SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


                [X]    Quarterly Report Pursuant to Section 13 or
                      15(d) of the Securities Exchange Act of 1934.
                                          
                  For the quarterly period ended June 30, 1998
                                        
                                        
                                       or
                                        
                                        
             [  ]  Transition Report Pursuant to Section  13 or 15(d)
                     of the Securities Exchange Act of 1934.
                                        
                    For the transition period _____ to ______
                                        
                                        
                         Commission File Number 1-12577


                                        
                                SITEL CORPORATION
             (Exact name of registrant as specified in its charter)
                                        
            Minnesota                                     47-0684333
   (State or jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                      Identification No.)


                          111 SOUTH CALVERT, STE. 1910
                              BALTIMORE,  MD  21202
                                 (410) 246-1505
                                        
   (Address, including zip code, and telephone number, including area code, of
                    registrant's principal executive offices)
                                        
      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
                                                _____    _____
                                        
     As of July 31, 1998, the Company had 64,050,109 shares of Common Stock
outstanding.
<PAGE>

                                        
                       SITEL CORPORATION AND SUBSIDIARIES
                                        
                                        
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

      Consolidated Condensed Balance Sheets.........................   1
      
      Consolidated Condensed Statements of Income (Loss)............   2
      
      Consolidated Condensed Statements of Cash Flows...............   3
      
      Notes to Consolidated Condensed Financial Statements..........   4

Item 2.  Management's Discussion and Analysis of Results of 
        Operations and Financial Condition..........................   15



PART II - OTHER INFORMATION


Item 4.  Submission of Matters to a Vote of Security Holders........  21  

Item 6.  Exhibits and Reports on Form 8-K...........................  21  

Signature...........................................................  22  
<PAGE>



                          SITEL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED  BALANCE SHEETS
                         December 31, 1997 and June 30, 1998
                      (dollars in thousands, except share data)
                                                                           
                      ASSETS                          December 31,     June 30
                                                          1997           1998
                                                      ____________   ___________
Current assets:                                                      (unaudited)
  Cash and cash equivalents.......................  $       24,285 $      28,697
  Trade accounts receivable (net of allowance for                               
  doubtful accounts of $ 5,099 and $5,375,                                     
  respectively) ..................................         107,697       129,148
  Marketable securities ..........................             159            --
  Prepaid expenses ...............................           3,916         6,307
  Other assets ...................................           9,548        10,439
  Deferred income taxes ..........................           3,153         1,443
                                                      ____________  ___________
     Total current assets ........................         148,758       176,034
     Property and equipment, net..................         120,600       116,941
     Deferred income taxes........................          11,114        14,748
     Goodwill, net................................          94,381        94,344
     Other assets.................................          11,027        12,907
                                                      ____________  ___________
     Total assets ................................  $      385,880 $     414,974
                                                      ============  ===========
                                                                 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                                           
  Note payable - bank............................   $       14,376 $      25,437
  Current portion of long-term debt..............           10,793         7,821
  Current portion of capitalized lease                                          
  obligations....................................            4,934         3,620
  Trade accounts payable.........................           27,322        22,257
  Income taxes payable...........................            8,398         7,230
  Accrued compensation...........................           14,120        25,960
  Accrued operating expenses.....................           22,984        29,043
  Deferred revenue and other.....................            6,286         6,956
                                                      ____________  ___________
     Total current liabilities...................          109,213       128,324
     Long-term debt, excluding current portion...          102,505       107,540
     Capitalized lease obligations, excluding
     current portion.............................           12,983        11,010
     Deferred compensation.......................            1,407         1,627
                                                                                
     Minority interest...........................            1,384         9,560
                                                                                
Stockholders' equity:                                                      
  Common stock, voting, $.001 par value                                         
  200,000,000 shares authorized, 63,099,597 and
  64,046,613 shares issued and outstanding,
  respectively....................................              63            64
  Paid-in capital.................................         155,326       157,879
  Accumulated other comprehensive income..........         (6,415)       (7,433)
  Retained earnings...............................           9,414         6,403
     Total stockholders' equity...................         158,388       156,913
                                                      ____________  ___________
                                                                               
     Total liabilities and stockholders' equity...  $      385,880 $     414,974
                                                      ============  ===========
                            
The accompanying notes are an integral part of the consolidated condensed 
financial statements.
                            




<TABLE>
                                        SITEL CORPORATION AND SUBSIDIARIES
                                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS)
                                                       (unaudited)

                                                          For The Three Months Ended        For The Three Months Ended
                                                         June 30, 1997   June 30, 1998     June 30, 1997   June 30, 1998
<S>                                                     <C>             <C>               <C>             <C>
                                                          _____________   _____________     _____________   _____________
     (in thousands, except per share data)                                                                       
                                                                                                                       
     Revenues........................................   $       125,267 $        147,307  $       229,527 $      285,055
                                                          _____________    _____________    _____________   _____________
     Operating expenses:                                                                                                
          Cost of services...........................            67,105           82,585          123,462        160,405
          Selling, general and administrative                                                                           
               expenses..............................            46,301           61,096           83,543        115,768
          Restructuring expenses ....................                --            6,607               --          6,607
                                                          _____________    _____________    _____________   _____________
                        Total operating expense......           113,406          150,288          207,005        282,780
                                                          _____________    _____________    _____________   _____________
                                                                                                                        
                        Operating income (loss)......            11,861          (2,981)           22,522          2,275
     Other income (expense):                                                                                            
          Interest income (expense), net.............           (1,153)          (3,375)          (1,687)        (5,965)
          Other income (expense) ....................              (61)               34             (61)            169
                                                          _____________    _____________    _____________   _____________
     Income (loss) before income taxes                                                                                    
          and minority interest......................            10,647          (6,322)          20,774         (3,521)
                                                                                                                       
     Income tax expense (benefit) ...................             3,995          (1,878)           7,638           (761)
     Minority interest ..............................                46               31              76           (263)
                                                          _____________    _____________    _____________   _____________
                                                                                                                        
     Net income (loss) from continuing operations....             6,606          (4,475)           13,060        (2,497)
     Extraordinary loss on refinancing of debt, net                                                                     
     of taxes ..................................                     --               --               --            514
                                                          _____________    _____________    _____________   _____________
     Net income (loss) .............................. $           6,606 $        (4,475)  $        13,060 $      (3,011)
                                                          =============    =============    =============   =============



     Income (loss) from continuing operations per                                                                       
     common share:
       Basic.........................................  $          0.11 $         (0.07)  $          0.21  $      (0.04)
       Diluted.......................................  $          0.10 $         (0.07)  $          0.19  $      (0.04)
     Income (loss) per common share:                                                                                   
       Basic.........................................  $          0.11 $         (0.07)  $          0.21  $      (0.05)
       Diluted.......................................  $          0.10 $         (0.07)  $          0.19  $      (0.05)
     Weighted average common shares outstanding:                                                                       
       Basic.........................................           61,622           63,871           60,753         63,584
       Diluted.......................................           68,800           63,871           68,158         63,584


The accompanying notes are an integral part of the consolidated condensed
financial statements
</TABLE>
                              SITEL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                          (unaudited)
                                                         
