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 quarterly period ended March 31, 1998

                                     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

                  175 E. Houston, San Antonio, Texas 78205
                      Telephone Number: (210) 821-4105


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
                                                         March 31,
                                                 -----------------------
                                                        1998       1997
------------------------------------------------------------------------
Operating Revenues
Local service                                     $    1,366  $   1,254
Network access:
   Interstate                                            579        565
   Intrastate                                            272        270
Long-distance service                                    189        211
Other                                                    268        235
------------------------------------------------------------------------
Total operating revenues                               2,674      2,535
------------------------------------------------------------------------

Operating Expenses
Cost of services and products                          1,025        938
Selling, general and administrative                      431        425
Depreciation and amortization                            480        462
------------------------------------------------------------------------
Total operating expenses                               1,936      1,825
------------------------------------------------------------------------
Operating Income                                         738        710
------------------------------------------------------------------------

Other Income (Expense)
Interest expense                                         (89)       (84)
Other income (expense) - net                             (10)         -
------------------------------------------------------------------------
Total other income (expense)                             (99)       (84)
------------------------------------------------------------------------
Income Before Income Taxes                               639        626
------------------------------------------------------------------------
Income Taxes                                             237        231
------------------------------------------------------------------------
Net Income                                        $      402  $     395
------------------------------------------------------------------------

See Notes to Financial Statements.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY
------------------------------------------------------------------------------
BALANCE SHEETS
Dollars in millions
------------------------------------------------------------------------------
                                                   March 31,     December 31,
                                           -----------------------------------
                                                        1998             1997
------------------------------------------------------------------------------
Assets                                         (Unaudited)
Current Assets
Cash and cash equivalents                         $       91   $           79
Accounts receivable - net of allowances
for uncollectibles of $36 and $33                      1,752            1,819
Prepaid expenses                                         269              156
Deferred charges                                          45               39
Deferred income taxes                                    148              192
Other current assets                                     162              167
------------------------------------------------------------------------------
Total current assets                                   2,467            2,452
------------------------------------------------------------------------------
Property, Plant and Equipment - at cost               31,553           31,011
  Less: Accumulated depreciation and amortization     18,914           18,460
------------------------------------------------------------------------------
Property, Plant and Equipment - Net                   12,639           12,551
------------------------------------------------------------------------------
Other Assets                                              35               11
------------------------------------------------------------------------------
Total Assets                                      $   15,141   $       15,014
------------------------------------------------------------------------------

Liabilities and Shareowner's Equity
Current Liabilities
Intercompany loans                                $    1,429   $          473
Current portion of long-term obligations                  85              172
-------------------------------------------------------------------------------
Total debt maturing within one year                    1,514              645
Accounts payable and accrued liabilities               2,468            3,041
------------------------------------------------------------------------------
Total current liabilities                              3,982            3,686
------------------------------------------------------------------------------
Long-Term Debt                                         4,585            4,824
------------------------------------------------------------------------------

Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes                                    522              383
Postemployment benefit obligation                      2,493            2,574
Unamortized investment tax credits                       217              224
Other noncurrent liabilities                             290              305
------------------------------------------------------------------------------
Total deferred credits and other noncurrent
 liabilities                                           3,522            3,486
------------------------------------------------------------------------------


Shareowner's Equity
Common stock - one share, no par value                     1                 1
Paid-in surplus                                        2,845             2,745
Retained earnings                                        206               272
------------------------------------------------------------------------------
Total shareowner's equity                              3,052             3,018
------------------------------------------------------------------------------
Total Liabilities and Shareowner's Equity         $   15,141    $       15,014  
------------------------------------------------------------------------------

See Notes to Financial Statements.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY
------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
Dollars in millions, increase (decrease) in cash and cash
equivalents
(Unaudited)
------------------------------------------------------------------------
                                                 Three months ended
                                                       March 31,
                                                      1998 1997
--------------------------------------------------------------------
Operating Activities
Net income                                   $       402  $     395  
                                                                
Adjustments to reconcile net income tnet cash
  provided by operating activities:
   Depreciation and amortization                     480        462
   Provision for uncollectible accounts               30         23
   Amortization of investment tax credits             (7)        (8)
   Deferred income taxes                             145        125
   Other - net                                      (758)      (483)
--------------------------------------------------------------------
Total adjustments                                   (110)       119
--------------------------------------------------------------------
Net Cash Provided by Operating Activities            292        514
--------------------------------------------------------------------

Investing Activities
Construction and capital expenditures               (531)      (553)
--------------------------------------------------------------------
Net Cash Used in Investing Activities               (531)      (553)
--------------------------------------------------------------------

