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

                                    FORM 10-Q

(MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
     SECURITIES AND EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.
                               --------------


[ ]  TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
     SECURITIES AND EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM  ________  TO _____


COMMISSION FILE NUMBER 0 - 26728


                            TEL-SAVE HOLDINGS, INC.
         ---------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER


                                    DELWARE
         ---------------------------------------------------------------
         (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION


                                   23-2827736
         ---------------------------------------------------------------
                      (I.R.S. EMPLOYER IDENTIFICATION NO.)


                       6805 ROUTE 202, NEW HOPE, PA 18938
         ---------------------------------------------------------------
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES -- ZIP CODE)



REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 215 - 862 - 1500

FORMER  NAME,  FORMER  ADDRESS AND FORMER  FISCAL  YEAR,  IF CHANGES  SINCE LAST
REPORT.

INDICATE BY CHECK 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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

INDICATE  BY CHECK MARK  WHETHER  THE  REGISTRANT  HAS FILED ALL  DOCUMENTS  AND
REPORTS  REQUIRED  TO BE  FILED BY  SECTION  12,13,  OR 15(D) OF THE  SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE  DISTRIBUTION OF SECURITIES  UNDER A PLAN
CONFIRMED BY A COURT

                               YES       NO

APPLICABLE ONLY TO CORPORATE ISSUERS:  INDICATE THE NUMBER OF SHARES OUTSTANDING
OF EACH OF THE ISSUER'S  CLASSES OF COMMON STOCK,  AS OF THE LATEST  PRACTICABLE
DATE.

Common Stock,  $.01 par value,  64,727,490  shares  outstanding as of August 12,
1998.
<PAGE>
                             TEL-SAVE HOLDINGS, INC.
                                    FORM 10-Q

                                  JUNE 30, 1998

                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

        Item 1. Financial Statements

             Consolidated Balance Sheets as of June 30, 1998
                  and December 31, 1997

            Consolidated Statements of Operations for the three and six
                  months ended June 30, 1998 and 1997

            Consolidated Statement of Stockholders' Equity for
                  the six months ended June 30, 1998

            Consolidated Statements of Cash Flows for the six
                  months ended June 30, 1998 and 1997

            Notes to Consolidated Financial Statements

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

PART II - OTHER INFORMATION

        Items 1-6

        Signatures


                                       2
<PAGE>
PART I - FINANCIAL INFORMATION
     ITEM 1. FINANCIAL STATEMENTS

                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT FOR SHARE DATA)

<TABLE>
<CAPTION>
                                                              JUNE 30,       DECEMBER 31,
                                                                1998            1997
----------------------------------------------------------------------------------------------------
<S>                                                            <C>             <C>     
Assets:
CURRENT:
   Cash and cash equivalents                                   $ 33,148        $316,730
   Marketable securities                                        566,307         212,269
     Accounts receivable, trade net of allowance for
       uncollectible account of $4,215 and $2,419,
       respectively                                              57,735          44,587
   Advances to partitions and note receivables                   11,276          26,110
   Due from broker                                               13,230          21,087
   Prepaid AOL marketing costs - current                         41,275          30,857
   Deferred taxes - current                                         --           30,916
   Prepaid expenses and other current assets                     16,413          8,495
----------------------------------------------------------------------------------------------------
       TOTAL CURRENT ASSETS                                     739,384         691,051
Property and equipment, net                                      60,265          55,835
Intangibles, net                                                 10,512          10,590
Prepaid AOL marketing costs                                          --          32,722
Other assets                                                     63,247          24,693
----------------------------------------------------------------------------------------------------
       TOTAL ASSETS                                            $873,408        $814,891
====================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
   Margin account indebtedness                                 $192,892        $     --
   Accounts payable and accrued expenses:
      Trade and other                                            34,178          16,858
      Partitions                                                  3,269           7,740
      Interest and other                                         10,988          10,578
   Securities sold short, at cost to purchase                    13,230          21,087
----------------------------------------------------------------------------------------------------
       TOTAL CURRENT LIABILITIES                                254,557          56,263
Convertible debt                                                500,000         500,000
Deferred revenue                                                 32,100          35,800
Other liabilities                                                 1,565              --
----------------------------------------------------------------------------------------------------
       TOTAL LIABILITIES                                        788,222         592,063
----------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
     Preferred stock,  $.01 par value,  5,000,000 shares
       authorized;  no shares outstanding                           --              --
     Common stock - $.01 par value,  100,000,000 shares 
       authorized; 66,934,635 and 67,249,635 issued
       respectively                                                 669            672
   Additional paid-in capital                                   284,055        291,952
   Retained earnings (accumulated deficit)                     (134,852)         3,097
   Unrealized loss on marketable securities                      (6,730)            --
   Treasury stock                                               (57,956)        (72,893)
----------------------------------------------------------------------------------------------------
       TOTAL STOCKHOLDERS' EQUITY                                85,186         222,828
----------------------------------------------------------------------------------------------------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $873,408        $814,891
====================================================================================================
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
                                                       FOR THE THREE MONTHS          FOR THE SIX MONTHS
                                                           ENDED JUNE 30,              ENDED JUNE 30,
                                                    ------------------------------------------------------------
                                                         1998          1997         1998          1997
-------------------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>       <C>             <C>     
SALES                                                  $111,098       $75,032   $  202,244      $146,192

COST OF SALES                                            93,058        73,521      169,638       131,715
-------------------------------------------------------------------------------------------------------------

GROSS PROFIT                                             18,040         1,511       32,606       14,477

GENERAL AND ADMINISTRATIVE EXPENSES                      10,195         4,660       19,823        7,953

     PROMOTIONAL, MARKETING AND ADVERTISING

     EXPENSES - PRIMARILY AOL                            37,617        10,775       84,939       14,366

RESEARCH AND DEVELOPMENT COSTS                              277            --       21,595           --
-------------------------------------------------------------------------------------------------------------

