U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                      _____________________________________

                                    FORM 10-K
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                         COMMISSION FILE NUMBER 0-24622

                          TELSCAPE INTERNATIONAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              TEXAS                                           75-2433637
(STATE OR OTHER JURISDICTION OF                            (I.R.S.  EMPLOYER
INCORPORATION  OR ORGANIZATION)                            IDENTIFICATION NO.)
1325  NORTHMEADOW  PARKWAY,  SUITE  110
           ROSWELL, GA                                          30076
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP  CODE)

     REGISTRANT'S  TELEPHONE  NUMBER,  INCLUDING AREA CODE:  (770) 432-6800

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:



                       COMMON  STOCK  ($0.001  PAR  VALUE)

                                (TITLE OF CLASS)

Indicate  by  check  mark  whether  the  registrant:  (1)  has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
Registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.
     Yes  [X]     No  [  ]

Indicate  by  check mark if the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  [  ]

The  aggregate  market  value  of  common  stock  held  by non-affiliates of the
registrant (based on the closing price as reported on the Nasdaq National Market
on  April 2,  2001,  was  approximately $11.5 million.  Shares  of  common stock
held  by  each  executive  officer  and  director  and  by  each  stockholder
affiliated  with  a  director  have  been  excluded  from  this  calculation
because  such  persons  may  be  deemed  to be affiliates.  The determination of
affiliate  status  is  not  necessarily  a  conclusive  determination  for other
purposes.  The number of outstanding  shares  of  the  registrant's Common Stock
as  of  April  2,  2001  was  20,819,444.


<PAGE>
                                     PART I

     The  statements  contained  in this Annual Report on Form 10-K that are not
historical  facts  are  "forward-looking statements" (as such term is defined in
the  Private  Securities Litigation Reform Act of 1995), which can be identified
by  the use of forward-looking terminology such as "believes," "expects," "may,"
"estimates,"  "will," "should," "plans" or "anticipates" or the negative thereof
or  other  variations  thereon  or  comparable terminology, or by discussions of
strategy.  Such statements include, but are not limited to, statements under the
captions  "Business",  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations" and elsewhere in this Annual Report on Form
10-K  as  to  our  plans to implement its growth strategy, improve its financial
performance,  expand  its  infrastructure,  develop  new  products and services,
expand  its  sales  force,  expand  its  customer  base  and enter international
markets.  In addition, from time to time, we or our representatives have made or
may  make  forward-looking  statements,  orally or in writing. Furthermore, such
forward-looking  statements  may be included in, but are not limited to, various
filings  made  by  us  with  the  Securities  and  Exchange  Commission  (the
"Commission"), or press releases or oral statements made by or with the approval
of  an  authorized  executive  officer  of  ours.

     Management wishes to caution the reader that the forward-looking statements
referred  to  above  and contained  in this Annual Report on Form 10-K regarding
matters  that  are  not  historical  facts  involve  and  are  based on numerous
assumptions  and  predictions about future conditions that could prove not to be
accurate.  No  assurance  can be given that the future results will be achieved;
actual  events,  transactions  or  results  may differ materially as a result of
risks  facing  us. Such risks include, but are not limited to, the effectiveness
of  management's  strategies  and  decisions,  changes  in  business conditions,
changes in the telecommunications industry and the general economy, competition,
changes  in  service  offerings  and risks associated with our limited operating
history,  entry  into  developing  markets, managing rapid growth, international
operations,  dependence  on effective information systems, ability to consummate
acquisitions  or enter into joint ventures with companies on terms acceptable to
us  and  development  of  its network, as well as regulatory developments any of
which  could  cause  actual  results  to vary materially from the future results
indicated,  expressed  or  implied,  in  such  forward-looking  statements.  No
assurance can be given that these are all of the factors that could cause actual
results to vary materially from the forward-looking statements.  Statements with
respect  to  acquisitions  and  continued trends are forward-looking and involve
risks and uncertainties.  Furthermore, we have significant operations in Mexico,
subjecting  us  to  certain  political  and  commercial  risk.  We  undertake no
obligation and do not intend to update, revise or otherwise publicly release the
result  of any revisions to these forward-looking statements that may be made to
reflect  future  events  or  circumstances.


ITEM  1.      DESCRIPTION  OF  BUSINESS.

GENERAL


     Telscape International, Inc. ("Telscape" or the "Company") is emerging as a
leading  integrated  communications  provider  ("ICP")  that serves the Hispanic
market in the United States, Mexico and Central America. Since June of 1999, the
Company  has:  (1) successfully launched Telscape-branded communication services
in  four  of the top ten cities in the U.S. Hispanic market, and (2) developed a
flexible  voice  and  data-capable  international  communications  network  that
includes one of the largest fiber optic ring based networks in Mexico (3500+ km)
and  satellite  facilities in select cities in North, Central and South America.
The  Company has grown rapidly to over 48,000 residential and business customers
in  the  U.S.,  and  now  carries  over  30 million minutes per month across its
international  network.  The  Company  will leverage its cross-border network to
deliver  communication services at costs below competition, and will utilize the
Telscape  brand to market products and services on both sides of the U.S.-Mexico
border.  We  believe  the  Company  is  one  of if not the the only ICP that (1)
focuses  its branded service exclusively on the Hispanic community, (2) delivers
its  quality  service  with culturally relevant marketing programs and products,
and  (3)  is  able  to  provide fully integrated service across its cross-border
network.


                                        2
<PAGE>
HISTORY

     The Company was  incorporated in Nevada on April 10, 1996 as a wholly owned
subsidiary of Maui Capital Corporation, a Colorado Corporation ("Maui Capital"),
which  incorporated  on August 8, 1988. On April 21, 1996,  Maui Capital and the
Company merged with the Company being the surviving  corporation  and succeeding
to all the business,  properties,  assets, and liabilities of Maui Capital.  The
purpose of the merger of Maui Capital and the Company was to change the name and
state of incorporation  of Maui Capital.  Maui Capital had no business or assets
prior to September 21, 1995 when it acquired TOPS Corporation ("TOPS"), a Nevada
corporation  (TOPS was named Charter  Communications  International,  Inc. until
April 10, 1996, when its name was changed so that the Company could be formed in
Nevada with the same name).  At the time of the  acquisition,  TOPS was the sole
stockholder of Charter  Communicaciones  Internacionales  Grupo,  S.A., a Panama
corporation  ("Charter Panama"),  which was engaged in developing a private line
telecommunications  system in Panama  and  pursuing  licenses  to  provide  such
services in various other Latin  American  countries.  Since the  acquisition of
TOPS,  the Company has  endeavored to grow both through the  development  of its
existing  businesses and through the  acquisition of  complementary  businesses.
Proceeds  from private  placements  of securities  with  principals  and outside
investors  have  funded  the  development  of  the  Company  to  date.

     On  June  1,  1998,  the  Company  acquired  Galatel  Inc.  ("Galatel"),  a
distributor  of  prepaid calling cards primarily to the Hispanic community, in a
cash  and  stock  transaction.  On  July  30,  1998, the Company acquired Pointe
Communications  Corporation  ("Pointe  Communications"), a Delaware corporation,
in a cash and warrant  transaction.  Pointe Communications  did not have revenue
from operations prior to its acquisition.  On  August  31,  1998, the  Company's
stockholders  approved  an amendment  to the Company's Articles of Incorporation
to  effect  a  change  in  the  Company's  name  from  Charter  Communications
International, Inc. to Pointe Communications Corporation.  On August  12,  1998,
the  Company  acquired  International  Digital Telecommunications  Systems, Inc.
("IDTS")  in  a  cash  and  stock  transaction.   IDTS   is  a  facilities-based
long-distance carrier of voice, data,  and  other types of telecommunications in
the Miami, Florida market.  On October 1, 1998, the Company acquired Rent-A-Line
Telephone  Company,  LLC  ("Rent-A-Line")  in  a  stock  rights  transaction.
Rent-A-Line  is  a  reseller of prepaid local telephone service.  All  of  these
transactions  were  accounted  for  as  purchases.

     On  August  16, 1999, HTC Communications, LLC ("HTC"), a California limited
liability  company  licensed  as  a CLEC in California, merged with and into the
Company.  As consideration for the merger, the Company will issue 600,000 shares
of  common  stock  to the members of HTC upon the satisfaction by the members of
opening  two competitive local exchange markets for the Company within 12 months
of  the  closing date of the merger.  At the same time, the Company entered into
36 month employment agreements with two of the members of HTC for the purpose of
development  and  oversight  of  the  Company's  CLEC  operations.

     On  June  2,  2000,  Telscape  International,  Inc. completed a merger with
Pointe  Communications  Corporation  ("Pointe")  in accordance with the December
31,  1999  Agreement and Plan of Merger ("Merger Agreement").  The merger was an
all stock  transaction  in which each share of Pointe was exchanged for 0.223514
shares  of  Telscape  common  stock.  The purchase method of accounting has been
used  to record the transaction under which Pointe is viewed as the acquirer for
accounting  purposes  because  its  former  shareholders  own  a majority of the
combined  company's shares.  Therefore, the value of the Telscape common shares,
options  and  warrants  outstanding  on  the  date  of  merger is treated as the
consideration  given  in  the merger.  The value applied to the shares was based
upon  the  market  price  on  the  date  of  the  Merger Agreement. Due  to  the
reverse  merger accounting  treatment, Pointe's balance  sheet  and  results  of
operations  have  been  used  as  the  basis  of  these  financial  statements.
Telscape's  operations  from  June  2,  2000  through  December  31,  2000,  are
included  in  the  consolidated  results  of  operations.


                                        3
<PAGE>
Some  of  the  benefits  of  the  combined  companies  are:

-    An  experienced  management  team  with  a  significant  Latin  component.
-    Creates an integrated communications provider catering to Hispanics in both
     the  U.S.  and  Latin  America,  including a Telscape concession to provide
     domestic  and  international  long  distance  service  in Mexico granted to
     Telscape  by  Mexican  regulators.
-    Infrastructure-based  strategy utilizing "Smart Build" approach including a
     fiber  optic  network  under  construction  by  Telscape  in  Mexico.
-    Greater  critical  mass  and  compelling  synergies  and  cost  savings.
-    One  of the few companies that can compete in the U.S. and Latin America as
     one  company.

STRATEGY

     The  Company's  goal  is  to  become  a  leading  provider  of  integrated
telecommunications  services  (including  local,  long  distance,  and  data) to
Hispanic communities in the United States and Central America.  In doing so, the
Company  will  focus  on  the  following  tenets of the Company's business plan:

     Target  Underserved  Markets

     The  Company  intends  to capitalize on its existing business experience to
further penetrate select Hispanic communities in the United States. In doing so,
the  Company  will  select target markets based upon favorable demographics with
respect  to  local  and  long  distance  telephone  usage, including immigration
patterns,  population  growth and income levels. Initially, the Company believes
it  can  obtain  significant market share in selected U.S. metropolitan areas by
providing  an  integrated  bundle of telecommunications services directly to the
Hispanic  community,  a  segment  which  has  favorable  demographics  and
telecommunications  traffic  patterns relative to the Company's focus on Central
and  South  America.  The  Company believes that incumbent and competitive local
exchange  providers  have  concentrated on targeting broad markets and, with the
exception  of  limited  in-language  advertising,  have  not  focused  on ethnic
markets.  The  Company believes it can capitalize on the experience and customer
relationships  from  the  Company's  existing  businesses  to  market
telecommunications  services  effectively  to  the  Hispanic  community.

     Offer  an  Integrated  Suite  of  Telecommunications  Services

     The  Company  offers  both  consumer and commercial customers an integrated
suite  of  retail  telecommunications  services, including local, long distance,
internet  access,  and  data  transmission.  The  Company  believes  there  is
substantial  demand  among  residential  and business customers in the Company's
target  markets  for  an  integrated package of telecommunications services. The
Company  will focus on providing value to its customers by combining competitive
pricing  of the Company's bundled services with a high level of customer service
and  care  tailored  to  the Company's targeted markets. Providing local service
requires  appropriate  licensure  in  each  state where service is provided. The
Company  is currently certified as a Competitive Local Exchange Carrier ("CLEC")
in  Georgia,  California,  Texas,  New York, New Jersey and Florida. The Company
also intends to apply for certification in Illinois and Puerto Rico during 2001.
While the Company believes it will be able to obtain certifications, the outcome
is  not  assured.


                                        4
<PAGE>
     Expand  U.S.  CLEC  Operations  through  Success-Based  Staged  Buildout of
Markets.

     The  Company  intends to implement a success based staged build-out of CLEC
operations,  including  both  switched  and dedicated local service, in selected
U.S.  and Latin American markets. Once the Company has targeted a market, rather
than  installing  100%  of  the  Company's own network (i.e. fiber and switching
equipment),  the  Company  will  co-locate at a Incumbent Local Exchange Carrier
("ILEC")  or  other CLEC facilities, install a Class 5 (i.e., local service) and
data  switch, and use the fiber/copper provided by the ILEC or CLEC to reach the
end  user. The Company then intends to interconnect the Company's local networks
by  way  of leases with major wholesalers of IXC (i.e., long distance) services,
thereby  establishing the Company's own local, long distance and data network. A
staged  build-out  will  allow  the  Company to implement the its market pairing
strategy  and  to  improve  the  Company's  ability  to  originate and terminate
telecommunications  traffic on the Company's own network, while at the same time
complementing  the  Company's  existing  international  carriage  network.

     Capitalize  on  Benefits  Provided  by  Paired  Markets.

     By combining CLEC operations in selected domestic and paired Latin American
markets  with the Company's existing international carriage network, the Company
believes  it  can:  maximize the volume of telecommunications traffic carried on
the Company's network, whether originated, transported or terminated; and reduce
the  Company's  overall  cost  of  providing  telecommunication  services.

     By pairing identifiable market sub-segments in U.S. cities with their Latin
American  country  counterparts,  the Company is able to originate and terminate
traffic between cities that share the Company as a common network carrier, which
will  provide  an  attractive  cost  structure.

     Construct  State-of-the-Art  Networks

     The  Company's  networks  will  emphasize  flexibility,  reliability  and
scalability  as  the basis for all development. The Company intends to avoid the
limitations  of  legacy  processes  by  utilizing  Synchronous  Optical  Network
("SONET")  transport  over fiber with an Asynchronous Transfer Mode backbone and
an  Internet  protocol platform. In addition, the Company will attempt strategic
partnering  to  extend  the  reach  and flexibility of the Company's network and
minimize  technological  dependence. Larger commercial customers will access the
Company's products by way of fiber connectivity while residential customers will
access  the  Company's  Internet  protocol  platform services through a seamless
switchover  from  the  serving  ILEC.

     Build  on  Experienced  Management  Team

     The  Company  believes  that  the  quality  of  its management team and the
Company's  extensive  experience in the emerging telecommunications industry are
critical factors in the successful implementation of the Company's strategy. Key
personnel  possess  an  average  of  15  years  of  experience  with  major
telecommunications  companies.  Stephen  Raville, the Company's Chairman and CEO
held the same position with Advanced Telecommunications Corporation, a domestic,
long  distance  company,  which  grew  from  $50 million in revenue to over $550
million  in  six  years  prior to its $900 million merger with MCI/WorldCom. The
Company  believes  that  it  will  be  able  to  effectively  use the historical
relationships  and contacts of the Company's management and directors to enhance
the  Company's  development.


                                        5
<PAGE>
SEGMENT  INFORMATION

     During  1999,  management  identified  segments,  changed  its  focus,  and
began  using  segment  data  in  its  decision-making  process and for assessing
performance.  In  1999,  Pointe  had segments consisting of Prepaid Calling Card
Services,  Retail  Services,  Wholesale  /  International  Services,  Other, and
Corporate  and  Network.

     While  management of the Company monitors the revenue and costs of services
generated  from  each  of  the  various  services,  operations  are  managed and
financial  performance is evaluated  based on the delivery of multiple  services
being  provided over a single  network.  As a result of multiple  services being
provided over a single network,  there are many shared  administrative  expenses
and shared  assets  related to the  provision of various  services to customers.
Management  believes that any allocation of the shared expenses or assets to the
segments  would be  arbitrary  and  impractical.  The  operating  segments  were
aggregated into reportable segments based upon such  characteristics as products
and  services,  operating  methods,  customers,  and  distribution  methods.

     In  2000,  management  changed  its  focus and began to view the Company in
segments  consisting  of  CLEC  Services,  Network  Services,  and Corporate and
Network  overhead.  As  of  the end of fiscal 2000, the Company was marketing to
sell  its prepaid calling card services, and in our financial statements for all
periods  presented  we  have presented this business as discontinued operations.
CLEC  Services  include  local,  long  distance,  and  Internet  access services
provided  primarily  to  Hispanic  residential and commercial customers. Network
Services include carrier terminating services and operations of the Mexico fiber
optic  network.  Other  Services  include  carrier  terminating  services  and
international  private  line  provided  between  the  U.S. and various South and
Central  American  countries  as well as voice and data services provided within
various  Latin  American countries. Corporate and Network includes corporate and
network  overhead  including  finance  and  accounting,  human resources, legal,
information  technology,  LAN  administration,  and  engineering  overhead.
Intersegment  sales  and transfers occur as segments utilize carrier capacity of
other segments. Intersegment transactions are eliminated for reporting purposes.
(See  Note  17  to  the Company's consolidated financial statements for the year
ended  December 31, 2000, for financial segment information which is inorporated
herein  by  this  reference).

PRODUCTS  AND  SERVICES

     The  following  is  an  overview  of  the  Company's  product  and  service
offerings:
<TABLE>
<CAPTION>
PRODUCT                                                                   DESCRIPTION
<S>                                                    <C>
Local                                                  Dial tone, switched access, dedicated access and
                                                       value-added services
Long Distance                                          Domestic and international long distance services
Internet Service                                       Dedicated, dial-up and remote Internet access
Carrier Terminating                                    Facilities-based backbone with both voice and data
Services                                               switching capability to carry wholesale carrier
(Wholesale Business)                                   traffic for U.S. and foreign termination.
International Private Line                             Dedicated voice and data private line carried over
                                                       the Company's network and marketed to
                                                       businesses in Mexico, Panama, Venezuela, El
                                                       Salvador, Costa Rica, Nicaragua, and the United
                                                       States.
</TABLE>


                                        6
<PAGE>
     U.S.  CLEC  LOCAL  ACCESS

     With  the  implementation  of  CLEC  operations  in each target market, the
Company  will  provide  residential and commercial accounts with a full range of
local  exchange  services,  including:

     -    Basic  local  service  (including  dial  tone,  local  area  charges,
          dedicated  point-to-point  intraLATA  service  and  enhanced  calling
          features);
     -    Interstate  dedicated access service (i.e., connecting a customer to a
          long  distance  carrier's  facilities);
     -    Interstate  switched access service (i.e., originating and terminating
          calls  from  a  long  distance  carrier);
     -    IntraLATA  toll  calls;
     -    Intrastate  switched  access;
     -    Value-added  services  (Centrex,  voicemail,  call  forwarding);
     -    Miscellaneous  other  services  (including  provision  of directories,
          billing  and  collection  services).

     Providing  local service requires appropriate licensing in each state where
service  is  provided.  The Company is currently certified as a CLEC in Georgia,
California,  Texas,  Florida, New York, and New Jersey. The Company also intends
to  apply  for  certification in Puerto Rico and Illinois during 2001. While the
Company  believes  it will be successful in obtaining certification, this is not
assured.

     U.S.  CLEC  LONG  DISTANCE

     The  Company provides international and domestic long distance services. An
international  long  distance  call  typically originates on a local exchange or
private line and is carried to the tandem switch of a long distance carrier. The
call  is then transported along a fiber optic cable or a satellite connection to
an  international  gateway  switch  in  the  destination  country and finally to
another  local  exchange  or private line where the call is received. A domestic
long  distance  call  is  similar  to  an  international long distance call, but
typically  only involves one long distance carrier, which transports the call on
fiber,  microwave  radio  or  via  a  satellite connection within the country of
origination  and  termination.  The  Company will provide all or portions of the
above  network,  depending  on  the  origin  and  destination  of  calls placed.

     INTERNET  SERVICES

     The  Company  will  provide a complete array of internet services including
dedicated  and  dial-up  Internet  access,  virtual  web  hosting,  web  page
development,  e-mail,  web  commerce,  database  management  and remote Internet
access.  When applicable, the Company's Internet solutions are supported through
telephone  applications  such as Integrated Voice Response, call center services
and  800  services.

     CARRIER  TERMINATING  SERVICES  (WHOLESALE  DIVISION)

     During  1997, the Company began providing dedicated switched voice services
to certain customers. During 1998, the Company started constructing a facilities
based  backbone  for  both  voice  and data switching to carry wholesale carrier
traffic  for  U.S.  and  foreign termination. This network will provide a unique
partnering  opportunity  for  the  Company  and  for  foreign  Post, Telephone &
Telegraph  Companies  in  need of U.S. termination traffic, as well as companies
desiring  termination  in  Mexico and Central America. The Company leverages its
relationships  and  the  Company's  network  in  Central America to provide high
quality,  cost-competitive  services.  Furthermore,  the  Company  believes  its
relationships  will  benefit directly from the volume of inbound calling traffic
because  of  the  Company's  ability  to  direct  traffic  from  the  Company's
interconnection  point  to  the  Company's  domestic  network.

     INTERNATIONAL  PRIVATE  LINE

     The  Company  currently  provides  or  is licensed to provide international
private  line,  or  IPL,  services  in  Mexico,  Panama, Venezuela, El Salvador,
Nicaragua,  Costa  Rica,  and  the  United  States.


                                        7
<PAGE>
SALES,  MARKETING  AND  DISTRIBUTION

     INTEGRATED  SERVICES

The  Company  targets  Hispanic customers in dense Hispanic communities in major
metropolitan areas. The Company initially implemented operations in Los Angeles,
Miami,  San  Diego,  and Houston. Longer term, the Company anticipates accessing
additional  markets  including New York, New Jersey, San Francisco, Chicago, San
Antonio,  and  Puerto  Rico.

The Company brands its telecommunications services. The Company believes success
in marketing to Hispanic consumers lies in creating a culturally relevant brand,
which  appeals  to the strong cultural themes common in the Hispanic market. The
Company  utilizes  in-language  advertising  through  multiple media channels to
convey  a message of value, reliability and utility tailored to the unique needs
of this segment. The Company targets Hispanics through a comprehensive bilingual
and  bicultural  marketing program, including bilingual telemarketing, extensive
advertising  in  Spanish  language  media,  and  community  event  sponsorship.
Bilingual  customer  service  representatives  field  calls  from  the Company's
state-of-the-art  call center, where they inform customers about bundled product
offerings  and  enlist  orders. Additionally, the Company employs a direct sales
force  mainly for selling to small to mid-sized Hispanic businesses. The Company
also  differentiates  itself  within  the  Hispanic  community  by  establishing
Telemercados (i.e., retail storefronts) in locations with heavy foot traffic and
significant  Hispanic concentration. These Telemercados double as both sales and
service  centers.

The  Company believes its highly targeted, culturally relevant, direct marketing
approach  will:

     -    Yield higher success rates than those experienced by companies using a
          "switch  now"  approach,  and
     -    Establish  brand  name  recognition,  generating  increased use of our
          services  and  enhanced  customer  retention.

     The Company therefore believes it can establish itself as a value leader in
telecommunications  services  for  Hispanics in the target markets. Although the
Company  is  sensitive  to  the  role  that  price of services plays in customer
decision-making  and  will  offer  competitive  pricing,  the  Company  will not
necessarily  be  the lowest cost provider. Instead, the Company intends to focus
on  providing  overall  value  to  its  customers  by offering a cost-effective,
culturally  relevant  bundle  of  integrated  telecommunications  services.

     CARRIER  TERMINATING  AND  INTERNATIONAL  PRIVATE  LINE

     The  Company  has  a  wholesale  sales  group  actively contracting carrier
termination  and international private line in North, Central and South America.
The  Company  augments  its  direct  sales efforts through the use of agents and
brokers  that  market  the  Company's  service  to  institutional  customers and
carriers.

     CUSTOMER  SERVICE  AND  CARE

     The  Company  believes  customer  service  and  operating  support are core
components  for  success  as  a new entrant in the CLEC business. To enhance our
ability  in this area, the Company has built a state-of-the-art customer service
call  center in Mexico City. Additionally, the Company will invest approximately
$5  million  over  the  next  five years to further refine its Operating Support
System,  including  billing,  order  management and provisioning components. The
customer  service  center  is  staffed  24  hours  a day, 365 days per year with
bilingual  service  representatives.  The  Company  offers  a  range  of billing
services  including  integrated  billing  (i.e.,  multiple  products on a single
invoice),  billing  in Spanish, and the ability to render a bill in the U.S. for
services  provided  to  a  resident  of  Latin American countries. The latter is
useful  if  a  U.S.  resident  desires  to pay for a relative's phone service in
another  country.


                                        8
<PAGE>
OPERATIONS

     CLEC  OPERATIONS

     The  Company's  network  is  designed  with  flexibility,  reliability  and
scalability  as  its  basis.  Network  construction  is  based on central office
technology  interfacing  in  a  client/server-based  environment.  The  Company
believes  that  this  architecture  provides  a  competitive  advantage.  In the
Company's  target markets, it has deployed and intends to deploy its own Class 5
(i.e.,  local  service)  feature  node  switching  equipment  on  a  robust data
platform.  This  network  is  designed  to:

     -    Meet  demands  for  enhanced  services,
     -    Support  different  types  of  network  elements,
     -    Adapt  to  changing  service  providers,  and
     -    Easily  meet  subscriber  requirements.

     For  example,  this  network  allows  the  Company  to  provide local, long
distance  and  data  switched  services.  The  Company's  network model includes
traditional  public  switched  telephony services and performs in a multiservice
mode  with  Internet servers and data networks such as frame relay and corporate
intranet.

     The  Company  relies  on  ILECs and IXCs (i.e., long distance providers) to
provide  communications  capacity  or  interconnection for most of the Company's
local and long distance telephone services. Interconnection agreements typically
require  the  approval  of  state  regulatory  authorities.  The  1996
Telecommunications  Act  established  certain  requirements  and  standards  for
interconnection  arrangements.  The  FCC,  in  conjunction with state regulatory
bodies,  is  still developing these requirements and standards through a process
of  negotiation  and  arbitration. ILECs are required to negotiate in good faith
with  competitors,  such as the Company, requesting interconnection. The Company
currently  has  an interconnection agreement with Bell South, PacBell, GTE, Bell
Atlantic  and  Southwest  Bell.

     INTERNATIONAL  BACKBONE

     Creation  of  a  national  and  international  backbone network and a local
access  network  plan  is  critical  to  cost reduction and corresponding margin
improvement.  The  Company  has  negotiated  a  long  haul  dark  fiber contract
interconnecting  New  York, Houston, Atlanta, Los Angeles and Miami, which is an
integral  component  of  the  Asynchronous  Transfer  Mode, or ATM, backbone the
Company  established  during  1999.  The  Company intends to expand the backbone
nationally  and  internationally to transport both voice and data to each of the
Company's  U.S.  and  Latin American targeted markets. The Company has built and
will  continue  to  build  ATM-based switching facilities that will have full IP
transport  capabilities.  The  Company  leases  or trades switching capacity for
fiber  transport  capacity  to  support  its  traffic  requirements.

The  Company spent approximately $6.0 million during 1999, and $0 during 2000 on
the  ATM  backbone. The Company believes ATMAP backbones are preferable because:

     -    Internet  traffic  is  growing  15%  per  month;
     -    The  cost  of  an  ATM  infrastructure is less than circuit switching;
     -    Circuit  switching  platforms  cannot  meet  the  demands  of  today's
          networks created  by  increased  data  traffic;  and
     -    By  the  year 2005, voice traffic is expected to consume less than 10%
          of  network  bandwidth.


                                        9
<PAGE>
     SATELLITE  NETWORK

     The  Company's  satellite network consists of a series of teleports as well
as  a  number of smaller, single user, on-premise satellite ground stations. The
Company  currently  operates  teleports  in  seven  countries:  Costa  Rica,  El
Salvador,  Nicaragua,  Panama,  Venezuela,  Peru,  and  the  United  States

     The  teleports  are  capable  of providing international satellite services
within  the  U.S.  and  Latin American countries. The teleports also provide the
Company  with  the  ability  to  provide  high  quality  Internet  services.

     All  of  U.S. satellite services are carried over the Satellites Mexicanos,
SA  de  CV, or Satmex satellite system. The Satmex system is a Mexican owned and
operated  satellite  system  that  offers a broad coverage area including all of
North  and South America that supports the Company's stated mission of servicing
Latin  American  countries  with  first  class  communications services. IPL and
Internet  access  services  are provided via satellite transmissions through the
Satmex  satellite  system.  The  Company  has long-term contracts with Satmex to
provide  satellite space segment of sufficient capacity to service the Company's
needs  for  the  foreseeable  future.

     The  Company's  Houston facility is the primary network control center. The
Houston  facility  is  outfitted  with two satellite ground stations designed to
support  C-band  communication  links  between  the  U.S.  and  Latin  American
countries,  and  a  Ku-band ground earth station used to carry services from the
U.S.  to  Mexico.  The  system  has  been  sized  with growth in mind and can be
expanded  should  growth  exceed  our  projections.  The  Company  uses  various
providers,  on  an  as-needed  basis,  to accommodate extension of the Company's
satellite  based  service to any office site customer facilities via terrestrial
local  loops.  Use  of  these  providers  permits  the Company to be an "On Net"
facility  with  the  ability to offer competitive terrestrial connections to the
Company's  U.S.  customer  base.

INDUSTRY  OVERVIEW  AND  REGULATION

     U.S.  TELECOMMUNICATIONS  INDUSTRY

Prior  to  its  court-ordered  breakup in 1984, or the divestiture, AT&T largely
monopolized  the  telecommunications  services  in  the  U.S.  even  though
technological  developments  had  begun  to  make  it  economically possible for
companies (primarily entrepreneurial enterprises) to compete for segments of the
communications  business.  The  present structure of the U.S. telecommunications
market  is  largely  the  result  of  the  1984  divestiture.  As  part  of  the
divestiture,  seven  local  exchange  holding  companies  were  created to offer
services  in  a  geographically defined area called a Local Access and Transport
Area  (LATA).  Each Regional Bell Operating Company, or RBOC, was separated from
the  long  distance  provider,  AT&T,  resulting in the creation of two distinct
market  segments: local exchange and long distance. The divestiture provided for
direct,  open  competition  in  the  long  distance  segment.

     The  divestiture  did  not  provide  for  competition in the local exchange
market.  However,  several  factors  served  to promote competition in the local
exchange  market,  including:

     -    Customer  desire  for an alternative to the RBOCs, also referred to as
          the  Incumbent  Local  Exchange  Carriers,  or  ILECs;
     -    Technological advances in the transmission of data and video requiring
          greater  capacity  and  reliability  than  ILEC  networks were able to
          accommodate;
     -    A  monopoly  position and rate of return-based pricing structure which
          provided little incentive for the ILECs to upgrade their networks; and
     -    The  significant  fees,  called access charges, long distance carriers
          were  required  to  pay  to  the  ILECs to access the ILECs' networks.


                                       10
<PAGE>
     The  first  competitors  in  the  local  exchange  market,  designated  as
Competitive  Access  Providers  ("CAPs")  by  the  FCC,  were established in the
mid-1980s. Most of the early CAPs were entrepreneurial enterprises that operated
limited networks in the central business districts of major cities in the United
States where the highest concentration of voice and data traffic is found. Since
most  states  prohibited  competition  for  local  switched  services, early CAP
services  primarily  consisted of providing dedicated, unswitched connections to
long  distance  carriers  and  large  businesses.  These  connections  allowed
high-volume  users  to  avoid  the  relatively  high  prices  charged  by ILECs.

     As  CAPs  proliferated during the latter part of the 1980s, certain federal
and  state  regulators  issued  rulings that favored competition and promised to
open  local  markets  to  new  entrants. These rulings allowed CAPs to offer new
services,  including,  in some states, a broad range of local exchange services,
including  local switched services. Companies providing a combination of CAP and
switched  local services are sometimes referred to as Competitive Local Exchange
Carriers, or CLECs. This pro-competitive trend continued with the passage of the
Telecommunications  Act  of  1996 (see the Regulation section), which provided a
legal framework for introducing competition to local telecommunications services
throughout  the  U.S.

     Over  the  last  three  years,  several  significant transactions have been
announced  representing  consolidation  of  the U.S. telecom industry. Among the
ILECs:  Bell  Atlantic  Corporation and NYNEX Corporation merged in August 1997,
and  Pacific  Telesis  Group  and  SBC Communications Inc. merged in April 1997.
Major  long  distance  providers have sought to enhance their positions in local
markets  through  transactions  such  as:  AT&T's  acquisition  of  Teleport
Communications  Group,  and  WorldCom's  mergers  with  MFS  and  Brooks  Fiber
Properties. These long distance providers also sought to otherwise improve their
competitive  positions, through transactions such as WorldCom's merger with MCI.

     INTERNATIONAL  TELECOMUNICATIONS  INDUSTRY

     Many  international  markets  resemble  that  of  the  U.S.  prior  to  the
divestiture.  In  many  countries,  traditional telecommunications services have
been provided through a monopoly provider, frequently controlled by the national
government,  such  as  a  Post, Telegraph and Telephone (PTT) Company. In recent
years, there has been a trend toward opening many of these markets, particularly
in  Europe.  Led  by  the introduction of competition in the United Kingdom, the
European  Union mandated open competition as of January 1998. Similar trends are
emerging,  albeit  more slowly, in Latin America. Today, the landscape in Mexico
and  Central  America is represents the U.S. market in roughly 1989. The Company
believes  that  Mexican  and Central American traffic, including traffic between
the  United  States  and  these  regions,  will continue to grow faster than the
international telecommunications market as a whole as a result of (i) underlying
economic growth within Mexico and Central America, (ii) growth of regional trade
as  a  result  of  free trade initiatives such as NAFTA, Mercosur and the Andean
Pact, (iii) deregulation and privatization of telecommunications carriers in the
region,  (iv)  projected  regional  increases  in  telephone  density  and  (v)
increasing  demand  for  bandwidth-intensive  applications.

     The Company believes that numerous factors have driven the growth in demand
for  international  telecommunications  products  and  services.  Those  factors
include:  (i) the globalization of the world's economies and the worldwide trend
toward  deregulation of the telecommunications sector, (ii) declining prices and
a  wider  selection  of  products  and  services  driven  by greater competition
resulting  from  deregulation, (iii) increased telephone accessibility resulting
from  technological  advances  and  greater  investment  in  telecommunications
infrastructure,  including  deployment  of  wireless  networks,  (iv)  increased
international  business  and  leisure  travel  and  (v)  growth  of computerized
transmission  of voice and data information. These trends have sharply increased
the  use  of,  and  reliance  upon,  telecommunications  products  and  services
throughout  the  world.  The  Company  expects  these trends to continue for the
foreseeable  future.


                                       11
<PAGE>
     The  Company  believes  that  the  growth  in the use of telecommunications
services  and  the rapidly changing international telecommunications market have
created  a  significant opportunity for carriers who can offer high quality, low
cost  comprehensive  telecommunications  products,  systems  and  services.
Additionally,  the  Company  believes  that  a  high  percentage  of the world's
business  and  residential  consumers continue to be subject to high prices with
poor  quality and lack of availability of service which have been characteristic
of  many  of  the  traditional monopolies in mail, telephony and telegraphy, and
therefore demand for improved service and lower prices has created opportunities
for private companies to compete in the international telecommunications market,
and  has  spurred  a  broadening of products and services. New technologies have
contributed  to  improved quality and increased transmission capacity and speed.
The  Company,  therefore,  believes  that  recent  and on-going deregulation and
increasing  access  to  telecommunications  facilities  in emerging markets will
bring  a  high  level  of  growth  in the demand for telecommunications services
outside  the  United  States,  particularly  in  Mexico  and  Central  America.

     By  eroding  the  traditional  monopolies  held  by  PTT,  deregulation  is
providing  U.S.-based  providers  the  opportunity  to  negotiate more favorable
agreements  with  both  the  traditional  administrations  and  emerging foreign
providers.  In  addition,  deregulation in certain foreign countries is enabling
U.S.-based providers to establish local switching and transmission facilities to
terminate  their  own  traffic  and  carry  international  long distance traffic
originating  in  those  countries. Deregulation, privatization, the expansion of
the  resale  market  and  other  trends  influencing  the  international
telecommunications  market  are  resulting  in  decreased  termination  costs, a
proliferation  of  routing  options  and  increased  competition.