Financing Activities
Net change in short-term borrowings with
original maturities of three months or less          955        256
Issuance of other short-term borrowings                -        120
Repayment of other short-term borrowings               -        (75)
Issuance of long-term debt                           195          -
Repayment of long-term debt                         (531)        (1)
Dividends paid                                      (468)      (412)
Equity received from parent                          100        155
--------------------------------------------------------------------
Net Cash Provided by Financing Activities            251         43
--------------------------------------------------------------------
Net increase in cash and cash equivalents             12          4
--------------------------------------------------------------------
Cash and cash equivalents beginning of year           79         69
--------------------------------------------------------------------
Cash and Cash Equivalents End of Period     $         91  $      73
--------------------------------------------------------------------

Cash paid during the three months ended March 31 for:
     Interest                               $         94 $       76
     Income taxes                           $        113 $       91

See Notes to Financial Statements.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY
-----------------------------------------------------------------------
STATEMENT OF SHAREOWNER'S EQUITY
Dollars in millions
(Unaudited)
-----------------------------------------------------------------------
                                        Common   Paid-in    Retained
                                        Stock    Surplus    Earnings
-----------------------------------------------------------------------

Balance, December 31, 1997             $      1 $    2,745 $       272
Net income                                    -          -         402
Dividend to shareowner                        -          -        (468)
Net equity from parent                        -        100           -
-----------------------------------------------------------------------
Balance, March 31, 1998                $      1 $    2,845 $       206
-----------------------------------------------------------------------

See Notes to Financial Statements.

                               * * * *


SELECTED FINANCIAL AND OPERATING DATA

At March 31, or for the three months                1998        1997
then ended:
                                                   --------   ---------

  Return on weighted average total capital  .      22.38%       22.85%

  Debt ratio   . . . . . . . . . . . . . . . .     66.65%       64.47%

  Network access lines in service (000)   . .      16,025       15,198

  Access minutes of use (000,000)  . . . . . .     15,066       14,225

  Number of employees . . . . . . . . . . . .      50,740       49,640






<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.   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 1997 Annual Report on Form 10-K filed
   with the SEC.  Comprehensive  income for SWBell is the same as Net Income for
   all periods presented.

2. SOFTWARE  COSTS  SWBell  currently  expenses  costs as incurred  software for
   purchased  or  developed  for  internal  use,  except for  initial  operating
   software  costs,  which are  capitalized  and amortized over the lives of the
   associated  hardware.  The American Institute of Certified Public Accountants
   has issued a Statement of Position (SOP) that will require  capitalization of
   certain  computer  software  expenditures  beginning  in 1999,  with  earlier
   adoption permitted.

   SWBell did not elect to early adopt the provisions of the SOP.  Management is
   currently  evaluating the impact of the change in accounting  required by the
   SOP, but is not able to quantify the effect at this time.  The SOP would tend
   to cause an increase in net income in the first year of adoption.



<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 quarter of 1998 and 1997 are summarized as follows:

---------------------------------------------------------------------------
                                                   Three-Month Period
                                              -----------------------------
                                                                   Percent
                                                   1998     1997   Change
---------------------------------------------------------------------------
Operating revenues                             $  2,674 $  2,535      5.5%
Operating expenses                             $  1,936 $  1,825      6.1%
Net income                                     $    402 $    395      1.8%
===========================================================================

SWBell  reported  net income of $402 for the first  quarter of 1998,  relatively
unchanged  from the first  quarter of 1997 as growth in demand for  services and
products  was offset by  increases  in employee  compensation,  including  those
resulting from higher force levels, and costs associated with  implementation of
the merger between SBC Communications Inc. (SBC) and Pacific Telesis Group.

Revenues Components of operating revenues for the first quarter of 1998 and 1997
are as follows:

----------------------------------------------------------------------------
                                                   Three-Month Period
                                              ------------------------------
                                                                    Percent
                                                  1998     1997     Change
----------------------------------------------------------------------------
Local service                                 $  1,366  $ 1,254        8.9%
Network access:
   Interstate                                      579      565        2.5
   Intrastate                                      272      270        0.7
Long-distance service                              189      211      (10.4)
Other                                              268      235       14.0
-------------------------------------------------------------------
     Total                                    $  2,674  $ 2,535        5.5%
============================================================================

      Local  Service  revenues  increased  in the  first  quarter  of  1998  due
      primarily to increases in demand,  including increases in access lines and
      vertical services  revenues.  The number of access lines increased by 5.4%
      since  March  31,  1997,  of  which  66%  was  due  to  growth  in  Texas.
      Approximately  29% of access  line  growth was due to sales of  additional
      access  lines  to  existing  residential   customers.   Vertical  services
      revenues,  which include custom calling  services,  call control  options,
      Caller  ID  and  other   services,   increased   by   approximately   16%.
      Additionally,  Federal  payphone  deregulation  implemented  in April 1997
      increased  local  service   revenues  and  decreased   long-distance   and
      interstate  network  access;  the overall impact was a slight  increase in
      total operating revenues.