                                                       For Six Months Ended
(dollars in thousands)                            June 30, 1997    June 30, 1998
                                                  ______________   _____________
Net income(loss)............................... $         13,060 $      (3,011)
     Adjustments to reconcile net income to net                                
     cash provided by operating activities:
   Depreciation and amortization...............           12,450         19,551
   Extraordinary loss on refinancing of debt...               --            792
   Gain on marketable securities...............               --          (208)
   Restructuring provision.....................               --          6,607
   Change in assets and liabilities:                                           
       Trade accounts receivable...............                        (21,247)
                                                        (28,706)
       Other assets............................          (4,042)        (1,400)
       Trade accounts payable..................            2,048        (4,969)
       Other liabilities.......................            8,337         11,352
                                                  ______________   _____________
                                                                                
         Net cash provided by operating                                        
         activities............................            3,147          7,467
                                                  ______________   _____________
                                                                               
        Cash flows from investing activities:                                  
   Purchases of property and equipment.........         (42,533)       (23,986)
   Proceeds from sale-leasebacks of facilities.               --          9,397
   Acquisition of businesses, net of cash                                      
   acquired....................................         (28,866)        (2,355)
   Sale of marketable securities...............               --            257
   Changes in other assets, net................            (120)          (209)
                                                  ______________   _____________
                                                                               
         Net cash used in investing activities.         (71,519)       (16,896)
                                                  ______________   _____________
                                                                               
         Cash flows from financing activities:                                 
   Borrowings on note payable..................           75,577         13,664
   Repayments of note payable..................         (43,763)        (2,866)
   Borrowings on long-term debt................           18,411        127,339
   Repayment of long-term debt and capitalized 
   lease obligations...........................            (620)      (131,541)
   State incentive credits received............              900             --
   Capital contribution from subsidiary                                        
   shareholder.................................               --          1,400
   Sale of stock of subsidiaries...............               --          6,541
   Common stock issued for option exercises....              227              2
                                                  ______________   _____________
                                                                               
                                                                               
         Net cash provided by financing 
         activities............................           50,732         14,539
                                                  ______________   _____________
                                                                               
         Effect of exchange rates on cash......          (1,773)          (698)
                                                  ______________   _____________
                                                                               
         Net increase (decrease) in cash.......         (19,413)          4,412
         Cash and cash equivalents, beginning
         pf period.............................           25,710         24,285
                                                  ______________   _____________
         Cash and cash equivalents, end of
         period................................ $          6,297 $       28,697
                                                  ==============   =============
                                                                               
    SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
    The Company issued approximately 2,100,000 and 41,000 shares of the
    Company's common stock in connection with acquisitions in the first
    six months of 1997 and 1998, respectively.
                       
    The accompanying notes are an integral part of the consolidated 
    condensed financial statements.
                       
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS



1.   BASIS OF PRESENTATION:

The consolidated condensed balance sheet of SITEL Corporation and Subsidiaries
(the "Company") at December 31, 1997 was obtained from the Company's audited
balance sheet as of that date.  All other financial statements contained herein
are unaudited and, in the opinion of management, contain all adjustments
necessary for a fair presentation of  the financial position, operating results,
and cash flows for the periods presented.  Such adjustments consist only of
normal recurring items.  The consolidated condensed financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's Form 10-K for
the year ended December 31, 1997.

2.   SALE OF STOCK OF SUBSIDIARIES:

During the first quarter of 1998 the Company sold newly issued stock of certain
subsidiaries located in the Asia Pacific region to Lend Lease Corporation
Limited, Sydney, Australia and certain of its subsidiaries ("Lend Lease").  Lend
Lease paid approximately $6.6 million for a 20% interest in these subsidiaries,
which provide outsourced call center solutions throughout the region.

Lend Lease has several options to increase its ownership percentage in amounts
up to a total of 49% which, subject to meeting certain conditions, expire at
various times through on or about March 2004.  The option exercise prices are
intended to approximate fair value through formulas tied to the subsidiary's
revenue levels for certain prior periods.  The Company also has an option to
reacquire the original shares sold to Lend Lease at an agreed formula price from
on or about March 2000 through on or about March 2001 so long as Lend Lease has
not exercised its option to increase its ownership percentage.  Lend Lease also
has an option to sell its shares back to the Company at an agreed formula price
(the "put option").  The put option expires upon the earlier of Lend Lease
exercising its option to increase its ownership percentage or on or about March
2001.

Operations of these subsidiaries are controlled by a management committee on
which Lend Lease and the Company have equal representation.  The Company,
however, effectively controls the operations of these subsidiaries through
certain dispute resolution processes that are included in the shareholder
agreements.  Should the Company exercise its control through these dispute
resolution processes, Lend Lease has the option to sell its shares back to the
Company at an agreed formula price which is intended to approximate fair value.

Although the purchase price paid by Lend Lease exceeds the book value of the 20%
ownership that they acquired, due to the put option the Company has included the
entire amount of the stock purchase price as minority interest. The Company will
accrete to the put option formula price if earnings credited to the minority
interest are not sufficient to record the amount that would be required to be
paid to Lend Lease upon their exercise of the put option.

3.  INCOME TAXES:

The difference between the Company's income tax expense as reported in the
accompanying financial statements and that which would be calculated using the
statutory Federal income tax rate of 34% on income is primarily due to non-
deductible business acquisition expenses and international, state and local
income taxes.
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS



4.  LONG TERM DEBT AND NOTES PAYABLE:

On March 10, 1998, the Company completed the private placement of $100 million
of 9.25% Senior Subordinated Notes due 2006 (the "Notes").  The proceeds from
the offering were used to repay borrowings outstanding under the Company's long
term revolving credit facility (the "Credit Facility"), which was also amended
on that date.
     
The Notes, which include interest payable semiannually, are general unsecured
obligations of the Company and will be subordinated in right of payment to all
existing and future senior debt of the Company.  The Notes are guaranteed by
certain of the Company's subsidiaries and contain certain covenants that limit
the ability of the Company and certain of its subsidiaries to, among other
things, incur additional indebtedness, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates, incur liens, merge or consolidate with another
company and sell or otherwise dispose of all or substantially all of the assets
of the Company.
     
The Notes are redeemable, at the Company's option, in whole or in part from time
to time on or after March 15, 2002.  If redeemed during the twelve-month period
commencing on March 15 of the year set forth below, the redemption prices are as
follows, plus in each case, accrued and unpaid interest thereon, if any, to the
date of redemption:

            Year                               Percentage
            _____                              __________
            2002      .......................  104.625%
            2003      .......................  103.083%
            2004      .......................  101.542%
            2005 and thereafter  ............  100.000%


In addition, the Company may redeem up to 35% of the aggregate principal amount
of the Notes at any time on or prior to March 15, 2001 at 109.25% of the
principal amount thereof, plus accrued interest to the date of redemption, from
the net proceeds of one or more public equity offerings, as defined.  Also, upon
a change of control of the Company, as defined, the Company may be required to
repurchase the Notes at a price equal to 101% of the principal amount thereof,
plus accrued interest to the date of repurchase.

In connection with the repayment of the amounts due under the existing Credit
Facility from the proceeds of the Notes, the Company also reached an agreement
with a syndicate of commercial banks to amend the Company's existing Credit
Facility to limit borrowings under the Credit Facility to an amount based upon a
percentage of the Company's eligible domestic accounts receivable, as defined,
up to $75 million.  Certain of the financial covenants and restrictions were
amended and the Company's eligible domestic accounts receivable were pledged as
security.   As a result of the amendment the Company recognized an extraordinary
charge of $514,000, net of tax, to write off the deferred costs of the original
Credit Agreement.  Additionally, in the second quarter of 1998, the Company
sought and obtained certain modifications to the Credit Facility to permit
continued availability of borrowing under such facility.