     Advances  in  technology  have created multiple ways for telecommunications
carriers  to  provide  customer  access to their networks and services. Overall,
these  changes  have  resulted  in  a  trend  towards  bypassing  traditional
international  long distance operating agreements as international long distance
companies seek to operate more efficiently. In markets that have not deregulated
or  are in the process of implementing deregulation, international long distance
carriers  have  used  advances  in  technology to develop innovative alternative
methods  to  meet  customer  demand.

     Legislation  and  the  World  Trade  Organization  agreement among numerous
countries  are  expected  to lead to increased liberalization of the majority of
the world's telecommunication markets. Specifically, the WTO Agreement created a
framework  under  which  69  countries  committed  to  liberalize  their
telecommunications  laws  to  permit  increased  competition and, in most cases,
foreign  ownership  in  their telecommunications markets, beginning in 1998. The
Telecommunications  Act  of  1996  established  a  framework  for  increasing
competition  in  the  U.S.  telecommunications  services market and the European
Union's Services Directive abolished exclusive rights for the provision of voice
telephony  services  throughout the European Union and the local Public Switched
Telephone  Network  of  any  member  country  of  the EU by January 1, 1998. The
Company  believes  that these initiatives, as well as other proposed legislation
and  agreements,  will  provide increased opportunities for emerging competitive
carriers  such  as  Telscape  to provide telecommunications services in targeted
markets.  Deregulation  has  encouraged  competition, which in turn has prompted
carriers  to  offer  a  wider  selection  of  services  and  reduce  prices.

     MEXICO

     The  market  for  telecommunications services in Mexico is undergoing rapid
expansion.  According  to  telecommunications  data  from  International  Data
Corporation  ("IDC")  and  population  data  from  the  IMF,  the volume of long
distance  telecommunication  traffic  to  Mexico  increased 30% in 2000, and the
minutes  per  capita  of  long  distance in Mexico is twice the average of other
major  Latin American countries. IDC also estimates that over 85% of the Mexican
international  telecommunications traffic is with the U.S. According to a report
issued  by  the  Federal  Communications  Commission's  (''FCC'') Common Carrier
Bureau  in  November  1998, revenues for sales on the U.S.-Mexico route exceeded
$1.1  billion  in  1997.


                                       12
<PAGE>
     As  with  most countries prior to their deregulation, Mexico operated in an
environment  dominated  by  the incumbent PTT carrier Telmex. Telmex essentially
controlled  all  local  and  long distance traffic in the country. In 1995 other
companies were first allowed to apply for long distance concession licenses, and
upon  receiving  a  license  were permitted to sell services in competition with
Telmex.  However, as these long distance concession licenses were granted Telmex
retained  sole  rights  to  the  local  loop,  and  hence  even competitors with
substantial  long  distance  operations  and traffic volume were required to pay
large  fees  to  access  the customers - even for termination. Additionally, all
long  distance  carriers were required to pay a significant tariff to Telmex for
traffic  that  crossed  the  Mexico border. This charge created a price umbrella
under  which some companies began to operate, selling 'gray' minutes (those that
would  cross  the  border as data instead of voice and therefore would be exempt
from  the  tariff),  providing cross border rates that were as much as 25% less.

     In 1996, Comision Federal de Telecomunicaciones ("COFETEL") began to accept
applications  for  concession  licenses  for  local  traffic.  Some  companies
participated,  but  Telmex - with its incumbent monopoly position for both local
and  long  distance  -  was  still  able  to  make it generally uneconomical for
companies  to  participate.  In  December  2000, an agreement was struck between
Telmex,  Avantel  (Worldcom)  and  Alestra  (AT&T)  (collectively "Groupo de Las
Tres")  and  certified by COFETEL. Under the terms of the agreement, which apply
to  any  current and future members of the Groupo de Las Tres, specific and more
economical  rates were set for the cross-border tariffs and for the local access
charges.

     The Company expects that the Groupo de Las Tres agreement will dramatically
change  the competitive landscape in Mexico. For example, the current members of
the  Groupo  de  Las  Tres  handle  about 95% of all northbound traffic, and the
current  proportional  return  rate  (the  number  of  southbound minutes that a
carrier  gets  in  return  for a northbound minute) is currently set at three to
one.  The  Company  expects  that the Groupo de Las Tres will drive more minutes
being  transferred  via proportional return and the standard settlement process,
and management expects that the balance of economics - which had largely been in
the hands of the North American carriers sending minutes south - will shift. The
Company  expects  that  those carriers with cross-border operations will receive
the  greatest  economic  benefit  from  this  shift.

     The Company believes it is well positioned to take advantage of the growing
demand for telecommunications services between the United States and Mexico. The
Company  currently  provides a full range of systems integration and value-added
services  to  major  public  and  private customers. In June 1998, the Company's
subsidiary  Telereunion  S.A.,  received  a  concession  from  the  national
telecommunications  regulatory  agency,  the  Secretaria  de  Comunicaciones  de
Telecomunicaciones (''SCT''), which allowed it to construct its Mexican network.

     OTHER  CENTRAL  AMERICAN  MARKETS

     The  Company also intends to focus on opportunities created by deregulation
of  telecommunications  services  in other telecommunications markets in Central
America.  Central  American  markets  have  also  undergone rapid expansion as a
result  of  regional  and  global  deregulation.

     Countries within Central America have different national regulatory schemes
and  are  in varying stages of deregulation. The requirements for the Company to
obtain  the  necessary approvals to offer value-added services and various other
telecommunications  services,  including  voice  telephony, vary from country to
country.  In 1999 the Company entered into several transactions in Latin America
including  the  provision of Internet services via satellite to Guatemala, Costa
Rica  and  El  Salvador,  and  the  signing of interconnection and correspondent
agreements  with  Telefonica  de  El  Salvador.


                                       13
<PAGE>
     GOVERNMENT  REGULATION

     The  telecommunications  industry  is  subject  to  extensive regulation by
federal,  state  and  local  governmental  agencies,  including  common  carrier
regulation  by  the  FCC.  The  Telecommunications  Act  of  1996  (the  "1996
Telecommunications  Act")  eliminates many of the pre-existing legal barriers to
competition  in  the  telephone and video programming communications businesses,
preempts  many of the state barriers to local telephone service competition that
previously  existed  in  state  and  local  laws and regulations, and sets basic
standards  for  relationships  between  telecommunications  providers.  The 1996
Telecommunications  Act  will also, once certain thresholds are met, allow ILECs
to  enter  the  long distance market within their own local service regions. The
1996  Telecommunications  Act  thus  introduced  the  possibility  of  new,
non-traditional  competition  for  telecommunications  companies and resulted in
greater  potential  competition  for the Company. The outcome of pending federal
and  state  administrative  proceedings may also affect the nature and extent of
competition  that  will  be  encountered  by  the  Company.

     Providing  local service requires appropriate licensure in each state where
service  is  provided.  The Company is currently certified as a CLEC in Georgia,
Florida,  California,  New York, New Jersey, and Texas. The Company also intends
to  apply  for  certification in Illinois and Puerto Rico during 2001. While the
Company  believes  it  will  be  successful in obtaining such certification, the
outcome  cannot  be  assured.  Future  regulations  may prevent the Company from
generating  revenues from sales of database information about consumers obtained
by  the  Company from its telephone business. These competitive developments, as
well  as  other  regulatory  requirements relating to privacy issues, may have a
material  adverse  effect  on  the  Company's  business.

     UNITED  STATES

     While  state-to-state  long  distance business in the U.S. is generally not
subject  to substantial regulation, local service and within-state long distance
service  are subject to regulation that varies by state, and can be substantial.

     The  terms  and  conditions  under  which  the  Company  provides
telecommunications  and  information  services  are  potentially  subject  to
regulation  by  the  state  and  federal government agencies. With regard to the
Company's domestic telecommunications services, federal laws and FCC regulations
generally  apply  to  calls  from  one  state to another, while state regulatory
authorities generally have jurisdiction over calls which are placed and received
within  the  same  state.

     LOCAL  SERVICE;  INTEGRATED  SERVICE

      Federal  regulation  has  the  greatest  impact  on the telecommunications
industry  and  has undergone major changes in the last three years as the result
of  the  adoption  of  the  1996  Telecommunications  Act.  The  Act  provides
comprehensive  reform of the nation's telecommunications laws. The Act imposes a
number of access and interconnection requirements on telecommunications carriers
and  on  all  local  exchange  providers,  including  CLECs,  with  additional
requirements  imposed  on  ILECs. The Act provides a detailed list of items that
are  subject to these interconnection requirements, as well as a detailed set of
duties  for  all  affected  carriers.  All  telecommunications  carriers  must
interconnect with the facilities of other carriers and not install features that
will interfere with the interoperability of networks. All LECs, including CLECs,
have  a  duty  to:


                                       14
<PAGE>
     -    Not  unreasonably  limit  the  resale  of  their  services,
     -    Provide  number  portability  if  technically  feasible,
     -    Provide  dialing  parity to competing providers, and nondiscriminatory
          access  to  telephone numbers, directory assistance, operator services
          and  directory  listings,
     -    Provide  access  to  poles,  ducts,  conduits,  and rights-of-way, and
     -    Establish  reciprocal  compensation arrangements for the transport and
          termination  of  telecommunications.

In  addition  to  those general duties of all LECs, ILECs have additional duties
to:

     -    Interconnect  at  any  technically  feasible point and provide service
          equal  in  quality  to  that  provided  to their customers or the ILEC
          itself,
     -    Provide  unbundled  access  to  network  elements  at  any technically
          feasible  point at just, reasonable and nondiscriminatory rates, terms
          and  conditions,
     -    Offer  retail  services  at  wholesale  prices  for  the  use  of
          telecommunication  carriers,
     -    Provide  reasonable  public  notice  of  changes in the network or the
          information  necessary  to  use  the  network  or  which  affect
          interoperability,  and
     -    Allow  other carriers to enter their premises to install, maintain and
          repair  that  carrier's  equipment  necessary for access to the ILEC's
          network,  or
     -    If  on-premise  installation  is  not  permitted for practical reasons
          (i.e.,  space limitations), the ILEC must allow the carrier to use its
          own  equipment,  and electronically monitor and control communications
          being  placed  with  the  equipment.

     The  FCC  adopted  pricing  and  other  guidelines  to  implement  the
interconnection  provisions  of  the  Act,  but the 8th Circuit Court of Appeals
vacated  many  of  the FCC's guidelines. The Supreme Court re-affirmed the FCC's
right to establish pricing methodology in AT&T Corp. vs. Iowa Utilities Bd., 525
U.S.  366  (1999).

     INTERNATIONAL  TELECOMMUNICATIONS;  LONG  DISTANCE

     The  1996  Telecommunications Act allows local exchange carriers, including
RBOCs,  to  provide  interLATA long distance service and also grants the FCC the
authority  to  deregulate  other aspects of the telecommunications industry. The
Company  is  classified  by  the FCC as a non-dominant carrier for the Company's
common  carrier  telecommunications  services.  The  Company has applied for and
received  all  necessary  authority  from  the  FCC  to  provide  international
telecommunications  service. The FCC reserves the right to condition, modify, or
revoke such international authority for violations of the Federal Communications
Act  or  the  FCC's  rules  and  policies.

     The  FCC and the state commissions have jurisdiction to act upon complaints
against any common carrier for failure to comply with its statutory obligations.
If  the FCC or state regulators find that the Company was engaging in activities
that  required  authorizations  which  the  Company  currently  does not hold or
violated  the  regulatory  requirements established by the relevant commissions,
the  FCC  or  state  regulators  could  impose financial penalties and order the
Company  to comply with the applicable regulations or cease doing business. Such
penalties  or  action  could materially adversely effect the Company's business,
financial  condition  or  results  of  operations.

     As  a  telecommunications carrier, the Company is required to contribute to
universal  service  funds  established  by the FCC, the states, or both. Federal
contribution factors have been established by the FCC and are effective. Federal
universal  service  requirements  are  now under review by both Congress and the
appellate  court.  Whether  the Company's universal service contributions can be
passed on to customers depends upon the competitive carrier market and potential
FCC  regulation. Certain states are in the process of determining what universal
service  contribution  requirements  to  adopt and others have already made such
determinations.


                                       15
<PAGE>
     Current  proposals  to  change  the universal service support system do not
entail  the  imposition of universal service fees on enhanced service providers.
These  fees,  however,  might  be  assessed in the future. Similarly, individual
states  may  determine  that  enhanced  services providers should be required to
contribute  to state universal service funding mechanisms. Moreover, information
service  providers  traditionally  have  been treated by the FCC as providing an
"enhanced"  computer processing service rather than a "basic" telecommunications
transmission  service  and,  as  a  result,  were thought to be beyond the FCC's
regulatory  authority.  A  large portion of the Company's business involves such
unregulated  enhanced  services.  Although  the  1996  Telecommunications  Act
continues  to  distinguish  between  unregulated  information  or  enhanced  and
regulated  telecommunications  or  basic  services, the changes made by the 1996
Telecommunications  Act  may  have  important  implications  for  providers  of
unregulated  enhanced  services.

     Within-state  long  distance  service  is  subject  to  state  laws  and
regulations,  including  prior  certification,  notification  and  registration
requirements.  In  certain states, prior regulatory approval may be required for
changes  in  control  of telecommunications operations. The Company is currently
subject  to varying levels of regulation in the states in which it provides "1+"
and  card  services  (which  are  both generally considered "l+" services by the
states).  The  vast  majority  of  states  require  the  Company  to:

     -    Apply  for  certification  to  provide telecommunications services, or
     -    At  least  register  or  be  found  exempt  from  regulation,  before
          commencing  service,  and
     -    File  and  maintain  detailed  tariffs listing rates for long distance
          service  within  the  state.

     Many states also impose various reporting requirements and/or require prior
approval  for:

     -    Transfers  of  control  of  certified  carriers,
     -    Assignments  of  carrier  assets,  including  customer  bases,
     -    Carrier  stock  offerings,  and
     -    Incurrence  by  carriers  by  significant  debt  obligations.

     Certificates of authority can generally be conditioned, modified, canceled,
terminated or revoked by state regulatory authorities for failure to comply with
state  law  and/or  the  rules  regulations and policies of the state regulatory
authorities.  Fines  and  other  penalties,  including  the return of all monies
received  for  intrastate  traffic from residents of a state, may be imposed for
such  violations.

     STATE  REGULATION

     The  1996 Telecommunications Act is intended to increase competition in the
telecommunications  industry,  especially  in the local exchange market. The Act
prohibits  state  and  local  governments  from enforcing any law, rule or legal
requirement  that  prohibits  or  has  the effect of prohibiting any person from
providing  any interstate or intrastate telecommunications service. In addition,
under  current FCC policies, any dedicated transmission service or facility that
is  used  more  than  10%  of  the time for the purpose of interstate or foreign
communication  is  subject  to  FCC  jurisdiction  to the exclusion of any state
regulation.  Notwithstanding these prohibitions and limitations, states regulate
telecommunications  services,  including  through:

     -    Certification  of  providers  of  intrastate  services,
     -    Regulation  of  intrastate  rates  and  service  offerings,  and
     -    Other  regulations,

     And  retain  jurisdiction  under  the  1996  Telecommunications  Act  to:

     -    Adopt  regulations  necessary  to  preserve  universal  service,
     -    Protect  public  safety  and  welfare,
     -    Ensure  the  continued  quality  of  communications  services,  and
     -    Safeguard  the  rights  of  consumers.


                                       16
<PAGE>
     Accordingly,  the  degree  of state involvement in local telecommunications
services  may  be  substantial.

     The  state regulatory environment varies substantially from state to state.
State  regulatory  agencies have regulatory jurisdiction when Company facilities
and services are used to provide intrastate services. A portion of the Company's
current  traffic  may be classified as intrastate and therefore subject to state
regulation.  Currently,  the  Company  does  not  anticipate that the regulatory
requirements  to  which  the  Company  will be subject in Florida, New York, New
Jersey,  Georgia,  Texas, Illinois and California will have any material adverse
effect on the Company's operations. In some jurisdictions, the Company's pricing
flexibility  for  intrastate  services  may  be  limited  because of regulation,
although  the  Company's  direct  competitors  will  be  subject  to  similar
restrictions.  However,  future  regulatory, judicial, or legislative action may
have  a  materially  adverse  effects  on  the  Company.

     THE  FCC'S  PRIVATE  LINE  RESALE  POLICY

     The  FCC's  private  line  resale policy currently prohibits a carrier from
reselling  international  private  leased  circuits to provide switched services
(known  as  ''ISR'')  to  or  from  a country unless the FCC has designated that
country  as one that affords U.S. carriers equivalent opportunities to engage in
similar  activities  in  that country or that the country is a member of the WTO
and  the  local  PTT  offers  U.S. carriers rates at or below the FCC-prescribed
benchmark for terminating the U.S. carriers' traffic. There can be no assurance,
however,  that  the  FCC or any other country's regulatory authority will change
their  policies  in  a way that would have a beneficial impact on the Company or
that  would  not  have  a  material  adverse  effect  on the Company's business,
financial  condition and results of operations. Furthermore, it is possible that
the  FCC  could  take  the  view  that certain arrangements by which the Company
provides  international  services does not comply with the existing Private Line
Resale Policy. If the FCC, on its own motion or in response to a challenge filed
by  a  third  party,  determines  that  such arrangements do not comply with FCC
rules, among other measures, it may issue a cease and desist order, impose fines
on  the  Company,  or, in extreme circumstances, revoke or suspend the Company's
FCC  authorizations. Any of these events could have a material adverse effect on
the  Company's  business,  financial  condition  or  results  of  operations.

     INTERNATIONAL  SETTLEMENTS  POLICY

     The  International  Settlements  Policy establishes the framework governing
U.S.  carriers'  relationships  with  their  foreign  correspondents  who  are
designated as dominant, on routes that have not yet been found to be competitive
by  the  FCC.  The  FCC revised its International Settlements Policy in an order
released  May  6, 1999. Specifically, the current policy governs the exchange of
traffic  and  settlements  between  U.S.  carriers  and  dominant  foreign
correspondents  on  non-competitive  routes,  including  the cost of terminating
traffic  over  each other's networks and prevents dominant foreign carriers from
discriminating  among  U.S.  carriers  in  the  rates  they  charge to terminate
international  traffic.

     The  FCC  revisions to the International Settlements Policy also impact the
FCC's  rules  on  International  Simple Resale (sometimes called ''ISR''), which
permits  U.S.  carriers  to provide international switched services over private
lines  interconnected with the public switched telecommunications network on the
current  FCC-authorized  routes.  The  FCC  declined to remove the International
Settlements  Policy  completely  on  all  International  Simple  Resale-approved
routes,  and  will continue to maintain a distinction between routes it approves
for International Simple Resale and routes on which it removes the International
Settlements  Policy.  However,  as  a  result  of revisions to the International
Settlements Policy, U.S. carriers may now enter into International Simple Resale
arrangements  with  non-dominant  foreign carriers on any route. On those routes
where  the  International  Settlements  Policy  continues  to  apply to dominant
carriers,  U.S.  carriers  may  exchange traffic via International Simple Resale
arrangements  with such carriers only on the routes authorized for International
Simple  Resale  by  the  FCC.


                                       17
<PAGE>
     To  the extent that the International Settlements Policy still applies, the
FCC  could find that the Company does not meet certain International Settlements
Policy  requirements  with respect to certain of our foreign carrier agreements.
Although  the FCC generally has not issued penalties in this area, it has issued
a  Notice  of  Apparent  Liability  to  a  U.S.  company  for  violations of the
International Settlements Policy and it could, among other things, issue a cease
and  desist  order,  impose fines or allow the collection of damages if it finds
that the Company is not in compliance with the International Settlements Policy.
Any  of  these  events  could  have  a  material adverse effect on the Company's
business,  financial  condition  or  results  of  operations.

     FOREIGN  MARKETS

     The  Company  is  also subject to regulation by governmental authorities in
certain  foreign  countries with respect to the licenses it holds, agreements to
which  it  is  a  party,  and  its operations in such foreign countries. In many
foreign  countries, the incumbent Post, Telegraph and Telephone (PTT) carrier is
(or was) largely owned by the government, creating the potential for significant
conflicts  of  interest.  In  some  countries  the  regulating  body has limited
influence  over  the  competitors  in  the  marketplace,  and in other countries
alternative markets for communications services exist which exploit loopholes in
government  regulations  to the detriment of the economic operating environment.

     The  international  long  distance  business  is  subject  to  the  FCC's
jurisdiction  in  the  U.S.,  and  is  subject  to  the  jurisdiction of foreign
governments  abroad,  some  of  which  limit or prohibit the Company's services.
Foreign local service is governed by the respective jurisdiction. Local laws and
regulations  differ  significantly  among the foreign jurisdictions in which the
Company  operates,  and  the  interpretation  and  enforcement  of such laws and
regulations  vary  and  are  often  based  on  the  informal  views of the local
government  ministries,  which, in some cases, are subject to influence by local
monopoly  companies. Accordingly, in certain of the Company's principal existing
and  target  markets,  there  are  laws  and regulations that either prohibit or
limit,  or  could  be  used  to  prohibit or limit, certain services the Company
markets.  The  Company  intends to provide its services to the maximum extent it
believes  permissible  under  applicable  local  laws  and  regulations, and the
licenses  it  has  obtained.  Portions  of  the services the Company markets and
provides,  or  intends  to  market  and provide, are now or may in the future be
prohibited  in  certain  jurisdictions.

     The  Company has significant operations in Mexico, where a recent agreement
between  the  three  largest  carriers  (Telmex,  Avantel  and  Alestra)  will
dramatically  change  the  operating  environment.  While the company expects to
participate  in  the agreement, it is unclear when or if that participation will
be  allowed.  With  or  without  participation  in the agreement, the regulatory
environment  in  Mexico  and  the  resulting  economics  are  unclear.

     The  Company  is subject to the regulatory regimes in each of the countries
in  which  it  conducts  business.  Local  regulations  range from permissive to
restrictive,  depending  upon  the  country.  In  general,  provision  of
telecommunications  services  in  these  countries  is  permitted  only  through
obtaining  proper  licenses and service is limited to that specifically provided
by  the  license  (see  the  LICENSES  section for a detailed listing of foreign
licenses  held by the Company). The World Trade Organization, or WTO, Agreement,
which  became  effective  in  February  1998,  is  intended  to  open  foreign
telecommunications  markets  of  signatory  countries. The Company does not know
whether  or  how  foreign  governments  will  implement  the  WTO  Agreement.


                                       18
<PAGE>
          MEXICO

     In June 1998, the Company's subsidiary Telereunion S.A., received a 30-year
facilities-based  carrier  license  from  the  SCT, allowing it to originate and
terminate  long  distance  services  and  to  provide data and other value-added
services in Mexico. The Foreign Investment Law and Telecom Law of Mexico ("FTL")
opened  the  local  and  long  distance  telecommunications  service  markets to
competition  and  imposed  varying  levels  of  regulation  on  Mexican
telecommunications  providers.  Pursuant  to  the  FTL,  the SCT and the COFETEL
implement  the  provisions  of  the  FTL.  The FTL imposes regulations on public
carriers.  Facilities-based  public carriers, those that use the radio spectrum,
satellite  links  or any form of land-based cables to provide telecommunications
services,  must  obtain  concessions prior to providing service. Concessionaires
may  also  resell  the facilities and services of other concessionaires. Vendors
(resellers)  of telecommunications services may not own their own facilities but
need  only obtain a permit to provide service. Although the FTL provides for the
existence  of  resellers, the Mexican government has not issued the implementing
rules  and  regulations  to  allow  their  entry  into the market. Consequently,
Mexican  law  does  not  currently  permit  pure  switched international resale.
Carriers  wishing  to  offer  value-added  services  need only register with the
COFETEL's  Telecommunications  Registry.

     In  addition  to  the  FTL,  the  Mexican Long Distance International Rules
establish  the  specific  regulatory  framework  that governs international long
distance services. Among other matters, the rules (i) mandate uniform accounting
rate  and  proportionate  return  for three years for all international traffic;
(ii)  require  concessionaires  to  obtain  additional specific authorization to
install  and  operate  international gateways; (iii) implicitly prohibit ISR for
three  years;  and  (iv)  regulate international correspondent agreements, which
must  reflect  the  uniform  accounting rate and proportionate return rules. The
International  Rules  prohibit  all  telecommunications  operators, except those
concessionaires  that have obtained the specific authorization from the COFETEL,
to  install  and  operate  international gateway switches. Those concessionaires
that  have  not  received  such  specific  authorization,  as  well as any other
companies  that  provide  telecommunications  services,  such  as  providers  of
value-added  services,  cellular  concessionaires  and  paging service providers
cannot  directly  transmit  international switched traffic. To date, the SCT and
the  COFETEL  have  granted 16 companies, including Telmex and Telereunion S.A.,
concessions  for  the  installation, operation and exploitation of long distance
public  telecommunications  networks, of which eight have received authorization
to  install  and  operate international gateway facilities. In addition, the SCT
and  the  COFETEL  have granted eight concessions for local switched services as
well  as  numerous  registrations  for  value-added  services.

     Pursuant  to the FTL, concessions for public telecommunication networks may
only  be granted to Mexican citizens or Mexican companies. Foreign investors may
own  minority interests in concessionaires, but may not own more than 49% of the
voting  ownership  interest  except for companies that provide cellular service.
NAFTA  removed  certain  Mexican  restrictions  on  foreign  investment and U.S.
companies  may  now  maintain 100% ownership interests in companies that provide
value-added  services  in Mexico. Pursuant to Mexican law, only Mexican citizens
or  companies  incorporated and domiciled in Mexico can register as providers of
value-added  services.

          OTHER  CENTRAL  AMERICAN  MARKETS

     The Company's provision of services elsewhere in Central America is subject
to  the  developing  laws and regulations governing the competitive provision of
telecommunications  services  in  each  Central  American  country  in  which it
provides  or  seeks  to  provide services. Each such Central American country in
which  the  Company  currently  conducts  or  intends  to conduct business has a
different  national  regulatory scheme. Historically, Central American countries
have  prohibited  voice telephony except by the PTT. The available opportunities
and  the  requirements  for  the  Company to obtain necessary approvals to offer
value-added  services,  systems  integration  or  the  full  range  of
telecommunications  services,  including voice telephony, vary considerably from
country  to  country.  The Company currently plans to provide a limited range of
services  in  certain  Central  American  countries,  as permitted by regulatory
conditions  in  those  markets,  and  to  expand its operations as these markets
implement  liberalization  to  permit  competition  in  the  full  range  of


                                       19
<PAGE>
telecommunications  services.  The  nature, extent and timing of the opportunity
for  the Company to compete in these markets will be determined, in part, by the
actions taken by the governments in these countries to implement competition and
the  response  of incumbent carriers to these efforts. There can be no assurance
that  any of these countries will implement competition in the near future or at
all,  that the Company will be able to take advantage of any such liberalization
in a timely manner, or that the Company's operations in any such country will be
successful.  There  can  be  no  assurance  that  the  Company  has received all
necessary  approvals,  filed  applications  for such approvals, received comfort
letters  or  obtained  all  necessary  licenses  from  the applicable regulatory
authorities  to  offer  telecommunications  services  in  the  Central  American
countries  where  it  currently  provides  services,  those in which it seeks to
provide  services  in  the  future,  or  that  it  will do so in the future. The
Company's failure to obtain, or retain necessary approvals could have a material
adverse  effect  on its business, financial condition and results of operations.

     Liberalization  in  Central  America  is proceeding rapidly and the Company
seeks  to  keep  pace with competition even where PTTs retain a legally mandated
monopoly on voice telephony. The Company is currently offering or plans to offer
certain  systems  integration,  enhanced  services, or value-added services in a
number  of Central American countries where the PTT retains the legally mandated
monopoly  on  voice  telephony.  While  the Company believes that it will not be
found  to be offering voice telephony in these countries prior to the expiration
of  the  PTT's  monopoly on such services, the Company has received no assurance
from the respective PTTs or from the respective regulating authorities that this
will  be  the  case. It is possible that the Company could be fined, or that its
facilities or equipment could be confiscated, or that it would not be allowed to
provide  specific services in these countries, among other sanctions, if it were
found  to  be  providing  voice  telephony  before  the  date in which the PTT's
monopoly  on  Voice  Telephony ceases. Any of such actions could have a material
adverse  impact  on  the  Company's business, financial condition and results of
operations.

     Moreover,  the  Company  may  be  incorrect in our assumption that (i) each
Central  American  country will abolish, on a timely basis, the respective PTT's
monopoly  to  provide  voice  telephony within and between other countries, (ii)
deregulation  will  continue  to occur, and (iii) the Company will be allowed to
continue  to  provide  and  to  expand  its  services  in  the  Central American
countries.  There  can  be  no assurance that any or all of the Central American
countries  will  not  adopt  laws or regulatory requirements that will adversely
affect  the  Company's  interests.  Additionally, there can be no assurance that
future  regulatory, judicial or legislative changes in any or all of the Central
American  countries  will  not  have a material adverse effect on the Company or
that  regulators  or third parties will not raise material issues with regard to
its  compliance with applicable laws or regulations. If the Company is unable to
provide  the  services it is presently providing or intends to provide or to use
its  existing  or  contemplated  transmission  methods  due  to its inability to
receive or retain formal or informal approvals for such services or transmission
methods,  or  for  any other reason related to regulatory compliance or the lack
thereof,  such  events  could  have  a  material adverse effect on the Company's
business,  financial  condition  and  results  of  operations.

INTELLECTUAL  PROPERTY

     We  use  the  names  ''Telscape  International,''  ''Telscape''  and ''TSCP
International''  as  our  primary business names, and received federal trademark
protection for the ''Telscape'' name on September 14, 1999. Telereunion S.A. has
a  national  trademark  registration  in  Mexico  for  ''Telereunion.''  We have
trademarked  the  term "Telemercados." We  regard our trademarks, service marks,
trade  names and logos  as  valuable  assets  and believe they have value in the
marketing  of  our  products  and  services. We intend to protect and defend our
name,  service  marks  and  trademarks  in  the  United  States  and
internationally.


                                       20
<PAGE>
     LICENSES

     In  the  United  States,  licenses  must  be obtained from the FCC or state
regulatory  authorities depending upon the type of license and/or services to be
offered.  In  order  to  provide  telecommunications services outside the United
States,  the  Company  must obtain appropriate licenses or enter into agreements
with  the  foreign  government  or  PTT.

     In  most  foreign  countries where the Company operates, telecommunications
licenses must be held by a corporation organized under the laws of that country.
In Panama, Venezuela, Mexico, El Salvador, Nicaragua and Costa Rica, the Company
has:

-     Created  a  local  corporation,
-     Obtained  appropriate  licenses with the assistance of local partners, and
-     Obtained  a  majority  ownership  position  in  exchange  for  the capital
      required  to  build  out  the  system.


                                       21
<PAGE>
<TABLE>
<CAPTION>
     LISTING  OF  LICENSES  OR  AGREEMENTS

COUNTRY           TYPE         DATE      SCOPE
-----------  --------------  ---------  --------------------------------------------------------------------
<S>          <C>             <C>        <C>
Costa Rica   Satellite       Aug. 1997  Establish and operate "on premise" private satellite earth stations;
                                        license from both Costarricense Electricidad, or ICE and
                                        Radiografica Costarricense S.A., or RACSA
-----------  --------------  ---------  --------------------------------------------------------------------
Costa Rica   Teleport        Jan. 1998  Establish Teleport services; license issued by
                                        RACSA
-----------  --------------  ---------  --------------------------------------------------------------------
Costa Rica   Private         Aug. 1997  Private satellite stations; The Company are
             Satellite                  obligated to Stations pay Costa Rican tariff for
                                        satellite services, but a discounted tariff is provided
                                        when the Company provides the satellite station;
                                        agreement with ICE and RACSA
-----------  --------------  ---------  --------------------------------------------------------------------
Costa Rica   Teleport        Apr. 1998  Teleport services (which will avoid the cost of single
                                        user private satellite stations); agreement with
                                        RACSA
-----------  --------------  ---------  --------------------------------------------------------------------
El Salvador  Satellite       Jul. 1996  Provide "on premises" private satellite earth
                                        stations using the Solidaridad satellite system;
                                        license issued by ANATEL
-----------  --------------  ---------  --------------------------------------------------------------------
Mexico       Satellite       Jul. 1995  Provide satellite services with Mexico and complete
                                        use of Mexican Solidaridad satellite system;
                                        agreements with Telecom de Mexico
-----------  --------------  ---------  --------------------------------------------------------------------
Nicaragua    Internet                   Provide Internet services; license
-----------  --------------  ---------  --------------------------------------------------------------------
Nicaragua    Teleport                   Provide Teleport services; license
-----------  --------------  ---------  --------------------------------------------------------------------
Nicaragua    IPL                        Right to sell dedicated services international private
                                        lines; agreement with Nicaraguan government
-----------  --------------  ---------  --------------------------------------------------------------------
Nicaragua    International              International switched voice; agreement with
                                        Switched Voice Nicaraguan government
-----------  --------------  ---------  --------------------------------------------------------------------
Panama       Satellite       Dec. 1995  Authorized to provide international carrier voice and
                                        data via the Solidaridad satellite system and other
                                        agreed communications services; joint venture with
                                        Instituto Nacional de Telecomunicaciones de
                                        Panama, or Intel
-----------  --------------  ---------  --------------------------------------------------------------------
Panama       Internet        Dec. 1995  Authorized by Intel to provide Internet services
                                        retail and wholesale within Panama; license
-----------  --------------  ---------  --------------------------------------------------------------------
Panama       Digital IPL                Construction of digital Teleport; Teleport provides
                                        IPL services for Panamanian services customers
-----------  --------------  ---------  --------------------------------------------------------------------
United       International   Aug. 1999  International facilities-based carrier; license
States                                  facilities-based from FCC carrier
United       International   May 1995   International satellite connectivity; license satellite
States                                  connectivity from FCC connectivity
United       Radio Station   Apr. 1996  Fixed earth station in Clear Lake City, Texas, for
States                                  domestic fixed satellite service and international
                                        fixed satellite service; authorization from FCC
United       Radio Station   Sep. 1996  Fixed earth station in Houston, Texas, for domestic
States                                  fixed satellite service and international fixed
                                        satellite service; authorization from FCC
United       Long Distance              Various Long distance services certification (Various
States                                  States) from respective state Public Service
                                        Commissions
United       CLEC            May 1997   Interim certification of authority to provide
States                                  (Georgia) CLEC services; by Georgia Public Service
                                        Commission
-----------  --------------  ---------  --------------------------------------------------------------------
United       CLEC            May 1999   Authority to provide CLEC services; issued by
States                                  (Florida) Florida Public Service Commission
-----------  --------------  ---------  --------------------------------------------------------------------
United       CLEC            July 1999  Authority to provide CLEC services; issued by
States                                  (California) California Public Service Commission
-----------  --------------  ---------  --------------------------------------------------------------------


                                       22
<PAGE>
-----------  --------------  ---------  --------------------------------------------------------------------
Venezuela    Point-to-Point  Apr. 1996  Provide voice, data and video point to point; point
                                        to and point to multipoint services throughout
                                        multipoint Venezuela and internationally; license
                                        authorized by Commision Nacional de
                                        Telecomunicaciones, or Conatel
-----------  --------------  ---------  --------------------------------------------------------------------
Venezuela    Access          Jul. 1996  To offer domestic and international access to
                                        databases for offering enhanced services such as
                                        Internet services, e-mail, etc.; concession from
                                        Conatel
-----------  --------------  ---------  --------------------------------------------------------------------
Venezuela    Digital         Mar. 1997  Construction of digital Teleport to provide IPL
             Teleport                   services for Venezuelan customers; The Company
                                        pays Conatel on an annual basis the equivalent of
                                        agreement of 1% of gross invoicing for the services
                                        provided under the Agreement; IPL services
-----------  --------------  ---------  --------------------------------------------------------------------
</TABLE>

COMPETITION

     In  the  overall market for Telecommunications services, the competitors to
Telscape's  U.S.  CLEC  business  are  the  ILECs  (Pac  Bell,  Bell South, GTE,
Southwestern  Bell,  etc.) and national long distance carriers (AT&T, MCI, etc),
as  well  as  other  CLECs  in each geographic market. However these competitors
focus  on  the  entire  telecommunications market - not just the Hispanic market
segment.

