U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q

        X      Quarterly report under to Section 13 or 15(d) of the Securities 
      -----    Exchange Act of 1934
         

                  For the quarterly period ended MARCH 31, 1998

      -----    Transition report under to Section 13 or 15(d) of the Securities
               Exchange Act of 1934

               For the transitional period from _______ to _______

                         Commission File Number 0-24622

                          TELSCAPE INTERNATIONAL, INC.
        (Exact name of Small Business Issuer as specified in its charter)

                          TEXAS                              75-2433637
         (State or other jurisdiction of                   (I.R.S. Employer
         incorporation or organization)                 identification number)

            2700 POST OAK BLVD., SUITE 1000, HOUSTON,
                           TEXAS                                 77056 
          (Address of principal executive offices)             (Zip Code)

          Issuer's telephone number including area code -- 713/968-0968

        ----------------------------------------------------------------
         (Former name, former address and former fiscal year if changed
                               since last report)

        Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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

4,732,328 shares of Registrant's common stock ($.001 Par Value) were outstanding
as of April 28, 1998.
<PAGE>
                          Telscape International, Inc.
                                Table of Contents
                                    Form 10-Q
                                 March 31, 1998

                                                                            PAGE

PART I. FINANCIAL INFORMATION

        Item 1.Financial Statements

               Condensed Consolidated Balance Sheets -
               As of December 31, 1997 and March 31, 1998 .................. 1

               Unaudited Condensed Consolidated Statements of Operations -
               For the Three Months Ended  March 31, 1997 and 1998 ......... 2

               Unaudited Condensed Consolidated Statements of Cash Flows -
               For the Three Months Ended March 31, 1997 and 1998 .......... 3

               Notes to Unaudited Condensed Consolidated Financial 
               Statements .................................................. 5

        Item 2.Management's Discussion and Analysis of
               Financial Condition and Results of Operations ............... 10


PART II.       OTHER INFORMATION

        Item 6.Exhibits and Reports on Form 8-K ............................ 17

               (a)    Exhibits

               (b)    Reports on Form 8-K

        Signatures ......................................................... 18
<PAGE>
                                 TELSCAPE INTERNATIONAL, INC
                            CONDENSED CONSOLIDATED BALANCE SHEETS

                                              ASSETS
<TABLE>
<CAPTION>
                                                                              ---------------------------
                                                                              December 31,     March 31,
                                                                                  1997           1998
                                                                              ------------   ------------
CURRENT ASSETS:                                                                       (unaudited)
<S>                                                                           <C>            <C>         
  Cash and cash equivalents ................................................  $  4,734,000   $  2,882,000
  Accounts receivable, less allowance for doubtful accounts
    of and $200,000 and $215,000 (unaudited), respectively .................     6,276,000      7,346,000
  Inventories ..............................................................     4,305,000      3,113,000
  Prepaid expenses and other ...............................................     2,674,000      4,917,000
  Deferred income taxes ....................................................       517,000        311,000
                                                                              ------------   ------------
    Total current assets ...................................................    18,506,000     18,569,000
PROPERTY AND EQUIPMENT, net of accumulated depreciation ....................     2,679,000      5,344,000
GOODWILL AND OTHER INTANGIBLES, net of accumulated
amortization ...............................................................    17,674,000     23,324,000
DEFERRED INCOME TAXES ......................................................        77,000         74,000
OTHER ASSETS ...............................................................       699,000        629,000
                                                                              ------------   ------------
              Total assets .................................................  $ 39,635,000   $ 47,940,000
                                                                              ============   ============

                               LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable .........................................................  $ 10,756,000   $ 13,583,000
  Accrued expenses .........................................................     3,303,000      2,398,000
  Current portion of notes payable and capital lease
    obligations ............................................................       508,000      1,747,000
  Deferred income taxes ....................................................       270,000        416,000
                                                                              ------------   ------------
    Total current liabilities ..............................................    14,837,000     18,144,000
NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS ................................     2,677,000      2,548,000
MINORITY INTERESTS .........................................................        34,000         46,000
COMMITMENTS AND CONTINGENCIES

SERIES B NON-VOTING PREFERRED STOCK, $.001 par value, 380,000 and 0 shares,
respectively, authorized issued and outstanding, mandatorily redeemable as
certain performance measures were achieved .................................          --             --

STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 5,000,000 shares
    authorized; without defined preference rights ..........................          --             --
  Series A preferred stock, $.001 par value, 1,000,000 shares
    authorized .............................................................          --             --
  Common stock, $.001 par value, 25,000,000 shares authorized;
  4,104,027 and 4,667,548 issued, respectively .............................         4,000          5,000
  Additional paid-in capital ...............................................    25,232,000     29,310,000
  Accumulated deficit ......................................................    (2,852,000)    (1,738,000)
  Treasury stock ...........................................................      (297,000)      (375,000)
                                                                              ------------   ------------
    Total stockholders' equity .............................................    22,087,000     27,202,000
                                                                              ------------   ------------
    Total liabilities and stockholders' equity .............................  $ 39,635,000   $ 47,940,000
                                                                              ============   ============
</TABLE>
         The accompanying notes are an integral part of these financial
                                  statements.

