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

                                    FORM 10-Q

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1999
                               --------------

                         Commission file number 0-23139

                            RSL COMMUNICATIONS, LTD.
                            ------------------------
           (Exact name of the registrant as specified in its charter)

             Bermuda                                     N/A
             -------                                     ---
   (State or other jurisdiction                    (I.R.S. Employer
 of incorporation or organization)                identification No.)

                                 Clarendon House
                                  Church Street
                             Hamilton HM CX Bermuda
                             ----------------------
                    (Address of principal executive offices)

                                 (441) 295-2832
                                 --------------
                         (Registrant's telephone number)

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.

                                 Yes |X| No |_|

As of April 30, 1999, the registrant had 26,946,291 of its Class A common stock,
par value $0.00457 per share, and 26,245,315 of its Class B common stock, par
value $0.00457 per share, outstanding.

<PAGE>

                            RSL COMMUNICATIONS, LTD.

                                Table of Contents

                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

    Item 1.  Financial Statements

     Condensed Consolidated Balance Sheets as of
        March 31, 1999 (Unaudited) and December 31, 1998...................... 1

     Condensed Consolidated Statements of Operations for the
        Three Month Periods Ended March 31, 1999 (Unaudited)
        And 1998 (Unaudited).................................................. 2

     Condensed Consolidated Statements of Cash Flows for the Three Month
        Periods Ended March 31, 1999 (Unaudited) and 1998 (Unaudited)......... 3

     Notes to Condensed Consolidated Financial Statements..................... 4

    Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations ....................................... 6

    Item 3. Quantitative and Qualitative Disclosures About Market Risk....... 18

PART II - OTHER INFORMATION

    Item 1.  Legal Proceedings............................................... 19

    Item 2.  Change in Securities and Use of Proceeds........................ 19

    Item 5.  Other Information............................................... 19

    Item 6.  Exhibits and Reports on Form 8-K................................ 19

Signatures................................................................... 20

Exhibit Index................................................................ 21

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements.

                            RSL COMMUNICATIONS, LTD.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

                                                        As of           As of
                                                      March 31,     December 31,
                                                        1999            1998
                                                        ----            ----
                                                     (unaudited)
Assets

Cash and Cash Equivalents                            $   174,955    $   367,823
Accounts Receivable, Net                                 200,315        181,845
Marketable Securities - Available for Sale               167,704         98,637
Prepaid Expenses and Other Current Assets                 87,086         77,772
                                                     -----------    -----------
Total Current Assets                                     630,060        726,077
                                                     -----------    -----------

Restricted Marketable Securities - Held to
Maturity                                                  20,454         20,159
Marketable Securities - Available for Sale                12,911         12,911
Property and Equipment                                   414,605        369,508
Less: Accumulated Depreciation                           (61,157)       (45,785)
                                                     -----------    -----------
Property and Equipment, Net                              353,448        323,723
Investment in Unconsolidated Subsidiaries                  8,217          8,446
Goodwill and Other Intangibles, Net                      593,613        589,517
Deposits and Other Assets                                 33,491         33,760
                                                     -----------    -----------

     Total Assets                                    $ 1,652,194    $ 1,714,593
                                                     ===========    ===========

Liabilities and Shareholders' Equity

Accounts Payable and Other Liabilities               $   431,314    $   434,797
Short-term Debt                                           32,680         36,130
                                                     -----------    -----------
Total Current Liabilities                                463,994        470,927
                                                     -----------    -----------
Total Long-term Debt                                   1,086,529      1,089,375
Other Liabilities - Noncurrent                            31,020         20,807
                                                     -----------    -----------
Total Liabilities                                      1,581,543      1,581,109
                                                     -----------    -----------

Shareholders' Capital                                    494,778        500,647
Accumulated Deficit                                     (424,127)      (367,163)
                                                     -----------    -----------
Total Shareholders' Equity                                70,651        133,484
                                                     -----------    -----------

     Total Liabilities and Shareholders' Equity      $ 1,652,194    $ 1,714,593
                                                     ===========    ===========

            See notes to condensed consolidated financial statements.


                                       1
<PAGE>

                            RSL COMMUNICATIONS, LTD.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
                      (in thousands, except loss per share)

                                                            Three Months Ended
                                                                 March 31,
                                                            1999         1998
                                                            ----         ----

Revenues .............................................   $ 340,281    $ 131,635
Operating Costs and Expenses:
     Cost of Services (exclusive of depreciation
     and amortization shown separately below) ........     250,391      113,037
     Selling, General and Administrative Expenses ....      97,842       35,635
     Depreciation and Amortization ...................      37,079        9,548
                                                         ---------    ---------
Total Operating Costs and Expenses ...................     385,312      158,220
                                                         ---------    ---------
Loss From Operations .................................     (45,031)     (26,585)
Interest Income ......................................       6,055        4,806
Interest Expense .....................................     (28,998)     (14,464)
Other Income - Net ...................................         115           48
Foreign Exchange Transaction Gain - Net ..............       9,688           --
Minority Interest ....................................       1,431        1,083
Loss in Equity Interest of
  Unconsolidated Subsidiaries - Net ..................        (224)          --
Income Tax Expense ...................................          --         (222)
                                                         ---------    ---------
Net Loss .............................................   $ (56,964)   $ (35,334)
                                                         =========    =========

Basic and Diluted Loss Per Share of                   
  Common Stock                                           $   (1.08)   $   (0.85)

Weighted Average Number of Shares of
Common Stock Outstanding                                    52,930       41,777

            See notes to condensed consolidated financial statements.