OPERATING LOSS                                          (30,049)      (13,924)     (93,751)      (7,842)

INVESTMENT AND OTHER INCOME (EXPENSE), NET                1,004         4,309       (3,810)       7,128
-------------------------------------------------------------------------------------------------------------

LOSS BEFORE PROVISION FOR INCOME TAXES                  (29,045)       (9,615)     (97,561)        (714)

PROVISION (BENEFIT) FOR INCOME TAXES                     67,109        (3,750)      40,388         (279)
-------------------------------------------------------------------------------------------------------------

NET LOSS                                               $(96,154)      $(5,865)  $ (137,949)      $ (435)
=============================================================================================================

NET LOSS PER SHARE - BASIC                             $  (1.49)      $  (.09)       (2.14)      $ (.01)
=============================================================================================================

WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING - BASIC                                 64,486        63,898       64,320       63,171
=============================================================================================================

NET LOSS PER SHARE - DILUTED                           $  (1.49)    $    (.09)  $    (2.14)      $ (.01)
=============================================================================================================

WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT 
 SHARES OUTSTANDING - DILUTED                            64,486        63,898       64,320       63,171
=============================================================================================================
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     FOR THE SIX MONTHS ENDED JUNE 30, 1998
                                   (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>   
                                                                    RETAINED      UNREALIZED  
                                        COMMON STOCK   ADDITIONAL   EARNINGS       LOSS ON        TREASURY STOCK
                                  -------------------   PAID-IN   (ACCUMULATED    MARKETABLE   --------------------
                                     SHARES    AMOUNT   CAPITAL     DEFICIT)      SECURITIES     SHARES    AMOUNT        TOTAL  
                                   ------------------- ----------   ----------    ------------  ---------  -------       -----
<S>                                  <C>        <C>    <C>         <C>           <C>           <C>         <C>        <C>     
Balance, January 1, 1998             67,250     $672   $291,952    $   3,097     $    --       (3,608)     $(72,893)  $222,828
 Net loss                                --      --         --      (137,949)         --           --          --      (137,949)
  Issuance of warrants to AOL            --      --      27,208        --             --           --            --     27,208
  Exercise of common stock warrants      --      --      (3,620)       --             --          250         5,053      1,433
  Exercise of common stock options       --      --     (22,068)       --             --        1,429        29,125      7,057
  Purchase of treasury shares            --      --         --         --             --       (1,341)      (28,890)    (28,890)
  Exercise of AOL warrant                --      --      (7,693)       --             --          381         7,693          --
  Retirement of common stock           (315)      (3)    1,467)        --                          --            --      (1,470)
  Common stock issued for bonuses        --     (257)       --         --             --           97         1,956       1,699
  Unrealized loss on marketable
     securities                          --       --        --         --         (6,730)          --            --      (6,730)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 1998               66,935     $669  $284,055     $(134,852)    $(6,730)      (2,792)     $(57,956)    $85,186
====================================================================================================================================
</TABLE>
            See accompanying notes consolidated financial statements.

                                       5
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                FOR THE SIX MONTHS
                                                                                  ENDED JUNE 30,
                                                                        ---------------------------------
                                                                           1998               1997
---------------------------------------------------------------------------------------------------------
<S>                                                                        <C>           <C>      
Cash flows from operating activities:
   Net Loss                                                                $(137,949)    $   (435)
   Adjustment To Reconcile Net Income To Net Cash (Used In)
      Provided By Operating Activities:
   Unrealized Loss On Securities                                               2,850           --
   Provision For Bad Debts                                                     1,996         1,025
   Depreciation And Amortization                                               2,768         2,994
   Vested Aol Warrants And Amortization Of Prepaid Aol Marketing Costs        49,513        14,366
   Charge For Customer Acquisition Costs                                          --        11,550
   Purchased Research And Development                                         21,034            --
   Deferred Revenue                                                           (3,700)           --
   Valuation   allowance  for deferred tax assets                             40,388            --
     Income Tax Benefit Related To Exercise Of Options And Warrants               --         5,382
   (Increase) Decrease In:
     Accounts Receivable, Trade                                              (14,943)      (20,635)
     Advances To Partitions And Note Receivables                              14,834       (14,228)
     Prepaid Expenses And Other Current Assets                                (7,918)      (8,697)
     Prepaid Aol Marketing Costs                                                  --      (100,564)
     Other Assets                                                            (38,026)       (1,956)
   Increase (Decrease) In:
       Accounts And Partition Payables And Accrued Expenses                   13,581        11,483
     Other Liabilities                                                        (1,587)           --
--------------------------------------------------------------------------------------------------------
       Net Cash Used In Operating Activities                                 (57,159)       (99,715)
--------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
   Acquisition Of Intangibles                                                   (285)        (4,328)
   Acquisition Of Symetrics Industries, Inc.                                 (26,707)           --
   Capital Expenditures                                                       (6,836)       (16,246)
   Securities Sold Short                                                     (10,316)          (867)
   Due From Broker                                                             7,856            867
   Sale (Purchase) Of Securities, Net                                       (361,157)       149,238
--------------------------------------------------------------------------------------------------------
       Net Cash (Used In) Provided By Investing Activities                  (397,445)       128,664
---------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
   Proceeds From Margin Account Indebtedness                                 192,892             --
   Proceeds From Exercise Of Options And Warrants                              8,490         10,574
   Retirement Of Common Stock                                                 (1,470)            --
   Purchase Of Common Stock Warrants                                             --          (4,400)
   Acquisition Of Treasury Stock                                             (28,890)
---------------------------------------------------------------------------------------------------------
       Net Cash Provided By  Financing Activities                            171,022          6,174
---------------------------------------------------------------------------------------------------------
Net (Decrease) Increase In Cash And Cash Equivalents                        (283,582)        35,123
Cash And Cash Equivalents, At Beginning Of Period                            316,730          8,023
Cash And Cash Equivalents, At End Of Period                                  $33,148        $43,146
=========================================================================================================
</TABLE>

          See Accompanying Notes To Consolidated Financial Statements.