     To  date,  the  specific  U.S.  Hispanic  market  has  been  the focus of a
different kind of competitor -- one that offers low-end services such as calling
cards,  pre-paid  calling  cards  or  10-10-dial-around.  These  companies  have
traditionally  offered service that is focused on (1) low price, and (2) limited
credit  risk for the company and therefore limited flexibility for the consumer.
As  well, the services provided have often been unstable or uneven, and customer
service  is  generally  inattentive  if  it  exists  at  all.

     As  the Hispanic market in the United States has grown in size and economic
power,  it  desires/requires  service  and  products  that have the same quality
levels  as  those  marketed  to its non-Hispanic peers. Therefore, the Company's
strategy  is  to  create  a  strong  brand  image with high quality products and
service, and not to compete on cost alone. The first two marketing strategies of
Telscape are familiar: (1) position Telscape as the best option for the Hispanic
customer's  communications  needs,  (2)  provide  the  optimum one-stop shopping
solution  that offers local, long-distance, pre-paid and Internet services, with
value-added benefits. More importantly, however, it is the way in which Telscape
delivers  these  strategies  that  sets  the  Company apart. Telscape (1) offers
unique  "paired-market"  product  bundles  that  will  take  advantages  of  its
cross-border  presence,  (2)  enhances  the  Hispanic  customer  experience  by
championing highly ethical, consultative marketing and sales practices that that
market  segment  often  does  not  receive, and (3) delivers these marketing and
sales  practices  in  culturally  relevant  methods.

     For  the  International  division  there  are  more substantial barriers to
entry,  as  provisioning of service outside the United States generally requires
approval  and  licensing  from  the  local  government. Therefore, international
competition  is  often constrained to the incumbent Post Telegraph and Telephone
(PTT) carrier, and the few additional companies that have received licenses. For
example,  in  Mexico,  there currently are seventeen licensed service providers;
however,  management  believes  there  are  only  eight  that  have  substantial
operations  (including  international  concession  licenses)  and  are  primary
competitors. These eight primary competitors include Telmex (the incumbent PPT),
Avantel  (a  subsidiary  of  MCI),  and  Alestra  (a  subsidiary  of  AT&T).

     As  a  company  overall,  Telscape  does not have a competitor that has the
combined  portfolio  of  Hispanic  customers  in  the  United  States  and
fiber/satellite assets in Central America and Mexico. The Company's focus on the
Hispanic  market,  the market-specific services the Company provides (bi-lingual
network, billing, and customer service, etc.), and its cross-border network, are
significant  competitive  advantages.


                                       23
<PAGE>
     LOCAL  SERVICES;  INTEGRATED  SERVICES

     The  Company's  ability  to  acquire  market  share  from ILECs, CLECs, and
resellers  will  be  contingent  on  management's  ability  to  effectively:

     -    Sell  the  Company's  services  to the Company's target market through
          culturally  relevant  marketing  and  value  driven  product bundling,
     -    Build  an  effective  and  reliable  local  access  network,  and
     -    Develop  an  excellent  Operating  Support System to manage orders and
          provide  service  and  customer  support.

     One  major  impact of the 1996 Telecommunications Act may be a trend toward
the  use and the acceptance of bundled service packages, consisting of local and
long  distance  telephony, combined with other elements such as cable television
and  wireless  telecommunications  service.  As  a  result,  the Company will be
competing  with:

     -    ILECs,
     -    Traditional  providers of long distance service, such as AT&T, Sprint,
          and  MCI/WorldCom,  and
     -    Other  CLECs  or  CAPs.

     The  Company  may  also face competition from providers of cable television
service.  The Company's ability to compete successfully in telephony will depend
on  the  attributes  of  the  overall  bundle of services the Company is able to
offer,  including  price,  features,  and  customer  service.

     Wireless  telephone service (cellular, PCS, and Enhanced Specialized Mobile
Radio)  is  now  generally  viewed  (by  consumers)  as  a  supplement to, not a
replacement  for,  wire  line telephone service. In particular, wireless is more
expensive than wire line local service and is generally priced on a usage basis.

     It  is  possible,  however,  that  in  the  future  the  rate  and  quality
differential  between  wireless  and wire line service will decrease, leading to
more  direct  competition  between  providers of these two types of services. In
that  event,  the  Company's  telephony  operations  may  face  competition from
wireless  operators.

     INTERNATIONAL  TELECOMMUNICATIONS;  LONG  DISTANCE

     The Company is seeking international telecommunications licenses in various
foreign  countries.  The  Company  faces  competition  for  licenses  from major
international  telecommunications  entities as well as from local competitors in
each  country.  If  a  communications  license  is  obtained,  the  Company's
international  telecommunications operations will face competition from existing
government owned or monopolistic telephone service companies and other operators
who  receive  licenses.  The  Company  may  also  face  significant  potential
competition  from  other  communication  technologies  that  are being or may be
developed  or  perfected  in  the future. Some of the Company's competitors have
substantially  greater  financial, marketing, and technical resources. Thus, the
Company  may  not  be  successful  in obtaining additional licenses or competing
effectively  in  international  telecommunication  operations.


                                       24
<PAGE>
     The  Company  competes  with:

     -    IXCs  engaged  in the provision of long distance access and other long
          distance  resellers  and  providers,  including  large  U.S. carriers;
     -    Foreign  PTTs;
     -    Other  marketers of international long distance and call reorigination
          services;
     -    Wholesale  providers  of  international  long  distance  services;
     -    Alliances  for  providing  wholesale  carrier  services;
     -    New  entrants  to  the  long  distance market such as the RBOCs in the
          United  States,  who have entered or have announced plans to enter the
          U.S.  interstate  long  distance market pursuant to recent legislation
          authorizing  such  entry,  and  utilities;  and
     -    Small  resellers  and  facility-based  IXCs.

     Many  of  the  Company's  competitors  are  significantly  larger  and have
substantially  greater  market  presence  and financial, technical, operational,
marketing,  and other resources and experience than the Company does. Because of
their  close  ties  to  their  national regulatory authorities, foreign PTTs and
newly  privatized  successor  companies  can influence their national regulatory
authorities  to  the  Company's  detriment.  With  increasing  privatization  of
international  telecommunications  in foreign countries, it is possible that new
foreign  service  providers,  with  close  ties  to  their  national  regulatory
authorities and customer bases, will enter into competition with the Company, or
that  PTTs  will  become deregulated and gain the pricing flexibility to compete
more  effectively  with the Company. The ability of a deregulated PTT to compete
on  the basis of greater size and resources and long-standing relationships with
customers  in  its  own  country  could  have  a  material adverse effect on the
Company's  business,  financial  condition  or  results  of  operations.

     Although  the  large  U.S.  long  distance  carriers  have  previously been
reluctant  to  compete directly with the PTTs, other large carriers may begin to
compete  in  the  industry.  Because of their ability to compete on the basis of
superior  financial  and  technical  resources, the entry of any large U.S. long
distance  carrier  into the business could have a material adverse effect on the
Company's  business,  financial  condition  or  results  of  operations.

     Competition  for customers in the Company's international telecommunication
and  long  distance  markets is primarily on the basis of price and, to a lesser
extent,  on  the  basis  of  the  type and quality of service offered. Increased
competition  could  force  the Company to reduce the Company's prices and profit
margins  if  the  Company's  competitors are able to procure rates or enter into
service agreements comparable to or better than those the Company obtains, or to
offer  other  incentives  to  existing  and  potential customers. Similarly, the
Company  has  no control over the prices set by the Company's competitors in the
long  distance  resale  carrier-to-carrier  market.  The Company could also face
significant pricing pressure if the Company experiences a decrease in its market
share of international long distance traffic, as the Company's ability to obtain
favorable  rates  and  tariffs  depends,  in  large  part,  on  the  volume  of
international  long  distance call traffic it can generate for third-party IXCs.
The  Company  might  not  be  able  to  maintain  the  volume  of  domestic  and
international  long  distance  traffic  necessary  to obtain favorable rates and
tariffs.  In  addition,  the  Company  is  aware  that its ability to market the
Company's  carrier  services  depends  upon the existence of spreads between the
rates offered by the Company and those offered by the IXCs with whom it competes
as  well  as  those  from  whom  the Company obtains service. A decrease in rate
spreads  could  cause  the  Company  to  lose customers and therefore materially
adversely  affect  the  Company's  business,  financial condition, or results of
operations.

EMPLOYEES

     As  of December 31, 2000, we had 616 full-time employees, with 245 residing
outside  the  United  States,  principally  in  Mexico.  Of the total employees,
there  are  127  in  general  and  administration,  131  in  operations  and
engineering  and  358  in  sales, marketing, and customer service. None  of  our
employees  is  subject  to  a  collective bargaining agreement, and we have  not
experienced  any  work  stoppage.  We  believe  our relations with our employees
are  good.


                                       25
<PAGE>
ITEM  2.     PROPERTIES.


Network  Services
-----------------

     The  Company  leases  approximately  10,000  square feet of office space in
Houston,  Texas.  The  Company also leases  additional  facilities  in  Houston,
Texas  to  house  telecommunications  equipment  relating  to  its long distance
services  operations.  We  lease facilities in Mexico City, Guadalajara, Tijuana
and Monterrey, totaling approximately  71,000  square  feet  and  consisting  of
office  and  warehousing  facilities.

CLEC
----

     The  Company  leases  approximately  16,800  square feet of office space in
Monrovia,  California,  which  serves  as  its Administrative  Headquarters  for
CLEC  operations.  The  Company owns an office building with approximately 6,400
square  feet  in El  Monte,  California,  which serves as its Central Office for
Los Angeles CLEC operations.  The Company leases approximately 7,220 square feet
of  office  space  in  Miami,  Florida,  which  serves as its Central Office for
Miami  CLEC  operations.

Other
-----

     The  Company  leases  approximately  1,700  square  feet of office space in
Miami,  Florida.  The Company leases additional office and equipment co-location
space  in  the  U.S.  in  Phoenix,  Arizona;  Ft.  Lauderdale, Florida; Atlanta,
Georgia;  Houston,  Texas;  New  York,  New  York;  Los  Angeles,  California,
and  San  Diego,  California.  The  Company  also  leases  office  or  equipment
co-location space in Panama City,  Panama;  Colon,  Panama;  Caracas, Venezuela;
San  Salvador,  El  Salvador; Managua,  Nicaragua  and  San  Jose,  Costa  Rica.
We  lease  facilities  in  Sunnyvale  and  Mountain  View,  California  totaling
80,000  square  feet.

Corporate  and  Network
-----------------------

     The  Company  has  its  Corporate  Headquarters  located  in  6,200  square
feet of office space in  Roswell, Georgia.  Upon the merger in June 2, 2000, the
headquarters of the combined Company remained in Roswell, which was historically
the headquarters of Pointe Communications Corp., and the Houston headquarters of
Telscape  was  no  longer  needed  for  that  purpose.

The  physical  properties  of  the  Company  are  in  good  condition.


ITEM  3.     LEGAL  PROCEEDINGS.

     Telscape  International,  Inc.,  Telereunion,  S.A.  de  C.V.,  Telereunion
International,  S.A.  de C.V., vs. Mastec, et.al. and Acietel Mexicaona, S.A. de
C.V.  in  the  United States District Court, Southern District of Texas, Houston
Division,  Case  No.  H-99-1468.  The  Company  filed  suit  against  Mastec,
et.al.  and  Acietel  Mexicana,  S.A.  de  C.V.  on  May  14,  1999,  alleging
breach  of  contract,  fraud,  tortious  interference  with  contract,  and
negligent  misrepresentations.  The  company  alleged  that  agreements  between
the  parties  to  finance  and  construct  assets  in Mexico  were  not  honored
resulting  in  construction  delays  and  damages  of  additional  costs  and
expenses  resulting  from  alternate financing.  The Company sought compensatory
damages,  and  the  trial  was to begin  January  8,  2001.  On January 3, 2001,
the  parties entered into a settlement agreement whereby Mastec paid the Company
$1.75  million.  Additionally,  Mastec  purchased $3.25 million of the Company's
Series  H  Preferred Stock.  MasTec is now the preferred provider of our network
construction  requirements.


                                       26
<PAGE>
ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.

     There  were  no  matters submitted to a vote of security holders during the
fourth  quarter  of  the  fiscal  year  ended  December  31,  2000.

PART  II

ITEM  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED STOCKHOLDER
             MATTERS.

     Telscape's common stock was traded on the Nasdaq Small Cap Market under the
symbol  "PTMC"  from  August 10, 1994 until June 28, 1996, when it began trading
under  the  symbol  "TSCP."  Telscape's common stock began trading on the Nasdaq
National  Market ("Nasdaq NM") on July 31, 1998.  The following table sets forth
the  range  of  the  quarterly  high  and low sales prices for the common stock,
Nasdaq  NM  for  each  quarter  within  the  last  two  fiscal  years.


                High      Low
               -------  -------
2000
-------
First  Quarter   $23.00  $10.50
Second  Quarter   21.13    6.13
Third  Quarter     7.50    2.03
Fourth  Quarter    3.50    0.94

1999
-------
First  Quarter    10.00    6.31
Second  Quarter    8.56    5.38
Third  Quarter     9.38    5.88
Fourth  Quarter   13.31    5.69

     As  of  March 25,  2001,  there were approximately 260 holders of record of
Telscape's  common  stock.

     Telscape  has never paid any cash dividends on its common stock.  We expect
that  we  will retain all available earnings generated by our operations for the
development  and  growth  of  our business and do not anticipate paying any cash
dividends  in the foreseeable future.  In addition, our ability to pay dividends
may  be  adversely  affected  if,  in the future, the Mexican government were to
impose  restrictions  on  our  ability  to  repatriate  profits.

     In  December  2000,  the  Company  issued  90,000  shares  of  its Series G
Redeemable  Preferred  Stock.  The  Liquidation value per share is $100, and the
dividend  rate  is  15%  per annum.  $750,000 of this placement was to convert a
note  payable  (See  Note  9).  Cash  proceeds approximated $8.2 million.  These
shares are mandatorily redeemable by the Company on the tenth anniversary of the
issue  date,  and  there  are  optional  redemption  provisions  with  certain
adjustments  to  the  liquidation  price.  These  investors  were  accredited
investors, we used no underwriter, and the transactions were exempt from Federal
securities  laws  pursuant  to  Section  4(2)  of  the  Securities  Act of 1933.


                                       27
<PAGE>
ITEM  6.  SELECTED  FINANCIAL  DATA.

     The  following  table sets forth certain historical financial data relating
to  Telscape.  All  periods  reflect  our  prepaid  operations  as  discontinued
operations  due  to its proposed sale as of December 31, 2000.  The  information
set  forth  below  is  not  necessarily  indicative  of  the  results  of future
operations  and  should  be  read  in  conjunction  with "Item 7 -  Management's
Discussion  and  Analysis of Financial Condition and Results of Operations"  and
the  consolidated  financial  statements  and  the  notes  thereto  included  in
Item  8  of  this  Annual  Report  on  Form  10-K.

<TABLE>
<CAPTION>
                                    Amounts in thousands, except per share data.

                                                             For  the  Year  Ended  December  31,
                                         ---------------------------------------------------------------------------------
                                               2000            1999             1998             1997            1996
                                         ----------------  -------------  ----------------  ---------------  -------------
<S>                                      <C>               <C>            <C>               <C>              <C>
STATEMENT OF OPERATIONS DATA
Net revenues                             $    60,879        $  11,045      $    6,796         $  6,032        $ 8,096
Net loss from continuing
  operations                                 (65,483)         (36,018)         (7,864)         (12,253)        (7,758)
Net loss available to common
  shareholders                               (96,497)         (62,797)         (9,147)         (11,976)        (7,758)

Loss per share from continuing
  operations - basic and diluted         $     (3.88)       $   (3.49)     $    (0.83)        $  (1.76)       $ (2.30)
Loss per share available to common
  shareholders - basic and diluted             (5.71)           (6.08)          (0.14)           (1.72)         (2.30)

Weighted average shares outstanding           16,889           10,327           9,420            6,948          3,372


                                                                               At December 31,
                                         ---------------------------------------------------------------------------------
                                               2000            1999             1998             1997            1996

                                         ----------------  -------------  ----------------  ---------------  -------------
BALANCE SHEET DATA
Total assets                             $    376,386       $  76,890      $   42,222         $ 31,066        $34,792
Long term obligations and redeemable
  preferred stock                              32,198          12,134           9,625            3,949          2,523
</TABLE>


ITEM  7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

RESULTS  OF  OPERATIONS


     The  following  table sets forth certain financial data for the years ended
December  31,  2000, 1999, and 1998.  Results for any period are not necessarily
indicative  of  any  future  period.  Further,  all  periods reflect our prepaid
operations  as  discontinued  operations due to its proposed sale as of December
31,  2000.  See  Note  17  to  the  financial statements for further discussion.

<TABLE>
<CAPTION>
                                                                 ---------------------------------------------
                                                                       2000           1999          1998
                                                                 --------------  --------------  -------------
<S>                                                              <C>             <C>             <C>
NET REVENUES                                                     $60,879,015     $  11,044,795   $  6,796,311
COST OF REVENUES                                                  54,553,823        11,878,053      3,343,892
                                                                 --------------  --------------  -------------
  GROSS MARGIN                                                     6,325,192          (833,258)     3,452,419
SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                                         40,469,175        15,356,875      8,257,516

RESTRUCTURING CHARGE                                               2,600,591                -              -

DEPRECIATION AND AMORTIZATION                                     24,969,940         3,705,542      2,988,184
                                                                 --------------  --------------  -------------

OPERATING LOSS                                                   (61,714,514)      (19,895,675)    (7,793,281)
                                                                 --------------  --------------  -------------
OTHER INCOME (EXPENSE):
  Interest expense, net                                           (6,015,122)      (15,979,106)    (1,738,270)
  Other, net                                                       1,384,208          (143,123)     1,667,191
                                                                 --------------  --------------  -------------
  Total other expense, net                                        (4,630,914)      (16,122,229)       (71,079)
                                                                 --------------  --------------  -------------
LOSS BEFORE INCOME TAX (BENEFIT)                                 (66,345,428)      (36,017,904)    (7,864,360)

INCOME TAX (BENEFIT)                                                (862,000)                -              -
                                                                 --------------  --------------  -------------
LOSS FROM CONTINUING OPERATIONS                                  (65,483,428)      (36,017,904)    (7,864,360)

DISCONTINUED OPERATIONS
  Results from prepaid operations                                 (1,938,028)       (2,272,951)    (1,283,122)
  Loss on disposal of prepaid business                              (814,957)                -              -
                                                                 --------------  --------------  -------------
NET LOSS                                                         (68,236,413)      (38,290,855)    (9,147,482)

Beneficial Conversion Charge                                     (19,059,218)      (22,174,074)             -
Preferred Stock Dividends                                         (9,201,621)       (2,331,834)             -
                                                                 --------------  --------------  -------------
Net loss available to common shareholders                       $(96,497,252)     $(62,796,763)   $(9,147,482)
                                                                ==============  ==============  =============
</TABLE>


                                       28
<PAGE>
YEAR  ENDED  DECEMBER  31,  2000  COMPARED  TO  YEAR  ENDED  DECEMBER  31,  1999
--------------------------------------------------------------------------------

     Consolidated  revenues  for  the  combined  lines of business for the years
ended  December  31,  2000  and  1999,  were  $60.9 million  and  $11.0 million,
respectively.  The  increase  in  revenue  came  from  principally  two sources.
One,  the  revenues  from  Telscape  are  included from the date of the business
combination  with  Pointe  (June  2,  2000)  to December 31, 2000.  The Telscape
revenues  added $50 million to consolidated revenues for the year ended December
31,  2000. Second, the CLEC segment added an additional $5.9 million in revenues
in  2000.  The  Company  increased  Internet sales during the year by increasing
sales  of  dial  up,  dedicated  and  DSL  services  to  the  U.S.  Hispanic
residential  and  business communities. This was offset by a $6 million decrease
in  revenues  resulting  from  the  deconsolidation  of Telecommute Solutions in
fiscal  2000  (see Note 12 of the consolidated financial statements for the year
ended  December  31,  2000).

     Cost  of  services  and  products for the years ended December 31, 2000 and
1999  were  $54.6 million and $11.9 million respectively, yielding gross margins
of  10%  for 2000 and (8)% for 1999. Cost of services and products increased $43
million due to Telscape's amount being included since June 2, 2000. Gross profit
margins  were  adversely affected during 1999 by a significant increase in fixed
dedicated  line  costs  incurred in anticipation of higher wholesale carrier and
CLEC  traffic.

     SG&A  expenses  for  the year ended December 31, 2000 were $40.5 million or
66% of revenues compared to $15.4 million or 139% of revenues for the year ended
December  31,  1999.  Telscape's  SG&A  of $19 million was included from June 2,
2000.  The  overall increase was also attributable to expansion of the Company's
operations,  particularly the addition of management, marketing, engineering and
administrative personnel necessary to fulfill the CLEC business plan. This trend
is  expected  to  continue throughout 2001 as the Company continues to build out
its  target  markets.

     During  2000,  the  Company  recorded  a  $2.6  million charge in the third
quarter  related to its restructuring of certain of its operations.  See Note 15
to  the  financial  statements  for  further  discussion.

     Depreciation  and  amortization  expense was $25.0 million and $3.7 million
for  the  years  ended December 31, 2000 and 1999, respectively. The increase is
primarily  attributable  to  the  increase  depreciation  of property, plant and
equipment  for  the CLEC business and amortization of intangibles resulting from
the  Telscape  acquisition  completed  during  the  second  quarter  of  2000.

     Net  interest  expense  was  $6.0  million  and  $16.0  million  for  the
years  ended  December  31,  2000  and  1999, respectively.  The decrease during
2000  was  due  primarily  to  a  non-recurring  amount  in  1999.  The  Company
recorded  a  non-cash non-operating beneficial conversion  charge in conjunction
with  the  issuance  of the notes convertible into  Class  B  Preferred Stock in
1999.  The  discount  recognized  in  conjunction  with  the  issuance was $11.9
million  for the year ended December 31, 1999.  This represented the  difference
between  the  fair  value  of  the  Stock  underlying the Notes and the proceeds
recognized  in  conjunction  with  the  issuance.

     Other  income in 2000 resulted principally from a $1.5 million gain on sale
of  a  plant  from  our  Interlink  subsidiary.


                                       29
<PAGE>
     The  Company's effective income tax benefit rate for 2000 and 1999 was 1.2%
and 0%, respectively.  The Company recognized a benefit in 2000 equal to certain
intangible  amortization  as  a  result of the Telscape merger while providing a
valuation  allowance on all other related items.  The Company expects this trend
to  continue  in  the  future.

     As  discussed previously, due to the proposed sale of the Company's prepaid
operations  as  of December 31, 2000, the Company has reflected these operations
as  discontinued  for all periods presented.  Additionally, in 2000, the Company
has  recorded  its  estimated  loss  ($0.8  million) from this sale as a plan of
disposal  is  in  place  as  well  as an active program to find a buyer.

     The  net  losses  available  to  common  shareholders  for  the years ended
December  31,  2000  and  1999  were  approximately   $96.4  million,  or  $5.71
per  share,  and  $62.8  million,  or  $1.36  per  share,  respectively.
Approximately  $1.67  of  the net loss per share for 2000 is attributable to the
non-cash  non-operating  charge  of   approximately  $19.1  million  recognized
in  conjunction  with  the  beneficial  conversion  feature  on  the  Class  F
preferred  stock  issued  during  the  year and $9.2 million of dividends on all
preferred stock.  Approximately $0.53  of  the $1.36 net loss per share for 1999
is attributable to the non-cash  non-operating charge  of   approximately  $22.2
million  recognized   in  conjunction  with  the  beneficial  conversion feature
on the Class D and E (formerly Class A and B) preferred stock  issued during the
year and $2.3 million of dividends on the preferred stock.  (See Notes 13 and 14
of  the  consolidated  financial  statements).


YEAR  ENDED  DECEMBER  31,  1999  COMPARED  TO  YEAR  ENDED  DECEMBER  31,  1998
--------------------------------------------------------------------------------

     Consolidated  revenues  for  the  combined  lines of business for the years
ended  December  31,  1999  and  1998,  were  $11.0  million  and  $6.8 million,
respectively.  The  increase  in  revenue  came  from  international  private
line,  principally  to  Costa  Rica,  and  wholesale  carrier  termination  to
various  destinations  in Latin America.  The increase in overall  revenues  for
the  year was offset by a decline in Internet connection service  revenues.  The
decline  in  internet  revenues  came  primarily from Panama as a result  of the
withdrawal  of  the U.S. Armed Forces during the first quarter of 1999, and from
the  U.S.  where  the  Company  sold  the  majority  of  its dial up subscribers
during  the  third  quarter  in  an  effort  to  realign  its  Internet offering
with  the  Company's  strategic  focus  on  the U.S. Hispanic community. Cost of
services and products  for  the  years  ended December 31, 1999  and  1998  were
$11.9  million  and $3.3 million respectively, yielding gross profit  margins of
(8)%  for  1999 and 51% for 1998.  Gross profit margins were adversely  affected
during  1999  by  a  significant increase in fixed dedicated line costs incurred
in  anticipation  of  higher  wholesale  carrier  and  Competitive  Local
Exchange  Carrier  ("CLEC")  traffic.

     Selling,  general,  and  administrative  ("SG&A")  expenses  for  the  year
ended  December  31,  1999  were  $15.4  million  or  137%  of revenues compared
to  $8.3 million  or  122%  of  revenues  for  the year ended December 31, 1998.

     Depreciation  and  amortization  expense  was $4.5 million and $3.0 million
for  the  years  ended  December  31,  1999  and  1998,  respectively.  The
increase  is attributable  to  the increase in property, plant and equipment and
amortization  of  intangibles  resulting  from  acquisitions  completed  during
1998  and  1999.


                                       30
<PAGE>
     Interest  expense  was  $16.0  million  and  $1.7  million  for  the  years
ended  December  31,  1999  and  1998,  respectively.  The increase during  1999
was  due  primarily  to the non-cash non-operating beneficial conversion  charge
taken  in  conjunction with the issuance of the notes convertible into  Class  B
Preferred  Stock.  The  discount recognized in conjunction with the issuance was
$11.9  million  for  the  year  ended  December  31, 1999.  This represented the
difference  between  the  fair  value  of the Stock underlying the Notes and the
proceeds  recognized  in  conjunction  with  the  issuance.  The  amount  is
non-recurring.  Additionally,  a  number  of  new  debt instruments were entered
into  in  late 1998 and during 1999, including  $11.0  million  in bridge loans,
$6.0  million  in  capital  leases.

     Other income in 1998 resulted from a gain  recognized on the  settlement of
an account payable to Sprint.  An agreement in principal was reached during 1997
to restructure the Company's  payable to Sprint.  At year end 1997, the disputed
amount was accrued as a deferred  credit.  During  1998,  the  Company  signed a
settlement  agreement  requiring  it to pay  $1.0  million,  at  which  time the
deferred  credit was recognized in the statement of  operations.  The settlement
agreement  obligates the Company to pay $100,000 at  settlement  and $50,000 per
month  over  the  succeeding  18  months.

LIQUIDITY  AND  CAPITAL  RESOURCES

          The  Company  has  not  generated  net  cash  from  operations for any
period  presented.  We  do  not  expect  that cash flows from operations will be
sufficient  to  meet  anticipated  capital  expenditures  and  debt  repayment
requirements  when  they  are  due  without  additional financing.  We intend to
finance our growth, principal  and  interest  obligations  under  existing  debt
obligations,  and  additional  capital  investments  required  for  our  planned
facilities  expansion through  vendor  financing, the sale of fiber, the prepaid
business  unit  and  strategic  assets  discussed  below,   and  the  sale  of
additional  debt or equity securities.  There can be no assurance that the above
mentioned equity financing or  asset  sales  will close as anticipated or at all
or  that  we  will  be  able  to  obtain  additional  financing  on commercially
reasonable  terms,  if  at all, to fund losses  generated  from  operations,  to
fund  capital  expenditures, to fund debt service  obligations  as  they  become
due,  or  to  fund  strategic  investment  alternatives.

     The  Company  had  a  net  cash  outflow from operating activities of $27.5
million  and  $22.2  million  for  the  year  ended  December 31, 2000 and 1999,
respectively.  These  amounts  include  $4.6  million  and  $2.1  million,
respectively, related to discontinued operations.  The  increase  from  1999  to
2000  is  primarily  the  result  of  increases  in  operating  losses  and  a
deteriorating  working  capital  position.

     As reflected in the report delivered by the Company's independent auditors,
Arthur  Andersen LLP, in connection with the preparation of the Company's fiscal
year  2000  audited consolidated financial statements included elsewhere in this
Annual Report on Form 10-K, the Company's consolidated financial statements have
been  prepared  assuming  that  Telscape will continue as a going concern, which
contemplates  the  realization  of assets and the satisfaction of liabilities in
the  normal  course  of  business.  As  described  in Note 3 to the accompanying
consolidated  financial  statements,  the  Company  has  had recurring operating
losses  and  has  a net capital deficiency. As of December 31, 2000, the Company
had  an  accumulated deficit of approximately $190 million and a working capital
deficit  of  approximately  $132  million,  and  expects  to  continue  to incur
operating  losses  in  the  near  future.

     The  consolidated  financial  statements  do  not  include  any adjustments
relating  to  the recoverability and classification of recorded asset amounts or
the amounts and classification of liabilities that might be necessary should the
Company  be  unable to continue as a going concern. Telscape's continuation as a
going  concern is dependent upon its ability to generate sufficient cash flow to
meet its obligations on a timely basis, to obtain additional financing as may be
required, and ultimately to attain profitable operations and positive cash flow.
Telscape's  future capital needs depend on a number of factors, certain of which
are  under  the  Company's control (such as marketing expenses, staffing levels,
customer  growth  and  capital  costs)  and  others  of  which are not under the
Company's  control  (such  as competitive conditions and government regulation).
Moreover,  the  terms  of  Telscape's  outstanding  indebtedness  impose certain
restrictions  upon  the  Company's  ability  to incur additional indebtedness or
issue  additional  preferred  stock.


                                       31
<PAGE>
     The Company used $35.7 million in investing activities in 2000, principally
to acquire $36.9 million of property and equipment for use mainly in the US CLEC
operations  in Los Angeles, Miami and San Diego and to build the Mexico network.
We  received $1.9 million in repayment of a loan to Telecommute Solutions, Inc.,
which  was  formerly a consolidated subsidiary but was deconsolidated during the
first  quarter  of  2000  as  a  result  of  a  private investment directly into
Telecommute,  which  reduced  the  Company's  ownership  below  fifty  percent.

     The  Company's  financing  activities for the year to date through December
31,  2000,  generated  $44.9  million  mainly  as  a  result  of the issuance of
Redeemable  Preferred  Stock  for  $8.3 million (see Note 13 of the consolidated
financial  statements)  and  Class  F  Senior  Convertible  Preferred  Stock for
$27.7  million  (see  Note  14  of  the  consolidated  financial  statements).
Additionally,  the  Company  received  $3.5  million  in  conjunction  with  the
exercise  of  warrants  and  options  and  $5.5 million  of  net  proceeds  from
leases  and  notes  payable.

     As  of  December  31,  2000,  the  Company had unrestricted cash on hand of
$3.0  million  with  a  negative working capital balance of $132.4 million which
includes  $73.9  million  of  debt  reclassified to current due to our currently
being  in default under the borrowing agreements. During the third quarter 2000,
we  signed  agreements  to  increase  amounts  available  under  our  borrowing
facilities.  On  September  29,  2000, the Company, along with its subsidiaries,
Telereunion  S.A. de C.V., Telereunion International, S.A. de C.V., Telereunion,
Inc.,  Telscape  USA,  Inc., MSN Communications, Inc., Interlink Communications,
Inc.,  TSCP  International,  Inc., Vextro De Mexico S.A. de C.V., and its wholly
owned  subsidiary,  Servicios  Corporativos  Vextro,  S.A.  de C.V., Telscape de
Mexico  S.A.  de  C.V.,  N.S.I.  S.A. de C.V., Lan and Wan S.A. de C.V. and M.S.
Noticias  y  Telecomunicaciones,  S.A. de C.V. signed a credit agreement with GE
Capital  Corp. (the "GECC Credit Agreement"). The GECC Credit Agreement provides
for up to $60 million in financing under long-term repayment terms. In September
2000,  the  Company  borrowed approximately $56 million. We used $1.3 million to
repay  a  note  payable to a bank, $3.5 million and $40 million to repay in full
accrued  interest  and  principal,  respectively,  on  the  1999  Lucent  Credit
Agreement,  $10.6 million to pay outstanding payables, and $1.6 million for debt
costs  associated  with  the  GECC  borrowing.  The Company received no net cash
proceeds  from  this  initial  borrowing.

     In  the fourth quarter of 2000, we borrowed an additional $1.5 million from
the  GECC  Credit  Agreement  to  pay  outstanding  payables.

     The  GECC  Credit  Agreement  requires  no  payments for the first year and
interest-only  payments  for  the  second  year.  Beginning  October  2002,  the
agreement  requires  nine semiannual principal payments, including prior accrued
interest  of  approximately  $5.2 million, plus current interest.  The agreement
bears  interest  at  a  per  annum rate of LIBOR plus a margin of 5.8% initially
which  increases  to  7.3  % by the fifth year (12.4 % at December 31, 2000). In
conjunction  with  the  extension,  the Company issued an additional warrants to
purchase  710,314  shares  of common stock for a period of six years at a strike
price of $2.53.  The warrants were valued at approximately $1.0 million and were
recorded  as  a  discount  on  the notes to be amortized over the 6.5 year term.
Approximately  $4  million is remaining under the facility to be used for future
equipment  acquisitions  or  to  capitalize  interest.

     In  September  2000,  the  Company  signed  a financing agreement with NTFC
Capital  Corporation ("NTFC"), a financing arm of GECC, for new funding of up to
$16  million.  The Company used part of the initial proceeds of $13.5 million to
repay  $13.2 million of accounts payable related to equipment for the U.S.  CLEC
/  DLEC  operations  and to pay $0.3 million of loan costs.  The agreement bears
interest  at  Libor  plus  a  margin  of  5.0%  (11.7%  at December 31, 2000)and
requires no payments the first year, then interest only payments until September
30,  2002, then 20 quarterly principal and interest payments until September 30,
2007.  Interest  accrued  during the no payment period is added to the principal
balance.  Approximately  $2.5 million is remaining under the facility to be used
for  future  equipment  acquisitions  or  to  capitalize  interest.


                                       32
<PAGE>
     On October 22, 1999, the Company signed a loan agreement with Lennox Invest
Ltd.  ("Lennox"),  a  BVI Corporation, which provided for funding of up to $10.0
million.  A  total of $1.5 million has been funded on this facility, which bears
interest at 10% per annum.  Interest on each note is to be paid at maturation of
the  respective  note,  which occurs six months after the date of each note.  Of
the  $1.5  million  funded under the facility, $1.0 million matured on April 19,
2000, and $0.5 million matured on April 26, 2000.  Lennox and the Company agreed
to  extend  the  notes an additional six months from the original maturity dates
and  again  until  November  30,  2000.  In  conjunction with the extension, the
Company  issued  additional  warrants to purchase 178,288 shares of common stock
for  a  period  of  three  years  at a strike price of $7.00.  The warrants were
valued  at  $72,049  and  were  recorded  as a discount on the note amortized to
interest  expense  over  the  six  month  extended  maturity.  In December 2000,
the  Company  paid  approximately  $586,000 of principal and interest and issued
75,000  shares  of  Series  G  Redeemable Preferred Stock to convert $750,000 of
principal  (see  Note  13  of  the  consolidated  financial  statements).  In
conjunction with these transactions, the Company issued a new note for $450,000,
which  bears  interest  at  10%  per  annum  and  matures  on  April  22,  2001.

     In  the  fourth  quarter  2000  the  Company  received  additional  equity
financing  from  a  group  of  existing  Telscape  investors  who purchased $8.3
million of our redeemable preferred stock.  The same group invested $3.5 million
in  our  redeemable preferred stock in the first quarter of 2001.   Also, in the
first  quarter of 2001, the Company received $3.3 million in equity financing in
its  Series  H  preferred  stock.

