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


                           FORM 8-K/A
                         CURRENT REPORT
             Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934


                        January 10, 1997
         -----------------------------------------------
        Date of Report (Date of earliest event reported)


                   SA TELECOMMUNICATIONS, INC.
      -----------------------------------------------------
      Exact Name of Registrant as Specified in its Charter)


     Delaware              0-18048           75-2258519
----------------         -----------         -----------
(State or Other          (Commission        (IRS Employer
Jurisdiction of          File Number)       Identification No.)
Incorporation)


1600 Promenade Center, 15th Floor
       Richardson, TX                           75080
---------------------------------            ----------
(Address of Principal Executive Offices)      (Zip Code)


                         (972) 690-5888
       ---------------------------------------------------
      (Registrant's Telephone Number, Including Area Code)


                  ----------------------------
  (Former Name or Former Address, If Changed Since Last Report)

<PAGE>

ITEM 2.   ACQUISITION OR DISPOSITION OF ASSETS.

     On January 10, 1997 (the "Closing Date"), SA
Telecommunications, Inc., a Delaware corporation (the "Company")
purchased all of the issued and outstanding capital stock (the
"Addtel Stock") of AddTel Communications, Inc., a California
corporation ("Addtel"), pursuant to the terms of the Stock Purchase
Agreement by and among the Company, Addtel, Charles Tony Lonstein,
Aviram Lonstein, Daniel G. Lonstein and David R. Lonstein, the
shareholders of Addtel.  Addtel is a switchless reseller of long
distance services based in Glendale, California.  The Company
intends to continue to provide long distance services through
Addtel in addition to its other existing operating
telecommunications subsidiaries.

     The aggregate purchase price paid for the Addtel Stock (the
"Initial Purchase Price") was $9.5 million, subject to a potential
downward adjustment (the "Adjustment") to be computed not later
than June 9, 1997.  The Initial Purchase Price included aggregate
consideration of $2 million contractually allocated to
Nonsolicitation Agreements of the Addtel shareholders, of which an
aggregate of $500,000 cash was paid on the Closing Date and $1.5
million was held in escrow by the Company for satisfaction of the
Adjustment and any indemnity claims of the Company; however, the
shareholders of Addtel are jointly and severally liable to satisfy
any such liabilities beyond the amount held in escrow.   The $7.5
million remainder of the Initial Purchase Price was paid in cash on
the Closing Date. The Adjustment equals the amount by which (1)
total liabilities of Addtel on the Closing Date minus $1,175,747.33
exceeds (2) the sum of (a) cash and certain cash equivalents on the
Closing Date and (b) net billed accounts receivable and properly
accrued but unbilled accounts receivable of Addtel as of the
Closing Date which are subsequently collected within 120 days of
the Closing Date.  The terms of the Stock Purchase Agreement were
determined by arms length negotiation among the parties. 

     In order to fund the portion of the Initial Purchase Price
paid at closing, the Company used the remaining proceeds of the
Company's 10% Convertible Notes issued in August 1996.

     Addtel's wholesale revenue produces a substantially lower
gross profit margin than its retail revenue.  The Company is
evaluating methods of enhancing its margin on this wholesale
revenue while protecting the interests of its wholesale clientele.
The dollar amount of the Company's consolidated gross margin is
expected to increase as a result of the acquisition; however, gross
margin as a percentage of revenue will be adversely affected by the
blending of Addtel's lower margin wholesale revenue into the
Company's total revenue base.

     Prior to the consummation of the transactions contemplated by
the Stock Purchase Agreement, no material relationship existed
between the Company, any officer, director or affiliate of the
Company or any associate of any such officer or director and Addtel
or the shareholders of Addtel.  After the acquisition, the
shareholders will hold the following positions with Addtel: Aviram
Lonstein as President, Daniel G. Lonstein and David R. Lonstein as
Vice Presidents and Charles Tony Lonstein as an employee.

ITEM 5.   OTHER EVENTS.

     On January 9, 1996, the Company completed a Line of Credit
arrangement with Greyrock Business Credit, a division of
NationsCredit Commercial Corporation ("Greyrock").  The line of
credit has a maximum availability of $10 million, with borrowings
based on 80% of eligible accounts receivable and inventory, other
than receivables arising from telecommunications services 

                                2
<PAGE>

rendered to customers which are billed to the customers by a
regional Bell operating company, a Bell operating company, a local
exchange company, a credit card company, or a provider of local
telephone services. The borrowings are secured by all of the assets
of the Company and its subsidiaries and the stock of the Company's
subsidiaries.  The line of credit matures December 31, 1997 and
automatically renews for successive additional one year terms
unless either party elects to terminate by giving written notice to
the other not less than 60 days prior to the next maturity date. 

     The borrowings bear interest at a floating rate of 2.5% above
the reference rate of Bank of America NT & SA, provided that the
interest rate is not less than 9% per annum.  Interest is payable
monthly and to the extent that accrued interest does not equal
$10,000 per month, the Company is required to pay an unused line of
credit fee of such difference.  The initial borrowing by the
Company under this facility aggregated $1.6 million principal
amount on January 9, 1997.