                                       2
<PAGE>

                            RSL COMMUNICATIONS, LTD.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

                                                             Three Months Ended
                                                                 March 31,
                                                                 ---------
                                                            1999         1998
                                                            ----         ----
Net loss .............................................   $ (56,964)   $ (35,334)
Depreciation and amortization ........................      37,079        9,548
Working capital change and other .....................     (32,297)     (15,725)
                                                         ---------    ---------
     Net cash used in operations .....................     (52,182)     (41,511)
                                                         ---------    ---------

Acquisitions of subsidiaries .........................     (16,653)     (23,605)
Purchase of property and equipment ...................     (52,442)     (18,337)
(Purchase of) proceeds from sales of marketable
  securities .........................................     (69,067)       8,889

Other ................................................       1,274          610
                                                         ---------    ---------
     Net cash used in investing activities ...........    (136,888)     (32,443)
                                                         ---------    ---------

Proceeds from the issuance of 1998 Notes .............          --      499,045
Payment of offering cost .............................          --       (5,417)
Proceeds from short term debt ........................      14,287        2,338
Payment of short term debt ...........................     (17,845)      (2,743)
Proceeds from issuance of Class A shares .............         864          189
                                                         ---------    ---------
     Net cash provided by (used in) financing
       activities ....................................      (2,694)     493,412
                                                         ---------    ---------

(Decrease) increase in cash and cash equivalents .....    (191,764)     419,548
Effects of foreign currency on cash and cash
  equivalents ........................................      (1,104)        (326)
Cash and cash equivalents at beginning of period .....     367,823      144,894
                                                         ---------    ---------

Cash and cash equivalents at end of period ...........   $ 174,955    $ 564,026
                                                         =========    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for interest ...............................   $  10,197    $     641
                                                         =========    =========

SUPPLEMENTAL SCHEDULE OF NON-
CASH INVESTING AND FINANCING ACTIVITIES:

Assets acquired under capital lease obligations ......   $   1,747    $   1,069
                                                         =========    =========

            See notes to condensed consolidated financial statements.


                                       3
<PAGE>

                            RSL COMMUNICATIONS, LTD.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    FOR THE THREE MONTHS ENDED MARCH 31, 1999

1. BASIS OF PRESENTATION

The condensed consolidated financial statements of which these notes are part
have been prepared by RSL Communications, Ltd. ("RSL COM") and RSL
Communications PLC, a wholly owned subsidiary of RSL COM ("RSL PLC" and,
together with RSL COM and their direct and indirect subsidiaries, the
"Company"), pursuant to the rules and regulations of the Securities and Exchange
Commission (the "Commission"). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations; however, in the opinion of management of the Company, the
Condensed Consolidated Financial Statements include all adjustments, consisting
only of normal recurring accruals, necessary to present fairly the financial
information for such periods. These Condensed Consolidated Financial Statements
should be read in conjunction with the Consolidated Financial Statements of RSL
COM and the notes thereto included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1998.

2. PRIVATE PLACEMENT OF NOTES AND EXCHANGE OFFER

In November 1998, RSL PLC issued (the "12% Notes Offering") $100 million
aggregate principal amount at maturity of 12% Senior Notes due 2008 (the "12%
Notes"). The 12% Notes generated gross proceeds to the Company of approximately
$94.5 million.

In December 1998, RSL PLC issued (the "10 1/2% Notes Offering" and, together
with the 12% Notes Offering, the "New Notes Offering") $200 million aggregate
principal amount of 10 1/2% Senior Notes due 2008 (the "10 1/2% Notes" and,
together with the 12% Notes, the "New Notes"). The 10 1/2% Notes generated gross
proceeds to the Company of approximately $198.5 million.

In connection with the New Notes Offerings, RSL PLC entered into registration
rights agreements for the benefit of the holders of the New Notes (the "New
Notes Registration Rights Agreements"), pursuant to which RSL PLC agreed to
offer to exchange the New Notes for substantially identical notes registered
under the Securities Act. In February and March of 1999, in accordance with the
New Notes Registration Rights Agreements, RSL COM and RSL PLC offered for
exchange the New Notes for substantially identical notes registered under the
Securities Act. The Company's Registration Statement on Form S-4 (Registration
No. 333-70023) filed with the Commission with respect to such offering was
declared effective by the Commission on January 26, 1999.

3. NET LOSS PER SHARE

Net loss per share is computed on the basis of the weighted average number of
common shares outstanding during the period. Diluted loss per share amounts are
not presented because the inclusion of these amounts would be anti-dilutive.

4. SUMMARIZED FINANCIAL INFORMATION FOR RSL PLC

The following presents summarized financial information of RSL PLC as of March
31, 1999 and as of 


                                       4
<PAGE>

December 31, 1998. RSL PLC had no independent operations other than serving
solely as a foreign holding company for the Company's North American and
European operations. The Notes issued by RSL PLC are fully and unconditionally
guaranteed by RSL COM. RSL COM has not presented separate financial statements
and other related disclosures concerning RSL PLC because management has
determined that such information is not material to shareholders or holders of
the Notes. RSL COM's financial statements are, except for RSL COM's
capitalization, Delta Three operations, Asia/Pacific operations, Latin American
operations, corporate overhead expenses and drawn credit facilities, identical
to the financial statements of RSL PLC.

                                                     As of             As of
                                                   March 31,        December 31,
                                                     1999              1998
                                                     ----              ----
                                                           (unaudited)
                                                          (in thousands)

Current Assets ...........................         $  588,191        $  686,727

Non-current Assets .......................         $  931,537        $  877,696

Current Liabilities ......................         $  404,085        $  411,667

Non-current Liabilities ..................         $1,497,892        $1,479,159

                                                        Three Months Ended
                                                             March 31,
                                                       1999              1998
                                                       ----              ----
                                                            (unaudited)
                                                          (in thousands)

Revenues .........................                 $ 300,530         $ 109,446

Net Loss .........................                 $ (46,125)        $ (29,860)

5. SUBSEQUENT EVENTS

In May 1999, the Company filed a post-effective amendment to a registration
statement with the Securities and Exchange Commission to register 909,798 Class
A common shares that can be issued upon the exercise of warrants. The
registration of the shares underlying the warrants was required by a
registration rights agreement the Company entered into in connection with the
1996 private offering of 300,000 units each consisting of (i) $1,000 principal
amount of 12 1/4% Senior Notes due 2006 (the "1996 Notes") and (ii) one warrant
to purchase 3.975 shares of Class A Common Stock of RSL COM.

In May 1999, RSL PLC issued $175 million aggregate principal amount at maturity
of 9.875% Senior Notes due 2009 (the "1999 Notes"). The 1999 Notes generated net
proceeds to the Company of approximately $169.5 million. The Company intends to
use these proceeds primarily for the expansion and development of its
infrastructure as well as for the funding of operating losses. The 1999 Notes
are fully and unconditionally guaranteed as to payment of principal, interest
and any other amount thereof by RSL COM.