     As  of  December  31,  2000, the Company was not in compliance with certain
covenants  contained  in  the  GECC  and NTFC credit facilities discussed above.
Additionally,  the  Company was obligated to obtain certain waivers and consents
from  third  parties  (including  landlords,  carriers, vendors, banks, etc.) by
November 30, 2000. As of December 31, 2000, not all of the required consents had
been  obtained.  We are also in default on payments of interest and/or principal
on the GECC facility, the NTFC Note Payable (1999), Integracion note, the senior
subordinated  notes,  and  the  Crist  note  payable. For these reasons, we have
classified  the above mentioned notes as short term in the financial statements.

     In  March 2001, we sold some of the fiber in our Mexico network for a total
of $10 million. We received $1 million in March 2001, and the buyer is obligated
to  pay  $4  million  in  June  2001,  and  $5  million  in  December  2001.

     We  are  currently  negotiating a bridge loan with our largest creditor for
approximately  $15  million.  Additionally,  we  are  negotiating  with  current
investors  to match this with additional, identical loans, bringing the total to
$30  million.  We expect this to be consummated in the second quarter 2001. This
loan is intended to fund the Company's operations and capital needs until we are
able  to sell some of our strategic assets. We are in the preliminary process of
marketing  some of these assets to be able to generate financing that will allow
us  to focus on our core business, which is local and long distance domestic and
international  telecommunications.  We  anticipate completing these sales in the
third quarter of 2001. If we are unable to obtain the aforementioned bridge loan
and  complete  these asset sales, we will be forced to constrict our operations.


                                       33
<PAGE>
Additionally,  we  will  have  to  delay the expansion of our CLEC business. The
Company must continue to enhance and expand its network in order to maintain its
competitive  position  and  continue  to meet the increasing demands for service
quality,  availability  and  competitive  pricing. The Company's ability to grow
depends,  in  part,  on  its  ability  to  expand  its  operations  through  the
establishment  of  new  points  of  presence, which requires significant advance
capital  equipment  expenditures as well as advance expenditures and commitments
for  leased telephone company facilities and circuits and advertising. There can
be no assurance that the Company will be able to raise such capital on favorable
terms or at all. If the Company is unable to obtain such additional capital, the
Company  may be required to reduce the scope of its anticipated expansion, which
could  have  a  material  adverse  effect  on  the Company's business, financial
condition  or results of operations and its ability to compete. If we are unable
to  find  additional  sources  of  financing, these matters will have a material
adverse  effect  on the Company and may jeopardize the ability of the Company to
continue  as  a  going  concern.

     The  Company's  ability  to achieve its strategic objectives will depend in
large  part  upon  the  successful,  timely,  and cost-effective provisioning of
service for new customers, as well as billing these additional customers for the
services  rendered. The lack of or inefficiency in provisioning could materially
increase  customer  cancellations.  The  lack  of  or  incompleteness in billing
operations  could  materially  reduce  the  receipt  of  revenue.  The Company's
inability to provision or bill for services rendered in a timely, cost-efficient
manner could have a material adverse effect on the Company's business, financial
condition,  and  results  of  operations.

FOREIGN  CURRENCY  TRANSLATION  RISK

     The  general  economic  conditions  of  Mexico  are greatly affected by the
fluctuations  in  exchange  rates  and  inflation.  Our foreign currency risk in
Mexico  has  traditionally  been  mitigated  due  to  the  fact  that  the
majority  of  our  customers  are  multinational  firms  that  pay  in  United
States  dollars.  Our  functional currency in Mexico is the United States dollar
because  the  majority  of  its transactions are in such currency.  In addition,
our  few  customers that pay in pesos pay at the spot exchange rate in effect at
the  time  of payment as opposed to the exchange rate at the time the receivable
is  created.  We  may  choose  to  limit  our  exposure to translation gains and
losses  through  the  purchase of forward  foreign exchange contracts or similar
hedging  strategies.  There  can  be  no  assurance  that  any  foreign currency
hedging  strategy  would  be successful in avoiding  translation  related  gains
or  losses.

     We  do  not  currently  hedge  against  the  risk  of foreign exchange rate
fluctuations.  See  further discussion in Item 7A - Quantitative and Qualitative
Disclosures  about  Market  Risk  -  Foreign  Currency  Exchange  Risk.

RECENT  ACCOUNTING  PRONOUNCEMENTS

     In June 1998,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards No. 133 "Accounting for Derivative
Instruments  and Hedging  Activities."  In June 2000,  FASB issued  Statement of
Financial  Accounting  Standards  No. 138  "Accounting  for  Certain  Derivative
Instruments and Certain Hedging  Activities - an amendment of FASB Statement No.
133." These  statements  require all  derivatives  to be recorded on the balance
sheet at fair value and establishes new accounting rules for hedging instruments
and  are  effective  for  fiscal  years  beginning  after  June  15,  2000.  We
believe  that  these  statements will not have a material  financial impact upon
our  annual  consolidated  financial  results.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.

     The  Company  has  operations  in Central and South America, mainly Panama,
Venezuela,  Costa  Rica  and  Mexico,  which expose it to currency exchange rate
risks (except Panama, whose currency is equal to the U.S. dollar). To manage the
volatility  attributable  to  these exposures, the Company nets the exposures to
take  advantage  of  natural offsets. Currently, the Company does not enter into
any  hedging  arrangements  to reduce this exposure. The Company is not aware of
any facts or circumstances that would significantly impact such exposures in the
near-term as the significant majority of the Company's activities are settled in
the  U.S. Dollar. If, however, there was a sustained decline in these currencies
versus  the  U.S.  dollar,  then  the consolidated financial statements could be
adversely  affected.


                                       34
<PAGE>
INTEREST  RATE  RISK

     As  of  December  31,  2000,  we  had  a mix of variable and fixed interest
bearing  notes.  All of our debt obligations are denominated in U.S. dollars and
represent  interest  rate  risk.  All  of our debt obligations are segregated in
fixed  and  variable  rate  instruments  as shown on the table below.  The table
shows  the amounts of principal payments due on our various debt instruments and
the weighted average rate for the principal payments then due using the rates in
effect  at  December  31,  2000.

     The  table  set forth below summarizes the fair values and payment terms of
financial  instruments  subject  to  interest  rate  risk maintained by us as of
December  31,  2000.

<TABLE>
<CAPTION>
                                                                                         Fair Value
DEBT               2001         2002        2003        2004      2005 and        Total      at
                                                                 thereafter               12/31/00
-------------  ------------  ----------  ----------  ----------  ----------  -----------  ----------
<S>            <C>           <C>         <C>         <C>         <C>         <C>          <C>
Non-interest
  bearing or
  fixed rate   $11,713,665   $3,491,553  $1,782,866  $1,630,832   $395,985   $19,014,901 $19,014,901

Weighted avg.
  interest rate       10.7%       10.8%        12.2%      121.1%      12.0%         11.3%          -

Variable       $73,306,599   $        -  $        -  $        -   $      -   $73,306,599 $73,306,599

Weighted avg.
  interest rate       12.3%           -           -           -          -          12.3%          -
----------------------------------------------------------------------------------------------------
Total          $85,020,264   $3,491,553  $1,782,866  $1,630,832   $395,985   $92,321,500 $92,321,500
====================================================================================================
</TABLE>

     We  have  not  entered  into  any  derivative  contracts  or used any other
interest  rate  risk  management  techniques to attempt to minimize the interest
rate risk inherent in each of our debt instruments.  At the time of this filing,
we  have  no  plans  in  place  to  actively  manage  this  risk.

     As  we  do  not  have  a  significant  amount  of  variable  interest  rate
obligations, we have not entered into derivative transactions to hedge our risk.

FOREIGN  CURRENCY  EXCHANGE  RISK

     We  conduct a significant amount of its operations in countries outside the
United  States.  Our  foreign  currency  exchange  risk  includes the following:

     The  Mexican  economy  has  historically  had  periods  of  exchange  rate
instability  and peso devaluation.  1999 was the first year in recent history in
which not only did the peso not decline but appreciated slightly year over year.
Our  Network  Services  business  is  conducted  in  Mexico. The majority of our
revenues  in the Network Services business are contracted in dollars or in pesos
indexed to the dollar at the time of settlement.  The products and services that
we  sell  in  the Network Services business line are generally imported from the
U.S.  or  other  countries  and are payable in dollars.  Our remaining operating
costs  in  this  segment  are  generally  paid  in  pesos.

     In our  broadband  services  business division,  we  generally  collect our
revenues in U.S. dollars and pay for our costs to provide these services in U.S.
dollars.


                                       35
<PAGE>
     In  our  voice  services  business  division,  we  sell  our  services  to
customers in the U.S. and thus our revenues have been collected in U.S. dollars.
Our costs of providing  these  services are paid to vendors both in the U.S. and
in  Mexico or other Latin American countries. A significant portion of our costs
to  provide  these  services  are  structured  under  operating  agreements with
carriers  in  Mexico  under  which the costs  historically  have been settled in
pesos.  We  entered  into  additional  agreements  with carriers in Mexico which
provided us with additional termination   capacity  in  Mexico  in  1999.  These
arrangements  provide  for  settlement  in  U.S.  dollars.

     We  do  not  have  a  hedging policy in place but do plan to consider using
derivatives  to mitigate the risk of paying off our dollar denominated debt with
increasingly  Mexican  operations.  We  have  not entered into any derivative or
futures contracts or used any other such exchange rate risk management technique
as  of  the  date  of  this  filing.


                                       36
<PAGE>
ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.


Index to Consolidated Financial Statements:                  F-1
Report of Independent Public Accountants                     F-2

Consolidated Balance Sheets - At December 31, 2000 and 1999  F-3 to F-4

Consolidated Statements of Operations - For the years ended
December 31, 2000, 1999 and 1998                             F-5

Consolidated Statements of Stockholders' Equity - For the
years ended December 31, 2000, 1999 and 1998                 F-6

Consolidated Statements of Cash Flows - For the years ended
December 31, 2000, 1999 and 1998                             F-7

Notes to Consolidated Financial Statements                   F-8


<PAGE>
                    Report of Independent Public Accountants


To  Telscape  International,  Inc.:

We  have  audited  the  accompanying  consolidated  balance  sheets  of Telscape
International,  Inc.  (a Texas corporation)  and subsidiaries as of December 31,
2000  and  1999,  and  the  related  consolidated  statements  of  operations,
stockholders'  equity,  and  cash  flows for each of the years in the three year
period  ended  December  31,  2000.  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  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States.  Those  standards  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.  An
audit  also  includes  assessing  the accounting principles used and significant
estimates  made  by  management,  as  well  as  evaluating the overall financial
statement  presentation.  We  believe that our audits provide a reasonable basis
for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  Telscape
International,  Inc.  and  subsidiaries  at  December 31, 2000 and 1999, and the
results  of  their  operations and their cash flows for each of the years in the
three  year  period  ended  December  31,  2000,  in  conformity with accounting
principles  generally  accepted  in  the  United  States.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 3 to the
financial  statements, the Company has suffered recurring losses from operations
and has a net working capital deficiency that raises substantial doubt about its
ability  to  continue as a going concern.  Management's plans in regard to these
matters  are  also described in Note 3.  The financial statements do not include
any  adjustments  relating  to  the  recoverability  and classification of asset
carrying  amounts  or  the  amount  and classification of liabilities that might
result  should  the  Company  be  unable  to  continue  as  a  going  concern.



                                  /s/  ARTHUR  ANDERSEN  LLP

Atlanta,  Georgia
April  13,  2001


<PAGE>
<TABLE>
<CAPTION>
                              TELSCAPE INTERNATIONAL, INC. AND SUBSIDIARIES
                                       CONSOLIDATED BALANCE SHEET


                                                                                 December  31
                                                                       ------------------------------
                                                                            2000            1999
                                                                       ---------------  -------------
<S>                                                                    <C>              <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents                                             $    2,978,472   $ 21,219,684
 Restricted cash                                                              208,000        542,913
 Accounts receivable, less allowance for doubtful accounts of
  $6,402,000 and $1,508,000, respectively                                  21,719,260      3,639,378
 Notes receivable, net (Note 5)                                               554,659      2,270,750
 Inventories                                                                2,696,959      1,742,543
 Prepaid expenses and other (Note 6)                                        5,439,321        629,787
                                                                       ---------------  -------------
    Total current assets                                                   33,596,671     30,045,055

PROPERTY AND EQUIPMENT, net (Note 7)                                      135,279,622     24,317,342
GOODWILL, net of accumulated amortization of $12,436,920 and
 $2,190,266 in 2000 and 1999, respectively                                134,539,000     17,237,653
ACQUIRED CUSTOMER BASE, net of accumulated amortization of
 $6,291,716 and $1,131,507 in 2000 and 1999, respectively                  13,126,116        890,271
FIRST TO MARKET, net of accumulated amortization of $4,072,414
 in 2000                                                                   30,833,993              -
LICENSE, net of accumulated amortization of $339,368 in 2000               17,113,834              -
OTHER INTANGIBLE ASSETS, net of accumulated amortization of
 $2,477,327 and $1,946,521 in 2000 and 1999, respectively                   1,446,610      1,723,225

OTHER ASSETS                                                               10,449,882      2,676,217
                                                                       ---------------  -------------
      Total assets                                                     $  376,385,728   $ 76,889,763
                                                                       ===============  =============


              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable                                                      $   53,440,833   $  6,233,914
 Accrued expenses                                                          21,491,157      6,132,570
 Current portion of notes payable and capital lease obligations            85,020,262      6,038,032
 Unearned Revenue                                                           6,059,467      1,514,328
                                                                       ---------------  -------------
 Total current liabilities                                                166,011,719     19,918,844
                                                                       ---------------  -------------
NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS                                 7,301,238     11,234,234
                                                                       ---------------  -------------
OTHER LONG TERM LIABILITIES                                                15,804,520              -
                                                                       ---------------  -------------
DEFERRED TAX LIABILITY                                                     14,652,000              -
                                                                       ---------------  -------------
CONVERTIBLE DEBENTURES                                                              -        900,000
                                                                       ---------------  -------------
REDEEMABLE SERIES G PREFERRED STOCK (Note 13)                               9,092,131              -
                                                                       ---------------  -------------
COMMITMENTS AND CONTINGENCIES (Note 18)                                             -              -
                                                                       ---------------  -------------
MINORITY INTEREST                                                                   -      2,014,959
                                                                       ---------------  -------------
STOCKHOLDERS' EQUITY:
 All classes of preferred stock - par value $.001; shares authorized
  10,000,000 in 2000 and 100,000 in 1999:
  Series D preferred stock, 12,222 and 10,857 issued and outstanding               12             11
  Series E preferred stock, 8,177 and 7,264 issued and outstanding                  8              7
  Series F preferred stock, 338,496 and 0 issued and outstanding                  339              -
 Common stock, par value $.001; shares authorized 100,000,000;
  20,819,444 and 11,554,375 issued and outstanding                             20,819         11,554
 Additional paid-in capital                                               353,549,825    136,359,780
 Accumulated deficit                                                     (190,046,883)   (93,549,626)
                                                                       ---------------  -------------
       Total stockholders' equity                                         163,524,120     42,821,726
                                                                       ---------------  -------------
       Total liabilities and stockholders' equity                      $  376,385,728   $ 76,889,763
                                                                       ===============  =============
          The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                            TELSCAPE INTERNATIONAL, INC.  AND SUBSIDIARIES
                                CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                              Year  Ended  December  31,
                                                                 ----------------------------------------------
                                                                       2000             1999           1998
                                                                 ----------------  --------------  ------------
<S>                                                              <C>               <C>             <C>
REVENUES                                                         $    60,879,015   $  11,044,795   $ 6,796,311
COST OF REVENUES                                                      54,553,823      11,878,053     3,343,892
                                                                 ----------------  --------------  ------------
 GROSS MARGIN                                                          6,325,192        (833,258)    3,452,419
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES                                              40,469,175      15,356,875     8,257,516

RESTRUCTURING CHARGE                                                   2,600,591               -             -

DEPRECIATION AND AMORTIZATION                                         24,969,940       3,705,542     2,988,184
                                                                 ----------------  --------------  ------------

OPERATING LOSS                                                       (61,714,514)    (19,895,675)   (7,793,281)
                                                                 ----------------  --------------  ------------
OTHER (EXPENSE)INCOME:
 Interest expense, net                                                (6,015,122)    (15,979,106)   (1,738,270)
 Other, net                                                            1,384,208        (143,123)    1,667,191
                                                                 ----------------  --------------  ------------
 Total other (expense) , net                                          (4,630,914)    (16,122,229)      (71,079)
                                                                 ----------------  --------------  ------------
LOSS BEFORE INCOME TAXES                                             (66,345,428)    (36,017,904)   (7,864,360)

INCOME TAX (BENEFIT)                                                    (862,000)              -             -
                                                                 ----------------  --------------  ------------
LOSS FROM CONTINUING OPERATIONS                                      (65,483,428)    (36,017,904)   (7,864,360)
                                                                 ----------------  --------------  ------------
DISCONTINUED OPERATIONS (Note 17)
 Results from prepaid operations                                      (1,938,028)     (2,272,951)   (1,283,122)
 Loss on disposal of prepaid business                                   (814,957)              -             -
                                                                 ----------------  --------------  ------------
 LOSS FROM DISCONTINUED OPERATIONS                                    (2,752,985)     (2,272,951)   (1,283,122)
                                                                 ----------------  --------------  ------------
NET LOSS                                                             (68,236,413)    (38,290,855)   (9,147,482)

Beneficial Conversion Charge                                         (19,059,218)    (22,174,074)            -
Preferred Stock Dividends                                             (9,201,621)     (2,331,834)            -
                                                                 ----------------  --------------  ------------
Net loss available to common shareholders                        $   (96,497,252)  $ (62,796,763)  $(9,147,482)
                                                                 ================  ==============  ============
LOSS PER SHARE - BASIC AND DILUTED:
  Continuing Operations                                          $         (3.88)  $       (3.49)  $     (0.83)
  Discontinued Operations                                                  (0.16)          (0.22)        (0.14)
  Beneficial conversions charges and preferred stock dividends             (1.67)          (2.37)            -
  Net Loss per share                                                       (5.71)          (6.08)        (0.97)

WEIGHTED AVERAGE SHARES OUTSTANDING:                                  16,888,704      10,327,270     9,419,714

                    The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                             TELSCAPE INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                           PREFERRED  STOCK     COMMON  STOCK      ADDITIONAL
                                           ----------------  -------------------     PAID-IN      ACCUMULATED
                                           SHARES   AMOUNT     SHARES    AMOUNT      CAPITAL        DEFICIT
                                           -------  -------  ----------  -------  -------------  --------------
<S>                                        <C>      <C>      <C>         <C>      <C>            <C>
Balance, December 31, 1997                       -  $     -   7,629,600  $ 7,630  $ 35,974,151   $ (21,605,381)
Issuance of common stock, net of related
  expenses for:
   Private placements                            -        -   2,425,127    2,425     5,997,575               -
   Merger transactions                           -        -      46,100       46       186,717               -
   Exercise of common stock
    warrants and options                         -        -      33,262       33       139,462               -
Issuance of common stock rights and
 Warrants                                        -        -           -        -       830,069               -
Net loss                                         -        -           -        -             -      (9,147,482)
                                           -------  -------  ----------  -------  -------------  --------------
Balance, December 31, 1998                       -        -  10,134,089   10,134    43,127,974     (30,752,863)
Issuance of common stock, net of related
  expenses for:
   Purchase of minority interest in
    Subsidiary                                   -        -      67,054       67       352,736               -
   Merger transactions                           -        -       8,402        8        56,375               -
   Exercise of warrants and options              -        -   1,150,945    1,151     5,202,805               -
   Settlement of payables                        -        -      16,937       17        20,193               -
   Conversion of debentures                      -        -      37,252       37       199,965               -
   Exercise of conversion rights                 -        -     139,696      140       108,418               -
Issuance of common stock warrants                -        -           -        -     1,144,434               -
Issuance of Class D Senior Convertible
 Preferred Stock and warrants, net of
 issuance costs                             10,080       10           -        -    50,152,115     (22,174,074)
Issuance of Class E Senior Convertible
 Preferred Stock and warrants, net of
 issuance costs                              7,264        7           -        -    33,505,777               -
Compensation on variable options                 -        -           -        -       157,155               -
Dividends paid in kind with Class D
 Senior Convertible Preferred Stock            777        1           -        -     2,331,833      (2,331,834)
Net los                                          -        -           -        -             -     (38,290,855)
                                           -------  -------  ----------  -------  -------------  --------------
Balance, December 31, 1999                  18,121       18  11,554,375   11,554   136,359,780     (93,549,626)
Deconsolidation of Telecommute Solutions         -        -           -        -     5,483,474               -
Issuance resulting from reverse merger         913        1   8,046,155    8,046   146,572,109               -
Issuance of common stock, net of related
  expenses for:
   Conversion of debentures                      -        -     167,635      168       899,992               -
Exercise of Pointe warrants and
 Options                                         -        -     102,422      102       537,525               -
   Exercise of Telscape warrants and
    Options                                      -        -     948,857      949     3,147,211               -
Issuance of Class F Convertible Preferred
 Stock, including beneficial conversion
 Charge                                    315,750      316           -        -    50,572,787     (19,059,218)
Dividends on Preferred Stock paid in kind
 with respective Series Preferred Stock     24,111       24           -        -     9,110,897      (9,201,626)
Stock Warrant Accretion                          -        -           -        -     1,023,205               -
Stock based compensation                         -        -           -        -      (157,155)              -
Net loss                                         -        -           -        -             -     (68,236,413)
                                           -------  -------  ----------  -------  -------------  --------------
Balance, December 31, 2000                 358,895  $   359  20,819,444  $20,819  $353,549,825   $(190,046,883)
                                           =======  =======  ==========  =======  =============  ==============

               The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                         TELSCAPE INTERNATIONAL, INC.  AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                       Year  Ended  December  31,
                                                              ------------------------------------------
                                                                  2000           1999           1998
                                                              -------------  -------------  ------------
<S>                                                           <C>            <C>            <C>
OPERATING ACTIVITIES:
 Net loss                                                     $(68,236,413)   (38,290,855)  $(9,147,482)
 Adjustments to reconcile net loss to net cash
  used in operating activities from continuing
  operations (excluding effect of acquisition):
 Loss on disposal of discontinued operations                       814,957              -             -
 Loss from discontinued operations                               1,938,028      2,272,951     1,283,122
 Gain on sale of property plant and equipment                     (916,075)             -             -
 Capitalized interest                                            1,798,580              -             -
 Deferred Taxes                                                   (862,000)             -             -
 Depreciation and amortization                                  24,969,940      3,705,541     2,988,184
 Amortization of discounts on debt and lease obligations         1,052,452     13,825,619       250,244
 Interest on convertible debenture paid in-kind                          -        791,662             -
 Deferred settlement gain                                                -              -    (2,757,132)
 Non cash stock compensation                                       106,794              -             -
 Non cash restructuring charge                                     526,504              -             -
 Changes in operating assets and liabilities:
  Accounts receivable, net                                      (3,768,479)     1,827,854    (1,485,415)
  Notes receivable                                                 216,091     (3,088,611)     (215,337)
  Inventories                                                    1,136,547       (149,412)     (155,880)
  Prepaid expenses and other                                       308,990     (2,206,238)     (322,748)
  Accounts payable, accrued and other liabilities               22,386,260      2,680,279     3,812,648
  Unearned revenue                                              (4,377,538)    (1,414,661)    2,249,403
                                                              -------------  -------------  ------------
Cash used in operating activities of continuing operations     (22,905,362)   (20,045,871)   (3,500,393)
Cash used in operating activities of discontinued operations    (4,563,717)    (2,178,125)   (3,946,225)
                                                              -------------  -------------  ------------
Net cash used in operating activities                          (27,469,079)   (22,223,996)   (7,446,618)
                                                              -------------  -------------  ------------

INVESTING ACTIVITIES:
Purchases of property and equipment                            (36,862,654)    (6,644,342)   (3,505,889)
Cash received from sale of property and equipment                  582,000              -             -
Restricted cash                                                    334,913       (357,913)      (50,000)
Repayment of debt by deconsolidated subsidiary                   1,909,596              -             -
Reduction in cash due to deconsolidation of subsidiary, net       (350,295)
Net cash received (paid) for acquisition                           228,633       (137,140)     (350,633)
Other                                                           (1,554,914)             -             -
                                                              -------------  -------------  ------------
Net cash used in investing activities                          (35,712,721)    (7,139,395)   (3,906,522)
                                                              -------------  -------------  ------------

FINANCING ACTIVITIES:
 Proceeds from issuance of preferred stock, net                 35,985,484     27,978,051             -
 Proceeds from issuance of preferred stock in subsidiary                 -              -     1,981,959
 Payments on financing lease obligations, notes payable and
  lines of credit                                               (3,720,078)   (10,222,915)     (645,912)
 Proceeds from notes payable and lease obligations               9,149,524     10,633,000     5,091,294
 Proceeds from warrants and options exercised                    3,525,658        170,622        25,495
 Proceeds from issuance of convertible debentures                        -     20,849,118             -
 Payments on convertible debentures                                      -        (80,000)            -
 Proceeds from sale of common stock                                      -              -     6,000,000
                                                              -------------  -------------  ------------
Net cash provided by financing activities                       44,940,588     49,327,876    12,452,836
                                                              -------------  -------------  ------------
Net change in cash and cash equivalents                        (18,241,212)    19,964,485     1,099,696
Cash and cash equivalents:
 Beginning of period                                            21,219,684      1,255,199       155,503
                                                              -------------  -------------  ------------
 End of period                                                $  2,978,472   $ 21,219,684   $ 1,255,199
                                                              =============  =============  ============

   The accompanying notes are an integral part of these financial statements.
</TABLE>


                                      F-6
<PAGE>
                 TELSCAPE INTERNATIONAL, INC.  AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   ORGANIZATION  AND  NATURE  OF  BUSINESS

     Telscape  International,  Inc.,  a  Texas corporation and its subsidiaries,
("the  Company")  is an international facilities based integrated communications
provider  ("ICP")  serving  residential  and  commercial customers in the United
States  ("U.S."),  Central  and  South  America.  The  Company provides enhanced
telecommunications  products  and  services,  including  local,  long  distance,
Internet,  international  private  line, carrier services, prepaid calling card,
and  telecommuting  services,  with  a  focus  on  the  Hispanic  community both
domestically  and internationally.  The Company is implementing facilities based
infrastructure  on  a  staged  basis  in  certain  identified U.S.  markets with
significant  Hispanic  presence  with  the  ultimate  objective  of  being  a
full-service Competetive Local Exchange Carrier ("CLEC") with a low-cost base of
operations.

     The  Company was incorporated in Nevada on April 10, 1996 as a wholly owned
subsidiary of Maui Capital Corporation, a Colorado Corporation ("Maui Capital"),
which  incorporated  on August 8, 1988.  On April 21, 1996, Maui Capital and the
Company  merged  with the Company being the surviving corporation and succeeding
to  all  the business, properties, assets, and liabilities of Maui Capital.  The
purpose of the merger of Maui Capital and the Company was to change the name and
state  of incorporation of Maui Capital.  Maui Capital had no business or assets
prior to September 21, 1995 when it acquired TOPS Corporation ("TOPS"), a Nevada
corporation  (TOPS  was  named Charter Communications International, Inc.  until
April 10, 1996, when its name was changed so that the Company could be formed in
Nevada  with  the same name).  At the time of the acquisition, TOPS was the sole
stockholder  of  Charter  Communicaciones  Internacionales Grupo, S.A., a Panama
corporation  ("Charter  Panama"), which was engaged in developing a private line
telecommunications  system  in  Panama  and  pursuing  licenses  to provide such
services  in  various  other Latin American countries.  Since the acquisition of
TOPS,  the  Company  has  endeavored to grow both through the development of its
existing  businesses  and  through  the acquisition of complementary businesses.
Proceeds  from  private  placements  of  securities  with principals and outside
investors  have  funded  the  development  of  the  Company  to  date.

     On  June  1,  1998,  the  Company  acquired  Galatel  Inc.  ("Galatel"),  a
distributor  of  prepaid calling cards primarily to the Hispanic community, in a
cash  and  stock  transaction.  On  July  30,  1998, the Company acquired Pointe
Communications Corporation ("Pointe Communications"), a Delaware corporation, in
a cash and warrant transaction.  Pointe Communications did not have revenue from
operations  prior  to  its  acquisition.  On  August  31,  1998,  the  Company's
stockholders approved an amendment to the Company's Articles of Incorporation to
effect a change in the Company's name from Charter Communications International,
Inc.  to  Pointe  Communications  Corporation.  On  August 12, 1998, the Company
acquired  International  Digital Telecommunications Systems, Inc.  ("IDTS") in a
cash  and  stock transaction.   IDTS is a facilities-based long-distance carrier
of  voice,  data,  and  other  types of telecommunications in the Miami, Florida
market.  On October 1, 1998, the Company acquired Rent-A-Line Telephone Company,
LLC ("Rent-A-Line") in a stock rights transaction.  Rent-A-Line is a reseller of
prepaid  local  telephone service.  All of these transactions were accounted for
as  purchases  (See  Note  4).

     On  August  16, 1999, HTC Communications, LLC ("HTC"), a California limited
liability  company  licensed  as  a CLEC in California, merged with and into the
Company.  As  consideration for the merger, the Company issued 600,000 shares of
common  stock  to  the  members  of  HTC upon the satisfaction by the members of
opening  two competitive local exchange markets for the Company within 12 months
of  the  closing  date of the merger. At the same time, the Company entered into
36-month employment agreements with two of the members of HTC for the purpose of
development  and  oversight  of  the  Company's  CLEC  operations.

     On  June  2,  2000,  Telscape  International,  Inc. completed a merger with
Pointe Communications Corporation ("Pointe") in accordance with the December 31,
1999  Agreement  and  Plan  of  Merger  ("Merger Agreement").  The merger was an
all-stock  transaction  in which each share of Pointe was exchanged for 0.223514
shares  of  Telscape  common  stock.  The purchase method of accounting has been
used  to record the transaction under which Pointe is viewed as the acquirer for
accounting  purposes  because  its  former  shareholders  own  a majority of the


                                      F-7
<PAGE>
combined  company's shares.  Therefore, the value of the Telscape common shares,
options  and  warrants  outstanding  on  the  date  of  merger is treated as the
consideration  given  in  the merger.  The value applied to the shares was based
upon  the  market price on the date of the Merger Agreement.  Due to the reverse
merger  accounting  treatment,  Pointe's balance sheet and results of operations
have  been  used  as  the  basis  of  these  financial  statements.  Telscape's
operations  from  June  2,  2000  through December 31, 2000, are included in the
consolidated  statements  of  operations  and  cash  flows.

     Some  of  the  telecommunications  services  offered  by  Telscape  require
licensing  by  U.S. Federal and state agencies and the foreign countries wherein
services  are  offered.  Telscape  has  formed  wholly  owned  or majority-owned
foreign corporations.  Telscape maintains financial control of all subsidiaries.
The  Company  has  been  licensed  by the U.S. Federal Communications Commission
("FCC") as an international facilities-based carrier.  Telscape has selected the
Mexican  Solidaridad  system  as  its  primary  satellite carrier.  Several U.S.
carriers  are used to provide domestic long-distance services.  In the U.S., the
Company  or  its subsidiaries have been granted four FCC 214 licenses to provide
international long-distance service and operate satellite teleports in the U.S.,
as  well as Competitive Local Exchange Licenses in California, Florida, Georgia,
Texas,  New York, New Jersey and inter-exchange carrier licenses in many states.

     The  Company  may  face  significant  potential  competition  from  other
communication  technologies  that  are being or may be developed or perfected in
the  future.  Some  of  the  Company's  competitors  have  substantially greater
financial,  marketing,  and  technical  resources  than  does  the Company.  The
Company's  international  telecommunications  operations  face  competition from
existing  government-owned  or monopolistic telephone service companies and from
other  operators  who  receive  licenses  to  provide  services  similar  to the
Company's.  Accordingly, there can be no assurance that the Company will be able
to  obtain  any  additional  licenses  or  that  it  will  be  able  to  compete
effectively.

2.     SUMMARY  OF  ACCOUNTING  POLICIES

     PRINCIPLES  OF  CONSOLIDATION

     The  accompanying consolidated financial statements include the accounts of
the  Company  and  its  wholly  owned  and  majority-owned  subsidiaries.  All
significant  intercompany  balances  and  transactions  have  been  eliminated.

     USE  OF  ESTIMATES

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

     CASH  AND  CASH  EQUIVALENTS

     Cash  and  cash  equivalents  include  cash  on  hand, demand deposits, and
short-term  investments  with  original maturities of three months or less.  The
carrying  value  of the cash and cash equivalents approximates fair market value
at  December  31,  2000  and  1999.

     RESTRICTED  CASH

     The  Company's  restricted  cash represents deposits on hand with a bank as
security  for  letters  of  credit.


                                      F-8
<PAGE>
     CONCENTRATION  OF  RISK

     A  portion  of  the  Company's assets and operations are located in various
South  and  Central  American  countries.  The Company's business cannot operate
unless  the governments of these countries provide licenses, privileges or other
regulatory  clearances.  No  such  assurance can be given that such rights, once
granted,  could  not  be  revoked  without  due  cause.

     The Company's accounts receivable potentially subject the Company to credit
risk,  as  collateral  is generally not required.  The Company's risk of loss is
limited  due  to  advance  billings to customers for services and the ability to
terminate  access  on  delinquent accounts.  The concentration of credit risk is
mitigated  by  the  large number of customers comprising the customer base.  The
carrying  amount  of  the  Company's  receivables approximates their fair value.

     INVENTORIES

     Inventories  consist  primarily  of  prepaid calling cards (see Note 17 for
discussion  of  the  discontinuance  of  this  business).  All  inventories  are
recorded  as  finished goods and are available for sale.  Inventories are stated
at  the  lower of cost or market.  Cost is determined on the first-in, first-out
method.

     PROPERTY  AND  DEPRECIATION

   Property  and  equipment  are recorded at cost, including certain engineering
and  internal software development costs.  Software costs represent salaries and
related  taxes and benefits paid to employees during the application development
stage  for  software  used  internally.  The  property and equipment acquired in
conjunction  with  the  acquisitions were recorded on the Company's books at net
book  value,  which  approximated fair market value at the dates of acquisition.
The  Company  records  depreciation  using  the  straight-line  method  over the
estimated  remaining  useful  lives  of  the  assets,  which  are  as  follows:

<TABLE>
<CAPTION>
                         Estimated Useful Lives
     Classification             (Years)
-----------------------  ----------------------
<S>                      <C>
Equipment and machinery                    5-10
Earth station facility                       10
Software                                    5-7
Furniture and fixtures                      5-7
Other property                             3-20
Fiber optic network                          15
</TABLE>

     Leasehold improvements are amortized over the shorter of the useful life of
the improvement or the life of the lease.  Property and equipment recorded under
capital  and  financing  leases  are  included  with the Company's owned assets.

     INTANGIBLES

     In  conjunction  with  its  acquisitions  described  in Note 4, the Company
recorded intangible assets of approximately $222,677 million due to the purchase
prices  exceeding  the  values  of  the  tangible  net  assets  acquired.  After
identifying  the  tangible  assets  and  liabilities,  the Company allocated the
excess  to  identifiable  intangible  assets  and  the  remainder  to  goodwill.
Allocation  of  the  purchase  price  among  tangible  and  intangible assets is
performed  based  upon  information  available at the time of acquisition and is
subject  to  adjustment  for up to one year after acquisition in accordance with
Accounting  Principles  Board  ("APB")  Opinion  No.  16.  Amortization of these
costs  is  included  in  depreciation  and  amortization  in  the  accompanying
statements of operations.  The following table summarizes the intangible assets'
respective  amortization  periods:

<TABLE>
<CAPTION>
                        Amortization Period
         Category             (Years)
----------------------  -------------------
<S>                     <C>
Acquired Customer Base                    2
License and other                      5-30
First to Market                           5
Goodwill                                 20
</TABLE>


                                      F-9
<PAGE>
     IMPAIRMENT  OF  LONG-LIVED  ASSETS

     The  Company periodically reviews the values assigned to long-lived assets,
including  property  and  equipment  and  intangibles,  to determine whether any
impairments  have  occurred in accordance with Statement of Financial Accounting
Standards ("SFAS") No.  121, "Accounting for the Impairment of Long-Lived Assets
and  for  Long-Lived  Assets  to  be  Disposed  Of."  If  events  or  changes in
circumstances  indicate  that  the  carrying  amount  of  an  asset  may  not be
recoverable,  the future cash flows expected to result from the use of the asset
and  its  eventual  disposition are estimated.  Future cash flows are the future
cash  inflows expected to be generated by an asset less the future cash outflows
expected  to  be  necessary to obtain those inflows.  If the sum of the expected
future  cash  flows (undiscounted and without interest charges) is less than the
carrying  amount  of  the  asset, an impairment loss is recognized in accordance
with  SFAS  No.  121.