                                       1
<PAGE>
                          TELSCAPE INTERNATIONAL, INC. AND SUBSIDIARIES
                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                         Three Months Ended
                                                             March 31,
                                                    --------------------------
                                                        1997           1998
                                                    -----------    -----------

REVENUES ........................................   $ 3,771,000    $ 33,399,000
COST OF REVENUES ................................     2,525,000      28,334,000
                                                    -----------    ------------
GROSS PROFIT ....................................     1,246,000       5,065,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ....     1,478,000       2,277,000
                                                    -----------    ------------
OPERATING INCOME (LOSS) BEFORE DEPRECIATION
AND AMORTIZATION ................................      (232,000)      2,788,000
DEPRECIATION AND AMORTIZATION ...................       154,000         569,000
                                                    -----------    ------------
OPERATING INCOME (LOSS) .........................      (386,000)      2,219,000

OTHER INCOME (EXPENSE):

  Interest income ...............................         5,000          37,000
  Interest expense ..............................        (8,000)        (93,000)
  Foreign exchange gain (loss) ..................         7,000        (122,000)
  Other, net ....................................        22,000          48,000
                                                    -----------    ------------
        Total other income (expense), net .......        26,000        (130,000)
                                                    -----------    ------------

INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTERESTS ..............................      (360,000)      2,089,000
INCOME TAX BENEFIT (EXPENSE) ....................        32,000        (963,000)
                                                    -----------    ------------
INCOME (LOSS) BEFORE MINORITY INTERESTS .........      (328,000)      1,126,000
MINORITY INTERESTS IN SUBSIDIARIES ..............         4,000         (12,000)
                                                    -----------    ------------
NET INCOME (LOSS) ...............................   $  (324,000)   $  1,114,000
                                                    ===========    ============
EARNINGS (LOSS) PER SHARE:
  Basic .........................................   $     (0.08)   $       0.25
  Diluted (1) ...................................           n/a    $       0.15

WEIGHTED AVERAGE SHARES OUTSTANDING:

  Basic .........................................     3,935,969       4,371,464
  Diluted(1) ....................................           n/a       7,779,177

(1)  Inclusion of additional shares under a diluted analysis for the three
     months ended March 31, 1997 is inappropriate due to the anti-dilutive
     effect

         The accompanying notes are an integral part of these financial
                                  statements.

                                       2
<PAGE>
                                   TELSCAPE INTERNATIONAL, INC.
                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                         Three Months Ended March 31,
                                                          -------------------------
                                                              1997          1998
                                                          -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>           <C>        
  Net income (loss) ....................................  $  (324,000)  $ 1,114,000
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
  Provision for doubtful accounts ......................       22,000        15,000
  Depreciation and amortization ........................      154,000       569,000
  Deferred income tax (benefit) expense ................      (88,000)      355,000
  Imputed interest on non-interest bearing notes payable         --          71,000
  Minority interest in subsidiaries' income (loss) .....       (4,000)       12,000
  Changes in assets and liabilities:
    Accounts receivable ................................      (98,000)      (44,000)
    Inventories ........................................      459,000     1,207,000
    Prepaid and other assets ...........................     (248,000)   (1,267,000)
    Accounts payable ...................................    1,265,000     1,880,000
    Deferred revenue ...................................         --      (1,997,000)
    Accrued liabilities ................................      (90,000)   (1,289,000)
                                                          -----------   -----------
Net cash provided by operating activities ..............    1,048,000       626,000
                                                          -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchases of property and equipment ..................     (394,000)   (3,642,000)
  Acquisition of MSN, net of cash acquired .............         --      (2,325,000)
                                                          -----------   -----------
Net cash used in investing activities ..................     (394,000)   (5,967,000)
                                                          -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Payments on capital lease obligations ................      (18,000)      (26,000)
  Payments on notes payable ............................         --        (300,000)
  Purchase of treasury shares ..........................         --         (78,000)
  Borrowings on line of credit .........................         --         694,000
  Proceeds from warrants and options exercised .........         --       3,199,000
                                                          -----------   -----------
Net cash provided by (used in) financing activities ....      (18,000)    3,489,000
                                                          -----------   -----------

Net increase (decrease) in cash and cash equivalents ...      636,000    (1,852,000)
                                                          -----------   -----------
Cash and cash equivalents at beginning of period .......      495,000     4,734,000
                                                          -----------   -----------
Cash and cash equivalents at end of period .............  $ 1,131,000   $ 2,882,000
                                                          ===========   ===========
</TABLE>
         The accompanying notes are an integral part of these financial
                                  statements.

                                       3
<PAGE>
                                   TELSCAPE INTERNATIONAL, INC.
                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                Three Months Ended March 31,
                                                                  -----------------------
                                                                     1997          1998
                                                                  ---------      --------
<S>                                                               <C>            <C>     
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid ................................................  $  7,762       $ 10,000

  Income taxes paid: ...........................................  $   --         $339,000
NON-CASH TRANSACTIONS:

Property and equipment acquired by execution of
capital lease obligation .......................................   328,985           --

Issuance of common stock and promissory notes in connection with
acquisition of MSN:

      Promissory Notes .........................................                 $672,000
      Common Stock .............................................                 $880,000

</TABLE>

         The accompanying notes are an integral part of these financial
                                  statements.

                                       4
<PAGE>
                          TELSCAPE INTERNATIONAL, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

NOTE 1 - FINANCIAL STATEMENTS

        The accompanying unaudited condensed consolidated financial statements
include the accounts of Telscape International, Inc. and its subsidiaries
(collectively, the "Company"). The unaudited condensed consolidated financial
statements of the Company for the three months ended March 31, 1997 and March
31, 1998 have been prepared without an audit pursuant to the rules and
regulations of the Securities and Exchange Commission. They do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments, which consist of normal recurring adjustments, considered necessary
to present fairly the financial position, results of operations and cash flows
for all periods presented have been made. Operating results for the three months
ended March 31, 1998 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. For further information, refer
to the consolidated financial statements and footnotes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.