                                       6
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

     The  consolidated  financial  statements  include the  accounts of Tel-Save
Holdings, Inc. and its wholly-owned  subsidiaries,  and have been prepared as if
the entities had operated as a single  consolidated group since their respective
dates of  incorporation.  All intercompany  balances and transactions  have been
eliminated.

     The consolidated  financial statements and related notes thereto as of June
30,  1998 and for the  three and six  months  ended  June 30,  1998 and 1997 are
presented as unaudited but in the opinion of management  include all adjustments
necessary to present fairly the information set forth therein. These adjustments
consist solely of normal  recurring  accruals.  The  consolidated  balance sheet
information  for  December  31,  1997 was  derived  from the  audited  financial
statements  included  in the  Company's  Form  10-K as  amended.  These  interim
financial  statements  should be read in conjunction with that Form 10-K report.
The interim results are not necessarily indicative of the results for any future
periods.

     Certain reclassifications of prior period data have been made to conform to
the current period  classifications.  The promotion,  advertising  and marketing
expenses related to the Company's  Telecommunications  Marketing  Agreement (the
"AOL  Agreement")  dated as of February 22,  1997,  with  America  Online,  Inc.
("AOL"),  as amended,  have been reclassified from cost of sales to promotional,
marketing  and  advertising  expenses  -  primarily  AOL  in the  statements  of
operations for the three and six months ended June 30, 1997, in order to conform
to the current period classifications.

2. Acquisition of ADS Holding Corporation (formerly Symetrics Industries, Inc.)

     In January  1998,  the Company  acquired  all of the  outstanding  stock of
Symetrics Industries,  Inc.  ("Symetrics"),  a manufacturer of digital telephone
switching  equipment  and systems  (the  "Telephone  Business")  and  electronic
equipment for the U.S.  Department of Defense (the "Defense Business") for $26.7
million.  The  Company  has  completed  the  sale of the  Defense  Business  for
approximately $10 million (including assumed  liabilities).  The transaction has
been  accounted  for under the purchase  method.  In  connection  with the sale,
Symetrics  changed its name to ADS Holding Corporation ("ADS").

     The Company's  purpose for  purchasing ADS was to obtain the technology for
the digital switch manufactured by the Telephone Business . The Company believes
that the digital  switch  requires  substantial  development in order to provide
state of the art features which would make the digital switch attractive for use
by local  telephone  companies  operating in smaller  cities and rural areas and
competitive local exchange carriers operating in metropolitan areas. The Company
plans to use the digital  switch in its own  operation  as a  competitive  local
exchange  carrier  and in its  planned  entry into the  college  and  university
telecommunication business. The net purchase price of $18.6 million exceeded the
book deficit of the  Telephone  Business by  approximately  $22.8  million.  The
majority of this excess has been  recorded by the Company as purchased  research
and development  and included in research and  development  expense in the first
quarter of 1998.  The Company is still in the  process of valuing the  purchased
research  and  development  and  approximately  $21.0  million  is  its  current
estimate. The operations of the Telephone Business,  which resulted in a loss in
1997 and 1996, are not material.

3. Other Assets 

     In connection with the Company entering into a Telecommunications  Services
Agreement   ("TSA")   dated  May  20,  1998  with   Communications   Telesystems
International   d/b/a   WorldXChange   Communications   ("WXC")   a   California
corporation,  the  Company  has  advanced  $40  million  to WXC which is due and
payable on October 15, 1999 ("WXC Note").  The Company  recorded the WXC Note in
other assets in the consolidated balance sheet at June 30, 1998. Interest on the
WXC Note is payable  quarterly  commencing  August 21, 1998 at a rate of 10% per
annum.  The  Company  can  purchase  from  WXC  international  telecommunication
services pursuant to the TSA.

                                       7
<PAGE>
4. Income Taxes

     Provision for Income Taxes. The Company reports the effects of income taxes
under  FASB  Statement  No. 109,  Accounting of Income  Taxes,  (SFAS 109).  The
objective  of income  tax  reporting  is to  recognize  (a) the  amount of taxes
payable or refundable for the current year and (b) deferred tax  liabilities and
assets for the future tax  consequences  of events that have been  recognized in
the financial  statements  or tax returns.  Under SFAS 109, the  measurement  of
deferred tax assets is reduced, if necessary,  by the amount of any tax benefits
that, based on available evidence, are not expected to be realized.  Realization
of deferred tax assets is determined on a more-likely-than-not basis.

     The Company considers all available  evidence,  both positive and negative,
to  determine  whether,  based  on the  weight  of that  evidence,  a  valuation
allowance  is  needed  for some  portion  or all of a net  deferred  tax  asset.
Judgment is used in  considering  the  relative  impact of negative and positive
evidence.  In  arriving a these  judgments,  the weight  given to the  potential
effect of negative  and  positive  evidence is  commensurate  with the extent to
which it can be objectively verified.

     The Company had net deferred tax assets of  approximately  $76.5 million at
March  31,  1998.  Those  deferred  tax  assets  primarily  represented  the tax
consequences  of benefits  attributable to net operating loss  carryforwards and
$36.3  million  related to  deductions  from the  exercise  of  executive  stock
options.  The Company  determined  that no valuation  allowance was necessary at
March 31, 1998 because, among other factors,  income, which it believed would be
indicative of future  operations,  had been generated in recent years,  with the
exception  of 1997.  The loss  incurred in 1997 was  primarily  attributable  to
amortization of the AOL marketing agreement.