5.  EMPLOYEE STOCK PURCHASE PLAN:

During the first quarter of 1998, the Company implemented an Employee Stock
Purchase Plan ("ESPP" or the "Plan").  The Plan enables eligible employees to
purchase the Company's stock at 85% of the current market value on a quarterly
basis.
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS



6.  ACCOUNTING PRONOUNCEMENT:

Statement of Financial Accounting Standard ("SFAS") 130, Reporting Comprehensive
Income establishes standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
The standard also requires disclosure of the total of comprehensive income
(loss) in interim financial statements.  The Company's comprehensive income
(loss) was $6,902,000 and $(4,170,000) for the three month periods ended June
30, 1997 and 1998, respectively, and $8,608,000 and $(4,029,000) for the six
month periods ended June 30, 1997 and 1998, respectively.  The difference
between the Company's reported net income (loss) and comprehensive income (loss)
for those periods is primarily due to the change in the currency exchange
adjustment.  The accumulated other comprehensive income included in the
Company's Consolidated Condensed Balance Sheet at December 31, 1997 and June 30,
1998 is primarily the accumulated currency exchange adjustment.

7.    RESTRUCTURING:

In the fourth quarter of 1997, the Company recorded a $15.7 million charge for
restructuring expenses.  Included in that charge were severance and other costs
of $3.6 million, of which $3.4 million was recorded as a liability at December
31, 1997, as well as $1.1 million of liabilities related to losses on
contractual obligations.  The amount of actual termination benefits paid and
actual losses charged against the liability for contractual obligations during
the six months ended June 30, 1998 was approximately $1.2 million and $0.5
million, respectively.

In the second quarter of 1998, the Company recorded a $6.6 million charge for
restructuring expenses related to it's European operations.  Included in that
charge were $6.4 million related to termination benefits for approximately 250
employees.  The restructuring expenses also include $0.2 million for the cost of
excess leased facilities.  There were no amounts charged against these accruals
through June 30, 1998.

8.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION:

The Notes are guaranteed, on a full, unconditional and joint and several basis,
by all wholly-owned domestic subsidiaries of the Company.  Separate financial
statements of the guarantor subsidiaries are not presented because management
has determined that they would not be material to investors.  However, the
following condensed consolidating information presents:

     (1)  Condensed consolidating financial statements as of December 31, 1997 
          and June 30, 1998, and for the three and six months ended, June 30, 
          1997 and 1998 of (a) SITEL Corporation, the parent, (b) the guarantor 
          subsidiaries, (c) the nonguarantor subsidiaries and (d) SITEL 
          Corporation on a consolidated basis,

     (2)  SITEL Corporation, the parent, with the investments in all 
          subsidiaries accounted for on the equity method, and the guarantor 
          subsidiaries with the nonguarantor subsidiaries accounted for on the 
          equity method (one of the guarantor subsidiaries is the parent of the 
          nonguarantor subsidiaries), and (3)  Elimination entries necessary to 
          consolidate SITEL Corporation, the parent, with all subsidiaries.
<TABLE>
                                        
                                           SITEL CORPORATION AND SUBSIDIARIES
                                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                         Condensed Consolidating Balance Sheet
                                                   December 31, 1997
                                                     (in thousands)

                                                                  Guarantor      Nonguarantor                            
                                                   Parent       Subsidiaries     Subsidiaries     Eliminations     Consolidated
                                                 ___________    ____________     _____________    ____________     ____________
<S>                                           <C>             <C>             <C>               <C>             <C>
ASSETS                                                                                                             
Current assets:                                                                                                    
  Cash and cash equivalents........           $       11,514  $         2,075 $         10,696  $            -- $        24,285
  Trade accounts receivable,                                                                                                     
    net............................                   21,832           22,167           65,313          (1,615)         107,697
  Marketable securities............                                                                                                
                                                         159               --               --               --             159
  Prepaid expenses and other                                                                                                     
    current assets.................                    6,523              264            9,830               --          16,617
                                                 ___________     ____________    _____________     ____________    ____________
     Total current assets..........                   40,028           24,506           85,839          (1,615)         148,758
  Property and equipment, net......                   37,585           24,251           58,764               --         120,600
  Deferred income taxes............                   11,070               --               44               --          11,114
  Goodwill, net....................                    1,627           21,926           70,828               --          94,381
  Other assets.....................                    7,532              121            3,374               --          11,027
  Investments in subsidiaries......                  180,112           94,999               --        (275,111)              --
  Notes receivable, intercompany...                       --           22,203               --         (22,203)              --
                                                 ___________     ____________    _____________     ____________    ____________
     Total assets..................           $      277,954  $       188,006 $        218,849  $     (298,929) $       385,880
                                                 ===========     ============    =============     ============    ============
                                                                                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                
Current Liabilities:                                                                                                               
  Notes payable....................           $           --  $            -- $         14,376  $            -- $        14,376
Current portion of long-term                                                                                                   
  debt.............................                    2,026               --            8,767               --          10,793
Current portion of capitalized                                                                                                 
  lease obligations................                      308               98            4,528               --           4,934
  Trade accounts payable...........                    2,841            1,202           24,894          (1,615)          27,322
Accrued expenses and other                                                                                                     
  current liabilities..............                   11,168            6,210           34,410               --          51,788
                                                 ___________     ____________    _____________     ____________    ____________
     Total current liabilities.....                   16,343            7,510           86,975          (1,615)         109,213
  Long-term debt, excluding current                                                                                            
     portion.......................                  101,488               --            1,017               --         102,505
  Capitalized lease obligations,                                                                                               
    excluding current portion......                      328              140           12,515               --          12,983
  Notes payable, intercompany and                                                                                              
     other.........................                       --              244           21,959         (22,203)              --
     Deferred compensation ........                    1,407               --               --               --           1,407
                                                                                                                               
     Minority interest.............                       --               --            1,384               --           1,384
                                                                                                                               
     Stockholders' equity..........                  158,388          180,112           94,999        (275,111)         158,388
                                                 ___________     ____________    _____________     ____________    ____________
  Total liabilities and                                                                                                        
    stockholders' equity...........           $      277,954  $       188,006 $        218,849  $     (298,929) $       385,880
                                                 ===========     ============    =============     ============    ============
                                        
                                            SITEL CORPORATION AND SUBSIDIARIES
                                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
 8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                           Condensed Consolidating Balance Sheet
                                                          June 30, 1998
                                                          (in thousands)

                                                                  Guarantor      Nonguarantor                            
                                                   Parent       Subsidiaries     Subsidiaries     Eliminations     Consolidated
                                                ___________     ____________     _____________     ____________    ____________
ASSETS                                                                                                                     
Current assets:                                                                                                            
   Cash and cash equivalents......           $        10,559  $         2,016 $         16,122  $             -  $        28,697
   Trade accounts receivable, net.                    29,320           33,235           69,061          (2,468)          129,148
   Prepaid expenses and other                                                                                                   
   current assets.................                     5,292                9           12,888                -           18,189
                                                 ___________     ____________    _____________     ____________     ____________
     Total current assets.........                    45,171           35,260           98,071          (2,468)          176,034
                                                                                                                                