MANAGEMENT'S ESTIMATES AND ASSUMPTIONS

        The accompanying financial statements are prepared in conformity with
generally accepted accounting principles which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. The Company reviews all significant estimates
affecting the financial statements on a recurring basis and records the effect
of any necessary adjustments prior to their issuance. The actual results could
differ from those estimates.

ECONOMIC CONDITIONS

        The devaluation of the Mexican peso in late 1994 caused Mexico to
experience an economic crisis characterized by exchange rate instability,
increased inflation, high domestic interest rates, reduced consumer purchasing
power and high unemployment. Consequently, the Mexican government has exercised,
and continues to exercise, significant influence over the Mexican economy.
Accordingly, Mexican governmental actions could have a significant effect on
Mexican companies, including the Company's customers, and overall market
conditions.

        The Company's foreign currency risk is mitigated in Mexico due to the
fact that many of the Company's customers are multinational firms that pay in
U.S. dollars. In addition, most of the customers that do pay in pesos pay at the
spot exchange rate in effect at the time of payment as opposed to the exchange
rate at the time the receivable is created. Nevertheless, significant adverse
effects from any downturns in the Mexican economy could result in an adverse
effect on the Company's operations. The Company also has a significant amount of
its payables denominated in pesos which exposes the Company to exchange rate
risk.

NEW ACCOUNTING STANDARDS

        Statement of Financial Accounting Standards ("SFAS") No. 130, "REPORTING
COMPREHENSIVE INCOME," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of 

                                       5
<PAGE>
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements.

        SFAS No. 131, "DISCLOSURE ABOUT SEGMENTS OF A BUSINESS ENTERPRISE,"
establishes standards for the way that public enterprises report information
about operating segments in annual financial statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers.

        SFAS 130 and 131 are effective for financial statements for the periods
beginning after December 15, 1997 and require comparative information for
earlier years to be restated. The Company does not believe this statement will
have a material impact on its financial statements.

NOTE 2 - MSN ACQUISITION

        Effective January 1, 1998, the Company acquired all of the outstanding
common stock of MSN. MSN, through its TELEFIESTA brand, markets prepaid
telephone calling cards across the United States primarily to the Hispanic
community. Under the terms of the transaction, the Company paid the following to
the shareholders of MSN: i) the sum of $3,250,000 in cash, ii) $750,000 in
non-interest bearing promissory notes payable in eight equal quarterly
installments, and iii) 100,000 shares of the Company's common stock. In
addition, the two selling shareholders were each granted 50,000 options to
purchase the Company's common stock at $11.00 per share. The acquisition was
accounted for under the purchase method of accounting. The financial position
and results of operations of MSN are included in the Company's financial
statements from the effective date of the acquisition.

        The consideration paid for MSN measured at the acquisition date was
$4,852,000 and consisted of cash of $3,250,000, non-interest bearing promissory
notes with a discounted value of $672,000, common stock valued at $880,000 and
transaction costs of $50,000. The purchase price was allocated to the acquired
company's assets and liabilities based upon an estimate of fair values at the
date of acquisition and resulted in $6,063,000 of goodwill, which is being
amortized over 15 years. The balances included in the Unaudited Condensed
Consolidated Balance Sheet related to the MSN acquisition are based on
preliminary information and are subject to change when additional information
concerning final asset and liability valuations are obtained. Management does
not expect that such adjustments will be material.

NOTE 3 - EARNINGS (LOSS) PER SHARE

        In February 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 128, Earnings Per Share. SFAS 128 simplifies the standards
required under current accounting rules for computing earnings per share and
replaces the presentation of primary earnings per share and fully-diluted
earnings per share with a presentation of basic earnings per share ("basic EPS")
and diluted earnings per share ("diluted EPS"). Following is a summary of the
calculations:
<TABLE>
<CAPTION>
                                                                           For the Three Months
                                                                              Ended March 31,
                                                                          ------------------------ 
                                                                              1997         1998
                                                                          -----------   ----------   
   BASIC
<S>                                                                       <C>           <C>       
     Net income (loss) as reported .....................................  $  (324,000)  $1,114,000
     Weighted average common shares outstanding ........................    3,935,969    4,371,464
     Basic earnings (loss) per share ...................................  $     (0.08)  $     0.25

                                       6
<PAGE>
   DILUTED
     Net income (loss) as reported .....................................  $  (324,000)  $1,114,000
     Interest expense on convertible debt ..............................         --         21,000
     Net income (loss) applicable to common stockholders ...............  $  (324,000)  $1,135,000
     Weighted average common shares outstanding ........................    3,935,969    4,371,464
     Weighted average diluted potential common shares outstanding ......       73,304    3,407,713
     Weight average common and dilutive potential common shares
      outstanding ......................................................    4,009,273    7,779,177
     Diluted earnings (loss) per share .................................  $     (0.08)  $     0.15
</TABLE>