     The agreements regarding the line of credit contain covenants
which, among other matters, limit the ability of the Company and
its subsidiaries to (1) merge, consolidate and acquire or sell
assets, (2) incur indebtedness outside the ordinary course of
business which would have a material adverse effect on the Company
and its subsidiaries taken as a whole or on the prospect of
repayment of the obligations under the line of credit, (3) pay
dividends other than stock dividends and certain dividends with
respect to the Company's Series A Cumulative Convertible Preferred
Stock, and (4) redeem, purchase or acquire its capital stock.

ITEM 7.   FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
          EXHIBITS.

     (a)  FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

          Audited Balance Sheet of AddTel Communications, Inc.
          as of May 31, 1996 and the related Statements of Income
          and Accumulated Deficit and Cash Flows for the year then 
          ended.

          Unaudited Condensed Balance Sheets of AddTel Communications, Inc.
          as of September 30, 1996 and 1995 and the related Unaudited
          Condensed Statements of Income and Retained Earnings (Deficit)
          and Cash Flows for the nine months then ended.

     (b)  PRO FORMA FINANCIAL INFORMATION.

          Unaudited Pro Forma Combined Statement of Operations
          of SA Telecommunications, Inc. and Subsidiaries for
          the year ended December 31, 1995.

          Unaudited Pro Forma Combined Balance Sheet of SA
          Telecommuncations, Inc. and Subsidiaries as of September
          30, 1996 and the related Unaudited Pro Forma Combined
          Statement of Operations for the nine months then ended.



                                3

<PAGE>


     (c)  EXHIBITS.

     EXHIBIT NO.    DOCUMENT DESCRIPTION

          2.1       Stock Purchase Agreement dated as of January
                    10, 1997 among SA Telecommunications, Inc.,
                    AddTel Communications, Inc., Charles Tony
                    Lonstein, Aviram Lonstein, Daniel G. Lonstein
                    and David R. Lonstein*

          10.1      Loan and Security Agreement dated December 26,
                    1996 among Greyrock Business Credit and SA
                    Telecommunications, Inc., U.S. Communications,
                    Inc., Long Distance Network, Inc., and
                    Southwest Long Distance Network, Inc.*

          10.2      Schedule to Loan and Security Agreement* 

          10.3      Cross-Corporate Continuing Guaranty dated
                    December 26, 1996 of SA Telecommunications,
                    Inc., U.S. Communications, Inc., Long Distance
                    Network, Inc., and Southwest Long Distance
                    Network, Inc.*

          10.4      Continuing Guaranty dated December 26, 1996 of
                    North American Telecommunications Corporation,
                    Baltic States and CIS Ventures, Inc., CIS
                    Intelligence Information Services, Inc. and
                    Uniquest Communications, Inc.*

          10.5      Pledge Agreement dated as of December 26, 1996
                    between Greyrock Business Credit and SA
                    Telecommunications, Inc.*

          10.6      Pledge Agreement dated as of December 26, 1996
                    between Greyrock Business Credit and U.S.
                    Communications, Inc.*

          10.7      Security Agreement dated December 26, 1996
                    among Greyrock Business Credit and North
                    American Telecommunications Corporation,
                    Baltic States and CIS Ventures, Inc., CIS
                    Intelligence Information Services, Inc. and
                    Uniquest Communications, Inc.*

          23.1      Consent of Price Waterhouse LLP**
___________
*    Previously filed
**   Filed herewith


                                4

<PAGE>


                            SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.

                              SA TELECOMMUNICATIONS, INC.

DATE:   February 6, 1997      By:  /s/ J. David Darnell
                                   --------------------
                                   J. David Darnell
                                   Vice President-Finance and
                                   Chief Financial Officer


                                5

<PAGE>
                          EXHIBIT INDEX

EXHIBIT NO.               DOCUMENT DESCRIPTION

2.1            Stock Purchase Agreement dated as of January 10,
               1997 among SA Telecommunications, Inc., AddTel
               Communications, Inc., Charles Tony Lonstein, Aviram
               Lonstein, Daniel G. Lonstein and David R. Lonstein*

10.1           Loan and Security Agreement dated December 26, 1996
               among Greyrock Business Credit and SA
               Telecommunications, Inc., U.S. Communications,
               Inc., Long Distance Network, Inc., and Southwest
               Long Distance Network, Inc.*

10.2           Schedule to Loan and Security Agreement* 

10.3           Cross-Corporate Continuing Guaranty dated December
               26, 1996 of SA Telecommunications, Inc., U.S.
               Communications, Inc., Long Distance Network, Inc.,
               and Southwest Long Distance Network, Inc.*

10.4           Continuing Guaranty dated December 26, 1996 of
               North American Telecommunications Corporation,
               Baltic States and CIS Ventures, Inc., CIS
               Intelligence Information Services, Inc. and
               Uniquest Communications, Inc.*