   Property and equipment, net.....                   31,603           21,452           63,886                -          116,941
   Deferred income taxes...........                    9,448            (244)            5,544                -           14,748
   Goodwill, net...................                    1,581           21,474           71,289                -           94,344
   Other assets....................                   10,310               42            2,555               --           12,907
   Investments in subsidiaries.....                  180,877           83,030                -        (263,907)               --
   Notes receivable, intercompany..                        -           30,419                -         (30,419)                 
                                                 ___________     ____________    _____________     ____________     ____________
     Total assets..................          $       278,990  $       191,433 $        241,345  $     (296,794)  $       414,974
                                                 ===========     ============    =============     ============     ============
                                                                                                        
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:                                                                              
   Notes payable...................           $           --  $            -- $         25,437   $           -- $         25,437
   Current portion of long-term                                                                                                
   debt............................                    2,301               --            5,520               --            7,821
   Current portion of capitalized                                                                                              
   lease obligations...............                      333               98            3,189               --            3,620
   Trade accounts payable..........                    1,668            2,480           20,577          (2,468)           22,257
   Accrued expenses and other                                                                                                  
   current liabilities.............                   15,065            7,886           46,238                -           69,189
                                                 ___________     ____________    _____________      ___________    ____________
                                                                                                              
     Total current liabilities.....                   19,367           10,464          100,961          (2,468)          128,324

Long-term bebt, excluding current                                                                                    
portion............................                  100,930                -            6,610                -          107,540
Capitalized lease obligations,
excluding current portion..........                      153               92           10,765                -           11,010
Notes payable, intercompany........                        -                -           30,419         (30,419)               --
Deferred compensation .............                    1,627                -                -                -            1,627
                                                                                                                                    
Minority interest..................                        -                -            9,560                -            9,560
                                                                                                                                    
Stockholders' equity...............                  156,913          180,877           83,030        (263,907)          156,913
                                                 ___________     ____________    _____________      ___________      ___________
                                                                                                                                  
     Total liabilities and               
     stockholders' equity..........          $       278,990  $       191,433 $        241,345   $    (296,794) $       414,974
                                                 ===========     ============    =============     ===========     ============

</TABLE>
<TABLE>
                                            SITEL CORPORATION AND SUBSIDIARIES
                                   NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                         Condensed Consolidating Statement of Income
                                           For the three months ended June 30, 1997
                                                          (in thousands)
                                        
                                                                 Guarantor       Nonguarantor                            
                                                   Parent       Subsidiaries     Subsidiaries      Eliminations     Consolidated
                                                 ___________     ____________    _____________      ___________     ____________
<S>                                           <C>             <C>             <C>                <C>            <C>             
Revenues..........................            $       20,115  $        43,311 $         61,841   $           -- $       125,267
                                                 ___________     ____________    _____________      ___________     ____________
Operating expenses:                                                                                                       
   Cost of services...............                    10,395           22,340           34,370               --          67,105
Selling, general and                                                                                                           
  administrative expenses.........                    10,027           14,831           21,443               --          46,301
                                                 ___________     ____________    _____________      ___________    ____________

     Total operating expenses.....                    20,422           37,171           55,813               --         113,406
                                                 ___________     ____________    _____________      ___________    ____________
                                                                                                                                
     Operating income (loss) .....                     (307)            6,140            6,028               --          11,861
                                                                                                                                
     Other income (expense):                                                                                                    
Equity in earnings (losses) of                                                                                                  
   subsidiaries, net of tax.......                     7,250            3,181                --         (10,431)              --
   Intercompany charges...........                       167              228             (395)               --              --
   Interest expense, net..........                     (428)                5             (730)               --         (1,153)
   Other income (expense).........                      (61)               --                --               --            (61)
                                                 ___________     ____________     _____________     ____________    ____________
                                                                                                                                  
     Total other income (expense).                     6,928            3,414           (1,125)         (10,431)         (1,214)
                                                 ___________     ____________     _____________     ____________    ____________
                                                                                                                                    
Income (loss) before income taxes                                                              
  and minority interest...........                     6,621            9,554             4,903         (10,431)          10,647
                                                                                                                                    
Income tax expense  (benefit)....                         15            2,304             1,676              --            3,995
                                                                                                                                    
Minority interest................                         --               --                46              --               46
                                                 ___________     ____________     _____________     ____________    ____________
                                                                                                                                    
     Net income (loss)...........              $       6,606            7,250  $          3,181  $      (10,431) $         6,606
                                                 ===========     ============     =============     ============    ============
</TABLE>
<TABLE>
                                        
                                            SITEL CORPORATION AND SUBSIDIARIES
                                   NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                     Condensed Consolidating Statement of Income (Loss)
                                          For the three months ended June 30, 1998 
                                                           (in thousands)
                                        
                                                                 Guarantor       Nonguarantor                            
                                                 Parent        Subsidiaries      Subsidiaries     Eliminations     Consolidated
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                   
<S>                                          <C>            <C>               <C>               <C>              <C>
Revenues.........................            $      36,259  $         45,810  $         65,238  $            --  $       147,307
                                               ___________      ____________     _____________     ____________     ____________
Operating expenses:                                                                                                        
  Cost of services...............                   18,932            25,001            38,652               --           82,585
Selling, general and                                                                                                            
  administrative expenses........                   17,198            15,730            28,168               --           61,096
  Restructuring expenses.........                       --                --             6,607               --            6,607
                                               ___________      ____________     _____________     ____________     ____________
    Total operating expenses.....                   36,130            40,731            73,427               --          150,288
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                 
    Operating income.............                      129             5,079           (8,189)               --          (2,981)
                                                                                                                                   
Other income (expense):                                                                                                            
Equity in earnings (losses) of                                                                                                  
  subsidiaries, net of tax.......                  (3,111)           (6,711)                --            9,822               --
  Intercompany charges...........                       65               440             (505)               --               --
  Interest expense, net..........                  (2,467)                20             (928)               --          (3,375)
  Other income (expense) ........                       33               (1)                 2               --               34
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                 
    Total other income (expense).                  (5,480)           (6,252)           (1,431)            9,822          (3,341)
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                   
Income (loss) before income taxes                                                                                                  
  and minority interest..........                  (5,351)           (1,173)           (9,620)            9,822          (6,322)
                                                                                                                                   
Income tax expense (benefit).....                    (876)             1,938           (2,940)               --          (1,878)
                                                                                                                                   
Minority interest................                       --                --                31               --               31
                                                ___________      ____________     _____________      ____________    ____________
                                                                               
                                                                                                                                   
    Net income (loss) ...........             $     (4,475)           (3,111)  $        (6,711)  $         9,822  $       (4,475)
                                                ===========      ============     =============      ============    ============
</TABLE>
<TABLE>
                                        
                                            SITEL CORPORATION AND SUBSIDIARIES
                                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                       Condensed Consolidating Statement of Income
                                          For the six months ended June 30, 1997
                                                         (in thousands)
                                        