     During the second  quarter  ended June 30,  1998 the Company  continued  to
incur significant  promotional,  marketing and advertising expenses attributable
to its efforts to increase  the customer  base.  Moreover,  competitive  factors
intensified  during the period making gains in  subscriber  base more costly and
more time consuming.  The Company  established in July new marketing efforts and
expects to incur up to $190 million in marketing  costs during the  remainder of
fiscal 1998 and thus, will incur a significant operating loss for fiscal 1998.

     Because (a) the Company expects to incur a significant loss for the current
fiscal year, and (b) uncertainties of the competitive  marketplace,  the Company
provided a  valuation  allowance  during the three month  period  ended June 30,
1998.  The valuation  allowance  eliminated  the net deferred tax asset that had
been recognized in previous periods and in the three months ended June 30, 1998.
The valuation  allowance  increased the net loss for the period by approximately
$78.4 million.  The income statement charge to establish the valuation allowance
includes  approximately  $26 million of the  previously  recognized tax benefits
from the exercise of executive  stock  options which had been reported in fiscal
1997 as a direct addition to paid-in capital.



5. Litigation

     On June 16,  1998,  a purported  shareholder  class action was filed in the
United States District Court for the Eastern  District of  Pennsylvania  against
the Company and certain of its officers  alleging  violation  of the  securities
laws in connection  with certain  disclosures  made by the Company in its public
filings and seeking unspecified damages. Thereafter,  additional lawsuits making
substantially  the same  allegations  were filed by other plaintiffs in the same
court. At this point, no classes have been certified.  The Company  believes the
allegations  in the  complaints  are  without  merit and  intends  to defend the
litigations  vigorously.  The  Company  also is a party to certain  other  legal
actions arising in the ordinary course of business.

     The Company  believes that the ultimate  outcome of the  foregoing  actions
will not result in liability  that would have a material  adverse  effect on the
Company's financial condition or results of operations. 

6. Comprehensive Income 

     As  of  January  1,  1998,  the  Company  adopted  Statement  of  Financial
Accounting  Standards No. 130, Reporting  Comprehensive Income ("SFAS 130"). The
adoption  of  this  Statement  had  no  impact  on the  Company's  net  loss  or
stockholders'  equity.  SFAS 130 requires that all  components of  comprehensive
income and total  comprehensive  income be reported on one of the  following:  a
statement  of income and  comprehensive  income,  a statement  of  comprehensive
income or a statement of stockholders' equity. Comprehensive income is comprised
of net  income and all  changes to  stockholders'  equity,  except  those due to
investments by owners (changes in paid in capital) and  distributions  to owners
(dividends).  For interim reporting  purposes,  SFAS 130 requires  disclosure of
total comprehensive income.

     Comprehensive income (loss) and its components consist of the following:

<TABLE>
<CAPTION>
                                                         For the Three Months           For the Six Months
                                                            Ended June 30,                  Ended June 30,
                                                     ----------------------------  --------------------------
                                                          1998             1997        1998          1997
                                                     -------------    -----------  ------------  ------------
<S>                                                  <C>               <C>           <C>            <C>   
Net loss                                             $ (96,154)        $(5,865)      $(137,949)     $(435)
   Other comprehensive loss:
   Unrealized loss on marketable securities
    available for  sale                                 (4,364)            --          (6,730)        --
                                                     -------------    ------------- -----------    ----------
Comprehensive loss                                   $(100,518)        $(5,865)      $(144,679)     $(435)
                                                     -------------    ------------- -----------    ----------
</TABLE>

                                       8
<PAGE>

                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

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

OVERVIEW

     As  previously  reported,  the Company  believes that it must either be, or
become part of, a larger  organization  in order to succeed in the long term. To
that end,  also as  previously  reported,  the  Company has been  exploring  the
possibility  of being  acquired by larger  entities  and had  discussion  with a
number  of  potential  suitors.  Such  discussions  have  not  resulted  in  any
acquisition  agreement  and have ceased.  The Company will continue to focus its
attention  on  the  expansion  of  its  business,  primarily  through  continued
marketing and  advertising  to increase its  subscriber  base,  the expansion of
services  offered to the Company's  online customer base and local services,  as
well as through  acquisitions and strategic  partnerships.  In this regard,  the
Company  regularly  considers   potential   acquisition  and  strategic  partner
candidates.  The Company is currently discussing with Communications Telesystems
Internatinal    d/b/a    WorldxChange    Communications,    a   privately   held
telecommunications company with 1997 revenues of approximately $325 million, the
possible  acquisition of such company for $500 to $600 million in Company stock.
However,  no  agreement  has  been  reached  on  this  or  any  other  potential
acquisition  and there can be no assurance that any agreement will be reached or
the terms of any such agreement.

RESULTS OF OPERATIONS

     The following tables set forth for the periods  indicated certain financial
data as a percentage of sales:


<TABLE>
<CAPTION>
                                                                    FOR THE THREE MONTHS ENDED
                                                                              JUNE 30,
                                                                    -------------------------
                                                                        1998         1997
                                                                        ----         ------
<S>                                                                     <C>          <C>   
Sales                                                                   100.0%       100.0%
Cost of sales                                                            83.8         98.0
                                                                        -----        ------
Gross profit                                                             16.2          2.0
Selling, general and administrative expenses                              9.2          6.2
Promotional, marketing and advertising expenses - primarily AOL          33.8         14.4
Research and development costs                                            0.2           --
                                                                        ------       ------
Operating loss                                                          (27.0)       (18.6)
Investment and other income (expense), net                                0.9          5.8
                                                                        ------       -------
Loss before income taxes                                                (26.1)       (12.8)
Provision (benefit) for income taxes                                     60.4         (5.0)
                                                                       --------      -------
Net loss                                                                (86.5)%       (7.8)%
                                                                       =======      =========
</TABLE>