10.5           Pledge Agreement dated as of December 26, 1996
               between Greyrock Business Credit and SA
               Telecommunications, Inc.*

10.6           Pledge Agreement dated as of December 26, 1996
               between Greyrock Business Credit and U.S.
               Communications, Inc.*

10.7           Security Agreement dated December 26, 1996 among
               Greyrock Business Credit and North American
               Telecommunications Corporation, Baltic States and
               CIS Ventures, Inc., CIS Intelligence Information
               Services, Inc. and Uniquest Communications, Inc.*

23.1           Consent of Price Waterhouse LLP**

___________
*    Previously filed
**   Filed herewith


                                6

<PAGE>

               INDEX TO FINANCIAL STATEMENTS AND 
            UNAUDITED PRO FORMA FINANCIAL INFORMATION


Audited Financial Statements:

     AddTel Communications, Inc.
          Report of Independent Accountants....................F-2 
          Balance Sheet as of May 31, 1996.....................F-3 
          Statement of Income and Accumulated Deficit
          for the year ended May 31, 1996......................F-4 
          Statement of Cash Flows for the year
          ended May 31, 1996...................................F-5 
          Notes to Financial Statements........................F-6 

Unaudited Condensed Financial Statements:

     AddTel Communications, Inc.
          Unaudited Condensed Balance Sheets
          as of September 30, 1996 and 1995...................F-11
          Unaudited Condensed Statements of Income
          and Retained Earnings (Deficit) for the
          four months ended September 30, 1996 and 1995.......F-12
          Unaudited Condensed Statements of Cash 
          Flows for the four months ended
          September 30, 1996 and 1995.........................F-13
          Notes to Unaudited Condensed Financial Statements...F-14

Unaudited Pro Forma Financial Information:

     SA Telecommunications, Inc. and Subsidiaries
          Unaudited Pro Forma Combined Statement
          of Operations for the year ended
          December 31, 1995...................................F-16
          Notes to Unaudited Pro Forma Combined
          Statement of Operations for the year ended
          December 31, 1995...................................F-17
          Unaudited Pro Forma Combined Balance
          Sheet as of September 30, 1996......................F-19
          Unaudited Pro Forma Combined Statement
          of Operations for the nine months ended
          September 30, 1996..................................F-20
          Notes to Unaudited Pro Forma Combined Financial
          Statements for nine months ended September
          30, 1996............................................F-21

                               F-1

<PAGE>

                REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
  AddTel Communications, Inc.

In our opinion, the accompanying balance sheet and the related
statements of income and accumulated deficit and of cash flows
present fairly, in all material respects, the financial position of
AddTel Communications, Inc. at May 31, 1996, and the results of its
operations and its cash flows for the year in conformity with
generally accepted accounting principles.  These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial
statements based on our audit.  We conducted our audit of these
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation.  We believe that our
audit provides a reasonable basis for the opinion expressed above.




PRICE WATERHOUSE LLP
Dallas, Texas
December 18, 1996,
   except as to Note 8 which
   is as of January 17, 1997

                               F-2

<PAGE>

ADDTEL COMMUNICATIONS, INC.

BALANCE SHEET
MAY 31, 1996
(in thousands, except share information)
-----------------------------------------------------------------

     ASSETS

Current assets:
     Cash and cash equivalents                         $   1,103
     Trade accounts receivable, less allowance for
       doubtful accounts of $540                           3,646
     Notes receivable from shareholders                      310
     Deferred income taxes                                    54
     Certificate of deposit                                   19
                                                       ---------
          Total current assets                             5,132

Property and equipment, net                                  365
Other assets                                                   5
                                                       ---------
          Total assets                                 $   5,502
                                                       =========

     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                  $      91
     Accrued telecommunications expenses                   4,344
     Accrued taxes not based on income                       278
     Other accrued expenses                                  339
     Income taxes payable                                     56
     Current maturities of long-term notes payable,
       net of  unamortized discounts                          15
                                                       ---------
          Total current liabilities                        5,123

Long-term notes payable, net of unamortized discounts        292
Deferred income taxes                                         87
                                                       ---------
          Total liabilities                                5,502
                                                       ---------

Commitments and contingencies (Note 7)

Shareholders' equity:
   Common stock, $.50 par value; 200,000 shares
     authorized, 125,000 shares issued and outstanding        63
   Discount on issued common stock                           (56)
   Accumulated deficit                                        (7)
                                                       ---------
     Total shareholders' equity                             -   
                                                       ---------
        Total liabilities and shareholders' equity     $   5,502
                                                       =========

             The accompanying notes are an integral
               part of these financial statements.

                               F-3

<PAGE>

ADDTEL COMMUNICATIONS, INC.