                                                                 Guarantor       Nonguarantor                            
                                                 Parent        Subsidiaries      Subsidiaries      Eliminations     Consolidated
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                   
<S>                                          <C>            <C>               <C>               <C>              <C>  
Revenues.........................            $      54,878  $         60,766  $        113,883  $            --  $       229,527
                                               ___________      ____________     _____________     ____________     ____________
Operating expenses:                                                                                                         
  Cost of services...............                   28,775            31,552            63,135               --          123,462
  Selling, general and                                                                                                            
     administrative expenses.....                   23,749            20,869            38,925               --           83,543
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                 
    Total operating expenses.....                   52,524            52,421           102,060               --          207,005
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                
    Operating income.............                    2,354             8,345            11,823               --           22,522
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                               
Other income (expense):                                                                                                        
  Equity in earnings of
    subsidiaries, net of tax.....                   11,447             6,153                --         (17,600)               --
  Intercompany charges...........                      167               597             (764)               --               --
  Interest income (expense), net.                       53             (566)           (1,174)               --          (1,687)
  Other income (expense).........                     (61)                --                --               --             (61)
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                 
    Total other income (expense).                   11,606             6,184           (1,938)         (17,600)          (1,748)
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                   
Income (loss) before income taxes
  and minority interest..........                   13,960            14,529             9,885         (17,600)          20,774
                                                                                                                            
Income tax expense...............                      900             3,082             3,656               --           7,638
                                                                                                                              
Minority interest................                       --                --                76               --              76
                                               ___________      ____________     _____________     ____________    ____________
                                                                                                                               
     Net income..................            $      13,060  $         11,447  $          6,153  $      (17,600)  $       13,060
                                               ===========      ============     =============     ============    ============
</TABLE>
<TABLE>
                                            SITEL CORPORATION AND SUBSIDIARIES
                                   NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                    Condensed Consolidating Statement of Income (Loss)
                                          For the six months ended June 30, 1998
                                                       (in thousands)
                                        
                                                                 Guarantor       Nonguarantor                            
                                                Parent         Subsidiaries      Subsidiaries     Eliminations      Consolidated
                                               ___________      ____________     _____________     ____________     ____________
<S>                                           <C>            <C>              <C>               <C>             <C>                
Revenues.........................             $     70,331   $        86,816  $        127,908  $           --  $       285,055
                                               ___________      ____________     _____________     ____________     ____________
Operating expenses:                                                                                                           
  Cost of services...............                   36,892            48,347            75,166              --          160,405
Selling, general and                                                                                                            
  administrative expenses........                   32,322            30,056            53,390              --          115,768
  Restructuring expenses.........                       --                --             6,607              --            6,607
                                               ___________      ____________     _____________     ____________     ____________
    Total operating expenses.....                   69,214            78,403           135,163              --          282,780
                                               ___________      ____________     _____________     ____________     ____________
                                                                                                                                 
    Operating income (loss)......                    1,117             8,413           (7,255)                            2,275
                                                                                                                                   
Other income (expense):                                                                                                        
  Equity in earnings (losses) of
    subsidiaries, net of tax.....                   (1,330)          (6,874)                --           8,204               --
  Intercompany charges...........                       121              876             (997)              --               --
  Interest expense, net..........                   (3,580)            (760)           (1,625)                          (5,965)
  Other income (expense).........                       168              (1)                 2                              169
                                                ___________     ____________     _____________     ____________     ____________
                                                                                                                                 
    Total other income (expense).                   (4,621)          (6,759)           (2,620)           8,204          (5,796)
                                                ___________     ____________     _____________     ____________     ____________
                                                                                                                                   
Income (loss) before income taxes
   and minority interest.........                   (3,504)            1,654           (9,875)           8,204         (3,521)
                                                                                                                               
Income tax expense (benefit).....                   (1,007)            2,984           (2,738)               -           (761)
                                                                                                                               
Minority interest................                         -                -             (263)               -           (263)
                                                ___________     ____________     _____________     ____________    ____________
                                                                                                                               
   Net income (loss)  from                                                                                                       
       continuing operations.....                   (2,497)          (1,330)           (6,874)           8,204          (2,497)
                                                                                                                                   
Extraordinary loss on refinancing                                                                                                
  of debt, net of taxes..........                      514                 -                 -               -             514
                                                ____________    ____________     _____________     ____________    ____________
                                                                                                                                 
    Net income (loss) ...........           $        (3,011)         (1,330)  $        (6,874)  $        8,204  $       (3,011)
                                                ============    ============     =============     ============     ============
    
</TABLE>
<TABLE>
                                            SITEL CORPORATION AND SUBSIDIARIES
                                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                      Condensed Consolidating Statement of Cash Flows
                                         For the six months ended June 30, 1997
                                                        (in thousands)

                                                                 Guarantor         Nonguarantor                            
                                                 Parent         Subsidiaries      Subsidiaries     Eliminations     Consolidated
                                               ___________      ____________     _____________     ____________     ____________
<S>                                          <C>             <C>              <C>               <C>              <C>               
Net cash provided by (used in)
  operating activities.........               $    (5,728)   $         3,753  $          5,122  $            --  $         3,147
  operating activities.........                ___________      ____________     _____________     ____________     ____________
                                                                                                                               
Cash flows from investing activities:                                                                                          
Investments in subsidiaries....                   (10,984)          (10,224)                --           21,208               --
Purchases of property and 
  equipment....................                   (19,756)           (4,634)          (18,143)               --         (42,533)
Acquisitions of  businesses,
  net of cash acquired.........                   (19,922)                --           (8,944)               --         (28,866)
Changes in other assets,net....                         --                --             (120)               --            (120)
                                               ___________      ____________     _____________     ____________     ____________
Net cash used in investing
  activities...................                   (50,662)          (14,858)          (27,207)           21,208         (71,519) 
                                               ___________      ____________     _____________     ____________     ____________

Cash flows from financing activities:                                                                                            
Borrowings on notes
  payable......................                     68,291                --             7,286               --           75,577
Repayments of notes
  payable......................                   (43,614)                --             (149)               --         (43,763)
Borrowings on long-term
  debt.........................                     15,808                --             2,603               --           18,411
Repayment of long-term debt and
  capital lease obligations....                      (163)              (25)             (432)               --            (620)
Net capital contribution from
  parent.......................                         --            10,984            10,224         (21,208)               --
State incentive credits
  received.....................                        900                --                --               --              900
Common stock issued for option
  exercises....................                        227                --                --               --              227
  exercises....................                ___________      ____________     _____________     ____________     ____________
                                                                                                                                
Net cash provided by financing
activities.....................                     41,449            10,959            19,532         (21,208)           50,732
                                               ___________      ____________     _____________     ____________     ____________
Effect of exchange rates on 
cash...........................                         --                --           (1,773)              --           (1,773)
                                               ___________      ____________     _____________     ____________    ____________
Net decrease in cash...........                   (14,941)             (146)           (4,326)              --          (19,413)
Cash and cash equivalents,                                                                                                       
   beginning of period.........                   13,302               1,859            10,549              --           25,710
                                               ___________      ____________     _____________     ____________    ____________
Cash and equivalents, end of                                                                                                     
period.........................               $    (1,639)    $        1,713   $         6,223  $           --   $        6,297
                                               ===========      ============     =============     ============    ============
</TABLE>
<TABLE>

                                        
                                        
                                            SITEL CORPORATION AND SUBSIDIARIES
                                  NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATMENTS
                                        
8.  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION (Continued):
                                        
                                    Condensed Consolidating Statement of Cash Flows
                                         For the six months ended June 30, 1998
                                                        (in thousands)
                                        