                                       5
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview

The Company is a multinational telecommunications company which provides a broad
array of telecommunications services, with an emphasis on international long
distance voice services. The Company's target customers are primarily small and
medium-sized businesses in key markets. The Company's services include
international and national fixed and wireless, calling card, fax, data,
Internet, private line and other value-added telecommunications services. The
Company currently has revenue generating operations in Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg,
Mexico, The Netherlands, Portugal, Spain, Sweden, Switzerland, the United
Kingdom, the United States and Venezuela. In 1997, approximately 70% of all
international long distance telecommunications minutes originated in these
markets. The Company also provides Internet telephony services through its
wholly-owned subsidiary, Delta Three, Inc. and its network of Internet gateway
servers located within key metropolitan areas in target countries.

Consolidated Results Of Operations For The Three Months Ended March 31, 1999
Compared To The Three Months Ended March 31, 1998

Revenues

The Company provides both domestic and international long distance voice
communications as well as the sale and resale of wireless services in certain
countries in which the Company operates. Revenues are derived from the number of
minutes of use (or fractions thereof) billed by the Company ("revenue minutes")
and are recorded upon completion of calls. The Company also derives revenues
from prepaid calling cards. These revenues are recognized at the time of usage
or upon expiration of the card. The Company maintains local market pricing
structures for its services and generally prices its services at a discount to
the prices charged by the local government-owned post, telegraph and telephone
monopolies ("PTTs") and established carriers. The Company has experienced, and
expects to continue to experience, declining revenue per minute in all of its
markets as a result of increasing competition in telecommunications, which the
Company expects will be offset by increased minute volumes and decreased
operating costs per minute.

Revenues increased to $340.3 million for the three months ended March 31, 1999
compared to $131.6 million for the three months ended March 31, 1998, an
increase of 159%. This increase is due primarily to the growth, primarily from
acquisitions, in the Company's North American and European operations.

Cost of Services (exclusive of depreciation and amortization shown separately
below)

The Company's cost of services is comprised of costs associated with gaining
local access and the transport and termination of calls over the Company's
network ("RSL-NET"). The majority of the Company's cost of services are
variable, including local access charges and transmission capacity leased on a
per-minute of use basis. For certain key markets, the Company plans to make
significant investments in indefeasible rights of use ("IRUs"), minimum
investment units ("MIUs") and domestic circuits and, as a result, expects an
increasing amount of its total operating costs will become fixed, as the volume
of the Company's calls carried over its own facilities increases. As the Company
migrates increasing amounts of traffic from leased facilities to owned
facilities, the Company experiences improving operating results in those
operations where such traffic migration occurs. The depreciation expense with
respect to the Company's MIUs and IRUs is not accounted for in cost of 


                                       6
<PAGE>

services. In addition, the Company intends to lower its variable cost of
termination as a percentage of revenues by carrying traffic pursuant to more of
its existing operating agreements and by negotiating additional operating
agreements on strategic routes. The Company has directly linked certain of its
local operators in Europe and the United States utilizing lines leased on a
fixed cost point to point basis and over MIUs and IRUs. To the extent traffic
can be transported between two local operators over MIUs or IRUs, there is only
marginal cost to the Company with respect to the international portion of a call
other than the fixed lease payment or the capital expenditure incurred in
connection with the purchase of the MIUs or IRUs. The Company's cost of
transport and termination will decrease to the extent that it is able to bypass
the settlement rates associated with the transport of international traffic.

While the Company intends to purchase or construct international transmission
facilities where such facilities are available for purchase or may be
constructed and such investments are cost effective and warranted by traffic
patterns, a significant percentage of its intranational transmission facilities
will continue to be leased on a variable cost basis. Accordingly, variable costs
will continue to be a majority of the Company's cost of services for the
foreseeable future.

The Company's cost of services is primarily affected by the volume of traffic
relative to its owned facilities and facilities leased on a point-to-point fixed
cost basis and capacity leased on a per minute basis with volume discounts. To
the extent that volume exceeds capacity on leased facilities that have been
arranged for in advance, the Company is forced to acquire capacity from
alternative carriers on a spot rate per-minute ("overflow") basis at a higher
cost. Acquiring capacity on an overflow basis has a negative impact on margins,
but enables the Company to maintain uninterrupted service to its customers.

Cost of services increased to $250.4 million for the three months ended March
31, 1999 from $113.0 million for the three months ended March 31, 1998, an
increase of 122%. This increase is primarily due to increased traffic and, to a
certain extent, increased rates paid to the Company's carrier vendors. As a
percentage of revenues, cost of services decreased to 73.6% for the three months
ended March 31, 1999 from 85.9% for the three months ended March 31, 1998. The
decrease in cost of services as a percentage of revenues is primarily
attributable to the increased utilization of the Company's facilities, increases
in higher-volume commercial accounts and increase in higher margin mobile
subscribers which positively impacted the Company's profitability.

Effect of Deregulation on Costs of Services (exclusive of depreciation and
amortization)

The Company's current cost structure varies from country to country as a result
of the different level of regulatory policies in place in each country. In
general, the Company's cost structure is lower in countries that have been
substantially deregulated than in those which are partially deregulated. In
countries that are not substantially deregulated, the Company's access to the
local exchange network is through more expensive means (i.e., leased lines or
dial-in access). This results in higher costs to the Company for carrying
international traffic originating within one country and terminating in another
country. In addition, local regulations in many countries restrict the Company
from purchasing capacity on international cable and fiber systems. The Company
must instead either enter into long-term lease agreements for international
capacity at a high fixed cost or purchase per-minute of use termination rates
from the dominant carrier. Deregulation in countries in which the Company
operates is expected to permit the Company to (i) interconnect its switches with
the local exchange network and (ii) purchase its own international facilities.
The Company believes that as a result of deregulation, its cost structure will
improve. Deregulation in a particular country is also expected to permit the
Company to terminate international inbound traffic in a country which will
result in an improved cost structure for the Company as a whole.