        Diluted EPS for the three months ended March 31, 1997 was not disclosed
on the Unaudited Condensed Consolidated Statement of Operations as the effect is
anti-dilutive. Certain performance based warrants issued in connection with the
Company's acquisitions vest upon the achievement of certain operating
performance measures. In accordance with SFAS 128, these contingently issuable
shares are included in the calculation of diluted EPS when all the necessary
conditions were met. If all the necessary conditions have not been satisfied by
the end of the period, the number of contingently issuable shares that would
have been issued if the reporting period was the end of the contingency period
are included in the calculation as if those shares were issued at the beginning
of that period. For year-to-date calculations, contingent shares are weighted
for the interim periods in which they are included in the computation of diluted
EPS. At March 31, 1997 and March 31, 1998, there were 2,695,000 and 500,000
performance based warrants, respectively, which had not vested which were not
included in the calculation of diluted EPS. Additionally, 556,164 and 17,000
options and warrants outstanding at March 31, 1997 and 1998, respectively, were
not included in the calculation of diluted EPS as their exercise prices were
greater than the average market price of the Company's common stock during the
period and inclusion of these securities in the calculation would result in an
anti-dilutive effect.

NOTE 4 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

        The Company's notes payable and capital lease obligations consist of the
following:

                                               -------------------------------
                                                   December 31,      March 31,
                                                      1997             1998
                                               ---------------    ------------

Non-interest bearing promissory notes, imputed interest 
at 10%, unamortized discount of $348,297 and $308,339, 
respectively, issued in connection with Integracion 
acquisition, maturing at various dates through 
January 1, 2001                                    $1,853,000      $1,592,000

Non-interest bearing promissory note, imputed interest 
at 10%, unamortized discount of $140,851 and $119,723, 
respectively, issued in connection with Integracion 
acquisition, convertible into 333,000 shares of 
common stock, and maturing on September 1, 1999       839,000         860,000

Promissory note issued to repurchase common stock, 
payable in six semi-annual installments through 
May 20, 2000, and bearing interest at 6%              250,000         250,000

Capital lease obligation payable in monthly 
installments of $11,244 including principal and 
interest maturing February 28, 2000                   243,000         217,000

                                       7
<PAGE>
Non-interest bearing promissory note, imputed 
interest at 10%, unamortized discount of $77,800,
issued in connection with MSN acquisition, payable
in eight equal quarterly installments beginning 
April 23, 1998                                            ---           682,000

Revolving credit facility maturing September 30, 
1998 bearing interest at prime plus 1%, secured 
by accounts receivable                                    ---           694,000

                                                 ---------------    ------------
Total notes payable and capital leases              3,185,000         4,296,000

Current portion                                       508,000         1,747,000
                                                 ---------------    ------------

Long term portion                                $  2,677,000       $ 2,548,000
                                                 ===============    ============

        The annual maturity of the debt indicated above for the five years
following December 31, 1997 are $508,000 in 1998, $1,429,000 in 1999, $565,000
in 2000 and $682,000 in 2001.

        On March 12, 1998, the Company entered into a revolving credit facility
with a commercial bank, which provides for borrowings up to $1,250,000 subject
to adequate levels of eligible receivables. Borrowings are secured by the
accounts receivable of the Company's Telscape USA and MSN subsidiaries. This
facility provides that borrowings will bear interest at floating rates of prime
plus one percent (1%). The Company has also negotiated terms with several of its
equipment vendors which call for extended payment terms and increased credit
lines (including $2,000,000 lines of credit with sixty day and ninety day
payment terms, respectively, obtained from two of its equipment vendors).

        On May 1, 1998, the Company issued $3,000,000 in 8% Convertible
Subordinated Debentures (the "Convertible Debentures") maturing three years from
closing. The Company has the option to issue up to another $2,000,000 in
Convertible Debentures on similar terms for a period of one year, subject to the
Company meeting certain requirements. The Convertible Debentures are convertible
by the holder into shares of the Company's common stock at a price equal to $26
per share for the first six months following closing, and thereafter, at the
lesser of (i) $26 per share or (ii) a price equal to the average of the three
highest of the five lowest closing prices of the Company's common stock for the
20 trading days preceding the conversion date. However, should the common stock
trade below $15.00 for three consecutive trading days, the Company may elect to
redeem all or part of such Convertible Debenture at one hundred and seven
percent of face value plus accrued interest. In the event that the Company's
common stock closes above $30 per share, adjusted without limitation, for any
stock splits or combinations, the Company's obligation to make interest payments
on the Convertible Debenture is terminated. In connection with the initial
$3,000,000 of Convertible Debentures, the holders also received warrants to
purchase an aggregate of 8,952 shares of the Company's common stock at an
exercise price of $16.76 per share. The warrants have a term of three years. If
the Company exercises its option to issue additional Convertible Debentures,
additional warrants would be issued based on a predefined formula. In addition,
the Company is required to file a registration statement with the Securities and
Exchange Commission to register the shares of common stock issuable upon the
conversion of the Convertible Debentures or the exercise of the warrants.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

ESCROW AGREEMENT

    Pursuant to the Texas Securities Act of 1957, the Texas State Securities
Commissioner has the discretion to require that an issuer offering and selling
securities to the residents of Texas in a public offering deposit certain
outstanding securities in escrow. In that regard, certain former officers and
directors of the Company, as well as two other individuals (collectively, the 

                                       8
<PAGE>
"Shareholders"), are parties to a Stock Escrow Agreement (the "Escrow
Agreement") dated August 8, 1994. The Escrow Agreement was required by the Texas
State Securities Commissioner as a condition to the registration of securities
in Texas in connection with the Company's IPO. The Escrow Agreement provides
that a total of 415,503 shares of Common Stock ("Shares") and 55,779 shares of
Common Stock issuable upon the exercise of options ("Options") be held in escrow
for a period of not less than two years and not more than ten years. The terms
of the Escrow Agreement provide further that Shares and Options held in escrow
may be released provided certain performance requirements of the Company
("Performance Requirements") are met. For instance, if the Company's common
stock trades at a price per share of at least $11.81 for at least ninety (90)
consecutive trading days then the Shares and Options are automatically released
from escrow.