STATEMENT OF INCOME AND ACCUMULATED DEFICIT
YEAR ENDED MAY 31, 1996
(in thousands)
-----------------------------------------------------------------


Telecommunications revenues                            $  16,449
Cost of revenues                                          11,849
                                                       ---------
  Gross profit                                             4,600

Operating expenses:
  General and administrative                               3,213
  Compensation expense to shareholders                       435
  Depreciation and amortization                              231
                                                       ---------
          Total operating expenses                         3,879
                                                       ---------

Income from operations                                       721

Other income (expense):
     Interest income from shareholders                        22
     Other interest income                                     4
     Interest expense                                        (84)
                                                       ---------
          Total other income (expense)                       (58)
                                                       ---------

Income before income taxes                                   663
Income tax expense                                           297
                                                       ---------

Net income                                                   366

Accumulated deficit, beginning of year                      (373)
                                                       ---------
Accumulated deficit, end of year                       $      (7)
                                                       =========




             The accompanying notes are an integral
               part of these financial statements.

                               F-4

<PAGE>

ADDTEL COMMUNICATIONS, INC.

STATEMENT OF CASH FLOWS
YEAR ENDED MAY 31, 1996
(in thousands)
-----------------------------------------------------------------

Cash flows from operating activities:
   Net income                                          $     366
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization                           231
     Provision for bad debts                                 603
     Deferred income taxes                                   241
     Other                                                    14
   Changes in operating assets and liabilities:
     Trade accounts receivable                            (2,046)
     Accounts payable                                        (30)
     Accrued telecommunications expenses                   1,833
     Accrued taxes not based on income                       128
     Other accrued expenses                                   84
     Income taxes payable                                     56
                                                       ---------
       Net cash provided by operating activities           1,480
                                                       ---------

Cash flows from investing activities:
     Purchases of property and equipment                     (64)
                                                       ---------
        Net cash used in investing activities                (64)
                                                       ---------

Cash flows from financing activities:
     Repayments of line of credit                           (461)
     Repayments of long-term notes payable                   (45)
                                                       ---------
        Net cash used in financing activities               (506)
                                                       ---------

Net increase in cash                                         910
Cash and cash equivalents at beginning of year               193
                                                       ---------
Cash and cash equivalents at end of year               $   1,103
                                                       =========

Supplemental cash flow information:
     Cash paid for interest                            $      84
                                                       =========






             The accompanying notes are an integral
               part of these financial statements.

                               F-5

<PAGE>

ADDTEL COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------

1.   DESCRIPTION OF BUSINESS
     
     AddTel Communications, Inc. (the "Company") is a switchless
     reseller of long-distance telecommunications services provided
     through the networks and switching facilities of other
     carriers.  The Company, based in Glendale, California, markets
     these services primarily to small and medium sized businesses
     principally through independent agents.  While most customers
     and agents are located in California, the Company also has
     customers and agents located in several other states. 

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     FINANCIAL INSTRUMENTS

     The fair market value of financial instruments is determined
     by reference to various market data and other valuation
     techniques as appropriate.  The Company believes that the fair
     values of long-term notes payable is approximately $683
     thousand (face value of the notes payable before discounting
     as further discussed in Note 4).  The Company believes that
     the fair values of all other financial instruments approximate
     their recorded values.

     CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include cash on hand and investments
     with purchased original maturities of three months or less. 
     The Company had approximately $872 thousand in cash and cash
     equivalents in excess of FDIC insured limits at May 31, 1996. 
     The Company has not experienced any losses on its cash and
     cash equivalents.

     BUSINESS AND CREDIT CONCENTRATIONS

     In the normal course of business, the Company extends
     unsecured credit to its customers.  Management has provided an
     allowance for doubtful accounts to provide for amounts which
     may eventually become uncollectible and to provide for any
     disputed charges.  No customers individually accounted for
     more than 10% of revenues in 1996.

     PROPERTY AND EQUIPMENT
     
     Property and equipment are stated at cost.  Depreciation for
     financial statement purposes is provided on an accelerated
     basis over the estimated useful lives of five years. 
     Maintenance and repairs are expensed as incurred while
     replacements and betterments are capitalized.

     REVENUE RECOGNITION

     The Company recognizes revenue as services are performed based
     on customer usage, net of an estimate for uncollectible
     revenue.  The Company sells its services to its customers
     primarily on a measured time basis.

                               F-6

<PAGE>

ADDTEL COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------

     USE OF ESTIMATES

     The preparation of financial statements in conformity with
     generally accepted accounting principles requires the Company
     to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent
     liabilities at the date of the financial statements and
     reported amounts of revenues and expenses during the reporting
     period.  Actual results could differ from those estimates.

