SOUTHWESTERN BELL TELEPHONE COMPANY

                                 FORM 10-Q

                               United States
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549



(Mark One)

     |X|          Quarterly Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

                     For the period ended June 30, 1997

                                     or

     |_|          Transition Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

                For the transition period from       to

                       Commission File Number 1-2346

                    SOUTHWESTERN BELL TELEPHONE COMPANY

            Incorporated under the laws of the State of Missouri
              I.R.S. Employer Identification Number 43-0529710

              One Bell Center, St. Louis, Missouri 63101-3099
                      Telephone Number: (314) 235-9800


THE REGISTRANT,  A WHOLLY-OWNED SUBSIDIARY OF SBC COMMUNICATIONS INC., MEETS THE
CONDITIONS SET FORTH IN GENERAL  INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS
THEREFORE  FILING THIS FORM WITH REDUCED  DISCLOSURE  FORMAT PURSUANT TO GENERAL
INSTRUCTION H(2).

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



<PAGE>



PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

SOUTHWESTERN BELL TELEPHONE COMPANY
--------------------------------------------------------------------------------
STATEMENTS OF INCOME
Dollars in millions
(Unaudited)
--------------------------------------------------------------------------------
                                     Three months ended        Six months ended
                                           June 30,                June 30,
                               -------------------------------------------------
                                     1997        1996        1997          1996
--------------------------------------------------------------------------------
Operating Revenues
Local service                     $ 1,307     $ 1,171     $ 2,561        $2,292
Network access
   Interstate                         518         530       1,083         1,064
   Intrastate                         270         274         540           544
Long-distance service                 205         226         416           443
Other                                 242         209         477           412
--------------------------------------------------------------------------------
Total operating revenues            2,542       2,410       5,077         4,755
--------------------------------------------------------------------------------

Operating Expenses
Cost of services and products         970         877       1,908         1,731
Selling, general and                  615         454       1,040           864
administrative
Depreciation and amortization         503         445         965           885
--------------------------------------------------------------------------------
Total operating expenses            2,088       1,776       3,913         3,480
--------------------------------------------------------------------------------
Operating Income                      454         634       1,164         1,275
--------------------------------------------------------------------------------

Other Income (Expense)
Interest expense                     (85)        (80)       (169)         (163)
Other income - net                      1           1           1             2
--------------------------------------------------------------------------------
Total other income (expense)         (84)        (79)       (168)         (161)
--------------------------------------------------------------------------------

Income Before Income Taxes            370         555         996         1,114
--------------------------------------------------------------------------------
Income Taxes                          142         207         373           415
--------------------------------------------------------------------------------
Net Income                        $   228     $   348     $   623      $    699
--------------------------------------------------------------------------------

See Notes to Financial Statements.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY
--------------------------------------------------------------------------------
BALANCE SHEETS
Dollars in millions
--------------------------------------------------------------------------------
                                                   ----------      -------------
                                                     June 30,      December 31,
                                                   -----------     -------------
                                                         1997              1996
--------------------------------------------------------------------------------
Assets                                            (Unaudited)
Current Assets
Cash and cash equivalents                            $     64          $     69
Accounts receivable - net of allowances for
uncollectibles of $32 and $23                           1,727             1,674
Prepaid expenses                                          290               168
Deferred charges                                           50                35
Deferred income taxes                                     105                96
Other current assets                                      125               137
--------------------------------------------------------------------------------
Total current assets                                    2,361             2,179
--------------------------------------------------------------------------------
Property, Plant and Equipment - at cost                30,250            29,347
 Accumulated depreciation and amortization             18,165            17,588
--------------------------------------------------------------------------------
Property, Plant and Equipment - Net                    12,085            11,759
--------------------------------------------------------------------------------
Other Assets                                               29                30
--------------------------------------------------------------------------------
Total Assets                                         $ 14,475          $ 13,968
--------------------------------------------------------------------------------

Liabilities and Shareowner's Equity
Current Liabilities
Debt maturing within one year                        $  1,460          $    921
Accounts payable and accrued liabilities                2,604             2,517
--------------------------------------------------------------------------------
Total current liabilities                               4,064             3,438
--------------------------------------------------------------------------------
Long-Term Debt                                          4,142             4,265
--------------------------------------------------------------------------------

Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes                                     288               209
Postemployment benefit obligation                       2,588             2,646
Unamortized investment tax credits                        239               255
Other noncurrent liabilities                              297               269
--------------------------------------------------------------------------------
Total deferred credits and other noncurrent             3,412             3,379
liabilities
--------------------------------------------------------------------------------

Shareowner's Equity
Common stock - one share, no par value                      1                 1
Paid-in surplus                                         3,035             3,687
Retained earnings (deficit)                             (179)             (802)
--------------------------------------------------------------------------------
Total shareowner's equity                               2,857             2,886
--------------------------------------------------------------------------------
Total Liabilities and Shareowner's Equity            $ 14,475          $ 13,968
--------------------------------------------------------------------------------

See Notes to the Financial Statements.


<PAGE>


<TABLE>
---------------------------------------------------
SOUTHWESTERN BELL TELEPHONE COMPANY
-----------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
Dollars in millions, increase (decrease) in cash
and cash equivalents
(Unaudited)
<CAPTION>
-----------------------------------------------------------------------------------
                                                                Six months ended
                                                                    June 30,
                                                               --------------------
                                                                   1997       1996
-----------------------------------------------------------------------------------
<S>                                                          <C>        <C>    
Operating Activities
Net income                                                   $      623   $    699
                                                                       
Adjustments  to  reconcile   net  income  to  net  cash  provided  by  operating
  activities:
   Depreciation and amortization                                    965        885
   Provision for uncollectible accounts                              59         44
   Amortization of investment tax credits                          (16)       (16)
   Deferred income tax expense                                       69         54
   Other - net                                                    (218)      (183)
-----------------------------------------------------------------------------------
Total adjustments                                                   859        784
-----------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                         1,482      1,483
-----------------------------------------------------------------------------------

Investing Activities
Construction and capital expenditures                           (1,251)    (1,042)
-----------------------------------------------------------------------------------
Net Cash Used in Investing Activities                           (1,251)
                                                                           (1,042)
-----------------------------------------------------------------------------------

Financing Activities
Net change in short-term borrowings with original
 maturities of three months or less                                 492        190
Issuance of other short-term borrowings                             120        164
Repayment of other short-term borrowings                          (195)       (89)
Repayment of long-term debt                                         (1)      (201)
Dividends paid                                                    (807)      (686)
Equity received from parent                                         155        200
-----------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing                          (236)      (422)
Activities                                                        
-----------------------------------------------------------------------------------
Net increase in cash and cash equivalents                           (5)         19
-----------------------------------------------------------------------------------
Cash and cash equivalents beginning of year                          69         43
-----------------------------------------------------------------------------------
Cash and Cash Equivalents End of Period                      $       64   $     62
                                                                       
-----------------------------------------------------------------------------------

Cash paid during the six months ended June 30 for:
     Interest                                                $      169 $      164
     Income taxes                                            $      128 $      238

<FN>
See Notes to the Financial Statements.
</FN>
</TABLE>


<PAGE>


-------------------------------------------------------------
SOUTHWESTERN BELL TELEPHONE COMPANY

--------------------------------------------------------------------------
STATEMENT OF SHAREOWNER'S EQUITY

Dollars in millions
(Unaudited)
----------------------------------------------------------------------------
                                                                  Retained
                                          Common      Paid-in     Earnings
                                          Stock       Surplus     (Deficit)
----------------------------------------------------------------------------
Balance, December 31, 1996           $          1    $   3,687     $  (802)
                                                         
Net income                                      -            -          623
Dividend to shareowner                          -        (807)            -
Equity received from parent                     -          155            -
----------------------------------------------------------------------------
Balance, June 30, 1997               $          1    $   3,035     $  (179)
                                                     
----------------------------------------------------------------------------

See Notes to Financial Statements.

