the increases attributable to the acquisition of The Friendly Net and 
the year and partial year of operations.  The Company generates and uses cash 
flows through three activities: operating, investing, and financing.  During 
the year ended September 30, 1996, operating activities used cash of $10,000 
as compared to net cash used of $19,000 for 1995 and $18,000 for 1994.  The 
increase in cash used by operating activities in 1995 compared to 1994 is due 
principally to the commencement of operations in The Friendly Net while in 
previous years the Company was in the development stage.

     The Company's merger with AHI and subsequent acquisition of Silicon Beach 
Communications, Inc., have substantially increased current monthly revenues 
and provided the Company with additional technical and other resources to 
allow the Company to further expand future operations.  The Company's 
anticipated acquisition of WNI will further increase the Company's revenues 
while the Company gains potential economies-of-scale through the integration 
of WNI's customer base into Silicon Beach's operations.

     Cash flows used in investing activities changed in 1996 primarily due to 
the acquisition of $44,000 of computer equipment for The Friendly Net 
Operations compared to $16,000 of computer equipment and $21,000 for the 
acquisition of the Friendly Net LLC, in 1995.

     Financing activities provided $46,000 in 1996,  $62,000 in 1995 and used 
$11,000 in 1994.  The increase in cash flow from financing activities in 1996 
and 1995 was primarily from the sale of restricted common stock while the 
decrease in 1994 was primarily from the repayment of loans from related 
parties. 

Results of Operations

     As of September 30, 1996, the Company has only been in operation  since 
January 1995 (twenty-one months).  During 1996, customers with repeat business 
accounted for a majority of the revenues generated.  Although for the 
Company's The Friendly Net (TFN) operations, TFN has performed work for it's 
customers with repeat business, there is no assurance that such customers will 
maintain or increase the level or volume of business of the Company.  During 
1996, general and administrative expenses decreased to 119% of gross revenues 
as compared to 163% for 1995 resulting in a loss from operations of $49,000 
for the year ended September 30, 1996, compared to 1995 with losses from 
operations of $128,000 and 1994 prior to the acquisition of The Friendly Net 
with losses from operations of $22,000.  During fiscal 1995 the increased 
general and administrative expenses was a result of increased activity in the 
search for potential acquisition candidates and the expenses resulting from 
staffing and training personnel for the operations of The Friendly Net, while 
the volume of revenues generated had not reached a point where the gross 
margin generated was sufficient to offset the cost of the initial start-up 
expenses.  During the Company's current fiscal year, management anticipates 
that selling, general and administrative expenses as a percentage of revenues 
and in absolute dollars, exceed comparable expenditures in fiscal 1996 as a 
result of the implementation and execution of the Company's business, sales 
and marketing strategy.  See "The Company - Strategy" and "Principal Sources 
of Revenues".

Inflation and Regulation

     The Company's operations have not been, and in the near term are not 
expected to be, materially affected by inflation or changing prices.  The 
Company encounters competition from a variety of firms offering Internet 
services in its market area.  Many of these firms have long standing customer 
relationships and are well-staffed and well financed.  The Company believes 
that competition in the Internet service industry is based on competitive 
pricing, although the ability, reputation and technical support of a concern 
is also significant.  The Company does not believe that any recently enacted 
or presently pending proposed legislation will have a material adverse effect 
on its results of operations.

     The Company believes that recent changes in telecommunications regulation 
has favorably impacted the Company's business.  The Company has initiated an 
expansion of operations to include a variety of voice and data services 
requiring certain federal and state licences and permits.  The Company is in 
the process of applying for various regulatory approvals and permits and 
anticipates they will be granted on a timely basis.  If they are not granted, 
the Company may have to curtail or delay certain elements of this strategy.

                                                                   
ITEM 7. FINANCIAL STATEMENTS
                                                                   
     The financial statements of the Company and supplementary data are 
included beginning immediately following the signature page to this report.  
See Item 14 for a list of financial statements and financial statement 
schedules included.

                                                                   
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                
ACCOUNTING AND FINANCIAL DISCLOSURE 
                                                                   
     There are not and have not been any disagreements between the Company and 
its accountants on any matter of accounting principles, practices or financial 
statements disclosure.


PART III

                                                                   
ITEM 9. DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
                                                                   
Included by reference - from the Company's Form of Notice of Annual meeting & 
Proxy Statements for the Company's annual meeting on February 27, 1997.


                                                                   
ITEM 10. EXECUTIVE COMPENSATION
                                                                   
Included by Reference - from the Company's Form of Notice of Annual meeting & 
Proxy Statements for the Company's annual meeting on February 27, 1997. 