                                       7
<PAGE>

Selling, General and Administrative Expenses

The Company's selling, general and administrative expenses consist of costs
incurred to support the continued expansion of RSL-NET, the introduction of new
products and services and the provision of ongoing customer service. These costs
are principally comprised of costs associated with employee compensation,
occupancy, insurance, professional fees, sales and marketing (including sales
commissions) and bad debt expenses. In addition, as the Company commences
operations in different countries, it incurs significant start-up costs,
particularly for hiring, training and retention of personnel, leasing of office
space and advertising.

The Company has grown by establishing operations in countries that are in the
process of being deregulated and that originate and terminate large volumes of
international traffic or offer other strategic benefits. Each of the Company's
operations is in a different stage of development. The early stages of
development of a new operation have involved substantial start-up costs in
advance of revenues. Upon the commencement of such operations, the Company
generally has incurred additional fixed costs to facilitate growth. The Company
expects that during periods of significant expansion, selling, general and
administrative expenses will increase materially. Accordingly, the Company's
consolidated results of operations will vary depending on the timing and speed
of the Company's expansion strategy and, during a period of rapid expansion,
will not necessarily reflect the performance of the Company's more established
local operators.

Selling, general and administrative expense for the three months ended March 31,
1999 increased by $62.2 million, or 175%, to $97.8 million from $35.6 million
for the three months ended March 31, 1998. This increase is primarily
attributable to start-ups costs in, and expansion of, the Company's European
operations, the hiring of additional personnel in Europe and acquisitions in
North America and Australia.

Selling, general and administrative expense as a percentage of revenues
increased to 28.8% in the first quarter of 1999 compared with 27.1% in the first
quarter of 1998. The percentage increase in the first quarter of 1999 is
primarily the result of the inclusion of the results of Telegate AG
("Telegate"), a directory information provider in Germany. During 1998, the
Company acquired a majority interest in Telegate Holding GmbH, the parent
holding company of Telegate. As a directory information provider, Telegate's
cost structure is quite different than the Company's other operations since its
costs are predominantly labor-related with proportionately lower network costs.
Excluding the results of Telegate, selling, general and administrative expense
as a percentage of revenues for the first quarter of 1999 would have been 26.9%,
a small decline from the amount recorded in the same period of 1998.

Depreciation and Amortization Expense

Depreciation and amortization expense increased 288% to $37.1 million for the
three months ended March 31, 1999 from $9.5 million for the three months ended
March 31, 1998. This increase is primarily attributable to the increased
amortization of goodwill and other intangibles recorded as a result of the
Company's acquisitions. Depreciation expense is expected to increase in the
future as the Company continues to expand and enhance its network.

Interest Income

Interest income increased to $6.1 million for the three months ended March 31,
1999 from $4.8 million for the three months ended March 31, 1998, primarily as a
result of additional interest earned on the remaining net 


                                       8
<PAGE>

proceeds of the notes issued during 1998.

Interest Expense

Interest expense increased to $29.0 million for the three months ended March 31,
1999 from $14.5 million for the three months ended March 31, 1998, primarily as
a result of increased debt relating to the notes issued during 1998.

Foreign Exchange

The Company is exposed to fluctuations in foreign currencies relative to the
U.S. dollar, as its revenues, costs, assets and liabilities are, for the most
part, denominated in local currencies. The results of operations of the
Company's subsidiaries, as reported in U.S. dollars, may be significantly
affected by fluctuations in the value of the local currencies in which the
Company transacts business.

The Company recorded a foreign currency translation adjustment of $7.3 million
as a component of equity for the three months ended March 31, 1999. Such amount
is recorded upon the translation of the foreign subsidiaries' financial
statements into U.S. dollars, and is dependent upon the various foreign exchange
rates and the magnitude of the foreign subsidiaries' financial statements.

The Company incurs settlement costs when it exchanges traffic via operating
agreements with foreign correspondents. These costs currently represent a small
portion of total costs; however, as the Company's international operations
increase, it expects that these costs will become a more significant portion of
its cost of services. Such costs are settled by utilizing a net settlement
process with the Company's foreign correspondents comprised of special drawing
rights ("SDRs"). SDRs are the established method of settlement among
international telecommunications carriers. The SDRs are valued based upon a
basket of foreign currencies and the Company believes that this mitigates, to
some extent, its foreign currency exposure. The Company has monitored and will
continue to monitor its currency exposure.

A foreign exchange transaction gain - net, of $9.7 million was recorded for the
three months ended March 31, primarily as a result of the decrease in the
Deutsche mark against the U.S. dollar in connection with the Company's 1998
Deutsche mark denominated Senior Discount Notes.

Loss in Equity Interest of Unconsolidated Subsidiaries - Net

A loss in equity interest of unconsolidated subsidiaries - net of $0.2 million
was recorded for the three months ended March 31, 1999 to record the Company's
pro-rata allocable loss in the investments of Maxitel Servicos e Gestao de
Telecommunicacoes, S.A., a Portugese international telecommunications carrier
and MK Telecom Network Inc, a Canadian microwave telecommunications facilities
company.

Net Loss

Net loss increased to $57.0 million for the three months ended March 31, 1999,
as compared to net loss of $35.3 million for the three months ended March 31,
1998 due to the factors described above and in the following discussion of
segment results.


                                       9
<PAGE>

Segment Information

North American Operations

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                        1999             1998
                                                        ----             ----
                                                              (unaudited)
                                                 (in thousands, except percentage of
                                                          consolidated revenues)
<S>                                                  <C>             <C>      
Revenues .......................................     $ 148,419       $  74,181
Percentage of consolidated revenues ............            43%             56%
Operating costs and expenses:
  Cost of services (exclusive of
      depreciation and amortization shown
      separately below) ........................       120,171          63,338

  Selling, general and administrative
    expenses ...................................        28,909          10,189
  Depreciation and amortization ................        12,267           1,975
                                                     ---------       ---------
                                                       161,347          75,502
                                                     ---------       ---------
Loss from operations ...........................     $ (12,928)      $  (1,321)
                                                     =========       =========
</TABLE>

The Company's North American revenues result primarily from the sale of long
distance voice services on a retail basis to commercial customers, on a bulk
discount basis to distributors of prepaid calling cards, and on a wholesale
basis to other carriers. The Company experiences significant month to month
changes in revenues generated by its carrier customers (i.e. customers who
acquire the Company's services for the purpose of reselling such services on a
wholesale basis to other carriers or on a retail basis to end users). The
Company believes such carrier customers will react to temporary price
fluctuations and spot market availability that will impact the Company's carrier
revenues. Over the past two years, the Company has shifted its marketing focus
in the United States to small and medium-sized businesses and has restructured
its pricing of wholesale services to other carriers.