        During the first quarter of 1998, the Company and the Shareholders
entered into a series of agreements, which will result in the early termination
of the Escrow Agreement in the second quarter of 1998, the repurchase by the
Company of certain of the Shares at a significant discount to market and the
resolution of a disagreement with certain of the Shareholders concerning the
validity of the Options. The agreements called for the Shareholders to sell a
total of 101,417 Shares to the Company for $985,580 or $9.72 per share to be
paid 25% upon closing and 75% by July 6, 1998. As of the filing of this Form
10-Q, each of the agreements have been closed. In addition, the Shareholders
agreed to sign a lock-up agreement ("Lock-Up"), ending on July 6, 1998, for any
Shares which were not sold to the Company; provided, however, that should any of
the Performance Requirements be met during the Lock-Up, the Lock-Up will
terminate automatically. Finally, certain of the Shareholders agreed to the
termination of approximately 40,000 of the Options, which had an exercise price
of $0.80 per share. On May 1, 1998, the Company agreed to reduce the number of
shares required to be sold to the Company, resulting in a reduction in the total
number of shares being repurchased to 86,417 Shares for total consideration of
$873,000, or $10.10 per share.

                                       9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        Certain statements in this Quarterly Report on Form 10-Q made herein
that are not historical are forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements can be identified by
the use of forward-looking terminology such as "believes", "expects", "may",
"estimates", "will", "should", "plans", or "anticipates" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. These statements are based on numerous assumptions about future
conditions that could prove not to be accurate. Actual events, transactions and
results may materially differ from the anticipated events, transactions or
results described in such statements. Investors are cautioned that all
forward-looking statements are not guarantees of future performance and that
actual results could vary materially from those in the forward-looking
statements. Investors are also cautioned that forward-looking statements involve
risks and uncertainties including, without limitation, risks related to the
effectiveness of management's strategies and decisions, market acceptance of and
demand for the Company's products and services by customers, continued
relationships with and pricing dependence on third party suppliers, economic
conditions, results of financing efforts and regulatory approvals and
developments. This report identifies other factors that could cause such
differences. No assurance can be given that these are all of the factors that
could cause actual results to vary materially from the forward-looking
statements. Statements with respect to acquisitions and continued trends are
forward-looking and involve risks and uncertainties. Furthermore, the Company
has significant operations in Mexico, subjecting the Company to certain
political and commercial risk. The Company undertakes no obligation and does not
intend to update, revise or otherwise publicly release the result of any
revisions to these forward-looking statements that may be made to reflect future
events or circumstances.

                                     OUTLOOK

        The quarter ended March 31, 1998 further demonstrated the Company's
strategy to position itself as a fully-integrated telecommunications provider
and to provide its customers with a complete telecommunications solution.
Operating results from the Company's two existing business lines, systems
integration and international long distance, were in line with management
expectations.

        In January 1998, the Company acquired MSN, a leading provider of prepaid
telephone calling cards to US-based Hispanic consumers via the TELEFIESTA brand
name. The acquisition enhances the profile of the Company's long distance
business by establishing a retail platform for its international long distance
services and the ability to market additional products and services to Hispanic
customers. Early results from this acquisition are encouraging, as revenues
exceeded expectations and operating results were immediately accretive.

        In March 1998, the Company acquired a license from the government of El
Salvador to provide inbound and outbound international long distance as well as
certain other telecommunications services. This license marks the first time the
Company will offer international long distance services for calls originating in
Latin America. The Company plans to leverage the TELEFIESTA brand recognition in
El Salvador and other Latin American countries as regulations and licenses
permit.

        REVENUES. During 1997, the Company derived its revenues principally from
the provision of systems integration and value-added services in Mexico and from
the sale of U.S. outbound international long distance services to Latin America.
During 1997, the Company's revenues were derived approximately equally from its
then two core businesses: systems integration and wholesale long distance
services. In the first quarter of 1998, with the growth in prepaid card revenues
generated by recently acquired MSN, the Company's revenue mix changed.

                                       10
<PAGE>
        The Company provides systems integration services to private and public
sector customers in Mexico. Revenues are derived from the sale of equipment and
value-added services. Revenues from this business have grown significantly
through both internal growth and strategic acquisitions in 1996 and 1997.

        The Company provides international long distance services to wholesale
customers. Revenues are derived from the number of minutes of use (or fraction
thereof) billed by the Company and are recorded upon completion of calls. For
the year ended December 31, 1997, one wholesale customer accounted for
approximately 28% of the Company's overall revenues. For the three months ended
March 31, 1998, that same customer accounted for approximately 12% of the
Company's overall revenues.

        The Company also provides domestic and international long distance
services through the sale of prepaid phone cards. In cases where the Company
arranges for or provides the telecommunications services related to the prepaid
phone cards, the Company recognizes revenue at the time of customer usage. The
Company recognizes deferred revenue as its prepaid phone cards are shipped. In
addition, the Company has entered into arrangements with a third party whereby
this party provides the long distance telecommunications services for the cards
the Company sells at a fixed cost to the Company. The Company recognizes
revenues from the sale of cards under these agreements at time of shipment.