                                                                   
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
                                                                    
Included by Reference - from the Company's Form of Notice of Annual meeting & 
Proxy Statements for the Company's annual meeting on February 27, 
1997.                         


                                                                   
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
                                                                   
Included by reference - from the Company's Form of Notice of Annual meeting & 
Proxy Statements for the Company's annual meeting on February 27, 1997.



                                                                   
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
                                                                   
     (a)     The following documents are filed as part of this report.

     1.     Financial Statements                                 PAGE
Report of Robison, Hill & Co., Independent Certified
Public Accountants                                               F-1 

Consolidated Balance Sheets as of September 30, 1996             F-2 

Consolidated Statements of Operations for the years ended
September 30, 1996 and 1995                                      F-4 

Consolidated Statement of Stockholders' Equity for the years ended
September 30, 1996 and 1995                                      F-5 

Consolidated Statements of Cash Flows for the years ended
September 30, 1996 and 1995                                      F-8 

Notes to Consolidated Financial Statements                       F-10

2.  Financial Statement Schedules

     The following financial statement schedules required by Regulation S-X 
are included herein.

     All schedules are omitted because they are not applicable or the required 
information is shown in the financial statements or notes thereto.

3.  Exhibits

     The following exhibits are included as part of this report:

Exhibit          Reference
Number           Number                    Title of Document          Location

Item 2.                     Plan of Acquisitions                               
2.01          2     Plan of Acquisition                          Incorporated
                                                                 by reference
Item 3.                     Articles of Incorporation and Bylaws 
                                                          
3.01          3     Articles of Incorporation of AvTel 
                    Communications, Inc., Inc. a Utah            Incorporated
                    Corporation formerly known as                by reference
                    Hi, Tiger International, Inc.         

3.02          3     Bylaws                                       Incorporated
                                                                 by reference
Item 4.                     Instruments Defining the Rights of 
                            Holders                            

4.01          4     Instruments defining the rights of holders    Incorporated
                    Including indentures                         by reference

Item 9.                      Voting Tust Agreement   

9.01          9      Noncompetition, Proprietary Rights and      Incorporated
                     Standstill Agreement dated August 30,       by reference
                     1996 between the     Company, Hi, Tiger
                     International, Inc., Peter D. Olsen, 
                     Paul g. Begum, and Tree of Stars, Inc.

9.02          9      Voting agreement dated August 30, 1996       Incorporated
                     between the Company, Hi, Tiger International, by reference
                     Inc., Peter D. Olsen, Paul G. Begum, and
                     Tree of Stars, Inc.

Item 10.                    Material Contracts 

10.01          10     Employment agreements with Anthony E. Papa   THIS FILING
                      and James P. Pisani

10.02          10     Letter Agreements dated as of December 13,   THIS FILING
                      1996 with Barry A. Peters.

10.03          10     Acquisition agreement and related agreements Incorporated
                      dated as of August 30, 1996.                 by reference

10.04          10     Agreement and plan of reorganization between THIS FILING
                      the Company and Silicon Beach Communicatons, Inc.

Item 22.                    Published report regarding matters submitted to 
                            vote              
22.01          22     Published report regarding matters submitted Incorporated
                      to vote.                                     by reference

Item 23.                    Consents of Experts and Counsel 

23.01          23     Consent of Robison, Hill & Co.              Incorporated
                                                                  by reference

*Note: Items incorporated by reference were filed as exhibits to the Company's 
Current Report on Form 8-K dated October 23, 1996.

























                                                                   
SIGNATURES
                                                                   
     In accordance with section 13 or 15(d) of the Exchange Act,  the 
Registrant has caused this report to be signed on it behalf by the 
undersigned, thereunto duly authorized.

                              AVTEL COMMUNICATIONS, INC.


Dated: January 7, 1997     By /S/                              
                              Anthony E. Papa,
                              President and Chief Executive Officer


Dated: January 7, 1997     By /S/                              
                              James P. Pisani,
                              Chief Operating Officer and
                              Chief Financial Officer
                              (Principal Financial and Accounting Officers)



     In Accordance with the Securities Exchange Act, this report has been 
signed below by the following persons on behalf of the Registrant and in the 
capacities indicated on this 7th day of January, 1997.

                              AVTEL COMMUNICATIONS, INC.


                              By /S/                                
                              Anthony E. Papa,
                              President and Chief Executive Officer


                              By  /S/                               
                              James P. Pisani,
                              Chief Operating Officer and
                              Chief Financial Officer
                              (Principal Financial and Accounting Officers)

                              By /S/                                
                              Frank Dziuba,
                              Senior Vice President, Software
                              Development, and a Director
                              

                              By /S/                        
                              Barry A. Peters,
                              Director