     INCOME TAXES

     The Company accounts for income taxes in accordance with
     Statement of Financial Accounting Standards No. 109,
     "Accounting for Income Taxes."  Deferred income taxes are
     calculated utilizing an asset and liability approach whereby
     deferred taxes are provided for tax effects of basis
     differences for assets and liabilities arising from differing
     treatments for financial and income tax reporting purposes

3.   PROPERTY AND EQUIPMENT

     Property and equipment at May 31, 1996 consisted of the
     following (in thousands):

       Telecommunications equipment                        $    467
       Computer equipment                                       217
       Software                                                  61
       Furniture and fixtures                                    19
       Office equipment                                          27
       Leasehold improvements                                     9
                                                           --------
                                                                800
       Less accumulated depreciation and amortization          (435)
                                                           --------
                                                           $    365
                                                           ========

4.   LONG-TERM NOTES PAYABLE

     Long-term notes payable at May 31, 1996 consisted
     of the following (in thousands):

     Notes payable ("New Notes") to independent
     investors, net of unamortized discounts,
     due in monthly installments aggregating 
     $10 thousand, including interest at 12% per
     annum (effective rate of 39.2% per annum), 
     maturing in November, 2005                        $   296

     Notes payable to independent investors, due
     in monthly installments aggregating $1 thousand,
     including interest at 10% per annum, maturing
     in January, 1997                                       11
                                                       -------
                                                           307
     Less current maturities                               (15)
                                                       -------
     Long-term portion                                 $   292
                                                       =======

                               F-7

<PAGE>

ADDTEL COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------

     During the year ended May 31, 1996, the Company experienced
     certain cash flow constraints resulting in the default of
     certain long-term debt obligations incurred in previous years. 
     These obligations were of a contingent nature with repayment
     based on a percentage of the Company's monthly revenues.  As
     a result of the fiscal 1996 default, the obligation was
     restructured into a fixed payment arrangement (New Notes) with
     a face value greater than the existing book value.  As a
     result of this transaction, the Company recorded a discount on
     debt in accordance with Statement of Financial Accounting
     Standard No. 15, "Accounting by Debtors and Creditors for
     Troubled Debt Restructuring."  The discount is being amortized
     to interest expense over the life of the New Notes and
     effectively increases the annual yield to 39.2%.  At May 31,
     1996, the New Notes had a face value of $672 thousand versus
     a discounted book value of $296 thousand.

     Annual maturities of long-term notes payable outstanding at
     May 31, 1996 are as follows (in thousands):

     YEARS ENDED MAY 31,
     --------------------

          1997                               $     15
          1998                                      5
          1999                                      8
          2000                                     12
          2001                                     17
          Thereafter                              250
                                             --------
                                             $    307
                                             ========
     
5.   INCOME TAXES

     Income tax provision for the year ended May 31, 1996 was
     comprised of the following (in thousands):

     Current:
       Federal                                           $    11
       State                                                  45
                                                         -------
          Total current                                       56
                                                         =======

     Deferred:
       Federal                                           $   226
       State                                                  15
                                                         -------
          Total deferred                                     241
                                                         -------

                    Total provision for income taxes     $   297
                                                         =======

     The Company utilized all of its federal and state net
     operating loss carryforwards, aggregating $827 thousand and
     $403 thousand, respectively, during the year ended May 31,
     1996.

                               F-8

<PAGE>

ADDTEL COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------

     The effective tax rate on earnings before income tax provision
     was different than the federal statutory tax rate.  The
     following summary reconciles the federal statutory tax rate
     with the actual effective rate:

     Federal income tax expense                        35.0%
     State taxes, net of federal expense                9.0%
     Disallowed meals and entertainment                 0.5%
     Other                                              0.3%
                                                       -----
                                                       44.8%
                                                       =====

     Deferred income taxes reflect the net tax effects of temporary
     differences between the carrying amount of assets and
     liabilities for financial reporting purposes and the amounts
     used for income tax purposes.  The significant components of
     the Company's net deferred tax assets and liabilities at May
     31, 1996 were comprised of the following (in thousands):

        Deferred tax assets:
          Accruals and reserves                   $   224
          Other, net                                    9
                                                  -------
            Total gross deferred tax assets           233
                                                  -------
     
        Deferred tax liabilities:
          Change in accounting method             $  (119)
          Depreciation                                (86)
          Pending adjustments to tax returns
           previously filed                           (61)
                                                  -------
            Total gross deferred tax liabilities     (266)
                                                  -------
               Net deferred tax liabilities       $   (33)
                                                  =======

6.   RELATED PARTY TRANSACTIONS

     The Company had notes receivable from its shareholders
     aggregating $310 thousand at May 31, 1996.  The notes
     receivable accrue interest at a rate of 7% per annum and
     mature on demand.

7.   COMMITMENTS AND CONTINGENCIES

     The Company is involved in various claims and legal actions
     arising in the ordinary course of business.  Management
     believes it is unlikely that the final outcome of any of the
     claims or proceedings to which the Company is a party would
     have a materially adverse effect on the Company's financial
     position or results of operations.

                               F-9

<PAGE>

ADDTEL COMMUNICATIONS, INC.