<TABLE>
<CAPTION>
                                                                    FOR THE SIX MONTHS ENDED 
                                                                            JUNE 30,
                                                                  ---------------------------
                                                                       1998           1997
                                                                       ----          -----   
<S>                                                                   <C>           <C>   
Sales                                                                 100.0%        100.0%
Cost of sales                                                          83.9          90.1
                                                                      ----
Gross profit                                                           16.1          9.9
Selling, general and administrative expenses                            9.8          5.5
Promotional, marketing and advertising expenses - primarily AOL        42.0          9.8
Research and development costs                                         10.7           --
                                                                      ----          -----
Operating loss                                                        (46.4)        (5.4)
Investment and other income (expense), net                             (1.8)         4.9
                                                                      -----
Loss before income taxes                                              (48.2)        (0.5)
Provision (benefit) for income taxes                                   20.0         (0.2)
                                                                      ----
Net loss                                                              (68.2)%       (0.3)%
                                                                      ======        =====
</TABLE>



                                       9
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

  THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997

     Sales.  Sales increased by 48.1% to $111.1 million in the second quarter of
1998 from $75.0  million in the second  quarter of 1997.  The  increase in sales
resulted from the Company's  marketing  campaign  under the AOL Agreement  which
offset a decrease in the Company's non-AOL sales.

     Although the Company expects sales to continue to increase by virtue of the
AOL Agreement, in view of the intense competition in this industry, there can be
no  assurance   that  the  Company  will   continue  to  increase   sales  on  a
quarter-to-quarter or year-to-year basis. In addition, the Company's sales under
the AOL  Agreement  have  continued to be adversely  affected by the PIC freezes
implemented by the local telephone companies.

     Cost of Sales.  Cost of sales  increased  by 26.6% to $93.1  million in the
second  quarter  of 1998 from $73.5  million in the second  quarter of 1997 as a
result of increased sales. In addition, the 1997 cost of sales includes a charge
of $11.5 million primarily related to the Company's change in its accounting for
customer acquisition costs.

     Prior to 1997,  network usage costs consisted  solely of "bundled"  charges
from AT&T.  Beginning in 1997,  the Company also incurred  "unbundled"  charges,
including  local  access  fees,  associated  with  the  operation  of OBN.  Both
"bundled"  and  "unbundled"  charges are  directly  related to calls made by the
Company's end users.

     Until April 30, 1998, the Company  acquired most of the services  purchased
from AT&T for resale or use in OBN  pursuant to AT&T  Contract  Tariff No. 5776.
The  Company  has signed a new  three-year  contract  with AT&T that  supersedes
Contract Tariff No. 5776 and provides a wide variety of services  supporting the
Company's  nationwide  telecommunications  network  and resale  operations.  The
contract  included a new offering (AT&T Network  Connection  Services,  formerly
known as  AT&T's  Carrier  Solutions  Platform)  that  enables  the  Company  to
accommodate  greater  numbers of additional  customers on OBN by handling  their
peak load or overflow traffic.  The new contract also provides most of the other
services that the Company acquires from AT&T. The new contract  includes certain
financial  commitments  by  the  Company,  both  in  terms  of  minimum  revenue
commitments and a minimum  percentage of certain services that must be purchased
from AT&T if those services are also  purchased  from any other  carrier.  These
commitments  expire at any time  after the first year that  total  charges  from
services purchased from AT&T during the term have reached $110 million.  The new
contract also specifies various options for satisfying the financial commitments
in the event of a change in control of the Company.  The Company and AT&T agreed
to  guidelines  for  describing  the  Company's   relationship  with  AT&T  and,
specifically, how the Company may refer to that relationship in the marketplace.

     Gross Margin. Gross margin increased to 16.2% in the second quarter of 1998
from 2.0% in the  second  quarter  of 1997.  The  increase  in gross  margin was
primarily due to a charge of $11.5 million  (described  above)  included in 1997
cost of sales.  Price  competition  continues  to  intensify  for the  Company's
service and this trend can be expected to continue to put  downward  pressure on
gross margins.

     General and administrative  expenses.  General and administrative  expenses
increased  by 118.8% to $10.2  million in the  second  quarter of 1998 from $4.7
million  in  the  second   quarter  of  1997.   The   increase  in  general  and
administrative  expenses was due primarily to the costs  associated  with hiring
additional  personnel to support the Company's  continuing  growth,  the general
administrative  expense incurred as a result of the acquisitions of Compco, Inc.
and ADS which were acquired in November 1997 and January 1998, respectively, and
increased fees for professional services.

                                       10
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

     In December 1997, the Company granted options to purchase 810,000 shares of
Company  Common  Stock at an exercise  price of $17.50 per share to an executive
officer  and two  outside  directors.  The  options  granted  are subject to the
approval of the stockholders and will be submitted for approval at the Company's
1998 stockholder  meeting.  To the extent the market value of the Company Common
Stock subject to these options on the date of such approval exceeds the exercise
price,  approval of the option grants will result in compensation  expense equal
to the amount of such excess.