Revenue from the Company's North American operations increased to $148.4 million
for the three months ended March 31, 1999 compared to $74.2 for the same period
in 1998, a 100% increase. In July 1998, the Company acquired Westinghouse
Communications which provides voice telephony and data services in the United
States, and Westel Communications Ltd. which provides long distance and enhanced
telecommunications services in Canada. These acquisitions contributed $38.6
million in revenues in the first quarter of 1999. The increase in the Company's
North American revenues was also due to a significant increase in the Company's
corporate customers and prepaid calling card usage.

North American revenues as a percentage of consolidated revenues decreased from
56% in the first quarter of 1998 to 43% in the first quarter of 1999. This
decline is a result of the Company's effort to reduce its dependence on the very
competitive North American operations and in particular its low margin wholesale
markets and focus additional efforts on expanding its more profitable European
operations. Cost of services increased 90% to $120.2 million in the first
quarter of 1999 from $63.3 million in the first quarter of 1998, primarily as a
result of acquisitions and higher revenues. Costs of services as a percentage of
revenues in the first quarter of 1999 was 81%, an improvement from the 85%
recorded in the first quarter of 1998 as a result of the focus to more
profitable customer segments. Selling, general and administrative expenses as a
percentage of revenues, however increased to 20% in the first quarter of 1999 as
compared to 14% recorded in the first quarter of 1998 primarily as a result of
costs incurred to acquire new customers and enhance customer services. Loss from
operations in North America increased from $1.3 million in the first quarter of


                                       10
<PAGE>

1998 to $12.9 million in the first quarter of 1999 primarily due to higher
amortization of intangible assets recorded in connection with the acquisitions
made in July 1998 as well as the factors described above.

European Operations

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                        1999             1998
                                                        ----             ----
                                                              (unaudited)
                                                 (in thousands, except percentage of
                                                          consolidated revenues)
<S>                                                    <C>           <C>      
Revenues ...........................................   $ 152,111     $  35,265
Percentage of consolidated revenues ................          45%           27%
Operating costs and expenses:
  Cost of services (exclusive of
      depreciation and amortization shown
      separately below) ............................      99,326        30,088

  Selling, general and administrative expenses .....      51,019        18,168
  Depreciation and amortization ....................      13,323         3,273
                                                       ---------     ---------
                                                         163,668        51,529
                                                       ---------     ---------
Loss from operations ...............................   $ (11,557)    $ (16,264)
                                                       =========     =========
</TABLE>

The Company derives its European revenues from the provision of international
and domestic long distance voice services including directory information
services, as well as the sale and resale of wireless services in certain
countries in which the Company operates. Substantially all revenues from the
Company's European operations are derived from commercial sales to end-users.
Sales are targeted at small to medium-sized corporate customers, and niche
consumer markets (including selected ethnic communities). To reduce its credit
risk to such niche consumer markets, the Company primarily offers prepaid
products to its targeted consumers.

The Company operates in various countries in Europe, each of which is in a
different state of deregulation. In certain of these countries, current
regulatory restrictions limit the Company's ability to offer a broader array of
products and services and limit the availability of those services to customers.
The Company anticipates that deregulation will have a favorable impact on
revenues because (i) customers will be able to access the Company's services
more easily and (ii) the Company will have the ability to provide a broader
array of products and services. The Company believes that, with established or
start-up operations in 14 European countries, it will be well positioned to
benefit from the anticipated continued deregulation of European markets. It is
anticipated that most European countries will deregulate various aspects of the
telecommunications industry during 1999 through 2000.

Revenue from the Company's European operations increased by 331% to $152.1
million for the three months ended March 31, 1999 compared to $35.3 million for
the same period in 1998. During 1998, the Company made several acquisitions in
Europe, including Motorola Tel.Co, a reseller of wireless services in the U.K.
and Germany, and a majority interest in Telegate Holding. The Company's European
acquisitions during 1998 contributed $84.7 million of revenue in the first
quarter of 1999. The increase in the Company's European revenues was also
attributable to a substantial increase in the number of carrier and corporate
customers.

In February, the Company announced that its German subsidiary and Debitel
Kommunikationstechnik GmbH & Co. KG ("Debitel"), Europe's largest mobile
reseller company had agreed that Debitel will utilize the Company's fixed wired
network for new telecommunications services that it will be promoting to German
consumers. For the first quarter and to date, the utilization of the Company's
network by Debitel has been 


                                       11
<PAGE>

below expectation. However, both the Company and Debitel remain committed to the
long-term potential of this alliance.

European revenues as a percentage of consolidated revenues increased from 27% in
the first quarter of 1998 to 45% in the first quarter of 1999. Europe represents
the Company's largest market segment surpassing the North American operations.

Costs of services as a percentage of revenues in the first quarter of 1999 was
65% reflecting a 20% improvement over the 85% recorded in the first quarter of
1998. The decrease in the cost of services as a percentage of revenue is
primarily attributable to the Company's ability to carry more traffic on its own
network which is less expensive than leasing capacity from other carriers. The
improved profitability is also due to the continued deregulation of several
European markets, allowing the Company to compete on more favorable terms, and
the impact of consolidating the results of Telegate. Excluding Telegate from
first quarter results, cost of services as a percentage of revenues would have
been 70%.

Selling, general and administrative expenses as a percentage of revenue in the
first quarter of 1999 was 34%, a significant reduction from 52% recorded in the
first quarter of 1998. This reduction was primarily attributable to lower
start-up costs in countries in which operations had already been established in
the past year.

Depreciation and amortization in the first quarter of 1999 increased to $13.3
million from $3.3 million recorded in the first quarter of 1998. This increase
was primarily attributable to the amortization of intangible assets, principally
goodwill, recorded in connection with several acquisitions made since the first
quarter of 1998. Depreciation expense also increased as a result of the
substantial capital investment made over the past year.

Net loss from European operations in the first quarter of 1999 declined to $11.6
million from $ 16.3 million recorded in the first quarter of 1998. The
improvement reflects the higher revenue partially offset by higher costs and
increased amortization of intangible assets acquired.