     An  impairment  loss is measured as the amount by which the carrying amount
of the asset exceeds the fair value of the asset.  The fair value of an asset is
the  amount  at which the asset could be bought or sold in a current transaction
between  willing  parties,  that is, other than in a forced or liquidation sale.
The fair value of an asset is determined using various techniques including, but
not  limited  to,  the present value of estimated expected future cash flows and
fundamental  analysis.  Management  believes  that  the long-lived assets in the
accompanying  balance  sheets  are  appropriately  valued.


     STOCK-BASED  COMPENSATION  PLANS

     The  Company  accounts  for  its  stock-based  compensation plans under APB
Opinion No.  25, "Accounting for Stock Issued to Employees." The Company adopted
the  disclosure  option  of  SFAS  No.  123,  "Accounting  for  Stock-Based
Compensation"  (Note 14), for all options granted subsequent to January 1, 1995.
SFAS  No.  123  defines  a fair value-based method of accounting for an employee
stock  option  or similar equity instrument and encourages all entities to adopt
that  method  of  accounting for all of their employee stock compensation plans.
SFAS  No.  123  requires  that  companies  which  do  not  choose to account for
stock-based  compensation as prescribed by this statement shall disclose the pro
forma  effects  on  earnings and earnings per share as if SFAS No.  123 had been
adopted.  Additionally,  certain  other disclosures are required with respect to
stock  compensation  and the assumptions used to determine the pro forma effects
of  SFAS  No.  123.

     REVENUE  RECOGNITION

     Revenues  from telecommunications services and products and Internet access
services  are  recognized when the services are provided.  Invoices rendered and
payments received for telecommunications services and Internet access in advance
of the period when revenues are earned are recorded as deferred revenues and are
recognized  ratably over the period the services are provided or the term of the
Internet subscription agreements, which are generally three to 12 months.  Sales
of prepaid phone calling cards are recorded as deferred revenues, and revenue is
recognized  as  minutes  are  used  or  when  the  cards  expire.

     Management  believes  the  Company's  revenue  recognition  policies  are
consistent  with  guidance  of  Staff  Accounting  Bulletin  No.  101,  "Revenue
Recognition  in  Financial  Statements".

     ADVERTISING  COSTS

     The  Company expenses all advertising costs as incurred.  Advertising costs
were  $4,243,000,  $409,000  and $152,000 for the years ended December 31, 2000,
1999  and  1998,  respectively.


                                      F-10
<PAGE>
     FOREIGN  CURRENCY  TRANSLATION

     Assets  and liabilities denominated in foreign currencies are translated at
exchange rates in effect at the balance sheet date, except that fixed assets are
translated  at  exchange rates in effect when the assets are acquired.  Revenues
and  expenses  of  foreign operations are translated at average monthly exchange
rates  prevailing  during  the  year,  except that depreciation and amortization
charges  are  translated at the exchange rates in effect when the related assets
are  acquired.

     The  national currency of Panama is the U.S. dollar. In accordance with the
requirements of FAS 52, the U.S. dollar is considered the functional currency of
our  subsidiaries in Mexico as substantially all transactions are performed with
U.S.  dollars. Accordingly, no foreign currency translation is required upon the
consolidation of the Company's Panamanian and Mexican operations. The effects of
foreign  currency  translation  on  the  Company's  El  Salvadoran,  Venezuelan,
Nicaraguan,  and  Costa  Rican  operations  were  not  material.

     NET  LOSS  PER  SHARE

     The  calculation  and  presentation of net loss per share are in accordance
with  SFAS No. 128, "Earnings Per Share".  Basic earnings per share are based on
the  weighted  average number of shares outstanding.  Diluted earnings per share
are  based on the weighted average of shares outstanding and the dilutive effect
of  common  stock  equivalents  (CSEs) issuable on the conversion of convertible
preferred  stock (using the if-converted method) and stock options and warrants
(using  the  treasury  stock  method).  For all periods presented CSEs have been
excluded  from  weighted  average  shares  outstanding,  as  their  impact  was
antidilutive.

     The  differences  between  net  loss  and  net  loss  available  to  common
stockholders  are  1)  the beneficial conversion charge incurred with respect to
the issuance of Class F and Class D (formerly Pointe Class A) Senior Convertible
Preferred  Stock  during  the second quarter of 2000 and 1999, respectively (see
Note  14), and 2) the payment of dividends issued on Class D, E (Formerly Pointe
Class  A  and  B),  F  and  G Preferred Stock during the periods presented.  The
Company  paid  the  dividends  in  additional  shares  of  Preferred  Stock.


     RECENT  ACCOUNTING  PRONOUNCEMENTS

     The  Financial  Accounting  Standards  Board  ("FASB") issued SFAS No. 133,
"Accounting  for  Derivative Instruments and Hedging Activities", in June, 1998,
SFAS  No.  137,  "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of SFAS No. 133", in June, 1999 and SFAS No. 138,
"Accounting  for certain Derivative Instruments and Certain Hedging Activities -
an Amendment of SFAS No. 133," in June 2000. SFAS No. 133 establishes accounting
and  reporting  standards  for  derivatives  and  hedges.  It  requires that all
derivatives  be  recognized  as  either  assets or liabilities at fair value and
establishes  specific  criteria  for  the use of hedge accounting.  SFAS No. 137
defers  the effective date of SFAS No. 133 by one year to fiscal years beginning
after June 15, 2000.  SFAS No. 138 amends the accounting and reporting standards
of  SFAS  No.  133  for  certain  derivative  instruments  and  certain  hedging
activities.  The  Company's  required  adoption  date  is January 1, 2001.  Upon
adoption  of  these  statements,  the  Company expects no material impact to its
results  of  operations  or  financial  position  as the company has no material
derivative  instruments.


     SOURCE  OF  SUPPLIES

     The  Company  relies  on  local  and  long-distance  telephone companies to
provide  certain  communications  services.  Although  management  feels  that
alternative telecommunications facilities could be found in a timely manner, any
disruption  of these services could have an adverse effect on operating results.

     There  are  a  limited  number  of  vendors which provide the equipment the
Company is using to expand its network.  If these vendors are unable to meet the
Company's  needs  related  to  the  timing and amount of equipment needed by the
Company, it would have an adverse impact on the Company's financial position and
results  of  operations.


                                      F-11
<PAGE>
     RECLASIFICATIONS

     Certain  prior  year  amounts  have  been  reclassified to conform with the
current  year  presentation.


3.   FINANCIAL  CONDITION

     The Company is subject to various risks in connection with the operation of
its  business including, among other things, (i) changes in external competitive
market factors, (ii) termination of certain operating agreements or inability to
enter  into  additional  operating  agreements,  (iii)  inability  to  satisfy
anticipated  working  capital  or  other  cash  requirements, (iv) changes in or
developments  under  laws,  regulations,  licensing  requirements,  or
telecommunications  standards,  (v)  changes in the availability of transmission
facilities,  (vi)  changes in the Company's business strategy or an inability to
execute  its  strategy due to unanticipated changes in the market, (vii) various
competitive  factors that may prevent the Company from competing successfully in
the  marketplace,  and (viii) the Company's lack of liquidity and its ability to
raise  additional  capital.  The  Company  has  an  accumulated  deficit  of
approximately  $190 million as of December 31, 2000 as well as a working capital
deficit of approximately $132 million and expects to continue to incur operating
losses  in  the  near  future.  Funding of the Company's working capital deficit
including debt maturities, current and future operating losses, and expansion of
the  Company  will  require  substantial  continuing  capital  investment.

     The  Company's  strategy  has  been to fund these cash requirements through
strategic  asset  sales, debt facilities and equity financing.  During the early
part  of  2001,  the  Company  has  :

     Sold  $3.5  million  of  Series  G  Redeemable  Preferred  Stock
     Sold  $3.3  million  of  Series  H  Preferred  Stock
     Sold  a  portion  of fiber from our Mexico network for $1 million and notes
for  $9  million  due  in  2001
     Actively marketed for sale its prepaid calling card business

     Additionally,  the  Company is currently negotiating for the potential sale
of  other  assets or divisions, and we are in discussions with GE Capital Corp.,
TSG  Capital and Lucent Technologies to convert additional available fixed asset
borrowings  into  working  capital  borrowings.  Further, the Company is working
with  this  as  well  as  other  vendors to obtain near term bridge financing of
between  $20-30  million.

     Although  the  Company  has  been able to arrange debt facilities or equity
financing  to  date,  there  can  be no assurance that sufficient debt or equity
financing  will  continue  to  be  available  in  the  future or that it will be
available  on  terms  acceptable  to  the Company.  Failure to obtain sufficient
capital  could  materially  affect  the  Company's  operations  and  expansion
strategies.  Due to the current unfavorable equity investment market conditions,
the  Company's board of directors has elected to also try to sell certain of the
Company's  assets or operating units.  As a result of the aforementioned factors
and  related  uncertainties,  there  is  substantial  doubt  about the Company's
ability  to  continue  as  a  going  concern.  Further,  while management cannot
estimate  what,  if  any,  price  for  which it may be able to sell the selected
Company  assets,  management  anticipates  that  it  will  exceed the historical
carrying  values of the assets in the accompanying balance sheets.  Accordingly,
no  adjustments  relating  to  the  recoverability  and  classification of asset
carrying  amounts  or  the  amount  and classification of liabilities that might
result  should  the  Company  be  unable  to  continue  as  a  going  concern.


                                      F-12
<PAGE>
4.     BUSINESS  COMBINATIONS  AND  ACQUISITIONS

     During  1998, the Company acquired 100% of the outstanding capital stock in
four  companies  for  cash,  stock,  and  warrants/stock  rights.  All  of these
transactions  were  accounted  for  as  purchases.  On June 1, 1998, the Company
acquired Galatel, a distributor of prepaid calling cards, for up to $200,000 and
300,000  shares  of  common  stock,  of  which  $162,500 and 175,000 shares were
earned.  The  shares  have  been valued at a weighted average price of $0.90 per
share,  the estimated fair value at the date of issuance.  On July 30, 1998, the
Company acquired Pointe Communications, a Delaware corporation, for $168,000 and
590,000 warrants to purchase common stock at $1.50 for five years.  The warrants
have been valued at $0.49 per warrant.  On August 12, 1998, the Company acquired
IDTS  for  $150,000  and 50,000 shares of stock of which 37,589 were released in
1999.  IDTS is a facilities based long distance carrier of voice, data and other
types  of  telecommunications in the Miami, Florida market.  On October 1, 1998,
the  Company  acquired Rent-A-Line Telephone Company, LLC in a stock transaction
for  rights  to purchase 625,000 shares at prices that range from $0.01 to $0.63
until  December  31,  2000.  The  rights  have been valued at a weighted average
price  of $0.44 per share.  Rent-A-Line is a reseller of prepaid local telephone
service.  All of these transactions were accounted for as purchases and were not
considered  to  be significant business combinations.  Accordingly, no pro forma
information  is  presented.

     During 1999, HTC, a California limited liability company licensed as a CLEC
in  California,  merged  with  and  into  the Company.  As consideration for the
merger,  the Company will issue 600,000 shares of common stock to the members of
HTC  upon  satisfaction by the members of opening two competitive local exchange
markets  for the Company within 12 months of the closing date of the merger.  At
the  same time, the Company entered into 36 month employment agreements with two
of  the  members  of  HTC  for  the  purpose of development and oversight of the
Company's  CLEC  operations.  In addition to base compensation and participation
in  the  recently  adopted Market Value Appreciation Stock Option Plan (Note 8),
the  agreements  entitle  the  employees  to receive options to purchase up to a
total  of  1.1 million shares of the Company's common stock at a strike price of
$1.75,  pursuant  to  the  Pay for Performance Plan.  Vesting of such options is
according to a schedule, which includes a specified number of shares for opening
each  of  eight CLEC markets for the Company.  The transaction was accounted for
as a purchase, and the shares issuable upon the opening of the CLEC markets will
be  valued  at  the  date  of  issuance.  The  merger was not considered to be a
significant  business  combination.  Accordingly,  no  pro  forma information is
presented.

     On  June  2,  2000,  Telscape  International,  Inc. completed a merger with
Pointe Communications Corporation ("Pointe") in accordance with the December 31,
1999,  Agreement  and  Plan  of  Merger ("Merger Agreement").  The merger was an
all-stock  transaction  in which each share of Pointe was exchanged for 0.223514
shares  of  Telscape  common  stock.  The purchase method of accounting has been
used  to record the transaction under which Pointe is viewed as the acquirer for
accounting  purposes  because  its  former  shareholders  own  a majority of the
combined  company's shares.  Therefore, the value of the Telscape common shares,
options  and  warrants  outstanding  on  the  date  of  merger is treated as the
consideration  given  in  the merger.  The value applied to the shares was based
upon  the  market  price  on  the  date of the Merger Agreement.  The Company is
deemed to have issued 8,187,358 common shares at a value of $12.51 per share and
7,301,239  common  stock  equivalents  valued under the Black-Scholes model at a
weighted  average  price  of  $7.44.  Due  to  the  reverse  merger  accounting
treatment,  Pointe's  balance  sheet and results of operations have been used as
the  basis  of  these  financial statements.  Telscape's operations from June 2,
2000  through  December  31,  2000  are  included in the consolidated results of
operations.

     In  conjunction  with the merger, the Company recorded intangible assets of
approximately $187 million due to the purchase price exceeding the values of the
tangible  net  assets  acquired.  After  identifying  the  tangible  assets  and
liabilities,  the Company allocated the excess to identifiable intangible assets
and  the remainder to goodwill.  Allocation of the purchase price among tangible
and intangible assets was performed based upon information available at the time
of acquisition and is subject to adjustment for up to one year after acquisition
in accordance with APB Opinion No.  16.  Amortization of these costs is included
in  depreciation  and amortization in the accompanying statements of operations.
The  allocation  of  purchase  price  is  as  follows:


                                      F-13
<PAGE>
<TABLE>
<CAPTION>
      INTANGIBLE               AMOUNT
------------------------  ----------------
<S>                       <C>
  Acquired Customer Base  $    17,202,000
  License and other            16,699,000
  Goodwill                    118,634,000
  First to Market              34,906,000
</TABLE>

     Amortization  expense  was  $13,217,757, $1,589,768, and $1,609,762 for the
years  ended  December  31,  2000,  1999,  and  1998  respectively.

     The  following  table presents the condensed unaudited consolidated balance
sheet  of  Telscape  on  the  merger  date:

<TABLE>
<CAPTION>
<S>                          <C>
Current Assets               $ 24,111,135
Property and Equipment, net    63,897,290
Intangibles, net               40,898,097
                             ------------
  Total Assets               $128,906,522
                             ============

Current Liabilities          $ 65,858,530
Long Term Liabilities          43,142,527
Stockholders' Equity           19,905,465
                             ------------
   Total liabilities and
   Stockholders' Equity      $128,906,522
                             ============
</TABLE>

     The  following  table presents the unaudited pro forma consolidated results
of operations of the Company as though the merger took place as of the beginning
of  each  of  the  periods  presented:

                    Amounts  in  Thousands
                   Except  Per  Share  Data
                   Year  Ended  December  31
                       2000       1999
                  ------------  -----------
Revenues             $ 86,944   $ 57,195

Net loss              (85,437)   (52,782)

Net loss per share,
 basic and diluted   $  (5.06)  $  (5.11)

     The  pro forma financial information does not purport to represent what the
consolidated  results  of operations would have been if the purchase acquisition
had  in fact occurred on these dates, nor does it purport to indicate our future
consolidated  financial  position  or future consolidated results of operations.
The  pro  forma  adjustments  are  based  on currently available information and
certain  assumptions  that  management  believes  to  be  reasonable.

5.     NOTES  RECEIVABLE

     The  following  table  summarizes  the components of notes receivable as of
December  31:


                                      F-14
<PAGE>
<TABLE>
<CAPTION>
                                       2000           1999
                                   -------------  ------------
<S>                                <C>            <C>
  Telscape International, Inc.     $           -  $ 1,518,500
  Affiliates and employees               105,494      628,836
  International business partners              -    1,140,178
  Other                                  449,165            -
  Allowance                                    -   (1,016,764)
                                   -------------  ------------
  Total                            $     554,659  $ 2,270,750
                                   =============  ============
</TABLE>

6.     PREPAID  EXPENSES  AND  OTHER  CURRENT  ASSETS

Prepaid  expenses  and  other  current  assets  consist  of  the following as of
December  31:

<TABLE>
<CAPTION>
                               2000       1999
<S>                         <C>         <C>
Foreign taxes receivable    $1,465,484  $      -
Foreign IVA tax receivable   2,663,499         -
Other                        1,310,338   629,787
                            ----------  --------
Total                       $5,439,321  $629,787
                            ==========  ========
</TABLE>

7.  PROPERTY  AND  EQUIPMENT

     Property  and  equipment  consist  of  the  following  as  of  December 31:

<TABLE>
<CAPTION>

                                                                   2000           1999
------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>
Equipment and machinery                                       $  77,971,899   $23,360,356
Fiber optic network                                              33,379,440             -
Earth station facility                                            1,471,822     1,471,822
Software                                                         15,739,884     2,016,576
Furniture and fixtures                                            7,390,109     1,257,666
Construction in Progress                                          9,180,261     1,586,359
Other                                                             4,838,994     1,452,303
                                                              -------------  -------------
                                                                149,972,409    31,145,082
Accumulated depreciation and amortization                       (14,692,787)   (6,827,740)
                                                              -------------  -------------
Property and equipment, net of depreciation and amortization  $ 135,279,622   $24,317,342
                                                              =============  =============
</TABLE>

Depreciation  expense was $11,752,183, $2,115,774, and $1,378,422, for the years
ended  December,  2000,  1999  and  1998  respectively.

8.     ACCRUED  EXPENSES

Accrued  expenses  consist  of  the  following  as  of  December  31:

<TABLE>
<CAPTION>
                                                2000         1999
----------------------------------------------------------------------
<S>                                          <C>          <C>
Excise Taxes Payable                         $ 7,920,365  $2,919,038
Series F Preferred Stock Commission Payable    1,012,278           -
Interconnection Rights Payable                 6,331,140     938,457
International Value Added Tax Payable          1,463,955           -
Payroll Tax Payable                              546,666           -
Foreign Taxes Payable                          1,190,825           -
Accrued Restructuring Expenses                   876,194
Customer Deposits                                289,755     229,052
Accrued Note Payable - Ascend                          -     581,898
Accrued Interest Payable                         658,781           -
Other                                          1,201,198   1,464,125
                                             -----------  ------------
Total                                        $21,491,157  $6,132,570
                                             ===========  ============
</TABLE>

9.     LONG-TERM  OBLIGATIONS

     Long  term  obligations  consist  of  the  following  as  of  December  31:


                                      F-15
<PAGE>
<TABLE>
<CAPTION>
                                                                 2000         1999
-------------------------------------------------------------------------------------
<S>                                                           <C>          <C>
  General Electric Capital Corp.                              $59,377,221  $         -
  NTFC Note Payable (2000)                                     13,929,377            -
  NTFC Note Payable (1999)                                      4,927,129            -
  Integracion selling shareholder notes                           976,700            -
  Note Payable - Dorsey                                           750,000      750,000
  Lease Obligations - Switch Equipment                            705,677            -
  Newbridge Financial Notes - Mexico Subsidiary                   961,256            -
  Senior Subordinated Notes                                       500,000      720,278
  Notes Payable - Lenox                                           450,000            -
  Capital Lease Obligations                                     9,257,756   11,777,590
  Financing Lease Obligation - Connecticut Bank of Commerce             -    1,832,446
  Note Payable - Crist                                            400,000            -
  Receivable Purchase Facility                                          -      600,000
  Other                                                            86,384    1,591,952
                                                              ------------------------
                                                               92,321,500   17,272,266
                                                              ------------------------
  Less Current Portion                                         85,020,262    6,038,032
                                                              ------------------------

  Long Term Obligations                                       $ 7,301,238  $11,234,234
                                                              ========================
</TABLE>

     On  September  29,  2000,  the  Company  signed  a credit agreement with GE
Capital  Corp.  (the  "GECC  Credit  Agreement").  The  GECC  Credit  Agreement
provides for up to $60 million in financing under long-term repayment terms.  In
September  2000,  the  Company  borrowed approximately $56 million.  The Company
used  $1.3  million  to  repay  a  note  payable to a bank, $3.5 million and $40
million  to  repay  in full accrued interest and principal, respectively, on the
1999  Lucent  Credit  Agreement,  $10.6 million to pay outstanding payables, and
$1.6 million for debt costs associated with the GECC borrowing.  The 1999 Lucent
Credit  Agreement  was a $40 million debt facility Telscape International signed
on  August  1999 before its merger with Pointe Communications Corp.  The Company
received  no net cash proceeds from this initial borrowing. In November 2000, we
borrowed  $1.5  million  under  the  GECC  Credit  Agreement  to pay outstanding
equipment  invoices.

     In  conjunction with the repayment of the 1999 Lucent Credit Agreement, the
Company  wrote off approximately $656,000 of deferred loan costs that related to
this  debt as  a  component  of  interest  expense.

     The  GECC  Credit  Agreement  requires  no  payments for the first year and
interest-only payments for the second year.  During the first year, interest can
be added to the facility up to the $60 million maximum.  We reached that maximum
in  March  2001,  and  we will be required to make interest payments thereafter.
Beginning  October  2002,  the  agreement  requires  nine  semiannual  principal
payments,  including  prior accrued interest of approximately $5.2 million, plus
current  interest.  The  agreement  bears  interest at a per annum rate of LIBOR
plus a margin of 5.8% initially which increases to 7.3 % by the fifth year (12.4
%  at December 31, 2000).  In conjunction with the extension, the Company issued
additional  warrants  to purchase 710,314 shares of common stock for a period of
six years at a strike price of $2.53.  The warrants were valued at approximately
$1.0  million  and were recorded as a discount on the notes to be amortized over
the  6.5-year  term  as  a  component  of  interest  expense.

     The  GECC Credit Agreement is secured by substantially all of the assets of
the  Company  including the network assets, accounts receivable, the capital and
equity  interests of the subsidiaries of the Company, and all other tangible and
intangible  assets  of  the  Company  excluding encumbered assets at the time of
signing.

     In  September  2000,  the  Company  signed  a financing agreement with NTFC
Capital Corporation ("NTFC"), a     financing arm of GECC, for new funding of up
to  $16 million.  The Company used part of the initial proceeds of $13.5 million
to  repay  $13.2  million  of accounts payable related to equipment for the U.S.
CLEC  /  DLEC  operations  and to pay $0.3 million of loan costs.  The agreement
bears  interest  at Libor plus a margin of 5.0% (11.7% at December 31, 2000) and
requires no payments the first year, then interest only payments until September
30,  2002, then 20 quarterly principal and interest payments until September 30,
2007.  Interest  accrued  during the no payment period is added to the principal
balance.


                                      F-16
<PAGE>
     Upon  the  merger with Telscape International, Inc., the Company acquired a
financing  arrangement  with  NTFC,  which  provided  for  funding  of equipment
purchases of up to $7.0 million.  The Company has borrowed $5.6 million pursuant
to this agreement.  This note bears interest at 10.8% per annum and was due four
interest  only  payments  through  January  1,  2000,  then  quarterly principal
payments  of  $350,000  plus  interest  until  January  2005.

     In  1998, Telscape International, Inc. issued non-interest-bearing notes to
the  selling  shareholders  when  it  acquired  Integracion.  These  notes  are
non-interest  bearing, however, the Company uses an imputed interest rate of 10%
per  annum.  These  notes  mature  January  1,  2001.

     During 1999, the Telscape International, Inc. renewed a $750,000 Promissory
Note  payable to James Dorsey, who at that time was a member of Telscape's Board
of  Directors  (see  Note  19),  which earns interest at 10% and matures June 1,
2001.  In  conjunction  with  the  promissory  note,  the Company issued 121,917
warrants  to  purchase common stock at $6.15, which are exercisable for a period
of  two  years  from  issuance.  The  fair  market  value  of these warrants was
estimated  to be $216,170, which has been recorded as additional paid-in capital
and a discount on the note to be amortized over the term of the note.  This note
is  unsecured.

     Upon  the merger with Telscape International, Inc, the Company acquired two
lease  obligations  for  switch  equipment related to the prepaid card business,
which  aggregate $705,677 as of December 31, 2000.  They bear interest at 10.8 %
and  14.6%  per annum and mature in July and September 2003, respectively.  They
require  monthly  payments  of  principal  and  interest  $18,000  and  $6,000,
respectively,  until  maturity.  We anticipate that the eventual  buyer of the
prepaid business will acquire these  obligations  when and if the proposed sale
closes  (see  Note  17).

     Upon  the  merger  with  Telscape  International, Inc, the Company acquired
three  notes payable to Newbridge which aggregate $961,256 at December 31, 2000.
The  notes bear interests are rates that fluctuate between 10.62% and 10.93% per
annum, require monthly payments that range between $14,700 and $36,435, and have
maturity  dates  between  March  31  and  May  31,  2002.

     During 1995 and 1996, the Company issued, in a private offering, $2,845,000
of  12%  senior subordinated notes due December 31, 2000, with attached warrants
which  grant  the purchasers of the notes the right to buy 501,565 shares of the
Company's common stock at $11.18 in 2000.  Interest was payable quarterly at the
rate  of 12% per annum in arrears.  The fair market value of the warrants issued
in  conjunction  with  the notes was estimated by the Company to be $345,000 and
was  recorded  as  additional  paid-in capital and a discount on the notes.  The
notes  are  stated  net  of  discount,  which was amortized over the term of the
notes.  Amortization  of this discount is included in the accompanying financial
statements  as interest expense.  The notes are not secured by any assets of the
Company.

     During  1998,  the  Company  entered  into  two  promissory  notes totaling
$2,000,000,  which  earned  interest  at  10%  and became due in April 1999.  In
conjunction  with  these  notes, the Company issued 169,871 warrants to purchase
common stock at $4.47 per share for three years.  The fair market value of these
warrants  was  estimated  to  be $129,200, which has been recorded as additional
paid-in  capital  and  a  discount  on  the notes amortized over the term of the
notes.  During  the  first  quarter of 1999, one of the notes for $1,000,000 was
refinanced  with  a  $5,000,000 promissory note which earned interest at 10% and
became  due in November 1999.  In conjunction with this note, the Company issued
warrants  to  purchase  1,117,570  shares  of  common  stock  at $4.47 per share
exercisable  for  eight  months.  The  fair  market  value of these warrants was
estimated  to be $391,950, which has been recorded as additional paid-in capital
and  a  discount on the notes amortized over the term of the notes.  Also during
the  first quarter of 1999, the Company entered into three additional promissory


                                      F-17
<PAGE>
notes  totaling  $5,000,000,  which earned interest at 10% and became due in May
and  September  1999.  In conjunction with the notes, the Company issued 376,994
warrants  to  purchase  common  stock  at  $4.47 per share exercisable for three
years.  The  fair  market  value of these warrants was estimated to be $417,951,
which  has  been  recorded  as  additional paid-in capital and a discount on the
notes  amortized  over  the  term  of  the  notes.  The  Company undertook these
short-term  obligations  in order to fund operations and network requirements in
advance  of  a  private  placement  of  $30,000,000 of the Company's convertible
preferred  stock  which was completed during the second quarter of 1999.  All of
the  above notes were repaid on their respective maturities during 1999, and the
1,117,570 warrants issued with one of the notes during the first quarter of 1999
were  exercised  during  the  fourth  quarter  of  1999.

     On October 22, 1999, the Company signed a loan agreement with Lennox Invest
Ltd.  ("Lennox"),  a  BVI Corporation, which provided for funding of up to $10.0
million.  A  total of $1.5 million has been funded on this facility, which bears
interest at 10% per annum.  Interest on each note is to be paid at maturation of
the  respective  note,  which occurs six months after the date of each note.  Of
the  $1.5  million  funded under the facility, $1.0 million matured on April 19,
2000, and $0.5 million matured on April 26, 2000.  Lennox and the Company agreed
to  extend  the  notes an additional six months from the original maturity dates
and  again  until  November  30,  2000.  In  conjunction with the extension, the
Company  issued  additional  warrants to purchase 178,288 shares of common stock
for  a  period  of  three  years  at a strike price of $7.00.  The warrants were
valued  at  $72,049  and  were  recorded  as a discount on the note amortized to
interest  expense  over  the six month extended maturity.  In December 2000, the
Company  paid  approximately $586,000 of principal and interest and issued 7,500
shares  of  Series G redeemable preferred stock to convert $750,000 of principal
(see Note 13).  In conjunction with these transactions, the Company issued a new
note  for  $450,000,  which bears interest at 10% per annum and matures on April
22,  2001.

     During 1999, the Company (and its subsidiaries) entered into capital leases
with one major vendor for a total of $6.0 million.  The leases generally include
six  months  of  accreted  interest  and  30  months  of  payments on a 48-month
amortization  schedule  with a balloon payment due in the 36th month.  The rates
range from 7% to 14% and include options to purchase the equipment at the end of
the  lease  period.  Also,  during  1998,  the Company entered into five capital
leases  for  a  total value of approximately $6.2 million. The leases range from
three  to  seven  years  and  are payable monthly in arrears.  The Company holds
options  to purchase the equipment at the end of the lease period for $1.00 with
respect  to  $3.0 million, 10% with respect to $1.0 million, 15% with respect to
$0.7  million,  and  fair  market  value  with  respect  to  $1.5  million.

     On  May  7,  1999,  the  Telscape  International, Inc. issued $6,850,000 in
senior  notes  originally  maturing on May 6, 2000.  E.  Scott Crist, CEO of the
Telscape  before  the  merger  with Pointe Communications Corp., originally held
$500,000  of  the  Senior  Notes.  The  Senior  Notes  are  subject  to optional
prepayment  provisions  allowing  the  Company to prepay a portion or all of the
outstanding principal amount without premium or penalty.  Under the terms of the
Senior  Notes,  Mr.  Crist  received  on November 6, 1999, 31,805 warrants at an
exercise  price of $6.69.  As the Senior Notes were not paid by May 5, 2000, Mr.
Crist  was issued additional 31,805 warrants, and the maturity date was extended
until  November  6,  2000.  The Company repaid $6,000,000 of the Senior Notes on
August  27,  1999, upon the funding of the Lucent Credit Agreement, and $350,000
more subsequent to this date.  The loan from Mr. Crist bears interest at 8% from
May  through  November  6,  1999  and  increases  by  1  percent  for each month
thereafter  (22%  at  December  31,  2000).  Pursuant to the terms of the Senior
Notes,  the  Company initially issued to the holders of the senior notes a total
of  256,315  warrants  at  an  exercise  price  of $6.68 per share.  The Company
estimated  the  fair value of the warrants by utilizing the Black-Scholes option
pricing  model  with  the  following assumptions: dividend yield of 0%, expected
volatility  of 54%, risk free interest rate of 5% and expected life of one year.
The resulting cost of the initial 256,315 warrants of approximately $398,000 was
amortized  over  three  months,  the expected term of the notes at the time they
were issued.  The resulting cost of the 31,805 warrants of approximately $49,000
will be amortized over one year.  We paid $100,000 on the Crist note in December
of 2000, and the balance at December 31, 2000 is $400,000.  We are in default on
this  note.


                                      F-18
<PAGE>
     During  1997, the Company entered into a $3,000,000 sale-leaseback facility
with  Connecticut Bank of Commerce with regard to certain of its assets included
in  property  and  equipment.   There were three leases drawn under the facility
for  a  total  of  $3,000,000.  The  term of each lease is five years commencing
December  1,  1997, February 1, 1998, and December 1, 1998, respectively.  Lease
payments  are  due  monthly in arrears.  The lease obligations are stated net of
discount,  which  was  amortized over the term of the lease.  As of December 31,
1999,  the  net balance of the leases was $1,832,446.  In 2000, the Company paid
off  the  remaining  balance  with  proceeds from the GECC Credit Agreement.  In
conjunction  with  the lease, 100,581 shares of common stock were granted to the
lessor  and  its  agent.  The  Company  issued  a guarantee with regard to these
shares  stating  that  it  would  reimburse  the  holder of these shares for the
difference  between  $10.42 and the average closing price of the Company's stock
for  the  20 trading days prior to June 30, 1998.  The average closing price for
this  period  was below $10.42 resulting in an approximate $400,000 liability of
the  Company, which was converted into an unsecured promissory note due June 30,
1999  earning  interest  at  14%  per annum.  In conjunction with the promissory
note, the holders received 26,822 warrants to purchase common stock at $3.49 for
three  years.  The  fair  market  value  of  these  warrants was estimated to be
$25,200, which has been recorded as additional paid in capital and a discount on
the  notes  to  be amortized over the term of the notes.  The note was repaid at
maturity.

     During  1999, the Company renewed a Receivable Purchase Facility Agreement,
which  enables  it  to  sell its receivables to the purchaser, up to the maximum
facility amount of $600,000.  Receivables are sold at 60% of book value with the
additional  40%  representing  collateral  until  the  receivables  are  paid,
repurchased,  or  substituted  with  other receivables, at which time the 40% is
returned  to  the Company.  Interest accrues on the purchase amount at a rate of
prime  plus  2%,  per  annum  until  the  receivables  are paid, repurchased, or
substituted.  As  of  December  31,  1999, the Company had received $600,000 for
receivables  sold  under  this  facility.  During the third quarter of 2000, the
Company  repaid  this  facility.

     During  1999,  the Company's former subsidiary, Telecommute, entered into a
$750,000 promissory note, which earns interest at 11.5% per annum and matures at
the  earlier  of  the completion of a $20 million private placement of preferred
stock  in  Telecommute or February 13, 2000.  In the second quarter of 2000, the
Company  deconsolidated  Telecommute  and  extinguished  this  note and minority
interest  (see  Note  12).

     During  1997,  the  Company  issued,  in  a  private  offering,  $1,180,000
principal amount of 18% convertible subordinated debentures due October 1, 2002.
The  debentures  are  convertible  at  any time into shares of common stock at a
price  of  $5.37  per share.  Interest is payable quarterly at a rate of 18% per
annum in arrears.  The debentures were noncallable for a period of one year from
issuance  and  are  not secured by any assets of the Company or guaranty.  As of
December  31,  2000,  all  of  the  debentures  have  been  converted.

     As  of  December  31,  2000, the Company was not in compliance with certain
covenants  contained  in  the  GECC  and NTFC credit facilities discussed above.
Additionally,  the  Company was obligated to obtain certain waivers and consents
from  third  parties  (including  landlords,  carriers, vendors, banks, etc.) by
November  30,  2000.  As  of December 31, 2000, not all of the required consents
had  been  obtained.  We  are  also  in  default  on payments of interest and/or
principal  on  the  GECC facility, the NTFC Note Payable (1999), the Integracion
note,  the  senior  subordinated  notes,  and the Crist note payable.  For these
reasons,  we  have  classified  the  aforementioned  notes  as  short  term.

     Scheduled  maturity  of  long-term  obligations,  including  capital  and
financing  leases,  as  of  December  31,  2000  are  as  follows:

<TABLE>
<CAPTION>
               Notes and Long    Capital Lease
                 Term Debt        Obligations       Total
<S>           <C>               <C>              <C>
2001          $    82,192,130   $    3,881,940   $86,074,070
2002                  235,502        3,828,611     4,064,113
2003                   20,000        2,065,530     2,085,530
2004                   30,000        1,720,943     1,750,943
2005                   52,305          285,806       338,111
  Thereafter           61,752                -        61,752
              -----------------------------------------------
  Total            82,591,689       11,782,830    94,374,519
  Interest                  -       (1,926,196)   (1,926,196)
  Discounts          (126,823)               -      (126,823)
              -----------------------------------------------
  Principal   $    82,464,866   $    9,856,634   $92,321,500
              ===============================================
</TABLE>


                                      F-19
<PAGE>
10.  OTHER  LONG  TERM  LIABILITIES

     Other long-term liabilities consist principally of $15.8 million payable to
TelMex  in  Mexico  for  interconnection  rights.  We  recorded  this  amount as
property,  plant, and  equipment.  This long term portion is payable as follows:

2002   $  6,527,380
2003      9,283,765
----   ------------
       $ 15,811,145
=====  ============

11.     OTHER  INCOME

     Other  income for the year ended December 31, 2000, consists principally of
a  $1.5  million  gain  on  sale of plant recorded by our subsidiary, Interlink.