     Promotional,  Marketing and Advertising Expense - Primarily AOL. During the
second quarter of 1998, the Company expensed  approximately $8.5 million related
to the AOL Agreement based on the value of advertising and promotion provided by
AOL and  approximately  $5.2 million for the performance  warrants issued to AOL
that vested on June 30, 1998.   During the second  quarter of 1997,  the Company
expensed  approximately  $10.8 million for certain  exclusivity rights under the
AOL Agreement. The Company made an initial payment of $100 million to AOL at the
signing  of the AOL  Agreement  and  issued to AOL at signing  two  warrants  to
purchase shares of the Company's Common Stock at a premium over the market value
of such stock on the issuance  date.  Under an  amendment  of the AOL  Agreement
dated as of May 14, 1998, among other things, the term of the AOL Agreement with
respect to the Company's long distance  telecommunications services was extended
by one year to June 30, 2001, the Company's  flexibility to   engage for 90 days
in certain acquisition transactions that may otherwise have triggered a right of
termination  by AOL under the AOL Agreement was increased and the Company issued
to AOL an  additional,  fully  exercisable  warrant to  purchase up to 1 million
Company  shares at an exercise  price of $22.25.  The $11.1 million value of the
new AOL warrant will be expensed  consistent  with the  treatment of the initial
payment of $100 million. Of the prepaid AOL marketing costs, approximately $57.0
million  was  charged to expense in 1997 and  approximately  $33.4  million  was
charged to expense in the first six months of 1998. The remaining portion of the
prepaid AOL marketing costs  (approximately $41.3 million at June 30, 1998) will
be  recognized  over the balance of the term of the AOL  Agreement,  the initial
term of which expires on June 30, 2000 (extended as to long distance services to
June 30, 2001 by amendment  as described  above),  as  advertising  services are
received.  The AOL  warrant  for up to 7 million  shares  vests at the rate of 2
shares for each new user of the Company's  services that subscribes  through AOL
and will be  valued  and  charged  to  expense  as and when  subscribers  to the
Company's  services  under the AOL  Agreement  sign-up and the shares under such
warrant vest. Through June 30, 1998,  approximately 1.7 million of the 7 million
shares  under such  warrant  had vested,  leaving up to 5.3 million  shares that
could still vest under this AOL warrant and be charged to expense in the future.
The amount of such  charges,  which could be  significant,  will be based on the
extent to which such AOL warrants  vest and the market  prices of the  Company's
Common Stock at the time of vesting and therefore such charges are not currently
determinable.  Generally,  the higher the market price of the  Company's  Common
Stock at the time of vesting, the larger the amount of the charge will be. 

     In addition to the prepaid  AOL  marketing  costs and the warrant  vestings
that were charged to expense in the second quarter,  the Company  incurred $23.9
million in marketing and advertising  expenses directed  primarily at generating
new subscribers  under the AOL Agreement.  The Company  anticipates  that it may
expend approximately $190 million for marketing and advertising in the third and
fourth  quarters  of 1998 to expand  further its  subscriber  base under the AOL
Agreement,  as well as to  implement  new  initiatives  to increase  its non-AOL
subscriber base. Such  expenditures,  together with the expensing of the balance
of the prepaid AOL marketing  costs,  the expensing of AOL warrants as they vest
and any  profit-sharing  payments by the Company  under the AOL  Agreement,  are
expected to result in significant losses in the third quarter and for 1998.

     Investment  and Other Income  (Expense),  Net.  Investment and other income
(expense),  net was $1.0  million in the  second  quarter  of 1998  versus  $4.3
million in the  second  quarter  of 1997.  During  the  second  quarter of 1998,
investment  and other income  (expense),  net consists  primarily of  investment
income offset by interest expense related to the Company's Convertible Notes. 

     Provision  for Income  Taxes.  The Company had  recorded  net  deferred tax
assets at  December  31,  1997 and March 31,  1998  primarily  representing  net
operating  loss  carry-forwards  and other  temporary  differences  because  the
Company  believed that no valuation  allowance was required for these assets due
to future  reversals of existing taxable  temporary  differences and expectation
that the Company would generate taxable income in future years.

                                       11
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

     In July 1998, the Company decided to expend  approximately  $190 million in
the third and  fourth  quarters  for  marketing  and  advertising  to expand the
Company's AOL and non-AOL customer basis. As a result, the Company anticipates a
significant  loss in the third quarter and for 1998. In view of the  anticipated
losses,  the intense  competition  in the  telecommunications  industry and that
there can be no assurance that the Company will realize any of the tax benefits,
the Company also decided to provide a 100% valuation  reserve for the previously
recorded  deferred tax benefits and to provide a 100% valuation  reserve for the
current and future tax benefits which may result from the anticipated 1998 loss.
The valuation reserves of approximately $78.4 million were included in provision
for income taxes in the  statements of  operations  for the three and six months
ended June 30, 1998

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997 

     Sales.  Sales  increased by 38.3% to $202.2 million in the first six months
of 1998 from  $146.2  million in the first six months of 1997.  The  increase in
sales  resulted  primarily from the Company's  marketing  campaign under the AOL
Agreement. 

     Cost of Sales.  Cost of sales  increased by 28.8% to $169.6  million in the
first six months of 1998 from $131.7  million in the first six months of 1997 as
a result of  increased  sales.  In addition,  the 1997 cost of sales  includes a
charge  of $11.5  million  primarily  related  to the  Company's  change  in its
accounting for customer acquisition costs. 

     Gross  Margin.  Gross margin  increased to 16.1% in the first six months of
1998 from 9.9% in the first six months of 1997. The increase in gross margin was
primarily due to a charge of $11.5 million  (described  above)  included in 1997
cost of sales. 

     General and administrative  expenses.  General and administrative  expenses
increased  by 149.3% to $19.8  million in the first six months of 1998 from $8.0
million  in  the  first  six  months  of  1997.  The  increase  in  general  and
administrative  expenses was due primarily to the costs  associated  with hiring
additional  personnel to support the Company's  continuing  growth,  the general
administrative  expense incurred as a result of the acquisitions of Compco, Inc.
and ADS which were acquired in November 1997 and January 1998, respectively, and
increased fees for professional services.

     Promotional,  Marketing and Advertising Expense - Primarily AOL. During the
first six months of 1998,  the  Company  expensed  approximately  $33.4  million
related to the AOL Marketing  Agreement  based on the value of  advertising  and
promotion  provided by AOL and  approximately  $16.1 million for the performance
warrants issued to AOL that vested in 1998. During the first six months of 1997,
the Company expensed approximately $14.4 million for certain exclusivity rights.
In addition to the prepaid AOL  marketing  costs and the warrant  vestings  that
were charged to expense in the first half of 1998,  the Company  incurred  $35.4
million in marketing and advertising  expenses directed  primarily at generating
new subscribers under the AOL Agreement. 