                             * * * *


SELECTED FINANCIAL AND OPERATING DATA

At June 30, or for the six months then                   1997          1996
ended:
                                                       -------       -------

  Return on weighted average total capital. . . . .     19.13%       21.54%

  Debt ratio  . . . . . . . . . . . . . . . . . . .     66.22%       63.60%

  Network access lines in service (000)   . . . . .     15,345       14,631

  Access minutes of use (000,000)  . . . . . . . . .    29,136       27,016

  Number of employees . . . . . . . . . . . . . . .     50,670       48,360





<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Dollars in millions

1. BASIS OF  PRESENTATION - Southwestern  Bell Telephone  Company  (SWBell) is a
   wholly-owned  subsidiary  of SBC  Communications  Inc.  (SBC).  The financial
   statements have been prepared by SWBell pursuant to the rules and regulations
   of the  Securities  and  Exchange  Commission  (SEC) and,  in the  opinion of
   management,  include all  adjustments  (consisting  only of normal  recurring
   accruals)  necessary  to present  fairly the results for the interim  periods
   shown.  Certain  information and footnote  disclosures,  normally included in
   financial   statements   prepared  in  accordance  with  generally   accepted
   accounting  principles,  have been condensed or omitted  pursuant to such SEC
   rules and regulations.  Certain  reclassifications have been made to the 1996
   financial  statements to conform with the 1997 presentation.  The results for
   the interim  periods are not  necessarily  indicative of results for the full
   year. The financial statements contained herein should be read in conjunction
   with the financial  statements  and notes  thereto  included in SWBell's 1996
   Annual Report on Form 10-K.

2. COMPLETION OF MERGER SBC and Pacific Telesis Group (PAC) completed the merger
   of an SBC  subsidiary  with PAC, in a transaction  in which each  outstanding
   share of PAC common stock was  exchanged for 0.73145 of a share of SBC common
   stock (equivalent to approximately 313 million shares).  With the merger, PAC
   became a wholly-owned subsidiary of SBC. The transaction was accounted for as
   a pooling of interests and a tax-free reorganization.

   Post-merger initiatives
   On June 19, 1997, SBC announced  several strategic  decisions  resulting from
   the  merger  integration  process  that began with the April 1 closing of its
   merger  with  PAC.  The  decisions  resulted  from  an  extensive  review  of
   operations throughout the merged company and include significant  integration
   of operations and consolidation of some administrative and support functions.
   In connection  with these  initiatives,  SWBell  recognized  several  charges
   during the second quarter.  Following is a discussion of the most significant
   of these charges.

   Reorganization  SBC will  centralize  several key functions that will support
   the operations of SWBell,  Pacific Bell (PacBell) and Nevada Bell,  including
   network   planning,   strategic   marketing  and  procurement.   It  is  also
   consolidating  a  number  of  corporate-wide  support  activities,  including
   research  and  development,  information  technology,  financial  transaction
   processing and real estate management.  SWBell, PacBell, and Nevada Bell will
   continue as separate legal  entities.  These  initiatives  will result in the
   creation of some jobs and the  elimination  and  realignment of others,  with
   many of the  affected  employees  changing job  responsibilities  and in some
   cases assuming positions in other locations.

   SWBell  recognized a charge of approximately  $57 ($36 net of tax) during the
   second quarter of 1997 in connection with these initiatives.  This charge was
   comprised mainly of postemployment benefits,  primarily related to severance.
   Other charges arising out of the merger related to relocation, retraining and
   other  effects of  consolidating  certain  operations  will be  recognized in
   future periods as those charges are incurred.

   Impairments/asset  valuation As a result of SBC's merger  integration  plans,
   strategic review of domestic operations and organizational alignments, SWBell
   reviewed  the  carrying  value of  related  long-lived  assets . This  review
   included estimating  remaining useful lives and cash flows. Where this review
   indicated  impairment,  discounted  cash flows  related to those  assets were
   analyzed  to  determine  the amount of the  impairment.  As a result of these
   reviews,  in the second  quarter  of 1997  SWBell  wrote off some  assets and
   recognized impairments to the value of other assets with a combined charge of
   $84 ($51 after tax),  including the write off of voice dial  equipment  which
   will be discontinued.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

RESULTS OF OPERATIONS 

Overview Financial results for Southwestern Bell Telephone  Company (SWBell) for
the first six months of 1997 and 1996 are summarized as follows:

---------------------------------------------------------------------------
                                                    Six-Month Period
                                              -----------------------------
                                                                   Percent
                                                   1997     1996   Change
---------------------------------------------------------------------------
Operating revenues                             $  5,077 $  4,755      6.8%
Operating expenses                             $  3,913 $  3,480     12.4%
Net income                                     $    623 $    699    (10.9)%
===========================================================================

SWBell's  six-month net income  includes  after-tax  charges of $149  reflecting
strategic   initiatives   resulting   from  SBC   Communication   Inc.'s   (SBC)
comprehensive  review of  operations  of the  merged  company  and the impact of
several recent regulatory rulings.  Excluding these charges, SWBell reported net
income of $772,  10.4%  higher  than the first six  months of 1996 net income of
$699.  SWBell currently  anticipates  additional  after-tax  charges for ongoing
merger integration costs, primarily related to movement of employees,  and local
number portability of $165 to $275 during the remainder of 1997.

Excluding these charges, the primary factors contributing to the increase in net
income during the first six months of 1997 was growth in demand for services and
products.

Revenues  SWBell's  operating  revenues in the first six months of 1997  reflect
reductions of $66 related  primarily to the impact of several recent  regulatory
rulings.  Excluding these items,  SWBell's operating revenues increased $388, or
8.2%,  over the first six months of 1996.  Components of operating  revenues for
the first six months of 1997 and 1996 are as follows:

----------------------------------------------------------------------------
                                                    Six Month Period
                                              ------------------------------
                                                                    Percent
                                                  1997     1996     Change
----------------------------------------------------------------------------
Local service                                 $  2,561  $ 2,292       11.7%
Network access:
   Interstate                                    1,083    1,064        1.8
   Intrastate                                      540      544       (0.7)
Long-distance service                              416      443       (6.1 )
Other                                              477      412       15.8
-------------------------------------------------------------------
     Total                                    $  5,077  $  4,755       6.8%
============================================================================

      Local  Service  revenues  increased  in the first  six  months of 1997 due
      primarily to increases in demand,  including increases in access lines and
      vertical services  revenues.  The number of access lines increased by 4.9%
      since  June  30,  1996,   of  which  66%  was  due  to  growth  in  Texas.
      Approximately  30% of access  line  growth was due to sales of  additional
      access  lines  to  existing  residential   customers.   Vertical  services
      revenues,  which  include  custom  calling  options,  Caller  ID and other
      enhanced services, increased by approximately 22%.
<PAGE>

SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

RESULTS OF OPERATIONS-Continued 

      Network Access  Interstate  network access revenues reflect charges of $52
      due to the adverse impacts of several recent regulatory issues,  including
      recovery of certain  employee-related  expenses and the retroactive effect
      of the  productivity  factor  adjustment  in the Federal price cap filing.
      Without these impacts, interstate network access revenues increased in the
      first six  months of 1997 due  largely to  increases  in demand for access
      services  by  interexchange  carriers.  Growth in  revenues  from end user
      charges,  attributable to an increasing access line base, also contributed
      to the increase.

      Intrastate network access revenues were relatively  unchanged in the first
      six  months of 1997 as modest  increases  in  demand,  including  usage by
      alternative intraLATA toll carriers, were offset by net price decreases.

      Long-Distance  Service revenues  decreased in the first six months of 1997
      due  primarily  to  the  impact  of  price  competition  from  alternative
      intraLATA  toll carriers and the  introduction  and deployment of extended
      area local service plans. The decrease in  long-distance  service revenues
      also reflects impacts of regulatory rate orders.

      Other  operating  revenues  increased  in the first six months of 1997 due
      primarily   to  sales  of  business   systems   communications   equipment
      attributable to the December 1996 movement of the business of Southwestern
      Bell  Telecommunications  Inc. (Telecom), a wholly-owned subsidiary of SBC
      which marketed  business and residential  communications  equipment,  into
      SWBell.  This increase was somewhat offset by decreased sales of Caller ID
      equipment.