<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  increased in the first
      quarter of 1998 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.  Also  contributing  to the increase was the absence of the 1997
      revenue offset required for net payments for long-term  support which were
      designed to subsidize universal service.  This change is discussed further
      in Cost  of  Services  and  Products  below.  Partially  offsetting  these
      increases  were the  effects  of the 1997 rate  reduction  related  to the
      Federal  productivity  factor  adjustment,  as discussed in SWBell's  1997
      Annual Report on Form10-K.

      Intrastate network access revenues increased slightly in the first quarter
      of 1998 as increases in demand,  including usage by alternative  intraLATA
      toll carriers, were partially offset by net price decreases resulting from
      1997 state regulatory rate orders.

      Long-Distance  Service revenues decreased in the first quarter of 1998 due
      to the  effect  of  price  competition  from  alternative  intraLATA  toll
      carriers,  regulatory rate orders and the  introduction  and deployment of
      extended area local service plans.

      Other  operating  revenues  increased in the first  quarter of 1998 due to
      increased demand for  nonregulated  services and products and increases in
      Caller ID equipment sales.

Expenses Components of operating expenses for the first quarter of 1998 and 1997
are as follows:

---------------------------------------------------------------------------
                                                   Three-Month Period
                                              -----------------------------
                                                                    Percent
                                                1998      1997      Change
---------------------------------------------------------------------------
Cost of services and products                 $  1,025  $   938        9.3%
Selling, general and administrative                431      425        1.4
Depreciation and amortization                      480      462        3.9
------------------------------------------------------------------
   Total                                      $  1,936  $ 1,825        6.1%
===========================================================================

      Cost of services and products for the first quarter of 1998 increased $87,
      or 9.3%, over the first quarter of 1997.  These costs increased  primarily
      as a  result  of  increases  in  employee  compensation,  including  force
      additions,  network expansion and maintenance,  and interconnection costs.
      Also increasing  expenses were increases in the Federal  Universal Service
      Fund  charges  implemented  January 1, 1998,  which  replaced the 1997 net
      payments  for  long-term  support  which were  accounted  for as an offset
      against  Interstate  Network  Access  Revenues.  Other factors  increasing
      expenses were continuing costs of local number portability  implementation
      of $12,  employee  training,  and  right-to-use  fees.  These  costs  were
      partially offset by reductions in employee benefit expenses.

      Selling,  general and administrative expense for the first quarter of 1998
      increased $6, or 1.4%, due to costs of merger implementation,  other costs
      associated  with the  consolidation  of  operations  since the  merger and
      increased other taxes. These increases were partially offset by a decrease
      in contract labor.

      Depreciation  and  amortization for the first quarter of 1998 increased by
      $18, or 3.9% over the first quarter of 1997.  The majority of the increase
      resulted from increased plant levels and a smaller portion of the increase
      resulted  from  rate  variances  related  to the  net  impact  of  revised
      composite rates.

Income Tax expense  increased  $6, or 2.6%,  compared to 1997  primarily  due to
higher income before income tax.

<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

Long-distance Applications SBC Communications Inc. (SBC) continues to seek entry
into interLATA long-distance through the courts and by approval from the Federal
Communications  Commission.  SWBell  has  section  271  applications  pending to
provide interLATA long-distance service in Arkansas, Kansas, Oklahoma and Texas,
and application is expected to be filed soon in Missouri.

OTHER BUSINESS MATTERS

Employees  A tentative  labor  agreement  was  reached on April 7, 1998  between
SWBell and the  Communications  Workers  of America  (CWA) to replace a contract
that  would  expire  on  August  8,  1998.  The  new  agreement  is  subject  to
ratification by the CWA membership, and covers approximately 40,000 employees of
SWBell through April 1, 2001. Among other items,  the contract  specifies an 11%
increase in wages over the life of the contract.



<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 March 12, 1998 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 $200 million in 6 7/8% Debentures due
      March 31, 2048.

      On March 4, 1998 SWBell filed a Current  Report on Form 8-K,  reporting on
      Item 5, Other Events. In the report,  SWBell filed unaudited  Supplemental
      Financial Data for December 31, 1997.

      On February 17, 1998 SWBell filed a Current Report on Form 8-K,  reporting
      on Item 5, Other Events.  In the report,  SWBell filed  certain  financial
      statement information included in a January 28, 1998 SBC press release.



<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




May 11, 1998                           /s/ Richard G. Lindner
                                       ----------------------
                                       Richard G. Lindner
                                       Vice President and Chief Financial
                                       Officer (Principal Accounting/Financial
                                       Officer)