     Research  and  Development  Costs.   Research  and  development  costs  are
associated with the telephone business of ADS and include purchased research and
development costs of approximately $21.0 million (Note 2). 

     Investment  and Other Income  (Expense),  Net.  Investment and other income
(expense),  net was $(3.8)  million in the first six months of 1998  versus $7.1
million  in the first six  months of 1997.  During the first six months of 1998,
investment  and other income  (expense),  net consists  primarily of  investment
income offset by interest expense related to the Company's Convertible Notes and
a loss of $3.0 million  incurred during the first quarter of 1998 on the sale of
its investment in US Wats,  Inc.,  which was  originally  acquired in connection
with the Company's proposed acquisition of another  telecommunications  company.


LIQUIDITY AND CAPITAL RESOURCES

     The  Company has since  September  1995 raised  capital  primarily  through
public and  private  distributions  of its  securities.  In fall 1995 and spring
1996, the Company consummated public offerings of shares of the Company's Common
Stock  and  received  net  proceeds  of  $42.8   million  and  $139.1   million,
respectively.


                                       12
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

     In  September  1997,  the  Company  privately  sold $300  million of 4 1/2%
Convertible  Subordinated  Notes which mature on  September  15, 2002 (the "2002
Convertible  Notes").  Interest on the 2002 Convertible Notes is due and payable
semiannually  on March 15 and  September 15 of each year.  The 2002  Convertible
Notes are  convertible,  at the option of the holder thereof,  at any time after
December 9, 1997 and prior to maturity,  unless previously redeemed, into shares
of the Company's  Common Stock at a conversion price of $24.61875 per share. The
2002  Convertible  Notes are  redeemable,  in whole or in part, at the Company's
option,  at any time on or after  September  15, 2000 at 101.80% of par prior to
September 14, 2001 and 100.90% of par thereafter.

     In December 1997, the Company privately sold $200 million of 5% Convertible
Subordinated  Notes  which  mature on December  15, 2004 (the "2004  Convertible
Notes").  Interest on the 2004 Convertible Notes is due and payable semiannually
on  June 15 and  December  15 of each  year.  The  2004  Convertible  Notes  are
convertible,  at the option of the holder  thereof,  at any time after  March 5,
1998 and prior to  maturity,  unless  previously  redeemed,  into  shares of the
Company's  Common  Stock at a  conversion  price of $25.47 per  share.  The 2004
Convertible  Notes are redeemable,  in whole or in part at the Company's option,
at any time on or after  December  15,  2002 at 101.43% of par prior to December
14, 2003 and 100.71% of par thereafter.

     During  1997,  certain  options  and  warrants  to  purchase  shares of the
Company's Common Stock were exercised and the Company repurchased certain Common
Stock  Warrants,  yielding  to the Company net  proceeds  of $16.9  million.  In
addition,  during 1997 the Company repurchased  approximately 3.5 million shares
of the Company's Common Stock, which were held as treasury shares for the future
issuance  of shares  upon the  exercise of  options,  warrants  and  convertible
securities of the Company, for approximately $72.0 million.

     During  the first six  months of 1998,  certain  options  and  warrants  to
purchase  shares of the Company's  Common Stock were  exercised  yielding to the
Company proceeds of $8.5 million.  Also, the Company  repurchased  approximately
1,341,000  shares of the  Company's  Common  Stock,  which are held as  treasury
shares, for approximately $28.9 million.

     The Company's working capital was $484.4 million and $634.8 million at June
30, 1998 and  December  31,  1997,  respectively.  The  significant  increase in
working capital when compared to historical amounts is primarily a result of the
sale of the 2002 and 2004 Convertibles Notes, discussed above. At June 30, 1998,
the Company's marketable securities included approximately $300 million in a tax
exempt bond fund and  approximately  $245 million in government  bond funds.  In
addition,  the Company  incurre  approximately  $193  million of margin  account
indebtedness in connection with these investments.

     While the  Investment  Company  Act of 1940,  as amended  (the  "Investment
Company  Act"),   principally  regulates  vehicles  for  pooled  investments  in
securities,  such as mutual  funds,  it also may be deemed to be  applicable  to
companies  that are not  organized  for the purpose of  investing  or trading in
securities but nonetheless have more than a specified percentage of their assets
in  investment  securities.  The  Company is  engaged in the  telecommunications
business, and the availability of cash and liquid securities is important to the
Company's   ability  to  take  advantage  of   opportunities  to  acquire  other
telecommunications  businesses,  assets and technologies  from time to time. The
Company believes, therefore, that its activities do not and will not subject the
Company to regulation under the Investment Company Act. However,  if the Company
were  to be  deemed  to be an  investment  company  within  the  meaning  of the
Investment Company Act, the Company would become subject to certain restrictions
relating  to  the  Company's   activities,   including,   but  not  limited  to,
restrictions on the conduct of its business, the nature of its investments,  the
issuance  of  securities  and  transactions  with  affiliates.   Therefore,  the
characterization  of the Company as an investment  company would have a material
adverse effect on the Company.  In the Indenture  governing the 2002 Convertible
Notes, the Company has covenanted that it will not become an investment  company
within the meaning of the Investment  Company Act and that it will take all such
actions as are  necessary  in order to continue  not to be deemed an  investment
company.

     The Company invested $6.8 million in capital equipment during the first six
months of 1998.

     During the first six months of 1998, the Company  purchased the outstanding
shares of Symetrics for $26.7 million.