     Since  mid-1996,  a  subsidiary  negotiated with Sprint Communications L.P.
("Sprint")  to  resolve  a  dispute-involving  Sprint's  past  services  to  the
subsidiary.  The  Company  had  accrued the entire amount, which Sprint claimed.
During 1997, the subsidiary reached an agreement in principle with Sprint to pay
$100,000 down and $50,000 per month for 18 months for a total of $1,000,000 with
release  of  all  claims against the subsidiary regarding the remaining balance.
As  of  December  31,  1997,  the  disputed  balance  was recorded as a deferred
settlement  gain  on  the  Company's  balance  sheet.  A  definitive  settlement
agreement  was  signed during the second quarter of 1998, at which time payments
commenced  and the Company recognized the deferred settlement gain of $2,757,132
in  other income and cost of services.  This is offset by approximately $232,000
for  legal  fees and settlement of a lawsuit with the Company's former president
over  certain  agreements,  including  an  executive  employment  agreement.

12.     TELECOMMUTE  SOLUTIONS

     The  Company's  former  subsidiary,  Telecommute  Solutions,  Inc.  ("TCS")
completed  a  private  placement of 2,000 shares of its $1.00 par value Series A
preferred  stock during 1998.  The preferred stock is convertible at any time on
or  prior  to  the  third  anniversary date of issuance into 1,321,500 shares of
Telecommute's  common stock or 149,009 shares of the Company's common stock.  At
the same time, the purchaser also received an option to purchase 2,000 shares of
Series  B  Preferred  Stock  at  any time prior to August 7, 1999.  The Series B
shares  are  convertible at any time until August 7, 2001 into 528,500 shares of
Telecommute  or 111,757 shares of the Company's common stock.  The purchaser did
not  exercise  its  option  to purchase the Series B shares of Telecommute.  The
preferred  stock  is  non-redeemable  and  nonvoting and does not pay dividends.
Total  proceeds  received  in  the  private  placement were $2,000,000, which is
recorded  net  of  issuance  costs  of  $18,041,  as  minority  interest  in the
accompanying  balance  sheets.

     During the quarter ended March 31, 2000, TCS, completed a private placement
of  its  Series  B  Convertible  Preferred  Stock  for  gross  proceeds totaling
approximately  $19  million.  The  preferred stock is convertible into shares of
TCS  common  stock  and votes with common stockholders on an as-converted basis.
Upon  issuance  of  the  Series  B Preferred Stock, the TCS Series A convertible
non-voting  preferred  stockholders converted their stock into TCS common stock.
As  a  result  of  these transactions the Company's ownership of TCS was reduced
from  100%  to  approximately  23%.  Therefore,  TCS is no longer a consolidated
subsidiary  and  the  Company  will  account  for its ownership using the equity
method.  As of the date of deconsolidation, TCS's cumulative losses exceeded the
Company's investment.  Therefore, the investment account was a credit balance of
approximately  $3.5  million,  which  has  been  reclassed to additional paid in
capital  along with the minority interest related to the Class A preferred stock
of  approximately $2.0 million, in accordance with Staff Accounting Bulletin No.
51.  TCS  is  in  a net loss position and after the entries above, the Company's
basis  in  the  TCS  investment  is $0; therefore, the Company has recognized no
income/loss  during  2000.


                                      F-20
<PAGE>
13.  REDEEMABLE  PREFERRED  STOCK

     In  December  2000,  the  Company  issued  90,000  shares  of  its Series G
Redeemable  Preferred  Stock.  The  Liquidation  value  per share is $100.  Each
holder  is  entitled to one vote per preferred share held, and the Series G vote
on  the  same  basis  as  the  common  shareholders.  Series  G  shares  are not
convertible  into  shares  of  common  stock.  $750,000 of this placement was to
convert  a  note payable (See Note 9).  Cash proceeds approximated $8.2 million.
The  Class  G  Preferred Stock earns dividends at a rate of 15% per annum, which
are  cumulative  and payable in either cash or shares of Class G Preferred Stock
at  the  Company's  discretion.  These  shares are mandatorily redeemable by the
Company  on  the  tenth  anniversary  of  the issue date, and there are optional
redemption  provisions  with  certain  adjustments to the liquidation price.  In
2000  the Company issued 922 additional shares of the Class G Preferred Stock to
the  holders  in  settlement  of  dividends  accrued.

14.     STOCKHOLDERS'  EQUITY

     During the first quarter of 2000 the Company issued 89,499 shares of common
stock  in  conjunction  with the exercise of employee stock options.  Certain of
the  options  were issued in cashless exercise transactions in which the Company
withheld  from the issuance the number of shares which market value was equal to
the  aggregate  exercise  price  of  the options exercised.  In conjunction with
these  cashless  exercises,  the  Company  recognized  $264,524  in compensation
expense.  Additionally,  the Company recognized compensation expense with regard
to variable options in the amount of $252,418, which represents the appreciation
in market price over the exercise price amortized over the vesting period of the
options.  Also  during  the  quarter, the Company issued 12,923 shares of common
stock  in  conjunction  with  the  exercise  of  warrants.

     Through a number of transactions TCS was deconsolidated (see Note 12).  The
Company's  basis  in  the  TCS  investment  is  $0,  therefore  the  company has
recognized  no  income  or  loss  during  2000.

     On  June  2,  2000,  Telscape  International,  Inc. completed a merger with
Pointe  Communications  Corporation  (See  Note  4  -  Business Combinations and
Acquisitions).  The  merger  was an all-stock transaction in which each share of
Pointe was exchanged for 0.223514 shares of Telscape common stock.  The purchase
method of accounting was used to record the transaction and Pointe was viewed as
the  acquirer  for  accounting  purposes  because  its former shareholders own a
majority  of the combined Company's shares.  Accordingly, Pointe's stockholders'
equity  is  shown  through  the transaction date.  The reduction of common stock
outstanding,  and  the  adjustment  to  goodwill  and additional paid in capital
represent  the  effect  of  the  merger  to  the  combined  company.

     During  the  second quarter of 2000, the Company also issued 167,635 shares
of  common  stock in conjunction with the conversion of $900,000 principal value
convertible debentures; issued 98,091 shares of common stock in conjunction with
the  exercise  of  employee  stock  options  for proceeds totaling $490,000; and
issued  850,766  shares  of  common  stock  in  conjunction with the exercise of
warrants  for  proceeds  totaling  $2,658,160.  The  Company  also  reversed
compensation  expense  totaling  $410,148  previously  recognized with regard to
variable  options.  This  reduction  in  expense  was  required as a result of a
reduction  in  the  market  price below the prior quarter's price which had been
used  to  measure  compensation  expense as a result of an appreciation over the
strike  price  on  certain  variable  options  as  required  by  APB  25.


                                      F-21
<PAGE>
     During  1999,  the  Company  issued  shares  of  common  stock  as follows:
5,000,000  shares  at  $1.00  per  share  in  conjunction  with  the exercise of
warrants;  625,000 shares in conjunction with the exercise of rights held by the
previous  owners  of  Rent-A-Line  Telephone  Company  LLC,  which  the  Company
purchased  during  1998;  300,000  shares  as  consideration for the purchase of
shares  in the Company's subsidiary in Venezuela owned by minority shareholders;
166,666 shares in conjunction with the conversion of 18% convertible debentures;
149,319  shares  in  conjunction  with  the  exercise  of  options;  37,589  in
conjunction  with the 1998 purchase of IDTS; and 75,776 in settlement of various
payables.

     During  1998,  the  Company  issued  shares of common stock through various
private  placement  offerings  as  follows: 2,011,626 shares at $2.24 per share,
189,987  shares  at  $4.47  per  share and 111,757 shares at $5.82 per share for
gross  proceeds totaling $6,000,000.  Additionally, during the year, the Company
issued  111,757  shares  as commission for one of the private placements, 46,100
shares in conjunction with a merger, 6,943 shares for warrant exercises at $3.13
per  share,  and  26,319  shares  for  option  exercises at $4.47 per share.  In
conjunction  with  certain  of  the  private  placements,  warrants  to purchase
additional  shares of common stock were granted to the purchasers.  The warrants
granted  the  holders the right to purchase 111,757 shares at $5.59 for a period
of  two  years,  33.527  shares at $6.71 for three years, and 134,108 shares for
$13.42  for  a  period  of  three  years.

     PREFERRED  STOCK

CLASS  D  (FORMERLY  CLASS  A)  CONVERTIBLE  SENIOR  PREFERRED  STOCK

     During 1999, the Company completed a $30 million private placement offering
of  10,080  shares  of  the Company's $0.01 par value Class A Convertible Senior
Preferred  Stock  (the  "Class  A  Preferred  Stock")  and  warrants to purchase
10,800,000  shares  of  common  stock (later reduced to 2,413,950 warrants after
giving  effect  to  the Pointe - Telscape merger in June, 2000).  At the date of
the  merger  these  shares were exchanged for Class D shares as described below.
The  Class  D  Preferred Stock has a liquidation preference of $3,000 per share.
Net proceeds from this offering totaled $28.1 million and are being used to fund
network  expansion,  repay  indebtedness,  and  fund  operations.  The  Class  D
Preferred Stock earns dividends at a rate of 12% per annum, which are cumulative
and payable in either cash or shares of Class D Preferred Stock at the Company's
discretion.  Each  share  of  Class  D  Preferred  Stock  is  convertible at the
holder's  option  into  479  shares  of  common stock (subject to adjustment for
certain  diluting  issues) at any time while the Class D Preferred Stock remains
outstanding.  The  Company  may  require  the  conversion  of all of the Class D
Preferred Stock as follows: (a) in conjunction with an offering of the Company's
common  stock  in  a  firm commitment underwritten public offering at a purchase
price  in  excess  of $17.90 per common share (subject to adjustment for certain
diluting  issues)  yielding  net proceeds in excess of $30.0 million, or (b) one
year  after  issuance  if the common stock shall have been listed for trading on
the  New  York  Stock  Exchange, American Stock Exchange, or the Nasdaq National
Market  System,  and  the  common  stock shall have traded on such exchange at a
price  of  at least $22.37 per share (subject to adjustment for certain diluting
issues)  for  20  consecutive trading days and the average daily value of shares
traded  during  that  20  day  period was at least $1.0 million.  On the twelfth
anniversary,  if  the  Class  D  Preferred  Stock  is  still outstanding and the
underlying  common stock has been listed on one of the aforementioned exchanges,
the Company is required to exchange the Class D Preferred Stock for common stock
at  a conversion price equal to the average trading price for the 20 consecutive
trading  days  immediately  prior  to  the  exchange  date.  In 200 and 1999 the
Company  issued  1,365 and 777, additional shares of the Class D Preferred Stock
to  the  holders  in  settlement  of  dividends  accrued,  respectively.

     The  warrants  give the holders the right to purchase 2,413,950 shares at a
price  of  $7.27  per  share  exercisable  for  a period of five years after the
issuance  date,  and  were  valued  at  $11.9  million, or $4.93 per share.  The
warrants  have been included in additional paid in capital at December 31, 1999.
The  Company may require exercise of the warrants if the underlying common stock
has  been  registered  with  the  SEC and is listed on one of the aforementioned
exchanges  and  has  traded  on  such exchange at a price of at least $22.37 per
share  (subject  to  adjustment  for certain diluting issues) for 20 consecutive
trading  days.  The  Company  was required to file a registration statement with
the  SEC  within 120 days after closing the private offering ofClass D Preferred
Stock  and  warrants  to  register the shares of common stock issued or issuable
upon  conversion  of  theClass  D  Preferred  Stock  (including shares issued as
dividends)  and  the  exercise  of the warrants.  It has been more than 120 days
since the closing, and the Company has not yet filed the registration statement.
The  holders of the Preferred Stock have each signed a waiver to extend the date
by  which  the Company must file the required registration statement until April
23,  2001.  This date is applicable only if we are eligible to use Form S-3.


                                      F-22
<PAGE>
     In  conjunction  with  the  issuance  of  the  Preferred Stock, the Company
evaluated  whether  a  beneficial  conversion  feature  existed  on  the date of
issuance,  as  defined  in  the  Emerging  Issues Task Force ("EITF") 98-5.  The
proceeds  received  in conjunction with the issuance were first allocated to the
$11.9 million fair value of the warrants, as calculated using the Black-scholles
model.  The  remaining  proceeds of $18.3 were allocated to the Preferred Stock.
This  amount was then compared to the fair market value of the shares underlying
the  Preferred  Stock  of $40.5 million, determined by multiplying the number of
shares  by  the market price on the date of issuance of $1.875.   The difference
of  $22.2  million has been recognized as a beneficial conversion feature on the
Preferred  Stock  and  recorded  as  a non-operating non-cash charge directly to
accumulated  deficit  and  an  increase  in  additional  paid  in  capital.

CLASS  E  (FORMERLY  CLASS  B)  CONVERTIBLE  SENIOR  PREFERRED  STOCK

     Also  during  1999,  the  Company completed a $21 million private placement
offering  of  convertible  promissory  notes  (the  "Notes").  The  Notes accrue
interest at 12% per annum compounded quarterly and payable in preferred stock at
maturity.  During  the  quarter  ended  December 31, 1999, the Notes and accrued
interest  automatically  converted  into 7,264 shares of the Company's $0.01 par
value Class B Convertible Senior Preferred Stock (the "Class B Preferred Stock")
and  warrants  to  purchase 9,000,000 shares of common stock (2,011,626 warrants
after  the  Telscape  -  Pointe merger).  At the date of the merger these shares
were exchanged for Class E shares as described below.  Each share of the Class E
Preferred  Stock  is convertible into 383 shares of common stock of the Company.
Net proceeds from this offering totaled $20.8 million and are being used to fund
network  expansion,  repay  indebtedness  and  fund  operations.  The  Class  E
Preferred Stock earns dividends at a rate of 12% per annum, which are cumulative
and payable in either cash or shares of Class E Preferred Stock at the Company's
discretion.  The  Class E Preferred Stock has a liquidation preference of $3,000
per  share.  The  dividend and liquidation rights of the Class E Preferred Stock
are parri passu with the Class D Preferred Stock.  Additionally, the Company may
require  conversion under the same conditions as the Class D Preferred Stock and
if  the  Class E Preferred Stock is still outstanding on the twelfth anniversary
from  issuance,  the  Company  is  required  to exchange the Preferred Stock for
common stock at a conversion price equal to the average trading price for the 20
consecutive  trading  days  immediately  prior to the exchange date. In 2000 the
Company  issued  913  additional  shares  of  the Class E Preferred Stock to the
holders in conjunction with the merger.   In 2000, The Company issued 547 shares
of  Series  E  Preferred  Stock  to the Series E holders as payments for accrued
dividends.

     The  warrants  give the holders the right to purchase 2,011,626 shares at a
price  of  $8.46  per  share  exercisable  for  a period of five years after the
issuance  date.  The  Company  may  require  exercise  of  the  warrants  if the
underlying common stock has been registered with the SEC and is listed on one of
the  aforementioned  exchanges  and has traded on such exchange at a price of at
least  $22.37  per share (subject to adjustment for certain diluting issues) for
20  consecutive  trading  days.  The  Company is required to file a registration
statement  with  the  SEC  within  120 days of issuance of the Class E Preferred
Stock to register the shares of  common stock issued or issuable upon conversion
of  the  Class E Preferred Stock  (including shares issued as dividends) and the
exercise  of  the warrants.  The required date has been extended until April 23,
2001.  This date is applicable only if we are eligible to use Form S-3.

     In  conjunction  with  the  issuance  of  the  Notes, the Company evaluated
whether  a  beneficial  conversion  feature  existed on the date of issuance, as
defined in EITF 98-5.  As explained above, the Notes were convertible into Class
B  Preferred  Stock  and warrants, with an initial conversion price and exercise
price  of  $2.16  and $2.33, respectively.  In order to calculate the beneficial
conversion feature the Company compared the total proceeds received with respect
to the preferred stock and warrants underlying the Notes, including the proceeds
to  be  received  upon  exercise  of  the warrants.  The aggregate proceeds were
determined  to  be  $38.0  million.  This  amount  was then compared to the fair
market  value  of  shares  underlying  the preferred stock and warrants of $40.4
million,  determined  by multiplying the number of shares by the market price on
the  date  of  issuance.  This  resulted in a $2.4 million beneficial conversion
included  as  a discount to the Notes, as of the date of issuance amortized into
interest  expense  the  period  from  issuance to December 31, 1999.  During the
quarter  ended  December 31, 1999, the conversion price of the Class B Preferred
Stock  and  the  exercise  price  of the warrants both underlying the Notes were
adjusted  to  $1.75  and  $1.89,  respectively, as a result of the fact that the
Pensat  Transaction  did  not close.  During the quarter ended December 31, 1999
when  the  contingency resolved itself and the exchange and exercise prices were
adjusted  the  company performed a similar calculation using the new terms.  The
aggregate  proceeds were measured against the fair market value of the increased
number  of  shares  underlying  the  Notes  multiplied  by  the  market price at
issuance.  The  market  value  was determined to be $49.9 million resulting in a
discount  of $11.9 million.  Since the Notes converted on December 31, 1999, the
entire  discount  has  been  recognized  during  1999.


                                      F-23
<PAGE>
     On  December  31, 1999, the convertible Promissory Notes were automatically
exchanged for Class B Preferred Stock and warrants.  The conversion price of the
preferred  stock  was  adjusted to $1.75 and the number of shares underlying the
warrants  and  exercise  price  of the warrants were adjusted to 9.0 million and
$1.89,  respectively.  The  Company calculated the beneficial conversion feature
with  respect  to  the  exchange as the increase in the fair market value of the
additional  securities received by the investors.  The increase in the number of
shares  of  common  stock  underlying the preferred stock was 2.3 million shares
from  9.7  million  shares  to  12  million  shares.  The  increase  in  value
attributable  to  the  increased  number  of  shares  is  5.4  million, which is
measured,  at  the  market price on issuance date.  The increase in the value of
the  warrants  received  was $2.8 million measured as the difference between the
fair  market  value  of the original number of warrants and the adjusted number.
The  total  beneficial  conversion  feature  recognized  in conjunction with the
issuance of the Class B Preferred Stock during the fourth quarter of 1999 is the
sum  of  the  two  components or $8.2 million recognized as a charge directly to
accumulated  deficit (and a charge to net loss available to common stockholders)
and  a  credit  to  additional  paid  in  capital.

     In  conjunction  with  the  merger  with  Pointe, Telscape issued 11,404.84
shares  of  Class  D  Preferred  Stock  with a face value of approximately $34.2
million  and  7,630.23  shares  of  Class E Preferred Stock with a face value of
approximately  $22.9  million  ("Class D Preferred Stock" and "Class E Preferred
Stock"),  to the former holders of Pointe Communications Corporation Class A and
B  Senior  Convertible  Preferred Stock, respectively.  The terms of the Class D
and  E  Preferred  Stock  are the same as the former Pointe Communications Corp.
Class A and B Senior Convertible Preferred Stock in all material respects except
that  the  conversion price has been adjusted for the exchange ratio of 0.223514
shares  of  underlying Pointe common stock for each share of underlying Telscape
common  stock.

CLASS  F  CONVERTIBLE  SENIOR  PREFERRED  STOCK

     In conjunction with the merger with Pointe, Telscape raised $29,575,000 and
exchanged  an  additional  $2,000,000  of  debt  (the  senior notes described in
footnote  9)  for  equity  in a private offering of its newly designated Class F
Convertible  Senior  Preferred  Stock  ("Class F Preferred Stock").  The Class F
Preferred Stock has a stated value (and also a liquidation value) of $100.00 per
share and was exempt from the registration requirements of the Securities Act of
1933,  as amended (the "Securities Act").  In connection with this offering, the
Company authorized the issuance of 315,750 shares of the Class F Preferred Stock
which  are  potentially  convertible  into  an  aggregate of 3,850,610 shares of
Telscape's  common  stock.  Additionally,  in  connection  with  the  private
placement, the Company authorized the issuance of warrants to purchase 1,925,305
shares  of Telscape's common stock.  The Class F Preferred Stock earns dividends
at  a  rate of 12% per annum, which are cumulative and payable in either cash or
shares  of  Class  F Preferred Stock at the Company's discretion.  Each share of
Class  F  Preferred Stock is convertible at the option of the holder into common
stock  at  a  conversion  price  of  $8.20  per share (subject to adjustment for
certain  diluting  issues) at any time while the Class F Preferred Stock remains
outstanding.  The Company has reserved the right to cause the holders of Class F
Preferred  Stock  to  convert  their  shares  if  Telscape  enters into a public
offering  of Telscape's common stock or if after one year from issuing the Class
F  Preferred Stock, (1) Telscape's common stock is trading on the New York Stock
Exchange,  the  Nasdaq  National  Market or the American Stock Exchange, (2) the
common  stock shall have traded for a period of 20 consecutive trading days at a
price  of  $15.00 (or the adjusted figure after any stock split, stock dividend,
reverse  stock  split or similar recapitalization event), and (3) the cumulative
average  daily  trading  volume in that period is at least $3,000,000.  Telscape
shall  be  required to exchange all of the Class F Preferred Stock for shares of
Common  Stock  on  the  seventh  anniversary  of  the  issue date of the Class F
Preferred Stock; provided that the shares of common stock to be issued have been
registered and listed on each securities exchange, over-the-counter market or on
the  Nasdaq  National  Market on which similar securities issued by Telscape are
then listed.  In 2000 the Company issued 22,746 additional shares of the Class F
Preferred  Stock  to  the  holders  in  settlement  of  dividends  accrued.


                                      F-24
<PAGE>
     The warrants issued give the holders the right to purchase 1,925,306 shares
of  Telscape's  common stock. The warrants terminate on the fifth anniversary of
the  date  of  issuance. The exercise price of the warrants is $10.00 per share,
subject  to adjustment in the same manner as the Class F Preferred Stock for any
event  that changes the number of outstanding shares of Telscape's common stock.
A  cashless  exercise option is also available to warrant-holders. If the market
price of the common stock is equal to at least $15.00 per share (as adjusted for
stock  splits,  recapitalizations,  mergers,  consolidations  and  other similar
events)  for  20  consecutive  trading days, Telscape has the right to cause the
warrant  holders  to  exercise  the warrants. The Company is obligated to file a
registration  statement  to register the shares underlying the Class F Preferred
Stock  within  150  days  of the closing date. This date has been extended until
April  23,  2001,  and the revised date is applicable only if we are eligible to
use  Form  S-3.

     In  conjunction  with  the  issuance  of  the  Class F Preferred Stock, the
Company evaluated whether a beneficial conversion feature existed on the date of
issuance,  as  defined  in  the  Emerging  Issues Task Force ("EITF") 98-5.  The
proceeds  received  in conjunction with the issuance were first allocated to the
$11.1  million fair value of the warrants, as calculated using the Black-Scholes
model.  The  remaining  proceeds  of $20.5 million were allocated to the Class F
Preferred  Stock.  This amount was then compared to the fair market value of the
shares  underlying  the  Class F Preferred Stock of $39.5 million, determined by
multiplying  the number of shares by the market price on the date of issuance of
$10.25.  The  difference  of  $19.0  million has been recognized as a beneficial
conversion  feature  on  the  Preferred  Stock  and  recorded as a non-operating
non-cash  charge  directly  to accumulated deficit and an increase in additional
paid  in  capital.

     COMMON  STOCK  WARRANTS

     In  September  2000,  for  consideration  of  Lucent  Technologies,  Inc.
("Lucent") facilitating the GECC agreement, the Company issued to Lucent 710,314
warrants  to  purchase shares of the Company's common stock at an exercise price
of  $2.53  per  share.  These  warrants  have  a  fair value of approximately $1
million,  and  will be amortized over six years to interest expense, the term of
the  GECC  Credit Agreement. Also in September, for consideration with extension
of  the  Lennox  loan, the Company issued 178,288 warrants to purchase shares of
common  stock at an exercise price of $7.00 per share.  The Company valued these
warrants  at  $72,049  and will expense this amount as interest expense over the
six  month  extended  maturity.

     At  December  31,  2000, the Company had outstanding warrants that gave the
holders  the  right  to  purchase  a  total of 15,132,902 shares of common stock
(including  the  warrants  issued  in  conjunction  with  the  Class D, E, and F
Preferred  Stock,  and  Redeemable  Preferred  Stock  discussed above) at prices
ranging  from  $0.01  to  $20.60  per  share  as  summarized in the table below:

<TABLE>
<CAPTION>
               Range of      Remaining Weighted
 Number of     Exercise        Average Life
  Shares        Prices           (Years)
---------  ---------------  -------------------
<S>        <C>              <C>
4,000,000  $          0.01                 4.9
2,873,861      2.19 - 4.47                 3.0
5,885,284      6.15 - 8.95                 3.2
2,326,525    10.00 - 13.42                 4.0
47,231       15.67 - 20.60                 1.7
</TABLE>


                                      F-25
<PAGE>
STOCK  OPTION  PLANS

     1995  OPTIONS

     During  1995,  the  Company  granted  279,393  stock options to certain key
employees  and  directors.  The  director shares were subsequently changed to be
issued  under  the  Non-employee  Director  Stock  Option  Plan ("NEDSOP").  The
exercise  price  of  the stock options granted to the employees and directors is
$3.13  per  share, the estimated fair market value of the Company's common stock
at the date of grant.  Options generally vest ratably over four years and expire
five  years  after  becoming  fully  vested.  As  of  December  31, 2000, 89,406
non-NEDSOP  options  issued  in  1995  were still outstanding, of which 911 were
exercisable.

     STOCK  OPTION  PLANS

     The  Company  had  established  three stock option plans prior to 1999: the
Long-Term Stock Option Plan ("LTSOP"), the Incentive Stock Option Plan ("ISOP"),
and  the  NEDSOP  (collectively,  the  "Plans");  670,542, 1,117,570 and 447,028
shares  of  common  stock  were  authorized  for  issuance  under  each  plan,
respectively,  by the shareholders at a special meeting held on August 31, 1998.
Options  are  exercisable  at  the  fair  market  value  of the common stock (as
determined  by  the board of directors) on the date of grant.  Options generally
vest  ratably  over  four  years and expire seven years after the date of grant.
The  plans  contain  various provisions pertaining to accelerated vesting in the
event  of  significant  corporate  changes.

     During  1999,  the  Company  established  two  new  stock option plans: the
Executive  Market  Value Appreciation Plan (the "Market Value Plan") and the Pay
for  Performance Stock Option Plan (the "Pay for Performance Plan").  The Market
Value  Plan and the Pay for Performance Plan authorize the issuance of 1,117,570
and  447,028 shares of common stock, respectively.  Options under both plans are
exercisable  at  the fair market value of the common stock (as determined by the
Board  of  Directors)  on  the  date of grant.  Options granted under the Market
Value  Plan become vested on December 31 of each year outstanding at the rate of
5%  of  the  options  granted  for each $1.00 of increase in the Company's stock
price,  and they become contingently vested in an equal number of shares but may
not  exercise  until fully vested.  The contingently vested options become fully
vested  on  the  following  December 31 assuming the stock price is at least the
same  as  that on the previous December 31 when they became contingently vested.
Any  optioned shares that have not vested after the seventh full year shall vest
pro rata on December 31 of years eight, nine, and ten.  Options granted pursuant
to  the  Pay  for  Performance Planbecome eligible for accelerated vesting based
upon  achievement  of Company, division, and individual objectives as determined
on  December 31 of the year of grant.   Options eligible for accelerated vesting
vest  ratably  on  three consecutive December 31 beginning in the year of grant.
Optionees  are  eligible  to  vest  in  up  to  120%  of  the  amount  granted.

     The  following  table summarizes the activity for each plan for each of the
three  years  in  the  period  ended  December  31,  2000.

<TABLE>
<CAPTION>
                                 LTSOP        ISOP        NEDSOP         PFP        MVAP
                              -----------  ----------  ------------  -----------  ---------
<S>                           <C>          <C>         <C>           <C>          <C>
Balance at December 31, 1997     135,002     312,129       134,108            -          -
Granted                                -     168,753             -            -          -
Forfeited                              -    (134,835)            -            -          -
Exercised                        (25,481)       (838)            -            -          -
                              -----------  ----------  ------------  -----------  ---------
Balance at December 31, 1998     109,521     345,209       134,108            -          -
Granted                                -      40,456             -      492,066    905,232
Forfeited                              -     (45,684)      (22,351)           -          -
Exercised                         (1,565)    (37,960)            -            -          -
                              -----------  ----------  ------------  -----------  ---------
Balance at December 31, 1999     107,956     302,021       111,757      492,066    905,232

Granted                                -   1,951,029             -      874,004          -
Forfeited                              -           -             -      (95,500)  (748,772)
Exercised                        (24,318)   (123,323)            -            -          -
                              -----------  ----------  ------------  -----------  ---------
Balance at December 31, 2000      83,638   2,129,727       111,757    1,270,570    156,460
                              ===========  ==========  ============  ===========  =========
Exercisable at
 December 31, 2000                83,638   1,527,057       111,757            -      7,823
                              ===========  ==========  ============  ===========  =========
</TABLE>


                                      F-26
<PAGE>
     The  exercise  price of the stock options granted to the employees is equal
to  the estimated fair market value of the Company's common stock at the date of
grant.  During the first quarter of 1998, the Company reestablished the exercise
price of all existing employees options granted under the ISOP and LTSOP, with a
strike  price  greater than $4.47, at $4.47 per share, which was the fair market
value  on  the  date  of  repricing.

     STATEMENT  OF  FINANCIAL  ACCOUNTING  STANDARDS  NO.  123

     The  Company accounts for its stock-based compensation related to all plans
under  APB  25; accordingly, no compensation expense has been recognized, as all
options  have been granted with an exercise price equal to the fair value of the
Company's stock on the date of grant.  For SFAS No.  123 pro forma purposes, the
fair value of each option grant has been estimated as of the date of grant using
the  Black-Scholes  option  pricing  model  with  the  following  assumptions:

<TABLE>
<CAPTION>
                          2000   1999   1998
                          -----  -----  -----
<S>                       <C>    <C>    <C>
Risk-free interest rate    5.7%   5.0%   5.0%
Expected dividend yield      0      0      0
Expected lives (years)       5      5      7
Expected volatility         64%    60%    80%
</TABLE>

     Using these assumptions, the fair value of the stock options granted during
2000, 1999 and 1998 is $1,821,689, $6,829,428, and $685,023, respectively, which
would  be  amortized  as  compensation  expense  over  the vesting period of the
options.  Had  compensation cost been determined pursuant to with the provisions
of  SFAS  No.  123,  the Company's net loss and pro forma net loss per share for
2000,  1999  and  1998  would  have  been  as  follows:

<TABLE>
<CAPTION>
                   In thousands, except per share data
                       2000       1999       1998
                     ---------  ---------  --------
<S>                  <C>        <C>        <C>
Net loss:
  As reported        $(96,497)  $(62,797)  $(9,147)
  Pro forma           (96,952)   (64,425)   (9,692)
Net loss per share
 basic and diluted:
  As reported        $  (5.71)  $  (1.36)  $ (0.22)
  Pro forma             (5.74)     (1.40)    (0.23)
</TABLE>

     The resulting pro forma compensation cost may not be representative of that
expected  in  future  years.

     A summary of the status of the Company's stock option plans at December 31,
2000,  1999 and 1998, and changes during the years ended December 31, 2000, 1999
and  1998  are  presented  in  the  following  table:

<TABLE>
<CAPTION>
                                                 Weighted
                                  Number of       Average
                                    Shares    Exercise Price
                                  ----------  ---------------
<S>                               <C>         <C>
Outstanding at December 31, 1997    655,000   $          5.46
Granted                             168,753              5.64
Forfeited                          (134,835)             4.74
Exercised                           (26,319)             4.74
                                  ----------
Outstanding at December 31, 1998    662,599              5.68
Granted                           1,482,379              7.72
Forfeited                           (68,035)             4.30
Exercised                           (39,524)             5.24
                                  ----------
Outstanding at December 31, 1999  2,037,419              7.25
Granted                           2,825,032              5.34
Forfeited                          (962,656)             4.45
Exercised                          (147,643)             5.06
                                  ----------
Outstanding at December 31, 2000  3,752,152              6.62
                                  ==========
</TABLE>


                                      F-27
<PAGE>
     The  following  table  summarizes,  as  of December 31, 2000, the number of
options  outstanding, the exercise price range, weighted average exercise price,
and  remaining  contractual  lives  by  plan  type:

<TABLE>
<CAPTION>
                                 Remaining
 Plan   Number of   Exercise      Weighted   Contractual Life
 Type    Shares    Price Range  Average Price    (years)
------  ---------  -----------  ------------  -------------
<S>     <C>        <C>          <C>           <C>
LTSOP      83,638  4.47 - 8.95  $       6.71            3.2
ISOP    2,129,727   4.47-12.00          7.50            7.0
NEDSOP    111,757  3.13 - 4.47          3.50            3.2
PFP     1,270,570  3.75 - 5.00          4.00            3.5
MVAP      156,460         7.83          7.83            1.5
</TABLE>

     Total  stock  options exercisable at December 31, 2000, were 1,730,275 at a
weighted  average  exercise  price  of  $6.00.

15.  RESTRUCTURING  CHARGE

   In  the third quarter of 2000, the Company recorded a charge of approximately
$2.6  million to restructure its call center and prepaid calling card operations
in  Mexico  and  Houston,  Texas  as  well  as  administrative functions at both
locations.  The  restructuring included facilities closures and certain employee
terminations.  Severance  benefits  have  been  provided  for  216  employees
terminated  at  the  following  locations  and  functions:

<TABLE>
<CAPTION>
                               Number
Location / Function         of Employees
-----------------------   -----------------
<S>                       <C>
MEXICO
Prepaid Calling Card                     26
Enterprise                               34
Call Center                              37
Administrative and other                 64


U.S.
Network Operations                       12
Administrative                           12
Prepaid Calling Card                     21
Call Center                              10
                                      -----
  Total                                 216
                                      =====
</TABLE>


                                      F-28
<PAGE>
   All  216  employees  were  terminated  as of September 30, 2000.  The Company
recorded  lease  terminating costs of approximately $204,000 principally related
to  redundant  administrative  and  call  center  facilities  in  Texas.  Lease
terminating  costs  of  approximately  $198,000  were  expensed  related  to
administrative  operations  in  Mexico.

   Charges  for  restructuring for the year ended December 31, 2000, and accrued
restructuring  at  December  31,  2000,  are  as  follows  (in  thousands):

<TABLE>
<CAPTION>
                                         Expensed
                                        Year Ended          Accrued Costs
                                    December 31, 2000         Incurred         December 31, 2000
                                 -----------------------     -----------    -----------------------
<S>                              <C>                       <C>              <C>
Severance for terminated
 Employees                       $                  1,347  $      ( 1,024)  $                    323
Facilities closures                                   403            (150)                       253
Dedicated lines discontinued                          268               -                        268
Termination of public relations
 Agreement                                            583            (551)                        32
                                 ------------------------                  --------------------------
                                 $                  2,601                   $                    876
                                 ========================                  ==========================
</TABLE>

16.  INCOME  TAXES

     The  following is a summary of the items which caused recorded income taxes
to  differ  from  taxes  computed  using  the statutory federal income tax rate:

<TABLE>
<CAPTION>
                                   YEARS  ENDED
                                   DECEMBER  31,
                                2000   1999   1998
<S>                             <C>    <C>    <C>
Statutory federal tax benefit   (34)%  (34)%  (34)%
Increase (decrease) in tax
 benefit resulting from:
  State taxes, net of Federal
   benefit                        (3)    (3)    (3)
  Goodwill amortization           20      2      7
  Other                            1      2      1
  Valuation allowance             15     33     29
                                -----  -----  -----

Actual income tax (benefit)      (1)%     0%     0%
</TABLE>


                                      F-29
<PAGE>
     The  sources  of differences between the financial accounting and tax bases
of  assets and liabilities which gave rise to the net deferred tax assets are as
follows:

<TABLE>
<CAPTION>
                                     2000             1999
                              ------------------  -------------
<S>                           <C>                 <C>
 Deferred tax assets:
  Net operating loss
    carry-forwards            $      77,787,000   $ 17,861,000
  Unearned revenue                    2,302,000        572,000
  Accrued expenses                            -        200,000
  Accounts receivable                 2,433,000        599,000
  Other                                       -         76,000
                              ------------------  -------------
                                     82,522,000     19,308,000
                              ------------------  -------------
 Deferred tax liabilities:
  Depreciation                       (4,006,000)    (1,172,000)
  Intangible Assets                 (14,652,000)             -
  Other                                (802,000)             -
                              ------------------  -------------
                                    (19,460,000)    (1,172,000)
                              ------------------  -------------
 Net deferred tax assets
  Before valuation allowance         63,062,000     18,136,000
 Valuation allowance                (77,714,000)   (18,136,000)
                              ------------------  -------------
 Net deferred tax liability   $     (14,652,000)  $          -
                              ==================  =============
</TABLE>

     The  Tax  Reform  Act  of  1986  provided  for  certain  limitations on the
utilization  of  net  operating  loss  carryforwards  ("NOLs") if certain events
occur,  such  as  a  50%  change  in  ownership.  The Company has had changes in
ownership,  and  accordingly, the Company's ability to utilize the carryforwards
is  limited.  Also,  the NOLs used to affect any taxes calculated as alternative
minimum  tax  could  be  significantly  less than the regular tax NOLs. The NOLs
amounting to $204.7 million, will be utilized to offset taxable income generated
in  future  years,  subject  to  the applicable limitations and their expiration
between  2006  and  2020. Since it currently cannot be determined that it is not
more  likely  than  not that the net deferred tax assets resulting from the NOLs
and  other  temporary items will be realized, a valuation allowance for the full
amount  of  the  net  deferred  tax assets has been provided in the accompanying
consolidated  financial  statements.