Expenses  SWBell's  operating  expenses in the first six months of 1997  reflect
$164 of charges related to strategic  initiatives resulting from a comprehensive
review of operations (see Note 2 to the financial  statements).  Excluding these
charges,  operating  expenses increased $269, or 7.7%, over the first six months
of 1996.  Components of operating  expenses for the first six months of 1997 and
1996 are as follows:

---------------------------------------------------------------------------
                                                    Six-Month Period
                                              -----------------------------
                                                                    Percent
                                                1997      1996      Change
---------------------------------------------------------------------------
Cost of services and products                 $  1,908  $ 1,731       10.2%
Selling, general and administrative              1,040      864       20.4
Depreciation and amortization                      965      885        9.0
------------------------------------------------------------------
   Total                                      $  3,913  $ 3,480       12.4%
===========================================================================

      Cost of services  and  products  for the first six months of 1997  reflect
      charges of $17 relating to strategic  initiatives,  including  charges for
      customer number portability. Excluding these charges, cost of services and
      products  increased  $160,  or 9.2%,  in the first six  months of 1997 due
      primarily to increases for employee  compensation,  network  expansion and
      maintenance and  interconnection.  Results also reflect increased expenses
      for business systems communications equipment now sold by SWBell (formerly
      sold by Telecom as described above).
<PAGE>
SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

RESULTS OF OPERATIONS-Continued 

      Selling,  general and administrative  expenses for the first six months of
      1997 reflect one-time  charges of $110,  including the $57 charge relating
      to  reorganization  (see Note 2 to the  financial  statements).  Excluding
      these charges, selling, general and administrative expenses increased $66,
      or 7.6%,  in the first six months of 1997 due  primarily  to  increases in
      sales agents commissions, uncollectibles and employee compensation.

      Depreciation  and  amortization  for the first six months of 1997  reflect
      one-time  charges of $37 for the write off of voice dial  equipment  which
      will be discontinued (see Note 2 to the financial  statements).  Excluding
      this charge,  depreciation and amortization increased $43, or 4.9%, in the
      first  six  months  of 1997 due  primarily  to  growth  in  plant  levels.
      Depreciation  and  amortization  for the  first  six  months  of 1997 also
      reflects a $45  decrease due to an increase in copper cable life caused by
      a limited  deployment of asymmetrical  digital  subscriber line equipment.
      This  decrease was mostly  offset by a change in the  effective  composite
      rate for other plant categories.

Interest  expense  increased $6, or 3.7%, in the first six months of 1997 due to
increases in short-term debt levels.

Income  taxes  decreased  $42,  or 10.1%,  in the  first six  months of 1997 due
primarily to lower income before income taxes.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

OPERATING ENVIRONMENT AND TRENDS OF THE BUSINESS

COMPETITIVE AND REGULATORY ENVIRONMENT

Access  Reform/Price  Caps - On  June  3,  1997,  SBC  filed  with  the  Federal
Communications  Commission  (FCC) a Petition  for  Partial  Stay  (Petition)  of
aspects  of the orders  adopted  on May 7, 1997 by the FCC on access  reform and
local  exchange  carrier  price  caps.  The  Petition  asked the FCC to stay the
application  of the 6.5%  productivity  offset to all  price cap Local  Exchange
Carriers (LECs), its retroactive  application to the 1996 annual tariff filings,
and  exogenous  reductions  associated  with  the  completion  of  equal  access
amortization.  The FCC  denied  the stay on June 18,  1997.  The  impact  of the
retroactive  portion  of the FCC orders was  recorded  in the second  quarter of
1997.

On June 16, 1997,  SBC and several other  parties filed court appeals  regarding
several aspects of the Access Reform and Price Cap Orders. The appeal related to
access  reform has been  assigned  to the U.S.  Court of Appeals  for the Eighth
Circuit in St.  Louis (8th  Circuit).  The appeal  related to price caps and the
productivity  offset decision had been assigned to the U.S. Court of Appeals for
the 10th Circuit in Denver,  but on July 28, 1997 it was  transferred to the U.S
Court of Appeals for the D.C. Circuit.

Interconnection  Agreements  SWBell  continues  to  enter  into  interconnection
agreements  with  companies  desiring to provide  local service in its operating
territory.  Agreements  have  been  reached  and  approved  by all of the  state
commissions in states where SWBell operates.