NOTES TO FINANCIAL STATEMENTS
-----------------------------------------------------------------

     The Company leases certain office facilities and equipment
     under noncancelable operating leases expiring through fiscal
     1999.  Minimum annual rentals under these leases are as
     follows (in thousands):

     YEARS ENDING MAY 31,
     --------------------

          1997                $    101
          1998                      18
          1999                       7
                              --------
                              $    126
                              ========

     Total rent expense incurred during the year ended May 31, 1996
     was $88 thousand.

8.   SUBSEQUENT EVENTS

     Effective October 31, 1996, the Company forgave all
     outstanding notes and accrued interest receivable from its
     shareholders aggregating $320 thousand.

     Effective November 1, 1996, 100% of the common stock of the
     Company was acquired by SA Telecommunications, Inc.  The
     financial statements of the Company do not reflect any
     adjustments arising from this transaction.

     On January 10, 1997, the Company retired all of its long-term
     notes payable and accrued but unpaid interest thereon for $773
     thousand in cash.  In connection with the retirement, the
     Company recorded an extraordinary loss on the extinguishment
     of debt of $485 thousand, which resulted from the unamortized
     discount from the face value of the notes and early retirement
     penalties.

                               F-10



<PAGE>

                   ADDTEL COMMUNICATIONS, INC.
               UNAUDITED CONDENSED BALANCE SHEETS
                         (In Thousands)




<TABLE>
<CAPTION>
                                                                           September 30,
                                                                         1996          1995
                                                                      ---------      -------
ASSETS
<S>                                                                   <C>            <C>

Current assets:
     Cash and cash equivalents                                        $  2,741       $     17
     Trade accounts and notes receivable, less allowance
          for doubtful accounts of $ 646 and $ 570, respectively         5,387          2,350
     Other current assets                                                   59            359
                                                                      --------       --------
          Total current assets                                           8,187          2,726

Property and equipment, net                                                333            490
Other assets                                                                 9              2
                                                                      --------       --------
          Total assets                                                $  8,529       $  3,218
                                                                      ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses                                 $  7,977       $  2,905
Notes payable and current maturities of long-term notes                     15            215
                                                                      --------       --------
          Total current liabilities                                      7,992          3,120

Long-term notes payable, less current maturities                           281            336
Deferred income taxes                                                      185             72
Stockholders' equity (deficit)                                              71           (310)
                                                                      --------       --------
          Total liabilities and stockholders' equity                  $  8,529       $  3,218
                                                                      ========       ========

</TABLE>

          See notes to unaudited condensed financial statements.



                              F-11


<PAGE>

                   ADDTEL COMMUNICATIONS, INC.
          UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
                AND RETAINED EARNINGS (DEFICIT)
                         (In Thousands)


                                           For the four months
                                           ended September 30,
                                           -------------------

                                         1996              1995
                                        -------           -------

Telecommunications revenues             $ 9,795           $ 4,327
Cost of revenues                          8,264             2,990
                                        -------            -------
Gross profit                              1,531             1,337

Operating expenses                        1,398             1,228
                                        -------           -------
Operating income                            133               109
Other (expenses)                             (5)               (8)
Income taxes                                 57                45
                                        -------           -------
Net income                                   71                56
Accumulated deficit,
   beginning of period                       (7)             (373)
                                        -------           -------
Retained earnings (deficit),
   end of period                        $    64           $  (317)
                                        =======           =======

              See notes to unaudited condensed financial statements.

                              F-12

<PAGE>

                   ADDTEL COMMUNICATIONS, INC.
          UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
                         (In Thousands)


                                                      For the four months
                                                      ended September 30,
                                                      -------------------
                                                         1996      1995
                                                         ------    -----
Cash flows from operating activities:
     Net income                                          $   71    $  56
     Depreciation and amortization                           25       23
     Net change in working capital and other              1,546       (4)
                                                         ------    -----
Net cash flows from operating activities                  1,642       75

Net cash flows from investing activities                      7       11

Net cash flows (used in) financing activities               (11)    (262)
                                                         ------    -----

Net increase (decrease) in cash                           1,638     (176)

Cash and cash equivalents at beginning of period          1,103      193
                                                         ------    -----
Cash and cash equivalents at end of period               $2,741    $  17
                                                         ======    =====

        See notes to unaudited condensed financial statements.


                              F-13


<PAGE>

                   ADDTEL COMMUNICATIONS, INC.
        NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


NOTE A  - BASIS OF PRESENTATION

     These unaudited condensed financial statements at September
     30, 1996 and 1995 and for the four months then ended were
     derived from the books and records of the Company, but do not
     include all disclosures required by generally accepted
     accounting principles.  In the opinion of management, these
     unaudited condensed financial statements reflect all
     adjustments of a normal recurring nature necessary for a fair
     presentation of the financial condition and results of
     operations for interim periods.  These results of operations
     are not necessarily indicative of the results which ultimately
     will be reported for the full year ended May 30, 1997.


NOTE B  - SUBSEQUENT EVENTS

     Effective October 31, 1996, the Company forgave all outstanding
     notes and accrued interest receivable from its shareholders
     aggregating $320 thousand.