17.  SEGMENT  INFORMATION

     Effective  January  1998,  the  Company adopted SFAS No.  131, "Disclosures
About  Segments  of  an  Enterprise  and Related Information," which established
revised  standards  for  the  reporting of financial and descriptive information
about  operating  segments  in financial statements.  During 1998, the Company's
management  did  not  utilize  segment  data  for making decisions and assessing
performance  because  it  provided various services over a single interconnected
network.  During  1999,  management  identified segments, changed its focus, and
began  using  segment  data  in  its  decision-making  process and for assessing
performance.

     While  management of the Company monitors the revenue and costs of services
generated  from  each  of  the  various  services,  operations  are  managed and
financial  performance  is  evaluated based on the delivery of multiple services
being  provided  over  a  single network. As a result of multiple services being
provided  over  a  single network, there are many shared administrative expenses
and  shared  assets  related  to the provision of various services to customers.
Management  believes that any allocation of the shared expenses or assets to the
operating  segments  would  be arbitrary and impractical. The operating segments
were  aggregated  into  reportable  segments  based upon such characteristics as
products


                                      F-30
<PAGE>
and  services,  operating  methods,  customers,  and  distribution methods.  The
segments  include  Competitive Local Exchange Carrier ("CLEC") Services, Network
Services, and Corporate and Network overhead.  CLEC services include local, long
distance,  and  Internet  access  services  provided  primarily  to  Hispanic
residential  and  commercial  customers.  Network  Services  include  carrier
terminating  services  and  operations of the Mexico fiber optic network.  Other
Services  include  carrier  terminating  services and international private line
provided  between  the U.S.  and various South and Central American countries as
well  as  voice  and  data  services  provided  within  various  Latin  American
countries.  Corporate  and  Network  includes  corporate  and  network  overhead
including  finance  and  accounting,  human  resources,  legal,  information
technology,  LAN  administration,  and engineering overhead.  Intersegment sales
and  transfers  occur  as  segments  utilize carrier capacity of other segments.
Intersegment  transactions  are  eliminated  for  reporting  purposes.

     Revenues  and cost of services by service and product offering for the year
ended  December  31,  2000,  are  as  follows:

<TABLE>
<CAPTION>
                    NETWORK                                CORPORATE &
                   SERVICES        CLEC          OTHER      NETWORK       TOTAL
----------------------------------------------------------------------------------
<S>               <C>          <C>            <C>          <C>         <C>
Revenues          $34,663,697  $ 10,009,496   $16,205,822  $        -  $60,879,015
Cost of revenues   32,824,445    10,502,426    11,226,952           -   54,553,823
----------------------------------------------------------------------------------
Gross Margin        1,839,252      (492,930)    4,978,870           -    6,325,192
SG&A               10,356,809    15,024,433    13,529,924   1,558,009   40,469,175
</TABLE>

     Revenues  and  cost  of services by segment for the year ended December 31,
1999,  are  as  follows:

<TABLE>
<CAPTION>
                    NETWORK                               CORPORATE &
                    SERVICES        CLEC        OTHER      NETWORK       TOTAL
----------------------------------------------------------------------------------
<S>               <C>           <C>           <C>         <C>         <C>
Revenues          $ 4,894,286   $  4,463,032  $1,687,477  $        -  $11,044,795
Cost of revenues    6,588,630      3,896,820   1,392,603           -   11,878,053
----------------------------------------------------------------------------------
Gross Margin       (1,694,344)       566,212     294,874           -     (833,258)
SG&A                4,080,209      2,875,029   3,239,587   5,162,051   15,356,876
</TABLE>

Information concerning principal geographic areas is as follows:

                                      For the year ended December 31,
                                            2000          1999
                                        ------------  ------------
Revenues
   United States                        $ 32,125,909  $  6,150,509
   Mexico                                 20,366,535             -
   Costa Rica                              2,756,799     2,084,320
   Other Foreign                           5,629,772     2,809,966
                                        ------------  ------------
Total Revenues                          $ 60,879,015  $ 11,044,795
                                        ============  ============

Fixed assets, net of accumulated depreciation
   United States                        $ 59,145,217  $ 23,466,927
   Mexico                                 75,303,855             -
   Costa Rica                                 47,278        34,609
   Other Foreign                             783,272       815,806
                                        ------------  ------------
Total Fixed Assets, net                 $135,279,622  $ 24,317,342
                                        ============  ============

PROPOSED SALE  OF  PREPAID  OPERATIONS  (DISCONTINUED  OPERATIONS)

Prepaid  Card  services  include the sale of both "on-net" (calls carried on the
Company's  network)  and  "off-net"  (calls carried on other Companies networks)
prepaid  calling  cards. As of December 31, 2000, the Company was in the process
of  marketing for sale its prepaid calling card business. The Company had a plan
of  disposal  in  place  and  an active program to find a buyer. Accordingly, in
accordance  with  APB  30,  we  have  accounted  for  these  operations  in  the
accompanying  financial  statements  as  discontinued  operations.

The  net  assets related to the prepaid operations we anticipate to sell in this
proposed  transaction  as  of December  31,  2000  are  as  follows:

<TABLE>
<CAPTION>
<S>                                       <C>
A/R, net of allowance of $2,068,000        $3,723,751
Prepaid expenses                              225,627
Inventory                                   1,328,518
Furniture and Leasehold improvements           31,371
Equipment                                      64,746
Vehicles                                       13,250
Equipment                                   1,702,521
                                          ------------
Total Assets                              $ 7,089,784
                                          ============

Accounts Payable                          $ 2,599,819
PIN Liability / Deferred Revenue            4,767,346
Vacation accrual                                7,057
Liabilities                                 1,053,418
Leasehold Obligations                         689,125
Divisional deficit                         (2,026,981)
                                          ------------
Total Liabilities and Divisional Deficit  $ 7,089,784
                                          ============
</TABLE>


                                      F-31
<PAGE>
18.  COMMITMENTS  AND  CONTINGENCIES

     LEASES

     Operating  lease expenses primarily relate to the lease of office space and
equipment  and  include  leases  with affiliates.  Rents charged to expense were
approximately  $2,529,000  $1,461,000  and $832,000 for the years ended December
31,  2000,  1999  and  1998,  respectively.

     At  December  31, 2000, the approximate future minimum lease payments under
noncancelable  operating  leases  with  initial remaining terms of more than one
year  are  as  follows  for  the  years  ended  December  31:

2001        $2,330,000
2002         1,657,000
2003         1,033,000
2004           930,000
2005           564,000
Thereafter   1,142,000
            ----------
Total       $7,656,000
            ==========

     In  August  1999, the Company entered into an employment agreement with the
president  of  U.S.  CLEC  operations  and  a key employee for a period of three
years.  Under  the agreements, they will receive annual salaries of $140,000 and
$125,000,  respectively,  and  are  eligible  for bonuses of up to 50% of annual
salary  based  upon performance. Additionally, they were each granted options to
purchase 550,000 shares of common stock under the Pay For Performance Plan.  The
options  become  vested  according to a schedule which includes 11,178 to 22,351
shares  for opening each of eight CLEC markets over three years.  An open market
is  defined as one that generates a minimum of $25,000 gross monthly income.  To
date,  we  have  opened  two  markets.

     The  Company's  subsidiary  operating  in  Mexico  must  maintain  certain
financial ratios to operate in that country in compliance with local regulations
maintained  by  Cofetel.  As  of  December  31,  2000, this subsidiary is not in
compliance  with  these  ratios.  While  there  can  be  no assurance, we do not
believe  being  out  of  compliance  will result in the cessation of operations.
However,  if  we  are  forced  to  suspend  oprations  in Mexico, it will have a
material  adverse  effect  on  the  Company.

     LITIGATION

     The  Company  is  subject  to  litigation related to matters arising in the
normal  course  of business.  Management is not aware of any asserted or pending
litigation  or  claims  against  the  Company that would have a material adverse
effect  on  the  results  of  operations  or  liquidity.


                                      F-32
<PAGE>
19.     TRANSACTIONS  WITH  AFFILIATES

     During  2000,  an  investment  company whose principal is a Director of the
Company  purchased  30,000 shares of Series F Preferred Stock for $3,000,000 and
182,927  warrants  to  purchase  common shares for $10 per share.  Additionally,
investment  companies  whose  principals  are Directors of the Company purchased
77,500  shares  of  Series  G  redeemable  preferred  stock for $7.8 million and
2,480,000  warrants  to  purchase  common  shares  for  $0.01.

     During  the  first  quarter  of  1999,  the  Company  issued  a  $2 million
promissory  note to First Southeastern Corp., which is an entity affiliated with
the  chairman.  In  conjunction  with  the  notes,  the  Company  issued 380,000
warrants  to  purchase  common  stock at $1.00 per share.  Also during the first
quarter  of  1999,  the  Company  entered  into  a  consulting  contract  with
Multielectronica  CYRF  C.A.,  a Venezuelan company whose affiliates include two
executive  officers  of  the  Company.  Under  the  agreement,  the  Company  is
obligated to pay $37,000 per month plus related expenses for the services of the
two  executive  officers and two engineers.  The term of the contact is one year
commencing  March  15,  1999.  The agreement automatically renews unless written
notice  of  termination is given by either party 30 days prior to the end of the
initial  term.

     During  1998,  the  Company  entered  into  various equity and debt private
placements  with officers and directors.  During the first quarter, the chairman
of  the  board of directors and another director purchased 3,400,000 and 600,000
shares  of  stock  for $1,700,000 and $300,000, respectively.  During the second
quarter,  the Company issued a promissory note to a director for $750,000, which
is  noninterest  bearing  and  matures on June 1, 1999.  In conjunction with the
promissory note, the Company issued 545,455 warrants to purchase common stock at
$1.375  exercisable  for  a  period of one year from issuance.  The note and the
warrants  were extended in May 1999 and now are due and expire, respectively, on
June  1,  2001.

     During  the  third quarter of 1998, the Company issued a promissory note to
Peachtree  Capital  Corporation,  a  company affiliated with the chairman, and a
director,  for  $150,000  payable  on  demand.  The note was repaid on March 15,
1999.  Also  during  the  third  quarter of 1998, an executive officer purchased
100,000 shares of common stock and warrants to purchase 100,000 shares of common
stock  at  $3.00  per  share  for gross proceeds of $100,000.  During the fourth
quarter  of  1998,  the  Company  issued a $1 million promissory note to Cordova
Capital  Partners LP - Enhanced Appreciation, which is an entity affiliated with
a  director.  In conjunction with the notes, the Company issued 380,000 warrants
to purchase common stock at $1.00 per share.  Also, during the fourth quarter of
1998,  the  Company  acquired  Rent-A-Line,  a  portion of which was owned by an
executive  officer  at  the time of acquisition.  The executive officer received
the right to convert a $38,150 promissory note, owed by Rent-A-Line, into 77,243
shares  of  The  Company's  common  stock  as consideration for his ownership of
Rent-A-Line.  Further  during  the  fourth  quarter of 1998, the Chairman of the
Company's  Board  of  Directors and an executive officer pledged shares of their
Company  common  stock  as  collateral for the $2.0 million bridge loans entered
into  during  the  same  quarter.

     During 1998 and 1999, a company affiliated with an executive officer of the
Company  conducted business with the Company as a distributor of prepaid calling
cards.  The  affiliated  company distributed a total of $523,026 and $602,382 of
prepaid  cards  during  1998 and 1999, respectively.  Also during 1998 and 1999,
the  Company  provided loans to certain of its officers and key employees in the
amount  of  $254,770.

     During  1997, the Company entered into a five year operating lease of earth
station  equipment  located  in Panama, Costa Rica and Nicaragua.  There are two
lessors,  one  of which is a company whose principal shareholder is the Chairman
of  the  Company's  board  of directors, and the other is a director.  The lease
obligations  total  approximately  $70,000  per  annum.  In conjunction with the
lease, the Company issued 195,000 warrants, which grant the holders the right to
purchase  shares  of  the  Company's common stock at a price of $3.00 per share.


                                      F-33
<PAGE>
20.  SUPPLEMENTAL  CASH  FLOW  INFORMATION

     In 2000 we paid $5.3 million of payables, $2.8 million of accrued interest,
$1.6 million in loan fees, and $40 million of Lucent debt through a borrowing on
our  GECC  facility.

     Cash  paid  for  interest  amounted  to  approximately  $1.7  million, $2.1
million, and $1.2 million for the years ended December 31, 2000, 1999, and 1998,
respectively.  Cash  paid  for  income  taxes  amounted  to  approximately  $7.2
million,  $0,  and  $0  for  the  years ended December 31, 2000, 1999, and 1998,
respectively.

     In  2000  and  1999,  the  Company  issued  warrants  with  a fair value of
approximately  $1.1  million  and  $1  million  respectively.

     In  2000,  1999 and 1998, the Company acquired $19,905,465, $1,146,728, and
$1,381,531, respectively, of assets in excess of liabilities assumed in business
combinations.

     In  1999  and  1998,  the  Company  acquired  $6,002,111  and  $6,219,977,
respectively,  in  assets  under  financing  and  capital  leases.

     In  1999,  the  Company  exchanged  a  promissory  note in the amount of $5
million  for  exercise  of  warrants.

     In  1998,  the Company issued a note payable in the amount of $1,397,000 to
satisfy  operating  obligations.

21.   QUARTERLY  DATA  (UNAUDITED)

<TABLE>
<CAPTION>
2000
                                                      FIRST         SECOND          THIRD         FOURTH
                                                   ------------  -------------  -------------  -------------
<S>                                                <C>           <C>            <C>            <C>
Revenues. . . . . . . . . . . . . . . . . . . . .  $ 3,313,518   $  3,485,380   $ 19,034,608   $ 35,045,509
 Revenue from Discontinued Operations.              10,919,555     10,412,736     16,544,920     13,484,742
                                                   ------------  -------------  -------------  -------------
Revenue as previously reported                      14,233,073     13,898,116     35,579,528     48,530,251
                                                   ============  =============  =============  =============
Operating loss                                      (5,931,700)    (5,785,664)   (21,466,151)   (28,530,999)
 Operating loss from Discontinued
  Operations                                          (300,759)       628,855       (731,538)    (1,212,353)
                                                   ------------  -------------  -------------  -------------
Operating Loss as previously reported               (6,232,459)    (5,156,809)   (22,197,689)   (29,743,352)
                                                   ============  =============  =============  =============
Net loss. . . . . . . . . . . . . . . . . . . . .   (5,863,499)    (6,063,031)   (24,364,319)   (30,054,579)
 Net (loss) gain from discontinued
  operations                                          (304,674)       608,859       (790,696)    (1,218,896)
                                                   ------------  -------------  -------------  -------------
Net loss as previously reported . . . . . . . . .   (6,168,173)    (5,454,172)   (25,155,015)   (31,273,475)
                                                   ============  =============  =============  =============
Basic and diluted loss per share from
  continuing operations(1). . . . . . . . . . . .  $     (0.51)  $      (0.41)  $      (1.18)  $      (1.78)
Basic and diluted (loss) earnings per share
  for discontinued operations (1)                        (0.03)          0.04          (0.04)         (0.13)
Basic and diluted loss per share as
  previously reported (1)                                (0.54)         (0.37)         (1.22)             -


                                      F-34
<PAGE>
1999
                                                      FIRST         SECOND          THIRD         FOURTH
                                                   ------------  -------------  -------------  -------------
Revenues. . . . . . . . . . . . . . . . . . . . .  $ 1,944,291   $  2,020,227   $  2,211,343   $  2,017,385
 Revenue from Discontinued Operations.               9,609,235     11,133,839     10,754,108     12,234,493
                                                   ------------  -------------  -------------  -------------
Revenue as previously reported                      11,553,526     13,154,066     12,965,451     14,251,878
                                                   ============  =============  =============  =============
Operating loss. . . . . . . . . . . . . . . . . .   (1,215,428)    (2,291,008)    (3,547,897)    (8,371,658)
Operating loss  - Discontinued Operations           (1,357,173)    (1,628,785)    (1,970,289)    (1,574,552)
                                                   ------------  -------------  -------------  -------------
Operating loss as previously reported               (2,572,601)    (3,919,793)    (5,518,186)    (9,946,210)
                                                   ============  =============  =============  =============
Net loss. . . . . . . . . . . . . . . . . . . . .   (3,551,712)    (5,376,006)    (6,299,006)   (20,858,099)
 Net loss from discontinued operations                (107,327)       (81,406)      (237,116)    (1,780,183)
                                                   ------------  -------------  -------------  -------------
Net loss as previously reported . . . . . . . . .   (3,659,039)    (5,457,412)    (6,536,122)   (22,638,282)
                                                   ============  =============  =============  =============
Basic and diluted loss per share from
  continuing operations(1). . . . . . . . . . . .  $     (0.35)  $      (0.65)  $      (0.68)  $      (1.81)
Basic and diluted loss per share for
  discontinued operations (1)                            (0.01)         (0.04)         (0.02)         (0.15)
Basic and Diluted loss per share as
  previously reported (1)                                (0.36)         (0.69)         (0.70)         (1.96)

<FN>
(1)  Earnings  (loss)  per  share  is  different  from previously reported amounts because Pointe's weighted
average  shares  outstanding have been converted using the 0.223514 exchange ratio used in the June 2, 2000,
merger  with  Telscape  to  account  for  the exchange of Pointe shares for Telscape shares in this business
combination  which  we  accounted for as a reverse acquisition with Pointe being the acquirer for accounting
purposes.
</TABLE>


                                      F-35
<PAGE>

            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES

To Telscape International, Inc.:

We  have audited in accordance with auditing standards generally accepted in the
United  States, the consolidated financial statements of TELSCAPE INTERNATIONAL,
INC.  and  Subsidiaries  included  in  this Form 10-K and have issued our report
thereon dated April 13, 2001. Our audits were made for the purpose of forming an
opinion  on the basic financial statements taken as a whole. The schedule listed
in  the index is the responsibility of the Company's management and is presented
for  purposes  of  complying with the Securities and Exchange Commission's rules
and  is  not  part  of  the  basic  financial statements. This schedule has been
subjected  to  the  auditing  procedures  applied  in  the  audits  of the basic
financial statements and, in our opinion, fairly states in all material respects
the  financial  data  required  to be set forth therein in relation to the basic
financial  statements  taken  as  a  whole.



/s/ ARTHUR  ANDERSEN  LLP
ARTHUR  ANDERSEN  LLP



Atlanta,  Georgia
April  13,  2001



                  TELSCAPE INTERNATIONAL, INC. AND SUBSIDIARIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

ALLOWANCE  FOR  DOUBTFUL  ACCOUNTS


           Balance at
           Beginning of                         Balance at
           Period        Additions  Deductions  End of Period
FY 2000    $1,378,000   $5,024,000  $        -     $6,402,000
FY 1999       500,000    1,996,000   1,118,000      1,378,000
FY 1998*      200,000      925,000     625,000        500,000

INVENTORY  RESERVES


           Balance at
           Beginning of                         Balance at
           Period        Additions  Deductions  End of Period
FY 2000      $1,313,000   $      -    $828,000     $  485,000
FY 1999       1,047,000    450,000     184,000      1,313,000
FY 1998*        352,000    946,000     251,000      1,047,000

*  Additions  and  deductions for 1998 include activity related to the Company's
acquisitions  during that year.  As such, the 1998 additions do not agree to the
related  entries  shown for the same items on the consolidated Statement of Cash
Flows.


                                       37
<PAGE>
ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE.

Arthur  Andersen LLP were accountants for Pointe for the year ended December 31,
1999.  Pointe  was  the  acquirer  for  accounting purposes in the June 2, 2000,
merger  with  Telscape International, Inc. which was accounting for as a reverse
merger.  Arthur  Andersen continued as auditors for the combined company for the
year  ended  December  31,  2000.

The  Company  is  not  aware  of  any  disagreements on accounting and financial
disclosure.

PART  III

ITEM  10.  Directors  and  Executive  Officers  of  the  Registrant

                   OFFICERS, DIRECTORS AND OTHER KEY EMPLOYEES

NAME                  AGE                     POSITION
-------------------  -----  ----------------------------------------------

Stephen E. Raville      53  Chairman of the Board, Chief Executive Officer

Peter C. Alexander      44  President and Chief Operating Officer

Steven L. Ford          48  Chief Financial Officer

Ruben Garcia            48  President, CLEC Division

Jose Juan Garrigo       35  President, Network Services

Gerald F. Schmidt       60  Director / Audit Committee Member

David C. Lee            35  Director / Audit Committee Member

Darryl B. Thompson      39  Director

Rafic A. Bizri          52  Director

William P. O'Reilly     55  Director / Audit Committee Member

E.  Scott  Crist        37  Director

STEPHEN  E.  RAVILLE.  Mr.  Raville  has  been a director of ours since December
14,  1995,  Chairman  since  January  28, 1997 and Chief Executive Officer since
September  12, 1997- Mr. Raville has been President of First Southeastern Corp.,
a  private  investment  company,  since  it  was  formed  shortly  after  Mr.
Raville's  departure from Advanced Telecommunications Corporation, or ATC, where
he  served  as  Chairman  of the Board and Chief Executive Officer- Prior to the
merger  of  ATC  and  Atlanta  based  TA Communications, Mr. Raville served as a
President  of  TA  Communications. Additionally, he was a partner in the Atlanta
law  firm  of  Hurt,  Richardson, Gamer, Todd & Cadenhead. Mr. Raville currently
serves  on  the  Board  of  numerous  private  concerns.  Mr. Raville also  sits
on  the  Board  of  Eltrax  Systems,  Inc.


                                       38
<PAGE>
PETER  C.  ALEXANDER.  Mr.  Alexander  joined  us in December 1999 with a strong
record  of  international  business  successes.  Most recently Mr. Alexander was
President  of  Premiere  Technologies,  Inc., an Internet communications service
provider.  Prior  to  Premiere,  he  served as Senior Vice President of non-U.S.
operations  for  GE  Capital  Information  Technology  Solutions, a $3.5 billion
division  of  GE  Capital  Services  Company.  Prior  to his GE affiliation, Mr.
Alexander  served  as President of AmeriData Global Limited, an international IT
services  group  of  AmeriData Technologies, and Vice President of International
Operations  for  Vanstar  Corporation.

STEVEN L. FORD  Steven Ford joined the Company as CFO in December 2000.  He most
recently  served  as Global CFO for Equifax (NYSE: EFX), a $1.8 billion provider
of  financial  services,  risk  solutions  and  technology.  He has held similar
financial  positions  with  Bostrom  Seating,  Horizons Technology and Brooktree
Corporation,  and did his professional training at Arthur Young (now E&Y). He is
a  CPA  who  holds  a  BBA  from  Cleveland State University and an MBA from the
University  of  Southern  California.

RUBEN  GARCIA.  Mr.  Garcia  joined  us in July of 1999 as President of the CLEC
Division. Mr. Garcia has more than twenty years of telecommunications management
experience  in  marketing,  sales and customer service. Prior to joining us, Mr.
Garcia was President of HTC Communications, a California-based CLEC, acquired by
us  during  the  third  quarter of 1999. He previously served as Chief Operating
Officer  at  ConexOne  Wireless,  where he joined the firm as the 10th employee.
During  Mr.  Garcia's  tenure,  ConexOne  was  ranked  the  19th fastest growing
Hispanic  owned  firm  in  the  U.S.  and  became  a member of the Hispanic 500.
Previously,  Mr.  Garcia was Vice-President and General Manager at Pacific Bell,
responsible  for  marketing  and  offering  services  to  more  than 1.1 million
Hispanic  customers  and managing 1,200 employees. His group generated over $350
million  in  annual  revenues  for  Pacific  Bell.

JOSE  JUAN  GARRIGO     Mr.  Garrigo  joined  the  Company  in  December 2000 as
President  of  Mexico  Network Services.  Prior to joining Telscape, Mr. Garrigo
was Vice President of Strategic Sales and Marketing at Marcatel International, a
telecommunications  company  in Monterrey, Mexico. He developed a successful new
sales  division  for  the  company,  gained  exposure  to  financial  markets by
collaborating  on  several  rounds  of financing for the company. He spent eight
years  at  MCI  Telecommunications, and held several positions from Global Sales
Manager  to  Interim  Vice-President  of Corporate Accounts at Avantel. Prior to
that,  Mr.  Garrigo  was  actively  involved  in  several MCI corporate national
accounts,  such  as  EDS,  Chrysler  and  Volkswagen. Mr. Garrigo holds a BBA in
International  Marketing  from  Eastern  Michigan  University, and has completed
graduate work in Economics from Wayne State University and in Telecommunications
from  Michigan  State  University.

GERALD  F.  SCHMIDT.  Mr.  Schmidt  joined  us  as  a  director  on February 28,
1997.  Mr.  Schmidt  is  Chairman,  a  director  and  a  shareholder  of Cordova
Technologies, Inc. As Chairman, he is responsible for the major policy decisions
of  the  General  Partner  and  the  Partnership. Mr. Schmidt is a co-founder of
Cordova  Capital  and also President of Cordova Capital Inc. and Cordova Capital
II,  Inc.,  and is a shareholder and member of the Board of Directors of each. A
major portion of his career was spent with Jostens, Inc., a publicly-traded NYSE
company  on  the Standard & Poor's 500, based in Minneapolis and involved in the
manufacturing  and  sale  of  motivation and recognition products to educational
institutions  and companies. While there, he was responsible for $170 million in
sales  through  more  than 500 independent sales representatives and led a sales
and  design team that won the opportunity to produce the gold, silver and bronze
medals  for  the  games  of the XXIII Olympiad held in Los Angeles. Upon leaving
Jostens  in  1984,  he  spent  five  years  as  senior vice president of O'Neill
Developments,  Inc.,  a  privately-held  merchant  developer  of  real  estate
properties  headquartered in Atlanta. Mr. Schmidt left in 1988 to join Manderson
& Associates, where Cordova Capital was founded. Mr. Schmidt serves on the Board
of  Directors  of  USBA  Holdings,  Ltd., a financial services company providing
products  and services to banks, Investors Financial Group, Inc., a full service
broker-dealer,  and  Premis  Corporation,  a publicly traded Nasdaq company that
designs,  develops  and  markets  software  systems  for  point  of  sale.


                                       39
<PAGE>
DAVID  C.  LEE.  Mr.  Lee  was  named  to our Board of Directors in June 1999 in
conjunction  with Sandier Capital's investment in our Class A Senior Convertible
Preferred  Stock. Mr. Lee is currently a Managing Director of  Sandler  Capital,
and is  experienced  in  a  broad  range  of  communications  services.   He  is
responsible for analyzing, structuring and managing  Sandler  Capital's  private
equity  investments  in  the  telecommunications  industry.  Prior  to  joining
Sandler Capital, he was a Managing Director at Lazard Freres & Co. LLC, where he
worked on a wide range  of  advisory  and  financial  assignments,  with special
emphasis in the communications sector.  Mr. Lee holds a BS in economics from The
Wharton  School  at  the  University  of  Pennsylvania.

DARRYL  B.  THOMPSON.  Mr.  Thompson was named to our Board of Directors in June
1999  in  conjunction  with  TSG  Capital's  investment in our Convertible Notes
convertible into the Class B Senior Convertible Preferred Stock. Mr. Thompson is
currently  a  Partner  at  TSG  Capital Group. Mr. Thompson began his investment
career  at  Morgan Stanley & Co. as a Financial Analyst and Senior Associate. He
subsequently  joined  TLC  Group,  L.P.,  as  special assistant to its Chairman,
Reginald  F.  Lewis. At TLC, Mr. Thompson managed operating company acquisitions
and  financings.  He  joined  TSG  Capital as Senior Vice President in 1992. Mr.
Thompson  holds an AB Degree in Chemistry and Mathematics from the University of
North  Carolina  at  Chapel  Hill,  an  MS  in  Technology  and  Policy from the
Massachusetts  Institute  of  Technology  (MIT)  and  an  MBA  from  Stanford
University.

RAFIC  A.  BIZRI.  Mr. Bizri was named to our Board of Directors in June 1999 in
conjunction  with  Oger  Pensat's  investment  in our Class A Senior Convertible
Preferred  Stock.  Mr.  Bizri is currently President and sole director of Hariri
Holding,  an  investment  company with investments throughout the United States.
Prior to Hariri Holding, Mr. Bizri held the positions of Controller and Investor
Representative  for  Mediterranean  Investors Group, Controller for Holiday Inn,
and  Financial  Officer  of  Saudi  Oger,  one  of  the largest construction and
development  companies  in  Saudi  Arabia.  Mr.  Bizri  also  heads  the  Hariri
Foundation-U.S.A., an organization which at its peak sponsored 2,300 scholars in
the  U.S.  and Canada. Mr. Bizri holds a Bachelor of Accounting and Finance from
Virginia  Commonwealth  University.

WILLIAM  P.  O'REILLY.  Mr.  O'Reilly  has  been  a  director since December 14,
1995.  Mr.  O'Reilly  has  over  20  years  experience  in the telecommunication
industry and has initiated several successful business ventures. In 1981, he was
the  founder  and  Chief  Executive  Officer  of  Lexitel  Corporation, which is
currently  part  of ALC Communications, Inc. Mr. O'Reilly was also a founder and
Chief  Executive Officer of Digital Signal, a leading provider of low-cost fiber
optic  capacity  to  long  distance  carriers.  In  1989,  he  acquired Military
Communications  Corporation,  or MCC. MCC provides international public switched
network  services via phone centers to the U.S. military worldwide. Mr. O'Reilly
sold MCC to LDDS in 1997. Mr. O'Reilly is currently Chairman and Chief Executive
Officer  of  ELTRAX  Systems,  Inc.,  a  public  company.

E.  SCOTT  CRIST.  Mr.  Crist  served  as  Chief  Executive  Officer of Telscape
(pre-merger) from July 1996 until the merger with Pointe.  Mr. Crist also serves
on  the  board  of  directors  of Billserve.com (NASDAQ: BLLS), SalvageSale.com,
Bynari,  Inc.  and  RealUse.com.  Prior  to  joining  Telscape,  Mr.  Crist  was
President  and  Chief  Executive  Officer  for  Matrix  Telecom, a long-distance
company  which  ranked  #7  on  THE  INC.  MAGAZINE  list  of  the  500  fastest
growing  private  companies  in  1995.  He  also  founded  DNS  Communications
(''DNS''),  a long-distance reseller. He served as DNS's Chief Executive Officer
from  its  inception until DNS's merger with Matrix Telecom. Formerly, he served
as  Vice President of Acquisitions for Trammell Crow Group, where he specialized
in  U.S.  capital  market  transactions.  Mr.  Crist has an M.B.A. from the J.L.
Kellogg  School  at Northwestern University, and received a B.S. MAGNA CUM LAUDE
in  Electrical  Engineering  with  an emphasis on telecommunications design from
North  Carolina  State  University.


                                       40
<PAGE>
     Each  officer  of  Telscape  holds office until such officer's successor is
chosen  and  qualified  in such officer's stead or until such officer's death or
until  such  officer's resignation or removal from office. Certain officers have
employment  contracts  with  Telscape  (See  Employment  Agreements).

     Each  of the directors were elected at the Company's Annual Meeting held on
June  2,  2000,  and  currently hold office until the next annual meeting of the
Company's  stockholders  or  until  their  successors are elected and qualified.

             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires the Company's executive officers
and  directors  and  persons  who own more than 10% of a registered class of the
Company's  equity  securities  to  file  reports  of  ownership  and  changes in
ownership with the Securities and Exchange Commission and the Nasdaq.  Executive
officers,  directors  and  greater than 10% stockholders are required by certain
regulations  to  furnish the Company with copies of all Section 16(a) forms they
file.

     Based  solely  on its review of the copies of Forms 3 and 4,  as  furnished
to the Company, pursuant to the Exchange Act during its most recent fiscal year,
and Forms 5 with respect  to  its  most recent  fiscal year, it is the Company's
belief that any such forms required to be filed pursuant to Section 16(a) of the
Exchange  Act  were  timely  filed,  except  for  Form  3's  related  to  Pointe
Directors  and  Officers  who  became  Telscape  Directors  and  Officers (Peter
Alexander,  Richard  Halevy,  Ruben Garcia, Gerald Schmidt, Rafic Bizri, William
O'Reilly,  and  Steve  Raville),  as  necessary  by  the officers, directors and
security holders required to file the same during the fiscal year ended December
31,  2000.  Each  of  these  Form  3's  has  been  filed.

ITEM  11.  EXECUTIVE  COMPENSATION.

     The  following  table  summarizes  the  compensation  we  paid to our Chief
Executive  Officer and all of our executive officers whose salary and bonus from
us  for  services  rendered  during  2000  exceeded $100,000. Information is not
included  for any persons not serving as an executive officer as of December 31,
2000.

<TABLE>
<CAPTION>
                               Annual Compensation                          Long-Term Compensation
                            --------------------------              --------------------------------
                                                                         Awards              Payouts
                                                                    ------------------       --------
                                                                                  Securities
                                                                      Restricted  Underlying
Name and                                                Other Annual    Stock      Options/    LTIP
Principal Position        Year    Salary        Bonus   Compensation    Awards       SARs     Payouts
------------------------  ----  -----------    -------  ------------  ----------  ----------  -------
<S>                       <C>   <C>            <C>      <C>           <C>         <C>         <C>
Stephen E. Raville        2000    $13,000       $-           $-            $-        -          $-
Chief Executive Officer   1999     13,000        -            -             -        -           -
                          1998     10,000        -            -             -        -           -

Peter C. Alexander        2000    200,000        75,000       -             -       150,000      -
President and Chief       1999     17,692        -            -             -       223,514      -
  Operating Officer

Ruben Garcia              2000    140,000        28,000       -             -        -           -
President CLEC Division   1999     71,077        -            -             -       201,163      -
</TABLE>

     We  have adopted a Nonemployee Director Stock Option Plan pursuant to which
447,028  shares  of  our  Common  Stock  have  been reserved for issuance to our
Nonemployee directors. Options are granted with an exercise price at fair market
value on the date of grant, are exercisable upon the one year anniversary of the
date  of  grant  and  expire  upon  the  earliest  to  occur  of:


                                       41
<PAGE>
  -  ten  years  after  the  date  of  grant,

  -  one  year after the recipient ceases to be a director by reason of death or
     disability,  or

  -  three  months  after  the  recipient ceases to be a director for any reason
     other  than  death  or  disability.

     To  date,  we have granted options to purchase 22,351 shares under the plan
to  each  of  the  following  persons:

  -  William  P.  O'Reilly,

  -  F.  Scott  Yeager,

  -  Gerald  F.  Schmidt,

  -  and  James  H.  Dorsey.

     The  options  vest  in  5,588 share increments on each one year anniversary
date  of  election  to  the  board  of  directors.  As  of  December  31,  2000,
Messrs.  O'Reilly,  Yeager and Schmidt  were vested in 22,351 options,  and  Mr.
Dorsey  was  vested  in  16,764  options.