Asia/Pacific and Other Operations

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                        1999             1998
                                                        ----             ----
                                                              (unaudited)
                                                 (in thousands, except percentage of
                                                          consolidated revenues)
<S>                                                    <C>            <C>      
Revenues .........................................     $ 39,751       $ 22,189
Percentage of consolidated revenues ..............           12%            17%
Operating costs and expenses:
  Cost of services (exclusive of
      depreciation and amortization shown
      separately below) ..........................       30,894         19,611

  Selling, general and administrative
    expenses .....................................       13,194          5,447
  Depreciation and amortization ..................        2,751          1,097
                                                       --------       --------
                                                         46,839         26,155
                                                       --------       --------
Loss from operations .............................     $ (7,088)      $ (3,966)
                                                       ========       ========
</TABLE>

Asia/Pacific and other operations is comprised primarily of domestic and
international long distance and wireless services operations in Australia. This
segment also includes relatively small start-up operations in 


                                       12
<PAGE>

Venezuela, Mexico, Japan and Delta Three, Inc., the Company's Internet telephony
subsidiary. In May 1999 the Company announced a plan to offer up to
approximately 20% of the common shares of Delta Three in an initial public
offering. The Company also announced that Delta Three is preparing to file a
registration statement with the Securities and Exchange Commission.

Revenues from the Company's Asia/Pacific and other operations increased 79% to
$39.8 million for the three months ended March 31, 1999 compared to $22.2
million for the same period in 1998. In March 1998, the Company acquired the
customer base of two mobile resellers; First Direct Communications, Pty. Limited
and Link Telecommunication, Pty. Ltd. In July 1998, the Company also initiated
operation in Japan. These new operations contributed $11.2 million of additional
revenues in the first quarter of 1999.

Revenues from the Company's Asia/Pacific and other operations as a percentage of
consolidated revenues declined to 12% in the first quarter of 1999 from 17% in
the first quarter of 1998, primarily as a result of the Company's acquisition of
significant businesses in Europe and North America over the past year.

Cost of services in the first quarter of 1999 increased to $30.9 million from
$19.6 million recorded in the first quarter of 1998 as a result of the higher
revenues. Cost of services as a percentage of revenues in the first quarter of
1999 declined to 78% from 88% in the first quarter of 1998.

Selling, general and administrative expense in the first quarter of 1999
increased to $13.2 million from $5.4 million in the first quarter of 1998
primarily due to the costs to acquire and retain wireless customers. Selling,
general and administrative expenses as a percent of revenues in the first
quarter of 1999 increased to 33% from 25% as a result of the initial start-up
costs incurred in Latin America and up-front costs incurred to acquire wireless
customers.

Depreciation and amortization in the first quarter of 1999 increased to $2.8
million from $1.1 million primarily as a result of the amortization of
intangibles recorded in connection with the 1998 acquisitions.

The loss from the Asia/Pacific and other operations for the first quarter of
1999 increased to $7.1 million from $4.0 million recorded in the first quarter
of 1998 primarily due to the start-up costs incurred in the Company's Latin
America operation and higher amortization of intangibles.

Liquidity and Capital Resources

The Company has incurred significant operating losses, net losses and negative
cash flow from operations, due in large part to the start-up and development of
the Company's operations and the development of "RSL-NET", the Company's
integrated digital telecommunications network. The Company expects that its net
losses and negative cash flow will continue as the Company implements its growth
strategy. Historically, the Company has funded its losses and capital
expenditures through borrowings, capital contributions, and a portion of the net
proceeds of prior securities offerings.

Cash used in operating activities for the three months ended March 31, 1999
totaled $52.2 million compared with $41.5 million for the same period in 1998
reflecting the use of cash to fund operating losses and working capital
requirements. Capital expenditures for the three months ended March 31, 1999
were $54.2 million compared with $19.4 million for the comparable period in
1998. These capital expenditures are principally for switches, fiber, and
related telecommunications equipment. The Company intends to continue to expand
and develop the Company's infrastructure, in part by replacing leased
transmission facilities with owned transmission lines, purchasing IRU and
interests in inter-city fiber routes in certain key markets and 


                                       13
<PAGE>

installing additional national and international telephone gateway switches. The
Company expects to invest approximately $250 million in 1999 to expand and
enhance its telecommunications network. Cash expended for acquisitions were
$16.7 million during the three months ended March 31, 1999 primarily reflecting
payments for properties acquired during 1998 compared with $23.6 million for the
three months ended March 31, 1998. At March 31, 1999, the Company had $166.1
million of working capital as compared to $255.2 million of working capital at
December 31, 1998.

The Company's indebtedness was approximately $1.03 billion at March 31, 1999 of
which $1.02 billion represented long-term debt and $12.3 million represented
short-term debt. Substantially all of the Company's indebtedness is attributable
to the debt securities issued by RSL PLC and guaranteed by RSL COM.

The Company through RSL PLC has various Senior Notes and Senior Discount Notes
which are due from 2006 through 2008 (the "Notes"), totaling $997.5 million,
net, as of March 31, 1999. The Notes were issued under indentures containing
certain restrictive covenants which impose limitations on the Company's ability
to, among other things: (i) incur additional indebtedness, (ii) pay dividends or
make certain other distributions, (iii) issue capital stock of certain
subsidiaries, (iv) guarantee debt, (v) enter into transactions with shareholders
and affiliates, (vi) create liens, (vii) enter into sale-leaseback transactions,
and (viii) sell assets.

Under the terms of the Notes, the Company was required to offer to exchange each
of the Notes for substantially identical notes registered under the Securities
Act of 1933. The Company has successfully completed all such exchange offers to
date.

In connection with the issuance of the 1996 Notes, RSL PLC was required to
purchase and maintain restricted marketable securities, which are held by the
indenture trustee for the 1996 Notes, in order to secure the payment of the
first six scheduled interest payments on the 1996 Notes. The market value of
such securities at March 31, 1999, as adjusted to reflect the redemption of
$127.5 million of the 1996 Notes, was $20.8 million.

The Company has a revolving credit facility with The Chase Manhattan Bank for $5
million. Approximately $3.8 million of the commitment under the facility was
utilized at March 31, 1999. The facility is payable on June 30, 1999 and accrues
interest, at the Company's option, at the lender's prime rate per annum (7.75%
at March 31, 1999).