        GROSS PROFIT. The Company has enjoyed strong gross profits from its
international long distance and systems integration services to date; however,
as these markets become more competitive, the Company may experience a decline
in gross profit percentage. The effects of this potential decline are expected
to be mitigated by the Company's strategy of focusing on deregulating markets,
particularly in Latin America, and on providing value-added services, where it
can enjoy higher gross profits. Gross profits from the Company's newly-acquired
prepaid phone card business are significantly lower than those of the wholesale
international long distance and systems integration businesses. As such, overall
gross profit as a percentage of revenues has declined in the first quarter of
1998 and may continue to decline to the extent that prepaid card revenues
increase as a percentage of overall revenues.

        OPERATING INCOME. As the Company continues to expand its core
businesses, growth in revenues is expected to outpace decreases in overall gross
margins. Additionally, operating expenses are expected to grow at a lesser rate
than that of revenues. These factors should result in increased operating income
to the Company in the future.

                              RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1997

        REVENUES increased from $3,771,000 in 1997 to $33,399,000 in 1998. This
increase of $29,628,000, or 786%, was due principally to the acquisition of MSN
completed in the first quarter of 1998, increased revenues of wholesale
international long distance and, to a lesser extent, the acquisitions of
Integracion de Redes ("Integracion") and N.S.I completed in the third and fourth
quarters of 1997. In addition, revenues from Vextro for the three months ended
March 31, 1998 doubled those for the three months ended March 31, 1997.

        COST OF REVENUES increased from $2,525,000 in 1997 to $28,334,000 in
1998, or $25,809,000. The 1022% increase in cost of revenues was due principally
to the incremental cost of revenues associated with the acquisition of MSN, the
increase in the sale of international long distance services and, to a lesser
extent, the incremental cost of revenues attributable to the acquisitions of
Integracion and N.S.I. In addition, cost of revenues increased due to the higher
sales generated at Vextro. The cost of revenues as a percentage of revenues
increased from 67.0% to 84.8%, or 17.8%, due principally to the higher cost of
revenues as a percentage of revenues associated with the sale of prepaid phone
cards.

                                       11
<PAGE>
        SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") increased from
$1,478,000 in 1997 to $2,277,000 in 1998, or $799,000. The 54% increase in SG&A
was due principally to the incremental SG&A related to the operations of the
acquisitions of Integracion, N.S.I. and MSN and, to a lesser extent, increased
staffing at existing operations of Vextro and the wholesale long distance
business to meet the additional resource requirements from the growth of these
operations.

        Overall SG&A as a percentage of revenues decreased from 39.2% to 6.8%,
or 32.4%. This decrease was due principally to the growth in overall revenues
rapidly outpacing the growth in operating expenses and to the lower SG&A as a
percentage of revenues required to support the MSN operations.

        DEPRECIATION AND AMORTIZATION increased from $154,000 in 1997 to
$569,000 in 1998, or $415,000. This increase is due to an increase in goodwill
amortization primarily due the vesting of performance based warrants issued in
connection with the Telereunion acquisition, which resulted in additional
goodwill being recognized on December 31, 1997; goodwill recognized on the MSN
acquisition completed effective January 1, 1998; and goodwill recognized on the
Integracion and N.S.I. acquisitions completed during 1997.

        OTHER INCOME (EXPENSE) decreased from $26,000 in 1997 to $(130,000) in
1998, or $156,000. This decrease is due to interest expense in 1998, relating to
the amortization of interest expense on non-interest bearing notes issued in
connection with the Integracion and MSN acquisitions, as compared to net
interest income in 1997, and a foreign exchange loss in 1998 as compared to a
foreign exchange gain in 1997.

        INCOME TAX BENEFIT (EXPENSE) changed from an income tax benefit of
$32,000 in 1997 to an income tax expense of $(963,000) in 1998. The Company's
overall effective tax rate for the three months ended March 31, 1998, at 46%,
was 12% over the statutory rate in the U.S. and Mexico primarily due to the non
deductible nature of goodwill amortization.

        NET INCOME (LOSS). The Company experienced a net loss of $(324,000) in
1997 as compared to a net income of $1,114,000 in 1998 due to a combination of
the factors discussed above.

                         LIQUIDITY AND CAPITAL RESOURCES

        Net cash provided by operating activities was $1,048,000 and $626,000
for the three months ended March 31, 1997 and March 31, 1998, respectively. The
decrease in net cash provided by operations in 1998 as compared to 1997 was due
primarily to an increase of value added tax receivable of approximately
$1,000,000 and a decrease in deferred revenues of $1,997,000. In the fourth
quarter of 1997, MSN entered into an arrangement with a third party whereby the
third party provides the telecommunications services related to the prepaid
phone cards sold by MSN at a fixed cost to MSN. Prior to this arrangement, MSN
would arrange for the telecommunication services itself and would recognize the
revenues associated with these telecommunications services as the cards were
utilized. As a result, at December 31, 1997, MSN had recorded $1,997,000 in
deferred revenues related to the receipt of monies related to sales of prepaid
phone cards in the fourth quarter of 1997. The cards were utilized in the first
quarter of 1998, and the costs associated with these services were paid by MSN
in the first quarter of 1997. Under the new arrangement with the third party,
revenues are recognized at time of shipment and the costs paid to the third
party are paid shortly thereafter.