<TABLE>
<CAPTION>
                     SUMMARY FISCAL YEAR OPTION GRANT TABLE

                                                         PERCENT OF TOTAL
                                            NUMBER OF     OPTIONS GRANTED
                                           SECURITIES           TO         EXERCISE
                                           UNDERLYING       EMPLOYEES IN     PRICE     EXPIRATION
    NAME AND PRINCIPAL POSITION          OPTIONS GRANTED     FISCAL YEAR   PER SHARE      DATE
---------------------------------------  ----------------  --------------  ----------  ----------
<S>                                      <C>               <C>             <C>         <C>
Stephen E. Raville                              -                 -             -           -
  Chief Executive Officer

Peter  C.  Alexander
  President and Chief Operating Officer        150,000          10%           $3.75       8-23-09

Ruben  Garcia
  President, CLEC Division                      -                 -             -           -
</TABLE>

These options were granted under the Pay for Performance Stock Option Plan. They
terminate  ten  years from the grant date and become exercisable upon attainment
of  certain performance goals through December 31, 2001. Any unvested options as
of  January 1, 2002, vest ratably in the period January 1, 2002 through December
31,  2004.

<TABLE>
<CAPTION>
                 SUMMARY  AGGREGATE  OPTION  EXERCISE  AND  VALUE  TABLE

                                                                                        VALUE OF
                                                                     NUMBER OF     UNEXERCISED IN-THE-
                                                                    UNEXERCISED    MONEY(1) OPTIONS AT
                                           SHARES                OPTIONS AT FY-END       FY-END
                                         ACQUIRED ON    VALUE      EXERCISABLE/        EXERCISABLE/
NAME AND PRINCIPAL POSITION               EXERCISE    REALIZED     UNEXERCISABLE       UNEXERCISABLE
---------------------------------------  -----------  ---------  -----------------  --------------------
<S>                                      <C>          <C>         <C>                <C>
Stephen E. Raville                                -         $-    22,351 / 0              $- / $-
  Chief Executive Officer

Peter C. Alexander                                -          -     2,794 / 370,720         - /  -
  President and Chief Operating Officer

Ruben Garcia                                      -          -
  President, CLEC Division                                         1,956 / 199,207         - /  -

<FN>
 (1)     Assumes  a  fair  market  value  at  December  31,  2000  of  $0.97.
</TABLE>


                                       42
<PAGE>
EMPLOYMENT  ARRANGEMENTS

     In  August  1999,  Pointe  entered  into an employment agreement with Ruben
Garcia  to  be  President  of  U.S. CLEC operations for a period of three years.
Under  the  plan,  Mr.  Garcia  will  receive  an annual salary of $ 140,000 and
is eligible  for  a  bonus of up to 50% of annual salary based upon performance.
In  addition,  Mr.  Garcia  was  granted  an  option  under the Executive Market
Value  Appreciation  Plan  to  purchase  up  to 78,230 shares of common stock at
$7.83  per  share. The options vest on December 31st of each year outstanding at
the rate of 5%  of  the grant for each $1.00 of increase in our stock price, and
they  become  contingently  vested  in  an  equal  number  of shares but may not
exercise until fully  vested.  The  contingently  vested  options  become  fully
vested  on  the following  December  31st  assuming  the stock price is at least
the  same  as  the  previous  December  31st.  Additionally,  Mr.  Garcia  was
granted  an option to purchase  122,933 shares of common stock under the Pay For
Performance  Plan.  The  options  become  vested  according  to a schedule which
includes 11,178 to 22,351 shares  for  opening each of eight CLEC markets for us
over  three  years.  An  open  market  is  defined  as  one  which  generates  a
minimum  of  $25,000  gross  monthly  income.

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION

     Stephen  E.  Raville,  Darryl  Thompson  and  Rafic  Bizri  serve  as  the
Compensation  Committee.  Except  for  Mr.  Raville,  the  Company's  Chief
Executive  Officer,  the  other  directors  acting  on  the  compensation
committee are not executives of the Company  or  its  subsidiaries, and none act
in  a  similar capacity for another entity. Additionally, no director or officer
of  the  Company  serves  in  a  similar capacity for an  entity  whose officers
or  directors  serve  on  the  Company's  compensation  committee.

DIRECTORS  COMPENSATION

     The Company's directors do not receive cash compensation for their services
as  directors.  The Company does pay for  out  of  pocket  expenses  related  to
attending a board meeting.  The Company does grant each non-employee director an
option  to  purchase  22,351  shares  of the Company's common stock, which vests
over a four year period and terminates within 90 days after the person ceases to
be  a  director.

                             Executive Compensation


     The  Compensation  Committee  has  put  together  compensation  packages
designed  to  attract  and  retain  the  executives.  The  Company  bases  its
compensation  to  executives on the level of expertise the  individual  has  for
the  position,  the  executive's  performance,  the  compensation  for  similar
executives  in  similar  businesses,  and the tenure of the executive  with  the
Company.  The  Company  attempts to align the executive pay with  the  Company's
overall  performance  and  to  provide  an  incentive  to  the  executive  to
achieve  positive  results  for  the  Company's  shareholders.  The  Company
achieves these goals by providing the executive with competitive market salaries
along  with  the  opportunity  to  earn  performance based bonuses and ownership
in  the  Company  through  the  Company's  Executive  Market  Value Appreciation
Stock  Option  Plan,  which  provides  executives with the ability to accelerate
the  vesting  of  their  options  through  exceptional performance.  The Company
believes  that  the  executives  have  incentive  to perform well because of the
risk  of  not  receiving  a  certain  portion  of  the  annual  compensation.


                                       43
<PAGE>
     The Compensation Committee reviews the base salaries of the named executive
officers  annually  and  recommend  new  salaries  for  the  next  year.  In the
analysis,  comparable  market  information,  performance  individually  and as a
Company,  and  projections for the Company are used to determine the new salary.
A  similar  analysis  is  performed in determining performance bonuses, with the
emphasis  on  the performance of the executive in the year.  Additionally, stock
options  are granted both as reward for performance by the executive but also as
incentive  to  the  executive  to  remain  with  the  Company.

     Mr.  Raville  does  not  participate  in setting his personal compensation.
Messrs.  Thompson and Bizri and the Board generally set the compensation for the
Company's  Chief  Executive Officer.  Mr. Raville receives $13,000 annually, and
he  is  vested  in  options  to  purchase  22,351  shares of common stock, which
previously were granted to Mr. Raville under the Company's Non-employee Director
Stock  Option Plan when he was not an employee of the Company.  Mr. Raville does
not  receive any other cash, stock, or stock option compensation.  Mr. Raville's
salary  is  not  based  on  performance.

Compensation  Committee:  Stephen  E.  Raville,  Rafic  A.  Bizri, and Darryl B.
Thompson

STOCKHOLDER  RETURN  PERFORMANCE  PRESENTATION

     Set  forth  below  is  a  chart  comparing  the yearly percentage change in
the total stockholders' return on the Company's common stock against the S&P 500
and  the  Nasdaq  Telecommunications  Industry  Index.


                                       44
<PAGE>


                             [GRAPHIC  OMITTED]


DESCRIPTION                   1997   1998   1999  2000

TELSCAPE  (%)                 155%   (9)%    75%  (71)%
S  &  P  500  (%)              90    150    180    (9)
NASDAQ  TELECOM  (%)           90    200    520   (70)

Source:  Bloomberg,  L.P.

     The  graph  assumes that all dividends were re-invested.  No dividends have
been  declared  or paid in the Company's common stock.  Stockholder returns over
the  indicated  period should not be considered indicative of future stockholder
returns.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.

     The  following  table  sets  forth,  as  of  December 31, 2000, information
regarding  the  ownership  of  our  Common  Stock  owned  by:

  -  each  person  (or  "group"  within  the  meaning of Section 13(d)(3) of the
Security  Exchange  Act of 1934) known by us to own beneficially more than 5% of
the  Common  Stock;

  -  each  of  our  directors;

  -  each  of  the  named  executive  officers;  and

-     all  of  our  officers  and  directors  as  a  group.


                                       45
<PAGE>
<TABLE>
<CAPTION>
                                                   Common Stock
                                                Beneficially Owned
                                                             % OF
BENEFICIAL OWNERS                                NUMBER     CLASS
-----------------                             ------------  -------
<S>                                           <C>           <C>
DIRECTORS AND EXECUTIVE OFFICERS

William P. O'Reilly                            134,074(2)     *
Ruben Garcia                                    262,071(3)      *

Stephen E. Raville                            1,773,532(4)    3.1%

Gerald F. Schmidt                               867,141(5)    1.5

Peter Alexander                                 373,514(6)      *

David C. Lee                                  4,582,817(7)    8.1

Rafic A. Bizri                                4,422,818(8)    7.8

Darryl B. Thompson                            7,459,644(9)   13.2

E. Scott Crist                                1,364,678(1)    2.4
                                              ------------
EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP:   21,240,289    37.6
                                              ============
BENEFICIAL OWNER OF 5% OF THE COMMON STOCK

TSG Capital Fund III, L.P.                    7,459,644(9)   13.2

Sandler Capital Partners IV, L.P.
  and Sandler Capital Partners IV FTE, L.P    4,582,817(7)    8.1

Oger Pensat Holdings Holdings, Ltd.           4,422,818(8)    7.8

     The business address for each of the above Directors and Executive Officers
is  1325  Northmeadow  Parkway,  Suite  110  Roswell,  Georgia  30076.
_______________

For  purposes  of  calculating  the percentage beneficially owned, the shares of
common  stock deemed outstanding as of March 30, 2000, of 20,819,444 plus shares
issuable  by  the  Company  pursuant  to  warrant or convertible Preferred Stock
agreements.  This  total  equals  56,521,059  shares.

<FN>
*:  Less  than  1%

(1)  Includes  327,778  options  to  purchase  common shares at $4.50 per share,
     27,836  options  to  purchase  common  shares  at  $8.25  per share, 69,223
     warrants  to  purchase common shares at $6.68 per share, 31,805 warrants to
     purchase common shares at $11.96 per share, and 12,000 warrants to purchase
     common  shares  at  $1.13  per  share.

(2)  Includes Non-employee Director options of 22,351 shares at $3.13 per share.

(3)  Includes  201,163  options  to  purchase  shares  at  $7.83  per  share.

(4)  Includes  1,450,560  of  our  shares  which are owned by the Star Insurance
     Company  ("Star").  On  May  12,  1998, the shares were sold to Star by the
     Raville  1994  Family  Limited  Partnership  ("Raville  FLP")  of which Mr.
     Raville  is  the  Managing General Partner. Includes 65,000 shares owned by
     the  Raville FLP. Includes 43,957 shares owned by Erin Raville. Mr. Raville
     disclaims  ownership  of  these shares but retains full power to vote these
     shares.  Also  includes  Non-employee  Director  option of 22,351 shares at
     $3.13  per  share;  warrants to purchase 21,793 shares at $13.42 per share;
     warrants  to  purchase  169,871  shares  at  $4.47  per  share.

(5)  Includes  670,542  shares,  warrants to purchase 84,935 shares at $4.47 per
     share,  and  warrants to purchase 80,000 shares at $0.01 per share owned by
     Cordova  Enhanced  Fund LP, the ownership of shares is disclaimed. Includes
     Non-employee  Director  options  of  22,351  shares  at  $3.13  per  share.

(6)  Includes  223,514 options to purchase shares at $9.51 per share and 150,000
     options  to  purchase  shares  at  $3.75  per  share.

(7)  Includes  2,905,421  shares  underlying  the  Class  D  Senior  Convertible
     Preferred Stock, warrants to purchase 1,197,396 shares for $7.27 per Share,
     and warrants to purchase 480,000 shares at $0.01 per share owned by Sandler
     Capital  Partners  IV,  L.P.  and Sandler Capital Partners IV FTE, L.P. The
     reporting  person  disclaims  beneficial  ownership  of  these  securities.
     Address  for  both  Sandler  Capital  Partners IV, L.P. and Sandler Capital
     Partners  IV  FTE,  L.P.  is  767  Fifth  Avenue,  New  York,  NY  10153.


                                       46
<PAGE>
(8)  Includes  2,905,422  shares  underlying  the  Class  D  Senior  Convertible
     Preferred Stock, warrants to purchase 1,197,396 shares for $7.27 per Share,
     and  warrants  to  purchase 320,000 shares at $0.01 per share owned by Oger
     Pensat Holdings Ltd. The reporting person disclaims beneficial ownership of
     these  securities.  Address  for  Oger  Pensat  Holdings  Ltd. is 1020 19th
     Street,  NW,  Suite  300,  Washington,  DC  20036.

(9)  Includes  2,983,810  shares  underlying  the  Class  E  Senior  Convertible
     Preferred Stock, warrants to purchase 1,915,834 shares for $8.46 per Share,
     and  warrants to purchase 2,560,000 shares for $0.01 per share owned by TSG
     Capital  Fund III, L.P. The reporting person disclaims beneficial ownership
     of  these  securities.  Address for TSG Capital Fund III, L.P. is 177 Broad
     Street,  12th  Floor,  Stamford,  CT  06901.
</TABLE>

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

     During  2000,  Oger  Pensat  Holdings  Ltd.,  an  investment  company whose
principal  is  a  Director  of  the Company, purchased 30,000 shares of Series F
Preferred  Stock  for  $3,000,000 and 182,927 warrants to purchase common shares
for  $10  per  share.  Additionally, TSG Capital Fund III, L.P., Sandler Capital
Partners  IV,  L.P.,  Sandler  Capital  Partners IV, FTE, Cordova Enhanced Fund,
L.P.,  and  Oger Pensat Holdings Ltd., investment companies whose principals are
Directors  of  the  Company,  purchased  77,500  shares  of  Series G redeemable
preferred  stock  for  $7.8  million  and  2,480,000 warrants to purchase common
shares  for  $0.01.

     During the first quarter of 1999, we issued a $2 million promissory note to
First  Southeastern  Corp.,  which  is  an entity affiliated with Steve Raville,
the  Chairman.  In  conjunction  with  the  notes,  we issued 84,935 warrants to
purchase  common  stock at  $4.47  per  share.  Also during the first quarter of
1999,  we  entered into a consulting contract with Multielectronica CYRF C.A., a
Venezuelan  company,  whose  affiliates  include  two  of  our  then  current
executive  officers,  Jaime Zambra and Federico Fuentes. Under the agreement, we
are obligated to pay $37,000 per month plus related expenses for the services of
the  two  executive  officers  and two engineers. The term of the contact is one
year  commencing  March  15,  1999  and  has  renewed  once.

     During  1998  and  1999,  a company affiliated with an executive officer of
ours  conducted  business with us as a distributor of prepaid calling cards. The
affiliated company distributed a total of $523,026 and $602,382 of prepaid cards
during 1998 and 1999, respectively. Also during 1998 and 1999, we provided loans
to  certain  of  its  officers  and  key  employees  in  the amount of $254,770.

     During  1998,  we  entered  into various equity and debt private placements
with officers and directors. During the first quarter, the Chairman of the Board
of  Directors  and  another  Director,  purchased  759,948 and 134,108 shares of
stock  for  $1,700,000 and $300,000, respectively. During the second quarter, we
issued  a  promissory  note  to  a  then current Director for $750,000, which is
non-interest  bearing  and  matures  June  1,  2001.  In  conjunction  with  the
promissory  note,  we  issued  121,917  warrants  to  purchase  common  stock at
$6.15  exercisable  for  a  period of two years from issuance. During  the third
quarter of 1998, we issued a promissory note to Peachtree Capital Corporation, a
company  affiliated with the Chairman, and a Director, for $150,000  payable  on
demand.  The  note was repaid on March 15, 1999. Also during the  third  quarter
of  1998,  an  executive  officer  purchased 22,351 shares of common  stock  and
warrants  to  purchase  22,351  shares  of common stock at $13.42 per  share for
gross  proceeds of $100,000.     During the fourth quarter of 1998, we issued  a
$1  million  promissory  note  to  Cordova  Capital  Partners  LP-Enhanced
Appreciation,  which  is  affiliated  with  a  Director. In conjunction with the
notes,  we  issued  84,935 warrants to purchase common stock at $4.47 per share.
Also,  during  the  fourth  quarter  of  1998, we acquired Rent-A-Line Telephone
Company,  LLC  ("Rent")  a portion of which was owned by an executive officer at
the  time  of acquisition. The executive officer received the right to convert a
$38,150  promissory  note,  owed  by Rent, into 17,265 shares of Common Stock as
consideration  for  his  ownership of Rent. Further during the fourth quarter of
1998,  the  Chairman  of our Board of Directors and an executive officer pledged
shares  of  their  common  stock as collateral for the $2.0 million bridge loans
entered  into  during  the  same  quarter.


                                       47
<PAGE>
PART  IV

ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON FORM 8-K

     (a)  Exhibits.  See  Index  to  Exhibits  after  signature  page.

     (b)  Financial  Statement  Schedules:  See  Schedule  II  -  Valuation  and
          Qualifying  Accounts  in  Item  8.

     (c)  Reports  on  Form  8-K:

          On June 16, 2000, the Company filed a report on Form 8-K reporting the
          change in control resulting from the merger of Telscape International,
          Inc.  and  Pointe  Communications  Corp.

SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) 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.


                                  TELSCAPE  INTERNATIONAL,  INC.
                                  (Registrant)


April  17,  2001                    /s/  STEPHEN  E.  RAVILLE
                                    -------------------------
                                     Stephen  E.  Raville
                                     Chairman of the Board,
                                     CEO and Principal Executive Officer


April  17,  2001                    /s/  STEVEN  L.  FORD
                                    -------------------------
                                    Steven  L.  Ford,
                                    CFO  and  Principal  Accounting  Officer

     Pursuant  to  requirements  of  the  Securities  Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  and  on  the  dates  indicated.


                                       48
<PAGE>
SIGNATURE     TITLE     DATE
---------     -----     ----

April  17,  2001    /s/  GERALD  F.  SCHMIDT
                    ------------------------
                    Gerald  F.  Schmidt
                    Director

April  17,  2001    /s/  DAVID  C.  LEE
                    -------------------
                    David  C.  Lee
                    Director

April  17,  2001    /s/  DARRYL  B.  THOMPSON
                    -------------------------
                    Darryl  B.  Thompson
                    Director

April  17,  2001    /s/  RAFIC  A.  BIZRI
                    ---------------------
                    Rafic  A.  Bizri
                    Director

April  17,  2001    /s/  WILLIAM  P.  O'REILLY
                    --------------------------
                    William  P.  O'Reilly
                    Director

April  17,  2000   /s/  E.  SCOTT  CRIST
                   ---------------------
                   E.  Scott  Crist
                   Director


                                       49
<PAGE>
INDEX  OF  EXHIBITS


Exhibit  No.  Description

  2.1       -     Amended  and  Restated  Agreement  and Plan of Merger dated as
                  of  December  31,  1999  by  and among Telscape International,
                  Inc.,  Pointe  Communications  Corporation  and  Pointe
                  Acquisition,  Corp.  (Incorporated  herein  by  reference  to
                  Exhibit  2.1 to the Company's Report on Form 10-K for the year
                  ended  December  31,  1999)

  3.1       -     Articles of Incorporation of the Registrant, as amended (filed
                  as  Exhibit  3.1  to  the Company's Registration Statement No.
                  33-80542-D  and  incorporated  herein  by  reference)

  3.2       -     Bylaws  of  the  Registrant,  as  amended  (filed  as  Exhibit
                  3.2 to the Company's Registration Statement No. 33-80542-D and
                  incorporated  herein  by  reference)

  3.6       -     Amendment  to  the  Company's  Articles  of  Incorporation
                  as  filed  June 2, 2000 (filed as Exhibit 3.6 to the Company's
                  Report  on  Form  10-Q for the quarter ended June 30, 2000 and
                  incorporated  herein  by  reference)

  4.1       -     Form  of  Certificate  evidencing  Common  Stock  (filed  as
                  Exhibit  4.1  to  the  Company's  Registration  Statement  No.
                  33-80542-D  and  incorporated  herein  by  reference)

  4.4       -     Form  of  Statement  of  the  establishment  of  the  Series B
                  non-voting, nonparticipating Preferred Stock (filed as Exhibit
                  4.1  to  the  Company's  Report on Form 10-QSB for the quarter
                  ended  March  31,  1996  and incorporated herein by reference)


                                       50
<PAGE>
  4.5       -     Certificate  of  Designation  of  Preferences,  Rights  and
                  Privileges  of  Class  D  Convertible  Senior  Preferred Stock
                  (filed as Exhibit 4.1 to the Company's periodic report on Form
                  8-K  filed  on  June  16,  2000 and incorporated by reference)

  4.6       -     Certificate  of  Designation  of  Preferences,  Rights  and
                  Privileges  of  Class  E  Convertible  Senior  Preferred Stock
                  (filed  as  Exhibit  4.2  to Company's periodic report on Form
                  8-K  filed  on  June  16,  2000 and incorporated by reference)

  4.7       -     Certificate  of  Designation  of  Preferences,  Rights  and
                  Privileges  of  Class  F  Convertible  Senior  Preferred Stock
                  (filed as Exhibit 4.7 to the Company's Report on Form 10-Q for
                  the quarter  ended  June  30,  2000  and  incorporated  herein
                  by  reference)

4.8*        -     Statement  of  Resolution  establishing  Series E of Preferred
                  Stock  of Telscape  International,  Inc.

4.9*        -     Statement  of  Resolution  establishing  Series D of Preferred
                  Stock  of Telscape  International,  Inc.

4.10*       -     Statement  of  Resolution  establishing  Series F of Preferred
                  Stock  of Telscape  International,  Inc.

4.11*       -     Certificate of Designation establishing  Series G of Preferred
                  Stock  of Telscape  International,  Inc.

10.6        -     Form  of  Non-Qualified  Stock  Option  Certificate  and
                  Agreement,  as  amended, for Manuel Landa, Ricardo Orea Gudino
                  and  Oscar Garcia Mora (filed as Exhibit 10.7 to the Company's
                  Report on Form 10-QSB for the quarter ended March 31, 1996 and
                  incorporated  herein  by  reference)

10.7       -      Form  of  Series  A  Common  Stock  Warrant dated May 17, 1996
                  between  the  Company  and  Manuel Landa, Ricardo Orea Gudino,
                  Oscar Garcia Mora and Christopher Efird (filed as Exhibit 10.1
                  to  the  Company's  Report  on Form 8-K dated June 3, 1996 and
                  incorporated  herein  by  reference)

10.14       -     Stock  Purchase  Agreement  dated  January  22,  1998,  by and
                  among the Company; MSN Communications, Inc.; Stuart Newman and
                  Michael  Newman,  together  with Form of Promissory Note dated
                  January  23,  1998 in the principal amount of $375,000 payable
                  to  Stuart  Newman  attached  as  Exhibit  B-1  and  Form  of
                  Promissory Note dated January 23, 1998 in the principal amount
                  of  $375,000 payable to Michael Newman attached as Exhibit B-2
                  (filed as Exhibit 10.1 to the Company's Current Report on Form
                  8-K  dated  February  6,  1998  and  incorporated  herein  by
                  reference)

 10.15      -     Stock  Purchase  Agreement  dated  May  18, 1998, by and among
                  Telscape  International,  Inc., California Microwave, Inc. and
                  California  Microwave Services Divisions, Inc. together with a
                  Form  of  Supply  Agreement between California Microwave, Inc.
                  and  California Microwave Services Division, Inc. as Exhibit B
                  (Incorporated  herein  by  reference  to  Exhibit  10.1 to the
                  Company's  Current  Report  on  Form  8-K  dated June 9, 1998)

  10.19     -      Equity  Purchase  Agreement  by  and  between  INTERLINK
                  Communications  Holding  Co.,  Inc.  and  each  of  Telscape
                  International, Inc., E. Russell Hardy, Stephen Strohman, Monty
                  J.  Moore,  and  Salvador  Giblas  dated  as  of  May 19, 1998
                  (Incorporated  herein  by  reference  to  Exhibit  10.5 to the
                  Company's  Current  Report  on  Form  8-K  dated June 9, 1998)


                                       51
<PAGE>
 10.20      -     Form  of  Employment  Agreement  by  and  between  California
                  Microwave  Services  Division, Inc. and E. Russell Hardy dated
                  as  of  May  18,  1998  (Incorporated  herein  by reference to
                  Exhibit 10.6 to the Company's Current Report on Form 8-K dated
                  June  9,  1998)

 10.21      -     Form  of  Employment  Agreement  by  and  between  California
                  Microwave  Services  Division, Inc. and Stephen Strohman dated
                  as  of  May  18,  1998  (Incorporated  herein  by reference to
                  Exhibit 10.7 to the Company's Current Report on Form 8-K dated
                  June  9,  1998)

 10.22      -     Form  of  Employment  Agreement  by  and  between  California
                  Microwave  Services Division, Inc. and Monty J. Moore dated as
                  of  May  18, 1998 (Incorporated herein by reference to Exhibit
                  10.8 to the Company's Current Report on Form 8-K dated June 9,
                  1998)

 10.25      -     Outside  Directors  Stock Option Plan of the Polish Telephones

                  and Microwave Corporation (Incorporated herein by reference to
                  Exhibit  10.24  to  the  Company's  Registration Statement No.
                  333-60271)

 10.26      -     Form  of  Financing  Agreement  by and between the Company and
                  Newbridge  Financial Services Networks dated as of December 7,
                  1998 (Incorporated herein by reference to Exhibit 10.26 to the
                  Company's  Report on Form 10-K for the year ended December 31,
                  1998)

 10.27      -     Form  of  Financing  Agreement  by and between the Company and
                  NTFC  Capital  Corporation  dated  as  of  January  11,  1999
                  (Incorporated  herein  by  reference  to  Exhibit 10.27 to the
                  Company's  Report on Form 10-K for the year ended December 31,
                  1998)

 10.28      -     Form  of  Securities  Purchase  Agreement  by  and between the
                  Company and Kendu Partners and MDNH Partners, L.P. dated as of
                  December  18,  1998,  and  Exhibit  B  to  this  agreement
                  representing  the  Form  of  Registration  Rights  Agreement
                  (Incorporated  herein  by  reference  to  Exhibit 10.28 to the
                  Company's  Report on Form 10-K for the year ended December 31,
                  1998)

 10.29      -     Form  of  Securities  Purchase  Agreement  by  and  between
                  Telscape  International,  Inc., INTERLINK Communications, Inc.
                  and Cahill, Warnock, Strategic Partners Fund, L.P. dated as of
                  May 5, 1999, Exhibit A representing the form of the Increasing
                  Rate  Secured Promissory Note, Exhibit B representing the form
                  of Warrant, and Exhibit C representing the Security Agreement.
                  (Incorporated  herein  by  reference  to  Exhibit 10.29 to the
                  Company's  Report on Form 10-Q for the quarter ended March 31,
                  1999)

 10.30      -     Form  of  Securities  Purchase  Agreement  by  and  between
                  Telscape  International,  Inc., INTERLINK Communications, Inc.
                  and Cahill, Warnock, Strategic Partners Fund, L.P. dated as of
                  June  18,  1999,  Exhibit  A  representing  the  form  of  the
                  Increasing  Rate  Secured  Promissory  Note,  Exhibit  B
                  representing  the  form of Warrant, and Exhibit C representing
                  the  Security  Agreement  and  Amendment  No.  1 to Securities
                  Purchase  Agreement.  (Incorporated  herein  by  reference  to
                  Exhibit  10.30  to  the  Company's Report on form 10-Q for the
                  quarter  ended  June  30,  1999)

 10.31      -     Securities  Purchase  Agreement  dated  July  19,  1999 by and
                  between Telscape International, Inc., Telscape USA, Inc., TSCP
                  International,  Inc.,  MSN  Communications,  Inc.  and  Lucent
                  Technologies  Inc., together with a Form of Demand Note in the
                  principal  amount of $3,000,000 payable to Lucent Technologies
                  Inc.  attached  as Exhibit A; a Form of Stock Purchase Warrant
                  for Lucent Technologies Inc. for 85,000 shares of Common Stock
                  of  Telscape  International, Inc. attached as Exhibit B; and a
                  Security  Agreement  by  and  between  Telscape International,
                  Inc.,  Telscape  USA,  Inc.,  MSN  Communications,  Inc., TSCP
                  International,  Inc.  and  State Street Bank and Trust Company
                  attached  as  Exhibit  C. (Incorporated herein by reference to
                  Exhibit  10.31  to  the  Company's Report on form 10-Q for the
                  quarter  ended  June  30,  1999)


                                       52
<PAGE>
 10.32      -     Credit  Agreement  dated  August  27,  1999  by  and  between
                  Telscape  International,  Inc.,  Telereunion  S.A.  de  C.V.,
                  Telereunion  International,  S.A.  de C.V., Telereunion, Inc.,
                  Telscape  USA,  Inc.,  MSN  Communications,  Inc.,  Interlink
                  Communications,  Inc.,  TSCP  International,  Inc.,  Vextro de
                  Mexico  S.A.  de  C.V.,  Servicios  Corporativos,  Telscape de
                  Mexico  S.A.  de C.V., N.S.I. S.A de C.V., Lan and Wan S.A. de
                  C.V.,  MS  Noticias  y  Telecomunicaciones,  S.A. de C.V., and
                  Lucent  Technologies Inc. (Incorporated herein by reference to
                  Exhibit  10.1  to  the  Company's  Report  on  Form  8-K dated
                  September  20,  1999)

 10.33      -     Loan  Agreement  dated  October  22,  1999  by  and  between
                  Telscape International, Inc. and Lennox Invest Ltd. Promissory
                  Note  dated  October  22,  1999  in  the  principal  amount of
                  $1,060,000  payable  to  Lennox  Invest,  Ltd.,  Stock  Pledge
                  Agreement  dated  October  22,  1999,  and Warrant Certificate
                  issued  to  Lennox  Invest,  Ltd. To purchase 35,714 shares of
                  Common Stock of Telscape International, Inc. dated October 22,
                  1999.  (Incorporated  herein  by reference to Exhibit 10.33 to
                  the  Company's  Report  on  form  10-Q  for  the quarter ended
                  September  30,  1999)

 10.34      -     Swap  Agreement  ("Contrato  de Compra-Venta de Fibras") dated
                  December  8,  1999  by  and  between  Iusatel  S.A. de C.V and
                  Telereunion, S.A. de C.V. (Incorporated herein by reference to
                  Exhibit  10.34  to  the  Company's Report on Form 10-K for the
                  year  ended  December  31,  1999)

 10.36      -     Fiber  Optic  Telecommunications  Services  Exchange Agreement
                  dated  May  14,  1999 by and between Avantel, S.A. de C.V. and
                  Telereunion  S.A  de C.V. (Incorporated herein by reference to
                  Exhibit  10.36  to  the  Company's Report on Form 10-K for the
                  year  ended  December  31,  1999)

 10.37      -     Telscape  2000  Executive  Market  Value  Appreciate  Stock
                  Option  Plan  (filed  as  Exhibit  10.37  to  the  Company's
                  registration  statement  No.  333-36882  and  incorporated
                  by  reference)

 10.38      -     Telscape  2000  Non-Employee  Director  Stock  Option  Plan
                  (filed  as  Exhibit  10.38  to  the  Company's  registration
                  statement  No.  333-36882  and  incorporated  by  reference)

 10.39      -     Telscape  2000 pay for Performance Stock Option Plan (filed as
                  Exhibit  10.39  to  the  Company's  registration statement No.
                  333-36882  and  incorporated  by  reference)

 10.40      -     Telscape  2000  Incentive  Stock Option Plan (filed as Exhibit
                  10.40  to  the  Company's registration statement No. 333-36882
                  and  incorporated  by  reference)

 10.41      -     Telscape  2000 Executive Long-Term Stock Option Plan (filed as
                  Exhibit  10.41  of  the  Company's  registration statement No.
                  333-36882  and  incorporated  by  reference)

 10.42      -     CREDIT  AGREEMENT  among TELEREUNION S.A. de C.V., TELEREUNION
                  INTERNATIONAL, S.A. de C.V., TELSCAPE INTERNATIONAL, INC., and
                  THE  OTHER BORROWERS PARTY HERETO and THE ADDITIONAL BORROWERS
                  FROM  TIME  TO  TIME A PARTY HERETO collectively, as Borrowers
                  and  THE  LENDERS  PARTY  HERETO, and GENERAL ELECTRIC CAPITAL
                  CORPORATION,  as  Administrative  Agent and Lender Dated as of
                  September  29,  2000  (filed as Exhibit 10.42 of the Company's
                  Form  10-Q  for  the  three  months ended September 30, 2000).

 10.43      -     Loan and Security Agreement dated as of September 29, 2000, by
                  and between NTFC Capital Corporation and Pointe Communications
                  Corporation (filed as Exhibit 10.43 of the Company's Form 10-Q
                  for  the  three  months  ended  September  30,  2000).


                                       53
<PAGE>
10.44*     -      Registration  Rights  Agreement  by  and  among  Telscape
                  International, Inc. and the holders of Class D Preferred
                  Stock, dated June 2, 2000.

10.45*     -      Registration  Rights  Agreement  by  and  among  Telscape
                  International,  Inc.  and  the  holders  of  Class E Preferred
                  Stock,  dated  June  2,  2000.

10.46*     -      Registration  Rights  Agreement  by  and  among  Telscape
                  International,  Inc.  and  the  holders  of  Class F Preferred
                  Stock,  dated  June  2,  2000.

10.47*     -      Registration  Rights  Agreement  by  and  among  Telscape
                  International,  Inc.  and  the  holders  of  Class G Preferred
                  Stock,  dated  June  2,  2000.

10.48*     -      Amendment  No. 1 to Registration Rights Agreement by and among
                  Telscape  International,  Inc.  and  the  holders  of  Class D
                  Preferred  Stock,  dated  November  2000.

10.49*     -      Amendment No. 1 to  Registration Rights Agreement by and among
                  Telscape  International,  Inc.  and  the  holders  of  Class E
                  Preferred  Stock,  dated  November  2000.

10.50*     -      Amendment No. 1 to  Registration Rights Agreement by and among
                  Telscape  International,  Inc.  and  the  holders  of  Class F
                  Preferred  Stock,  dated  November  2000.

10.51*     -      Amendment No. 2 to  Registration Rights Agreement by and among
                  Telscape  International,  Inc.  and  the  holders  of  Class D
                  Preferred  Stock,  dated  December  2000.

10.52*     -      Amendment No. 2 to  Registration Rights Agreement by and among
                  Telscape  International,  Inc.  and  the  holders  of  Class E
                  Preferred  Stock,  dated  December  2000.

10.53*     -      Amendment No. 2 to  Registration Rights Agreement by and among
                  Telscape  International,  Inc.  and  the  holders  of  Class F
                  Preferred  Stock,  dated  December  2000.

10.54*     -      Warrant agreement by and among Telscape International, Inc.
                  and  the  holders  of  Class  D Preferred Stock, dated June 2,
                  2000.

10.55*     -      Warrant agreement by and among Telscape International, Inc.
                  and  the  holders  of  Class  E Preferred Stock, dated June 2,
                  2000.

10.56*     -      Warrant  agreement  by and among Telscape International, Inc.
                  and  the  holders  of  Class  F Preferred Stock, dated June 2,
                  2000.

10.57*     -      Warrant  agreement  by and among Telscape International, Inc.
                  and  the holders of Class G Preferred Stock, dated December 7,
                  2000.

10.58*     -      Amendment No. 1 to  warrant  agreement  by  and among Telscape
                  International,  Inc.  and  the  holders  of  Class D Preferred
                  Stock,  dated  November  2000.

10.59*     -      Amendment No. 1 to  warrant  agreement  by  and among Telscape
                  International,  Inc.  and  the  holders  of  Class E Preferred
                  Stock,  dated  November  2000.

10.60*     -      Amendment No. 1 to  warrant  agreement  by  and among Telscape
                  International,  Inc.  and  the  holders  of  Class F Preferred
                  Stock,  dated  November  2000.

10.61*     -      MODIFICATION OF PROMISSORY NOTE (this "Modification
                  Agreement")  is  made  as of the 1st day of December, 2000, by
                  and between, Telscape International, Inc., a Texas corporation
                  (the  "Company"),  and  James  H.  Dorsey  III  ("Lender").

10.62*     -      Warrant Agreement to Purchase 50,000 Shares of Common Stock of
                  Telscape  International,  Inc. between Telscape International,
                  Inc.  and  James  H.  Dorsey  III

21.1*     -  List  of  Subsidiaries

23.1*     -  Consent  of  Arthur  Andersen  LLP



----------------
*  Filed  herewith


                                       54
<PAGE>