                                                                  Guarantor       Nonguarantor                            
                                                 Parent         Subsidiaries      Subsidiaries     Eliminations     Consolidated
                                               ___________      ____________     _____________     ____________     ____________
<S>                                           <C>            <C>               <C>               <C>             <C>         
Net cash provided by (used in)
  operating activities..........              $     (2,010)  $        10,570   $       (1,093)   $           --  $         7,467
                                               ___________      ____________     _____________     ____________     ____________
Cash flows from investing activities:                                                                                          
  Investments in subsidiaries..                      2,335           (5,924)                --            3,589               --
  Dividend on common stock.....                         --            10,000                --         (10,000)               --
  Purchases of property and                                                                                                       
    equipment..................                    (7,290)           (5,075)          (11,621)               --         (23,986)
  Acquisition of subsidiary....                         --                --           (2,355)               --          (2,355)
  Proceeds from sales of property                                                                                                 
    and equipment..............                      9,397                --                --               --            9,397
  Sale of marketable                                                                                                              
    securities.................                        257                --                --               --              257
  Changes in other assets......                         --                --             (209)               --            (209)
                                                ___________     ____________     _____________     ____________     ____________
Net cash provided by (used in)                                                                                                   
  investing activities.........                       4,699            (999)          (14,185)          (6,411)         (16,896)
                                                ___________     ____________     _____________     ____________     ____________
                                                                     
Cash flows from financing activities:                                                                                          
Borrowings on notes payable....                         --                --            13,664               --           13,664
Repayments of notes payable....                                                        (2,866)                           (2,866)
Borrowings on long-term                                                                                                         
  debt.........................                    124,478                --             2,861               --          127,339
Repayment of long-term debt and                                                                                                 
   capital lease obligations...                  (128,124)                --           (3,417)               --        (131,541)
Net capital contribution from                                                                                                   
  parent.......................                         --           (2,335)             5,924          (3,589)               --
Net borrowings and payments on                                                                                                  
  note to parent...............                         --           (7,295)             7,295               --               --
Dividend on common                                                                                                              
  stock........................                         --                --          (10,000)           10,000               --
Capital contribution from                                                                                                       
   subsidiary shareholder......                         --                --             1,400               --            1,400
  Sale of stock of
   subsidiaries................                         --                --             6,541               --            6,541
  Other........................                          2                --                --               --                2
                                               ___________      ____________     _____________     ____________     ____________
                                                                     
Net cash provided by (used in)                                                                                                  
   financing activities........                    (3,644)           (9,630)            21,402            6,411           14,539
                                               ___________      ____________     _____________     ____________     ____________
                                                                
Effect of exchange rates on                                                                                                     
  cash.........................                         --                --             (698)               --            (698)
                                               ___________      ____________     _____________     ____________     ____________
                                                                     
  Net decrease in cash.........                      (955)              (59)             5,426               --            4,412
Cash and cash equivalents,                                                                                                      
   beginning of period.........                     11,514             2,075            10,696               --           24,285
                                               ___________      ____________     _____________     ____________     ____________
Cash and equivalents, end of                                                                                                    
  period.......................              $      10,559  $          2,016  $         16,122  $            --  $        28,697
                                               ===========      ============     =============     ============     ============
</TABLE>
<PAGE>
                       SITEL CORPORATION AND SUBSIDIARIES



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

OVERVIEW

SITEL Corporation and subsidiaries (the "Company") are engaged primarily in
inbound, outbound, and interactive teleservicing activities, servicing the
telecommunications, financial services, insurance, technology, utilities, media
and entertainment, consumer, automotive and travel and hospitality industries.
Operations are primarily located in North America, Europe, the Asia Pacific
region, and Latin America.

The following table sets forth certain financial data and the percentage of
total revenues of the Company for the periods indicated.  All amounts are in
thousands.
<TABLE>
                                        
                                                Three Months Ended June 30,             Six Months Ended June 30,
                                                   1997               1998 (1)              1997               1998 (1)
                                             ________________     ________________    ________________     ________________
   <S>                                    <C>                   <C>                 <C>                   <C>                      
   Revenues........................       $   125,267    100%   $  147,307    100%  $ 229,527     100%    $ 285,055    100%
   Operating expenses:                                                                                                     
      Cost of services.............            67,105   53.6%       82,585   56.1%    123,462    53.8%      160,405   56.3%
      Selling, general, and                                                                                                
        administrative expenses....            46,301   37.0%       61,096   41.5%     83,543    36.4%      115,768   40.6%
      Restructuring expenses.......                 -    0.0%                                                 6,607    2.3%
                                                                     6,607    4.4%          -     0.0%
         Total operating expenses..           113,406   90.5%      150,288  102.0%    207,005    90.2%      282,780   99.2%
                                                                                                                           
         Operating income (loss)...            11,861    9.5%       (2,981) (2.0)%     22,522     9.8%        2,275    0.8%
                                                                                                                           
   Interest income (expense), net..            (1,153)  1.0)%       (3,375) (2.3)%     (1,687)  (0.8)%      (5,965)  (2.1)%
   Other income (expense)..........               (61)   0.0%           34  (0.0)%        (61)    0.0%         169     0.1%
   Income (loss) before income                                                                                             
   taxes and minority interest.....            10,647    8.5%       (6,322) (4.3)%     20,774     9.0%      (3,521)  (1.2)%
   
   Income tax expense (benefit)....             3,995    3.2%       (1,878) (1.3)%      7,638     3.3%       (761)   (0.2)%
   Minority interest...............                46    0.0%           31    0.0%         76     0.0%       (263)   (0.1)%
                                                                                                                           
   Net income (loss) from                                                                                                  
   continuing operations...........             6,606    5.3%       (4,475) (3.0)%     13,060     5.7%      (2,497)  (0.9)%
   Extraordinary loss on                                                                                                   
   refinancing of debt, net of                                                                                 514     0.2%
   taxes...........................                 -    0.0%            -    0.0%          -     0.0%
   Net income (loss)...............       $     6,066    5.3%  $    (4,475) (3.0)% $   13,060   (5.7)%  $   (3,011)  (1.1)%
                                                                                                                           

(1)   Includes non-recurring restructuring expenses.  Excluding those expenses,
operating income, net income, basic income per share and diluted income per
share were $3.6 million, $84,000, $0.00 and $0.00 for the three month period
ended June 30, 1998 and $8.9 million, $1.5 million, $0.03 and $0.02 for the six
month period ended June 30, 1998.
</TABLE>


                       SITEL CORPORATION AND SUBSIDIARIES


THREE MONTHS ENDED JUNE 30, 1998 VS. THREE MONTHS ENDED JUNE 30, 1997

REVENUES:

Revenues increased $22.0 million, or 17.6%, to $147.3 million in the three
months ended June 30, 1998 from $125.3 million in the three months ended June
30, 1997.  Of this increase, $13.5 million was attributable to services
initiated for new clients and increased revenues from existing clients and $8.5
million was attributable to increased revenues from businesses acquired under
the purchase method of accounting.  The increase in revenues from existing
clients was primarily the result of higher calling volumes rather than higher
rates.