     Effective November 1, 1996, 100% of the common stock of the 
     Company was acquired by SA Telecommunications, Inc.  The
     financial statements of the Company do not reflect any
     adjustments arising from this transaction.

     On January 10, 1997, the Company retired all of its long-term
     notes payable and accrued but unpaid interest thereon for
     $773 thousand in cash.  In connection with the retirement,
     the Company recorded an extraordinary loss on extinguishment
     of debt of $485 thousand, which resulted from the unamortized
     discount from the face value of the notes and early retirement
     penalties.

                              F-14

<PAGE>

          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
                   YEAR ENDED DECEMBER 31, 1995
      UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS


The unaudited pro forma combined statement of operations for
the year ended December 31, 1995 includes the historical results
of operations of the Company and AddTel as if the acquisition
had been effected on January 1, 1995.  This statement of operations
is not necessarily indicative of the results of operations that
would have been achieved had the transaction been consummated
as of the date indicated or which may be achieved in the future.



                              F-15


<PAGE>

          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
                  Year Ended December 31, 1995
      UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                (In Thousands, Except Per Share)


<TABLE>
<CAPTION>

                                         SA
                                   Telecommunications,                AddTel                                       Pro Forma
                                   Inc. and Subsidiaries         Communications, Inc.          Adjustments          Combined
                                   ---------------------         --------------------          -----------         ---------
<S>                                <C>                           <C>                           <C>                 <C>

Revenues                           $             20,748          $            12,726           $                   $ 33,474
Cost of revenues                                 14,116                        8,856                                 22,972
                                   --------------------          -------------------           -----------         ---------
 Gross profit                                     6,632                        3,870                                 10,502
                                                                                                       826  -A
Operating expenses                                7,909                        3,936                   128  -B       12,799
                                   --------------------          -------------------           -----------         --------
Loss from continuing operations
     before other income (expense)
     and extraordinary item                      (1,277)                         (66)                 (954)          (2,297)
Other income (expense)                             (658)                         (18)                 (950) -C       (1,626)
                                   --------------------          -------------------           -----------         --------
Loss from continuing operations
     before extraordinary item                   (1,935)                         (84)               (1,904)          (3,923)
Income taxes (benefit)                              -                            (38)                   38  -D          -
Discontinued operations                          (4,531)                         -                                   (4,531)
                                   --------------------          -------------------           -----------         --------
Net loss                                         (6,466)                         (46)               (1,942)          (8,454)
Preferred dividend requirements                    (125)                         -                     -               (125)
                                   --------------------          -------------------           -----------         --------
Net loss applicable to common
     shareholders                  $             (6,591)         $               (46)          $    (1,942)        $ (8,579)
                                   ====================          ===================           ===========         ========

Pro forma combined loss per share
    applicable to common shareholders                                                                              $  (0.74)
                                                                                                                   ========

Weighted average number of
   common shares outstanding                                                                                         11,639
                                                                                                                   ========
</TABLE>

   See notes to the unaudited pro forma combined statement of operations.

                              F-16

<PAGE>

          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
                        DECEMBER 31, 1995
                  NOTES TO UNAUDITED PRO FORMA
                COMBINED STATEMENT OF OPERATIONS


The following describes the assumptions used in determining the pro
forma adjustments necessary to give effect on a pro forma basis to
the transaction described above:

(A)  Adjustment to amortization of intangible assets from the
     AddTel acquisition.

(B)  Adjustment to depreciation of property and equipment whose
     values were adjusted to their fair values in conjunction with
     the AddTel acquisition.

(C)  Adjustment to interest expense related to obligation incurred
     in connection with the acquisition totaling $9.5 million with
     imputed interest at 10%.

(D)  Adjustment for reversal of federal income tax benefit.



                              F-17


<PAGE>

          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
                       SEPTEMBER 30, 1996
        UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS


The unaudited pro forma combined balance sheet as of September 30,
1996 includes the historical balance sheets of the Company and AddTel
as if the acquisition had been effected as of September 30, 1996. The
unaudited pro forma combined statement of operations for the nine
months ended September 30, 1996 includes the historical results of
operations of the Company and AddTel as if the acquisition had been
effected on January 1, 1996.  These financial statements are not 
necessarily indicative of the financial condition or results of
operations that would have been achieved had the transaction been
consummated as of the date indicated or which may be achieved in
the future.