        Net cash used in investing activities was $(394,000) and $(5,967,000)
for the three months ended March 31, 1997 and March 31, 1998, respectively. In
the first quarter of 1998, the Company expended approximately $3.6 million on
purchases of, or deposits on, property and equipment as part of the Company's
network expansion strategy. In addition, the Company acquired MSN for $2.3
million, net of cash acquired.

                                       12
<PAGE>
        Net cash provided by (used in) financing activities was $(18,000) and
$3,489,000 for the three months ended March 31, 1997 and March 31, 1998,
respectively. In December 1997, the Company announced its intention to redeem
publicly traded warrants to purchase an aggregate of 525,000 common shares with
a 30 day notice requirement. This announcement resulted in 475,535 warrants
being exercised prior to the redemption date. The Company realized net proceeds
from these exercises of $3,710,000, of which $2,721,000 was received subsequent
to year end.

        As of March 31, 1998, the Company had cash and cash equivalents of
$2,882,000 and positive working capital of $425,000. In January 1998, the
Company completed the acquisition of MSN by issuing to the sellers $3,250,000 in
cash, $750,000 in non-interest bearing promissory notes and 100,000 shares of
common stock. This acquisition utilized the majority of the funds realized from
the warrant exercises.

        In the first quarter of 1998, the Company continued its strategic plans
to significantly expand the Company's facilities and capacity related to its
long distance services and prepaid phone card business lines. Through May 11,
1998, the Company has expended or placed purchase orders for equipment purchases
for a total in excess of $6.0 million relating to these business expansions.
Management does not expect that cash generated from operations will be adequate
to fund these capital investments.

        On March 12, 1998, the Company entered into a revolving credit facility
with a commercial bank which provides for borrowings up to $1,250,000 subject to
adequate levels of eligible accounts receivable. Borrowings are secured by the
accounts receivable of the Company's Telscape USA and MSN subsidiaries. This
facility provides that borrowings will bear interest at floating rates of prime
plus 1% and expires in six months. The Company has also negotiated terms with
several of its equipment vendors which call for extended payment terms and
increased credit lines (including $2,000,000 lines of credit with sixty day and
ninety day payment terms, respectively, obtained from two of its equipment
vendors).

        On May 1, 1998, the Company issued $3,000,000 in 8% Convertible
Subordinated Debentures (the "Convertible Debentures") maturing three years from
closing. The Company has the option to issue up to another $2,000,000 in
Convertible Debentures on similar terms for a period of one year, subject to the
Company meeting certain requirements. The Convertible Debentures are convertible
by the holder into shares of the Company's common stock at a price equal to $26
per share for the first six months following closing, and thereafter, at the
lesser of (i) $26 per share or (ii) a price equal to the average of the three
highest of the five lowest closing prices of the Company's common stock for the
20 trading days preceding the conversion date. However, should the common stock
trade below $15.00 for three consecutive trading days, the Company may elect to
redeem all or part of such Convertible Debenture at one hundred and seven
percent of face value plus accrued interest. In the event that the Company's
common stock closes above $30 per share, adjusted without limitation, for any
stock splits or combinations, the Company's obligation to make interest payments
on the Convertible Debenture is terminated. In connection with the initial
$3,000,000 of Convertible Debentures, the holders also received warrants to
purchase an aggregate of 8,952 shares of the Company's common stock at an
exercise price of $16.76 per share. The warrants have a term of three years. If
the Company exercises its option to issue additional Convertible Debentures,
additional warrants would be issued based on a predefined formula. In addition,
the Company is required to file a registration statement with the Securities and
Exchange Commission to register the shares of common stock issuable upon the
conversion of the Convertible Debentures or the exercise of the warrants.

        The Company intends to finance its growth and additional capital
investments required for its planned facility expansions through cash generated
from operations, additional financing through commercial lenders and additional
lease financing and the sale of debt and additional equity (or a combination of
both). There can be no assurance that the cash generated from operations will be
sufficient nor that the Company will be able to obtain additional financing on
commercially reasonable terms, if at all. Additional funding through the
incurrence of debt or sale of additional equity (or a combination of both) may
be required to meet the Company's growth plans, although there can be no
assurance that such additional funds can be obtained on 

                                       13
<PAGE>
acceptable terms, if at all. If necessary funds are not available, the Company's
business and results of operations and the future expansion of its business
could be materially adversely affected.

ESCROW AGREEMENT

    Pursuant to the Texas Securities Act of 1957, the Texas State Securities
Commissioner has the discretion to require that an issuer offering and selling
securities to the residents of Texas in a public offering deposit certain
outstanding securities in escrow. In that regard, certain former officers and
directors of the Company, as well as two other individuals (collectively, the
"Shareholders"), are parties to a Stock Escrow Agreement (the "Escrow
Agreement") dated August 8, 1994. The Escrow Agreement was required by the Texas
State Securities Commissioner as a condition to the registration of securities
in Texas in connection with the Company's IPO. The Escrow Agreement provides
that a total of 415,503 shares of Common Stock ("Shares") and 55,779 shares of
Common Stock issuable upon the exercise of options ("Options") be held in escrow
for a period of not less than two years and not more than ten years. The terms
of the Escrow Agreement provide further that Shares and Options held in escrow
may be released provided certain performance requirements of the Company
("Performance Requirements") are met. For instance, if the Company's common
stock trades at a price per share of at least $11.81 for at least ninety (90)
consecutive trading days then the Shares and Options are automatically released
from escrow.