COST OF SERVICES:

Cost of services represents primarily labor and telephone expenses directly
related to teleservicing activities.  Cost of services increased $15.5 million,
or 23.1%, to $82.6 million in the three months ended June 30, 1998 from $67.1
million in the three months ended June 30, 1997.  As a percentage of revenues,
cost of services increased to 56.1% in the second quarter of 1998 from 53.6% in
the second quarter of 1997.  The increase in cost of services as a percentage of
revenues was primarily attributable to lower utilization of labor resources in
Europe, which costs were incurred in anticipation of higher teleservicing
campaign revenues, which did not materialize. The increase also relates to lower
margins in the North America region caused by an increasing percentage of
revenues being realized from lower gross margin sectors of the Company's
industry focused teleservicing activities, primarily the financial and insurance
industries.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling, general and administrative expenses represent expenses incurred to
directly support and manage the operations including costs of management,
administration, facilities expenses, depreciation and amortization, maintenance,
sales and marketing activities, and client support services.  Selling, general
and administrative expenses increased $14.8 million, or 32.0%, to $61.1 million
in the three months ended June 30, 1998 from $46.3 million in the three months
ended June 30, 1997.  This increase was primarily a result of the Company's
continued growth both internally and through acquisition. As a percentage of
revenues, selling, general and administrative expenses increased to 41.5% in the
second quarter of 1998 from 37.0% in the second quarter of 1997.  This increase
was primarily due to lower than anticipated revenues from European operations
and costs associated with start up operations in Asia Pacific and Latin America.

RESTRUCTURING EXPENSE:

The Company recorded non-recurring restructuring expenses of $6.6 million in the
second quarter of 1998.  The restructuring expenses relate entirely to the
Company's European operations and primarily represent expenses associated with
severance arrangements.  The charge was driven by two principal factors, a lower
level of campaign business, which historically has represented a large portion
of the Company's business in Europe, and the need to reposition the Company's
infrastructure there for increasing amounts of outsourcing business.

OPERATING INCOME(LOSS):

Operating income (loss) decreased to a $3.0 million loss in the three months
ended June 30, 1998 from $11.9 million of income in the three months ended June
30, 1997.  This decrease was primarily due to the restructuring expenses and the
increase in both cost of services and selling, general and administrative
expenses as a percentage of revenue as noted above. Excluding the restructuring
expense, operating income was $3.6 million for the second quarter of 1998.
<PAGE>


INTEREST EXPENSE, NET:

Interest expense, net of interest income, increased to $3.4 million of interest
expense in the three months ended June 30, 1998 from $1.2 million of interest
expense in the three months ended June 30, 1997.  This increase was primarily
due to increased borrowings utilized to support the Company's growth, including
acquisitions.

INCOME TAX EXPENSE (BENEFIT):

Income taxes for the three months ended June 30, 1998 were a benefit of $1.9
million compared to $4.0 million of expense in the three months ended in June
30, 1997.   Excluding the restructuring expenses, income tax expense was $0.2
million for the second quarter of 1998.  The income tax expense as a percent of
income before income taxes and minority interest, excluding restructuring
expenses and related tax effects, increased to 60.0% in the three months ended
June 30, 1998 from 37.5% in the three months ended June 30, 1997 primarily due
to the impact of nondeductible expenses associated with acquisitions combined
with lower operating income.

NET INCOME (LOSS):

For the reasons discussed above, net income decreased to a $4.5 million loss in
the three months ended June 30, 1998 from $6.6 million of income in the three
months ended June 30, 1997.  Excluding the restructuring expenses and the
related tax effects, net income was $0.1 million in the second quarter of 1998.

SIX MONTHS ENDED JUNE 30, 1998 VS. SIX MONTHS ENDED JUNE 30, 1997

REVENUES:

Revenues increased $55.5 million, or 24.2%, to $285.1 million in the six months
ended June 30, 1998 from $229.5 million in the six months ended June 30, 1997.
Of this increase, $40.5 million was attributable to services initiated for new
clients and increased revenues from existing clients and $15.0 million was
attributable to increased revenues from businesses acquired under the purchase
method of accounting.  The increase in revenues from existing clients was
primarily the result of higher calling volumes rather than higher rates.

COST OF SERVICES:

Cost of services increased $36.9 million, or 29.9%, to $160.4 million in the six
months ended June 30, 1998 from $123.5 million in the six months ended June 30,
1997.  As a percentage of revenues, cost of services increased to 56.3% in the
first six months of 1998 from 53.8% in the first six months of 1997.  The
overall increase in cost of services was primarily attributable to lower
utilization of labor resources in Europe, which costs were incurred in
anticipation of higher teleservicing campaign revenues, which did not
materialize. The increase also relates to lower margins in the North America
region caused by an increasing percentage of revenues being realized from lower
gross margin sectors of the Company's industry focused teleservicing activities,
primarily the financial and insurance industries.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:

Selling, general and administrative expenses increased $32.2 million, or 38.6%,
to $115.8 million in the six months ended June 30, 1998 from $83.5 million in
the six months ended June 30, 1997.  This increase was primarily a result of the
Company's continued growth both internally and through acquisition.  As a
percentage of revenues, selling, general and administrative expenses increased
to 40.6% in the first six months of 1998 from 36.4% in the first six months of
1997.  This increase was primarily due to lower than anticipated revenues from
European operations and costs associated with start up operations in Asia
Pacific and Latin America.
<PAGE>

OPERATING INCOME:

Operating income decreased to $2.3 million in the six months ended June 30, 1998
from $22.5 million income in the six months ended June 30, 1997.  This decrease
was primarily due to the restructuring expenses and the increase in both cost of
services and selling, general and administrative expenses as a percentage of
revenue as noted above. Excluding the restructuring expense, operating income
was $8.9 million for the six months ended June 30, 1998.

INTEREST EXPENSE, NET:

Interest expense, net of interest income, increased to $6.0 million of interest
expense in the six months ended June 30, 1998 from $1.7 million of interest
expense in the six months ended June 30, 1997.  This increase was primarily due
to increased borrowings utilized to support the Company's growth, including
acquisitions.

INCOME TAX EXPENSE (BENEFIT):

Income taxes for the six months ended June 30, 1998 were a benefit of $0.8
million compared to  $7.6 million of expense in the six months ended June 30,
1997.  Excluding the restructuring expenses, income tax expense was $1.3 million
for the six months ended June 30, 1998. The income tax expense as a percent of
income before income taxes and minority interest, excluding restructuring
expenses and related tax effects, increased to 41.7% in the six months ended
June 30, 1998 from 36.8% in the six months ended June 30, 1997 primarily due to
the impact of nondeductible expenses associated with acquisitions combined with
lower operating income.                    .

NET INCOME (LOSS) FROM CONTINUING OPERATIONS AND NET INCOME (LOSS):

For the reasons discussed above, net income from continuing operations decreased
to a $2.5 million loss in the six months ended June 30, 1998 from $13.1 million
of income in the six months ended June 30, 1997.  After the extraordinary loss
on refinancing of debt, net income decreased to a $3.0 million loss in the six
months ended June 30, 1998.  Excluding the restructuring expenses and the
related tax effects, net income from continuing operations and net income for
the six months ended June 30, 1998, was $2.1 million and $1.5 million,
respectively.

LIQUIDITY AND CAPITAL RESOURCES:

On June 23, 1998, the Company issued a press release indicating that it expected
to record a restructuring charge of approximately $6.5 for the second quarter
ending June 30.  The Company also indicated that it expected to record near
break-even results before the provision for income taxes, and the effect of the
restructuring charge, for the second quarter.  With respect to the third and
fourth quarters of 1998, the Company indicated that it expects to report
improved overall results, as compared to the second quarter of 1998, excluding
the effects of the restructuring charge.