                              F-18


<PAGE>
          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
                       September 30, 1996
           UNAUDITED PRO FORMA COMBINED BALANCE SHEET
                        (In Thousands)


<TABLE>
<CAPTION>


                                                 SA
                                        Telecommunications,             AddTel                                     Pro Forma
                                        Inc. and Subsidiaries    Communications, Inc.     Adjustments               Combined
                                        ---------------------    --------------------     -----------              ---------
<S>                                     <C>                      <C>                      <C>                      <C>
ASSETS
Current assets:
     Cash and cash equivalents          $              12,691    $              2,741     $                        $ 15,432
     Accounts and notes
       receivables, net                                 6,773                   5,387                                12,160
     Other current assets                               1,146                      59             (40) -A             1,165
                                        ---------------------    --------------------     -----------              --------
          Total current assets                         20,610                   8,187             (40)              28,757

Property and equipment, net                             7,422                     333             435  -A            8,190
Excess of cost over net
 assets acquired, net                                  17,721                   -               8,849  -A           26,570
Other assets                                            2,490                       9                                2,499
                                        ---------------------    --------------------     -----------              --------
           Total assets                 $              48,243    $              8,529     $     9,244              $66,016
                                        =====================    ====================     ===========              ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable - trade           $               1,476    $                 128    $                        $ 1,604
     Accrued telecommunications
        expenses                                        1,821                    7,249                               9,070
     Other accrued expenses                             3,408                      600                               4,008
     Acquisition obligation                               -                        -            9,500  -A            9,500
     Short-term notes payable                              44                      -                                    44
     Current maturities of long-
       term obligations                                   529                       15                                 544
                                        ---------------------    ---------------------    -----------              --------
          Total current liablities                      7,278                    7,992          9,500               24,770

Long-term obligations, less current
   maturities                                          28,585                      281                              28,866
Deferred income taxes                                     -                        185           (185) -A              -
Series A redeemable preferred stock                     1,310                      -                                 1,310


Stockholders' equity:
   Common stock                                             2                        7             (7) -A               2
   Additional paid-in capital                          26,479                      -                                26,479
   Retained deficit                                   (11,557)                      64            (64) -A          (11,557)
   Treasury stock                                      (3,854)                     -                                (3,854)
                                        ---------------------    ---------------------    -----------              -------
          Total shareholders' equity                   11,070                       71            (71)              11,070
                                        ---------------------    ---------------------    -----------              -------
          Total liabilities and
            shareholders' equity        $              48,243    $               8,529    $     9,244              $66,016
                                        =====================    =====================    ===========              =======

</TABLE>

           See notes to unaudited pro forma combined financial statements.

                              F-19
<PAGE>
          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
              Nine Months Ended September 30, 1996
      UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                (In Thousands, Except Per Share)


<TABLE>
<CAPTION>

                                         SA
                                   Telecommunications,           AddTel                                       Pro Forma
                                   Inc. and Subsidiaries    Communications, Inc.          Adjustments          Combined
                                   ---------------------    --------------------          -----------         ---------
<S>                                <C>                      <C>                           <C>                 <C>

Revenues                           $              22,200    $             18,065          $                   $  40,265
Cost of revenue                                   13,059                  14,523                                 27,582
                                   ---------------------    --------------------          -----------         ---------
Gross profit                                       9,141                   3,542                                 12,683

Operating expenses                                 9,015                   3,169                  603  -B        12,907
                                                                                                  120  -C
                                   ---------------------    --------------------          -----------         ---------
Income from continuing operations                                                                        
     before other income (expense)
     and extraordinary item                          126                     373                 (723)             (224)
Other income (expense)                            (1,306)                    (46)                (504) -D        (1,856)
                                   ---------------------    --------------------          -----------         ---------
Income (loss) from continuing
     operations before
     extraordinary item                           (1,180)                    327               (1,227)           (2,080)
Income taxes                                         -                       146                 (146) -E            - 
Extraordinary item                                 1,817                     -                                    1,817
                                   ---------------------    --------------------          -----------         ---------
Net income (loss)                                    637                     181               (1,081)             (263)

Preferred dividend requirements                     (198)                    -                                     (198)
                                   ---------------------    --------------------          -----------         ---------
Net income (loss) applicable to
     common shareholders           $                 439    $                181          $    (1,081)        $    (461)
                                   =====================    ====================          ===========         =========

Pro forma combined loss per share
   applicable to common shareholders                                                                          $   (0.03)
                                                                                                              =========

Weighted average number of
      common shares outstanding                                                                                  16,118
                                                                                                              =========

</TABLE>

      See notes to unaudited pro forma combined financial statements.

                              F-20

<PAGE>

          SA TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
                       SEPTEMBER 30, 1996
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS


The following describes the assumptions used in determining the pro
forma adjustments necessary to give effect on a pro forma basis to
the transaction described above:

(A)  Adjustment to reflect the borrowings and obligations necessary
     to consummate the acquisition and make the necessary purchase
     accounting and elimination entries.

(B)  Adjustment to amortization of intangible assets from the
     AddTel acquisition.

(C)  Adjustment to depreciation of property and equipment whose
     values were adjusted to their fair values in conjunction with
     the AddTel acquisition.

(D)  Adjustment to interest expense related to obligation incurred
     in connection with the acquisition totaling $9.5 million with
     imputed interest at 10%.

(E)  Adjustment for utilization of parent company losses to offset
     federal income taxes.


                              F-21
<PAGE>