                                       13

<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

     In connection with the Company  entering into the TSA with WXC, the Company
advanced  $40  million to WXC which is due and payable on October 15, 1999 ("WXC
Note"). Interest on the WXC Note is payable quarterly commencing August 21, 1998
at  a  rate  of  10%  per  annum.   The  Company  can   purchase   international
telecommunication services pursuant to the TSA.

     The Company  generally does not have a significant  concentration of credit
risk with  respect to accounts  receivable  due to the large number of end users
comprising the Company's  customer base and their  dispersion  across  different
geographic  regions.  The Company maintains reserves for potential credit losses
and, to date, such losses have been within the Company's expectations.

     The Company expects to expend  approximately  $190 million in the third and
fourth  quarters for marketing and  advertising  to expand the Company's AOL and
non-AOL  customer  bases.  The Company's  Board of Directors has  authorized the
expenditure,  from time to time, of up to $300 million for the repurchase of the
Company's outstanding securities.  It is anticipated that any repurchased shares
will be held in treasury for issuance upon exercise of  outstanding  options and
warrants  and upon  conversion,  if any,  of  convertible  notes,  and for other
general corporate purposes.

     The Company believes that its current cash position,  marketable securities
and the cash flow expected to be generated from  operations,  will be sufficient
to fund its capital  expenditures,  working capital and other cash  requirements
for at least the next twelve months.

     The "Year 2000" issue refers to the potential  harm from computer  programs
that  identify  dates by the last two digits of the year  rather  than using the
full four digits.  As such, dates after January 1, 2000 could be  misidentified,
and such  programs  could  fail.  The Company has  examined  its  computer-based
systems  and  believes  that the "Year  2000"  problem  is not  present  on such
systems.  However,  the Company is dependent upon computer  systems  operated by
third parties,  such as LECs, AT&T, AOL and other vendors. If those systems were
to  malfunction  due to the "Year 2000"  problem,  the Company's  services could
fail,  as well.  Such  failures  could have a material  adverse  effect upon the
Company's business,  results of operations and financial condition.  The Company
is inquiring of such third parties to determine the effect, if any, of the "Year
2000" problem on the systems upon which the Company is dependent,  and to obtain
appropriate assurance that no such problem exists.

                                    * * * * *

     Certain   of  the   statements   contained   herein   may   be   considered
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933  and  Section  21E of the  Securities  Exchange  Act of  1934.  Such
statements  are  identified  by the use of  forward-looking  words  or  phrases,
including,   but   not   limited   to,   "estimates,"   "expects,"   "expected,"
"anticipates," and "anticipated." These forward-looking  statements are based on
the  Company's  current  expectations.  Although  the Company  believe  that the
expectations reflected in such forward-looking statements are reasonable,  there
can be no  assurance  that such  expectations  will prove to have been  correct.
Forward-looking  statements  involve risks and  uncertainties  and the Company's
actual  results  could  differ  materially  from  the  Company's   expectations.
Important  factors  that could  cause such actual  results to differ  materially
include,  among others,  adverse developments in the Company's relationship with
AT&T or AOL, increased price competition for long distance services,  failure of
the marketing of long distance  services under the AOL  Agreement,  attrition in
the  number of end  users,  implementation  of PIC  freezes  by local  telephone
companies,  and changes in government  policy,  regulation and enforcement.  The
Company undertakes no obligations to update its forward-looking statements.

                                       14
<PAGE>
                    TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     On June 16,  1998,  a purported  shareholder  class action was filed in the
United States District Court for the Eastern  District of  Pennsylvania  against
the Company and certain of its officers  alleging  violation  of the  securities
laws in connection  with certain  disclosures  made by the Company in its public
filings and seeking unspecified damages. Thereafter,  additional lawsuits making
substantially  the same  allegations  were filed by other plaintiffs in the same
court. At this point, no classes have been certified.  The Company  believes the
allegations  in the  complaints  are  without  merit and  intends  to defend the
litigations  vigorously.  The  Company  also is a party to certain  other  legal
actions arising in the ordinary course of business.

     The Company  believes that the ultimate  outcome of the  foregoing  actions
will not result in liability  that would have a material  adverse  effect on the
Company's financial condition or results of operations.

Item 2. Changes in Securities

     In connection  with the Company's  amendment  dated May 14, 1998 to the AOL
Agreement,  the Company granted an additional,  fully exercisable warrant to AOL
to purchase  1,000,000 shares of the Company's Common Stock at an exercise price
of $22.25 per share.

Item 3. Defaults Upon Senior Securities

     None.

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

     (a) Not applicable.

     (b) Not applicable.

     (c) Not applicable.

Item 5. Other Information

     None.

Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

         Exhibit 10.1     Amendment    No.   2,   dated   May   14,    1998   to
                          Telecommunications  Marketing  Agreement  dated  as of
                          February 22, 1997 by and among the Company,  Tel-Save,
                          Inc. and America Online, Inc.*

         Exhibit 11       Computation  of Net Income Per Share

         Exhibit 27       Financial Data Schedule

     (b) Reports on Form 8-K
         Since March 31, 1998,  the Company has not filed any Current Reports on
         Form 8-K.

--------
* Confidential treatment has been requested for portions of this Exhibit.

                                       15
<PAGE>
                                   SIGNATURES

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

Date: August 14, 1998      TEL-SAVE HOLDINGS, INC.
                           ----------------------------------------------
                           (Registrant)



                           By: /s/ Daniel Borislow
                               ------------------------------------------
                                Daniel Borislow
                                Chairman of the Board,
                                Chief Executive Officer and Director


                           By: /s/ George P. Farley
                               ------------------------------------------
                                George P. Farley
                                Chief Financial Officer, Treasurer and Director


                           By: /s/ Kevin R. Kelly
                               ------------------------------------------
                                Kevin R. Kelly
                                Controller








                                       16