Cash provided by operating activities was approximately $7.5 million during the
six month period ended June 30, 1998.  This was primarily the result of noncash
charges and an increase in accrued liabilities partially offset by an increase
in accounts receivable. The Company anticipates that the accounts receivable
will continue to grow, using working capital, as the Company continues to grow.
Cash used in investing activities in the six months ended June 30, 1998 of
approximately $16.9 million was primarily related to capital expenditures
partially offset by the proceeds from sale-leasebacks of facilities.  Cash
provided by financing activities in the six months ended June 30, 1998 of
approximately $14.5 million primarily related to borrowings on the Company's
notes payable and the sale of stock of subsidiaries.  During the six months
ended June 30, 1998, the Company also completed the private placement of $100
million of 9.25% Senior Subordinated Notes due 2006.  The proceeds from the
offering were used to repay borrowings outstanding under the Company's long term
revolving credit facility.
<PAGE>


At June 30, 1998, the Company had unused lines of credit totaling approximately
$48.1 million.  In light of the Company's expectations with respect to its
operating results for the second quarter and the remainder of the year, the
Company sought and obtained certain modifications to its existing credit
facility to permit continued availability of borrowing under such facility.  The
Company believes that funds generated from operations, existing cash and the
funds available under the credit facility, as modified, will be sufficient to
finance its current operations, planned capital expenditures and internal growth
for the foreseeable future.

YEAR 2000 ISSUE

The Company recognizes the need to ensure its operations will not be adversely
impacted by Year 2000 software failures.  Specifically, computational errors are
a known risk with respect to dates after December 31, 1999.  SITEL has made a
preliminary assessment of its Year 2000 compliance issues, and is in the process
of developing a general plan to address such issues.  Although the Company has
not yet completed its analysis of the estimated total costs needed for Year 2000
compliance, the Company currently believes it will be able to upgrade and
maintain its computer systems to recognize years beginning with 2000 and that
the cost to do so will not be material to its financial position or liquidity.
Such costs may, however, be material to the Company's results of operations,
particularly on a short-term basis.

QUARTERLY RESULTS AND SEASONALITY

The Company has experienced and expects to continue to experience quarterly
variations in its results of operations principally due to the timing of
clients' teleservicing campaigns and the commencement of new contracts, revenue
mix, and the timing of additional selling, general and administrative expenses
to support new business.  The Company experiences periodic fluctuations related
to both the start-up costs associated with expansion into a new region and the
implementation of clients' teleservicing activities.  In addition, the Company's
business tends to be slower in the third quarter due to summer holidays in
Europe and, to a lesser degree, in the first quarter due to the changeover of
client marketing strategies which often occurs at the beginning of the year.

EFFECTS OF INFLATION

Inflation has not had a significant effect on the Company's operations. However,
there can be no assurance that inflation will not have a material effect on the
Company's operations in the future.

ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standard ("SFAS") 131, Disclosures about
Segments of an Enterprise and Related Information, was issued in June, 1997.
SFAS 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in annual financial reports issued to shareholders. It also established
standards for related disclosures about products and services, geographic areas
and major customers.  SFAS 131 is effective for fiscal years beginning after
December 15, 1997. The Company anticipates adopting this accounting
pronouncement in 1998; however, management believes that it will not have a
significant impact on the Company's annual consolidated financial statements.
<PAGE>


SFAS 133, Accounting for Derivative Investments and Hedging Activities, was
issued in June 1998.  SFAS 133 establishes accounting standards for derivative
instruments and for hedging activities.  The standard is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999.  The Company
anticipates adopting this accounting pronouncement in the third quarter of 1999;
however, management believes that it will not have a significant impact on the
Company's consolidated financial statements.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act.  Such statements
are identified by the use of forward-looking words or phrases which may include
but are not limited to,  "intended," "will be positioned," "expects,"
"expected," "anticipates," and "anticipated."  The forward-looking statements
are based on the Company's current expectations.  All statements other than
statements of historical facts included in this Form 10-Q, including those
regarding the Company's financial position, business strategy, projected costs
and plans and objectives of management for future operations, are forward-
looking statements.  Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct.  Because forward-
looking statements involve risks and uncertainties, the Company's actual results
could differ materially.  Important factors that could cause actual results to
differ materially from the Company's expectations may include, but are not
limited to, the effects of leverage, restrictions imposed by the terms of
indebtedness, reliance on major clients, risks associated with managing a global
business, fluctuations in operating results, reliance on telecommunications and
computer technology, risks associated with the Company's acquisition strategy,
the dependence on telephone service, the competitive industry, dependence on
labor force, foreign currency risks, the effects of business regulation,
dependence on key personnel and control by management.  All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on behalf of the Company are expressly qualified in their entirety by
this paragraph.  The Company disclaims, however, any intent or obligation to
update its forward-looking statements.
<PAGE>

                                        
                       SITEL CORPORATION AND SUBSIDIARIES
                                        

PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     (a)  Date and Type of Meeting.   The Company held its Annual Meeting of
     Stockholders on May 13, 1998.

     (b)  Matters Voted Upon and Number of Votes Cast.  There were 47,839,994
     shares of Common Stock represented at the meeting in person or by proxy.
     Two proposals were presented to the stockholders and both were approved.
     The voting on the proposals was as follows:

     Proposal 1 (election of two directors for a three year term)
                On the election of Phillip A. Clough:  45,873,168 votes for
                                                        1,966,826 votes withheld
                On the election of James F. Lynch :    45,871,668 votes for
                                                        1,968,326 votes withheld

     Proposal 2 (to ratify the Board of Directors' selection of KPMG Peat
          Marwick LLP as the Corporation's  independent accountants and to
          examine the financial statements of the Corporation for the year
          ending December 31, 1998):
          
                                47,781,313   votes for
                                    24,860   votes against
                                    32,821   abstained

Item 6.  Exhibits and Reports on Form 8-K.


     (a)  Exhibits:

         10.1   Separation Agreement dated May 12, 1998 with Michael P. May
      (1)10.2   First Amendment dated as of June 19, 1998 to Credit Agreement
         27     Financial Data Schedule
     ________________
      (1) Previously filed as Exhibit 10.1 to Form 8-K filed on July 1, 1998 and
          incorporated herein by reference.


     (b)  Reports on Form 8-K.   The Company filed the following reports on Form
          8-K during the quarter for which this report is filed:

      (1) The Company filed a Form 8-K on May 4, 1998, reporting under Item 9
          the issuance of certain shares of its Common Stock.

      (2) The Company filed a Form 8-K on June 1, 1998, reporting under Item 9
          the issuance of certain shares of its Common Stock.

      (3) The Company filed a Form 8-K on July 1, 1998, reporting under Item 5
          that it entered into the First Amendment to the Credit Agreement.
<PAGE>



     
                                   SIGNATURES


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


Date:  August 14, 1998             SITEL Corporation


                              By:  /s/ W. Gar Richlin
                                   ____________________________________________
                                   W. Gar Richlin
                                   Executive Vice-President and Chief Financial
                                   Officer (Principal Financial Officer)

<PAGE>



                       SITEL CORPORATION AND SUBSIDIARIES




     Exhibits Index:                                                   Page
                                                                       ____

     10.1  Separation Agreement dated May 12, 1998 with Michael P. May  24
     27    Financial Data Schedule                                      27