The Company, through LDM Systems, Inc., a subsidiary of the Company, has a $10.0
million revolving credit facility. There was $7.3 million utilized under this
facility at March 31, 1999. This facility is payable in full on September 30,
2000 and accrues interest at prime rate plus 2.5% per annum (10.25% at March 31,
1999).

The Company, through Telegate Holding, has a $7.4 million revolving credit
facility. There was $2.4 million utilized under this facility at March 31, 1999.
This facility is payable in annual payments through December 31, 2002 and
accrues interest at a variable interest rate not to exceed 5.5% per annum (4.3%
at March 31, 1999). Telegate had $11.6 million of overdraft credit facilities
with various banks that accrue interest at a rate of 6.5%. There was $1.5
million utilized under these facilities at March 31, 1999. Telegate also had
various secured and unsecured 6% debentures consisting of loans from its former
shareholders of $3.0 million and $5.1 million, respectively, as of March 31,
1999. These loans are payable in four semiannual installments beginning June 30,
2001.


                                       14
<PAGE>

One of the Company's primary equipment vendors has provided to certain of the
Company's subsidiaries $93.0 million in vendor financing commitments to fund the
purchase of additional switching and related telecommunications capital
equipment. At March 31, 1999, there was approximately $82.0 million utilized
under this facility. Borrowings from this equipment vendor accrue interest at a
rate of LIBOR plus either 5.25% or 4.5% depending on the equipment purchased.

In May 1999, the Company issued the 1999 Notes which generated net proceeds to
the Company of approximately $169.5 million. The 1999 Notes are guaranteed as to
payment of principal and interest by the Company. The Company plans to raise
additional capital in 1999. The limitation under the Company's most restrictive
covenants will likely prohibit the Company from incurring any significant amount
of additional indebtedness to fund net losses unless the Company completes a
significant equity offering or generates significant positive cash flow from
operation. The Company believes that the net proceeds from these notes and the
remaining net proceeds from the issuance of the outstanding notes and the 1998
equity offering, together with availability under its revolving credit
facilities, vendor financing facility and short-term lines of credit and
overdraft facilities from local banks, will be sufficient to fund its capital
expenditure and operations through the first half of 2000. However, the Company
may be required to raise additional capital regardless of market conditions, if
the Company's plans or assumptions change or prove to be inaccurate, if the
Company identifies additional required or desirable infrastructure investments
or acquisitions, if the Company experiences unanticipated costs or competitive
pressures or if the net proceeds from the issuance of its debt and equity
securities, together with other sources of liquidity otherwise prove to be
insufficient. Regardless, the Company plans to raise additional capital in 1999
to ensure that adequate funding is available for capital expenditures and
operations for the year 2000 and beyond.

Effects of Recently Issued Accounting Standards

In June 1998, the FASB issued SFAS No.133, "Accounting for Derivative
Instruments and Hedging Activities", which establishes accounting and reporting
standards for derivative instruments and hedging activities. Generally, it
requires that an entity recognize all derivatives as either an asset or
liability and measure those instruments at fair value, as well as identify the
conditions for which a derivative may be specially designed as a hedge. SFAS
No.133 is effective for fiscal years beginning after June 15, 1999. Management
is currently addressing the financial reporting measures that will be needed in
order to comply with this disclosure. The Company has not participated in any
hedging activities in connection with foreign currency exposure.

Seasonality

The Company's European operations experience seasonality during January, August,
October and December, and, to a lesser extent, March, as these months are
traditional holiday months in most European countries and many European
businesses, which are the Company's principal European customers, are closed
during portions of these months.

Year 2000 Technology Risks

The "Year 2000" problem is the result of computer programs being written using
two digits, rather than four digits, to define the applicable year. Any of the
programs used in the Company's operations that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could 


                                       15
<PAGE>

result in a major system failure or miscalculations, or other computer errors,
causing disruptions of operations. The potential for failures encompasses all
aspects of the Company's business, including computer systems and voice
networks, and could cause, among other things, a temporary inability to process
transactions, billing and customer service or to engage in similar normal
business activities.

The Company is implementing a comprehensive program of analysis of and/or
changes to its computer systems to ensure that all such systems are, or prior to
the end of 1999 will be, Year 2000 compliant. The Company's Year 2000 project
includes the following phases: (i) conducting a comprehensive inventory of the
Company's internal systems, including information technology systems and
non-information technology systems (which include switching, billing and other
platforms and electrical systems) and the systems acquired or to be acquired by
the Company, (ii) assessing and prioritizing any required remediation, (iii)
remediating any problems by repairing or, if appropriate, replacing the
non-compliant systems and (iv) testing all remediated systems for Year 2000
compliance. Phase 1 has been completed. Phase 2, 3 and 4 are expected to be
substantially completed by the end of the second quarter of 1999.

The Company has also retained a Year 2000 solution provider as a consultant to
assist the Company in its assessment and remediation projects and to manage and
coordinate Year 2000 compliance for each of the Company's local operators on a
global basis.

In addition to assessing its own systems, the Company is conducting an external
review of its vendors and suppliers, including equipment and system providers
and other telecommunications service providers, to determine their vulnerability
to Year 2000 problems and any potential impact on the Company. Based on
discussions with L.M. Ericsson A.B. ("Ericsson"), the Company's primary
equipment vendor, the Company believes that the equipment provided to the
Company by Ericsson will be Year 2000 compliant. Testing of the Ericsson
equipment is expected to be completed by June 30, 1999. The Company may
experience problems to the extent that other telecommunications carriers whose
services are resold by the Company or to which the Company sends traffic for
termination are not Year 2000 compliant. There can be no assurance that such
problems will not have a material adverse effect on the Company.

The Company expects to substantially complete all of the phases of the process
described above by June 30, 1999; although the Company expects to continue
testing its systems for Year 2000 compliance during the rest of 1999 as a result
of upgrades and other changes to our system and further expects that all of its
computer systems will be fully Year 2000 compliant before the end of 1999. There
can be no assurance, however, that the Company will achieve full Year 2000
compliance before the end of 1999 or that effective contingency plans will be
developed or implemented. A failure of the Company's computer systems or the
failure of the Company's vendors or customers to effectively upgrade their
software and systems for transition to the year 2000 could have a material
adverse effect on the Company's business, financial position and results of
operations.