Some parties have entered into second arbitration processes to address remaining
interconnection issues in dispute in Kansas, Oklahoma, and Texas.  Additionally,
on July 17, 1997 the Federal  District  Court in Kansas City  dismissed  without
prejudice SWBell's lawsuit challenging the AT&T arbitration
order in Kansas on the grounds it was premature.
<PAGE>

SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

OPERATING ENVIRONMENT AND TRENDS OF THE BUSINESS

COMPETITIVE AND REGULATORY ENVIRONMENT-Continued

On July 18, 1997, the 8th Circuit set aside key parts of the FCC Interconnection
Order that attempted to set prices for local exchange services, holding that the
right to set such prices is  reserved  exclusively  to the states.  SWBell is in
agreement with the 8th Circuit's  ruling on the order and believes the intent of
the  Telecommunications  Act of 1996 (Telecom Act)  retained  state  regulators'
jurisdiction over pricing of intrastate service and local  interconnection.  The
FCC has  indicated  it will  appeal the 8th  Circuit's  decision  to the Supreme
Court.

InterLATA  Long-distance Filing On April 11, 1997, SBC filed an application with
the FCC for the provision of interLATA  long-distance services in Oklahoma under
the provisions of the Telecom Act. The Oklahoma Corporation  Commission approved
SBC's  application  in  April  1997.  On June 26,  1997,  the FCC  denied  SBC's
application on the basis that SBC had not met the requirement established by the
Telecom Act. SBC intends to appeal.

Incentive  Legislation  Oklahoma  enacted  legislation,  effective July 1, 1997,
which  provides for  alternative  regulation in Oklahoma for  telecommunications
providers.  Key provisions of the new law allow SWBell to apply for  alternative
regulation  at any time,  impose a  restriction  against  the  state  commission
initiating  a rate case until  February 5, 2001,  establish a Universal  Service
Fund (USF),  and require SWBell to keep  intrastate  access rates in parity with
interstate  rates, but allows SWBell to seek partial recovery of the access rate
reductions from the USF. In addition,  the new law allows for streamlined tariff
processing  procedures and allows  companies to apply to have services  declared
competitive and eventually deregulated.

Portions of Telecom Act  Challenged On July 2, 1997,  SBC sued in U.S.  District
Court for the Northern District of Texas to declare a portion of the Telecom Act
unconstitutional on the grounds the Telecom Act improperly discriminates against
SBC  by  imposing   restrictions  that  prohibit  SBC  from  offering  interLATA
long-distance and other services that other local exchange companies are free to
provide. The suit challenges only that portion of the Telecom Act which excludes
SBC from competing in certain lines of business.

OTHER BUSINESS MATTERS

Over the next few years,  SWBell is expecting to incur  significant  capital and
software  expenditures  for  interconnection  and customer  number  portability.
SWBell expects the capital costs and expenses  associated  with customer  number
portability,  which allows customers to switch to new local competitors and keep
the same phone number, to total up to $750 on a pre-tax basis over the next four
years. Full recovery of customer number  portability costs is required under the
Telecom  Act;  however,  the  FCC  has not  yet  determined  when  or how  those
significant  costs will be recovered.  The FCC has suspended the tariff filed by
SWBell for recovery of these costs until September 1997, pending the issuance of
its order on  customer  number  portability.  SWBell is  unable to  predict  the
likelihood of the FCC permitting the tariff to become  effective.  Capital costs
and expenses  associated with  interconnection  will vary based on the number of
competitors seeking  interconnection and markets entered and customers served by
those  competitors.  Accordingly,  SWBell  is  currently  unable  to  reasonably
estimate these costs.



<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits

      Exhibit 12  Computation of Ratios of Earnings to Fixed Charges.

      Exhibit 27  Financial Data Schedule.

(b)   Reports on Form 8-K

      On July 15, 1997 SWBell filed a Current  Report on Form 8-K,  reporting on
      Item 7,  Financial  Statements and Exhibits.  In the report,  SWBell filed
      exhibits  relating to the issuance of 6 5/8% Notes due July 15, 2007 and 7
      3/8% debentures due July 15, 2027.




<PAGE>




                                   SIGNATURES


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

                                       Southwestern Bell Telephone Company




August 13, 1997                        /s/Richard G. Lindner
                                       Richard G. Lindner
                                       Vice President and Chief Financial
                                       Officer (Principal Accounting/
                                       Financial Officer)