The Company has completed numerous acquisitions during recent periods and is in
the process of integrating the systems of the acquired businesses into the
Company's operations. Those systems are included in the Company's Year 2000
review and remediation project. During the process of evaluating businesses for
potential acquisition, and after any such acquisition, the Company will evaluate
the extent of the Year 2000 problems associated with such acquisitions and the
cost and timing of the remediation. No assurance can be given, however, that the
systems of any acquired business will be Year 2000 compliant when acquired or
will be capable of timely remediation.

Through April 30, 1999, the Company has spent approximately $3 million on the
Year 2000 program. The Company expects that it will cost approximately an
additional $7 million, to be paid through the first quarter of 


                                       16
<PAGE>

2000, to become year 2000 compliant. These amounts will be financed through
working capital. The Company expenses costs associated with software
modification when they are incurred.

Following the completion of the Company's Year 2000 assessment by June 30, 1999,
the Company plans to determine the nature and extent of any contingency plans
that may be required. Even if the Company's assessment is completed without
identifying any additional material non-compliant systems operated by, or under
the control of, the Company, or of third parties, the most likely worst case
scenario would be a systems failure beyond the control of the Company to remedy.
Such a failure could materially prevent the Company from operating its business.
The Company believes that such a failure would likely lead to lost revenues,
increased operating costs, loss of customers or other business interruptions of
a material nature, in addition to potential claims against the Company.


                                       17
<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company has not entered into any financial instruments for trading or
hedging purposes.

The Company is exposed to fluctuations in foreign currencies relative to the
U.S. dollar, as its revenues, costs, assets and liabilities are, for the most
part, denominated in local currencies. The results of operations of the
Company's subsidiaries, as reported in U.S. dollars, may be significantly
affected by fluctuations in the value of the local currencies in which the
Company transacts business. The Company recorded a foreign currency translation
adjustment of $7.3 million as a component of equity for the three months ended
March 31, 1999. Such amount is recorded upon the translation of the foreign
subsidiaries' financial statements into U.S. dollars, and is dependent upon the
various foreign exchange rates and the magnitude of the foreign subsidiaries'
financial statements. As of March 31, 1999, the Company had recorded a foreign
currency transaction gain of approximately $9.7 million, primarily as a result
of the decrease in the Deutsche mark against the U.S. dollar in connection with
the DM Notes (as defined).

The Company incurs settlement costs when it exchanges traffic via operating
agreements with foreign correspondents. These costs currently represent a small
portion of the total costs of services; however, as the Company's international
operations increase, it expects that these costs will become a more significant
portion of its cost of services. Such costs are settled by utilizing a net
settlement process with the Company's foreign correspondents comprised of
special drawing rights ("SDRs"). SDRs are the established method of settlement
among international telecommunications carriers. The SDRs are valued based upon
a basket of foreign currencies and the Company believes that this mitigates, to
some extent, its foreign currency exposure. The Company has monitored and will
continue to monitor its foreign currency exposure, and, if necessary, may enter
into forward contracts and/or similar instruments to mitigate the potential
impacts of such risks.

The Company is currently not exposed to material future earnings or cash flow
exposures from changes in interest rates on long-term debt obligations since the
majority of the Company's long-term debt obligations are at fixed rates. The
Company is exposed to interest rate risk, as additional financing may be
required due to the large operating losses and capital expenditures associated
with establishing and expanding the Company's networks and facilities. The
interest rate that the Company will be able to obtain on additional financing
will depend on market conditions at that time, and may differ from the rates the
Company has secured on its current debt. The Company does not currently
anticipate entering into interest rate swap and/or similar instruments.

The Company's carrying value of cash and cash equivalents, accounts receivable,
accounts payable, marketable securities - available for sale, restricted
marketable securities held to maturity, accrued expenses and notes payable is a
reasonable approximation of their fair value.

At March 31, 1999, the fair value of the Company's long-term debt was estimated
to be $1.04 billion based on the overall weighted average rate of the Company's
long-term debt of 10.5% and an overall weighted average maturity of 8.9 years
compared to terms and rates currently available in long-term financing markets.
Market risk is estimated as the potential decrease in fair value of the
Company's long-term debt resulting from a hypothetical increase of 105 basis
points in interest rates (ten percent of the Company's overall weighted average
borrowing rate). Such an increase in interest rates would result in
approximately a $94.3 million decrease in fair value of the Company's long-term
debt.


                                       18
<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is, from time to time, a party to litigation that arises in the
normal course of business. The Company is not presently a party to any
litigation that it believes would reasonably be expected to have a material
adverse effect on its business or results of operations.

Item 2. Change in Securities and Use of Proceeds

In March 1999, the Company issued to Fridley Technologies, Ltd. 7,200 shares of
the Company's Class A Common Stock in exchange for options to purchase 35,000
shares of Delta Three, Inc., a subsidiary of the Company. The issuance of such
shares was exempt from registration under the Securities Act pursuant to Section
4(2) thereof.

Item 5. Other Information

      Forward-Looking Statements

Certain matters discussed in this Report under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operation -
Liquidity and Capital Resources" contain certain forward-looking statements
which involve risks and uncertainties and depend upon certain assumptions, some
of which may be beyond the Company's control, including changing market
conditions, competitive and regulatory matters (such as timing and extent of
deregulation of telecommunications market, the size and financial resources of
competitors, etc.), general economic conditions in the markets in which the
Company operates, Year 2000 readiness of the Company's customers and suppliers,
etc. and, accordingly, there can be no assurance with regard to such statements.

Item 6. Exhibits and Reports on Form 8-K

      Exhibits:

            27.1  Financial Data Schedule


                                       19
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on
its behalf by the undersigned thereunto duly authorized.

                                           RSL COMMUNICATIONS, LTD.


Date: May 17, 1999                         By /s/  Joel S. Beckoff
      ------------                            ----------------------------------
                                           Name: Joel S. Beckoff
                                           Title: Vice President - Controller
                                                  and Chief Accounting Officer


                                       20
<PAGE>

Exhibit Index

27.1  Financial Data Schedule


                                       21