        During the first quarter of 1998, the Company and the Shareholders
entered into a series of agreements, which will result in the early termination
of the Escrow Agreement in the second quarter of 1998, the repurchase by the
Company of certain of the Shares at a significant discount to market and the
resolution of a disagreement with certain of the Shareholders concerning the
validity of the Options. The agreements called for the Shareholders to sell a
total of 101,417 Shares to the Company for $985,580 or $9.72 per share to be
paid 25% upon closing and 75% by July 6, 1998. As of the date of the filing of
this Form 10-Q, each of the agreements have been closed. In addition, the
Shareholders agreed to sign a lock-up agreement ("Lock-Up"), ending on July 6,
1998 for any Shares which were not sold to the Company; provided, however, that
should any of the Performance Requirements be met during the Lock-Up, the
Lock-Up will terminate automatically. Finally, certain of the Shareholders
agreed to the termination of approximately 40,000 of the Options, which had an
exercise price of $0.80 per share. On May 1, 1998, the Company agreed to reduce
the number of shares required to be sold to the Company, resulting in a
reduction in the total number of shares being repurchased to 86,417 shares for
total consideration of $873,000, or $10.10 per share.

RECENT ACCOUNTING PRONOUNCEMENTS

        Statement of Financial Accounting Standards ("SFAS") No. 130, "REPORTING
COMPREHENSIVE INCOME," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.

        SFAS No. 131, "DISCLOSURE ABOUT SEGMENTS OF A BUSINESS ENTERPRISE,"
establishes standards for the way that public enterprises report information
about operating segments in annual financial statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers.

                                       14
<PAGE>
        SFAS 130 and 131 are effective for financial statements for the periods
beginning after December 15, 1997 and require comparative information for
earlier years to be restated. The Company does not believe this statement will
have a material impact on its financial statements.

                                  UNCERTAINTIES

        The Company continues to face many risks and uncertainties, including
general and specific market economic risks. The exploitation of the
opportunities presented by the Mexican market are expected to require
substantial capital. To the extent the Company's Mexican subsidiaries do not
have a positive net cash flow from its operations in 1998, it can be expected
that the Company would have to fund any shortfalls from its working capital. In
addition, any capital expenditures needed to expand the operations of the
Mexican subsidiaries would likely be funded out of the working capital of the
parent corporation. Any such fundings would reduce the funds available to
finance and expand the Company's strategy to compete in the international long
distance services business. Also, any economic crises in Mexico could result in
the need to fund any cash flow shortfalls of the Company's Mexican subsidiaries.

        As in any recently deregulated market, drastic changes and adjustments
of regulations or changes in government policies may occur from time to time
that will directly affect the Company. The Company's competitive position in the
telecommunications services and long distance markets depends heavily on the
license granted by the Mexican government. Should this permit be revoked for
whatever reason, the Company would be severely impaired or unable to provide
many of its telecommunications services. In addition, the Company relies on
other carriers to complete the transmission of certain telecommunications
services. To the extent that any of these carriers was to no longer do business
with the Company, the Company would either have to find an alternate source or
not be able to provide those services.

        The international long distance market, although large and rapidly
growing, is also very competitive. The Company competes in this market with
companies that have greater experience and substantially greater resources, both
financial and otherwise. In addition, the Company faces certain additional risks
in competing in this market, including changes in U.S. and foreign government
regulations and telecommunications standards, dependence on strategic partners,
tariffs, taxes and other trade barriers, the potential for nationalization and
economic downturns and political instability in foreign countries. In addition,
the Company could be adversely affected by a reversal in the trend toward
deregulation of telecommunication markets. The Company will be increasingly
exposed to these risks as the Company expands its presence in this market. The
Company's growth in this business is dependent on its ability to expand its
capacity through investments in additional facilities or entering into
termination arrangements with other carriers. There can be no assurance that the
Company will be successful in raising the capital required to fund the
additional facilities or to enter into such arrangements with other carriers, in
which case the Company's operations, the future growth in this business and the
ability to compete effectively against competitors with significantly more
resources could be materially adversely affected.

        The prepaid phone card market represents a new market for the Company.
While the former owners of MSN are currently officers of the Company and
continue to actively manage the prepaid phone card operations, this is a rapidly
growing and very competitive market. As with international long distance
services, the Company will compete in this market with companies that have
greater experience and have substantially greater resources. In addition, the
prepaid phone card industry is subject to extensive U.S. federal and state
regulation including the imposition of various excise taxes and fees, including
the "Universal Service Fund". As with the wholesale international long distance
business, the Company's growth in this business is dependent on its ability to
expand its capacity through investments in additional facilities or entering in
partnering arrangements for outsourcing the telecommunications services related
to calls initiated on the prepaid phone cards it serves. There can be no
assurance that the Company will be successful in 

                                       15
<PAGE>
raising the capital required to fund the additional facilities, or in obtaining
such partnering arrangements, in which case the Company's operations, the future
growth in this business and the ability to compete effectively against
competitors with significantly more resources could be materially adversely
affected.

        The Company is also pursuing a strategy of growth through selective
acquisitions. However, there can be no assurance that any acquisition will be
completed, that attractive candidates will be identified in the future, that the
Company will be successful in raising the capital to fund such acquistions, or
that, if completed, any acquisition will be beneficial to the Company.

FOREIGN CURRENCY RISK

        The general economic conditions of Mexico are greatly affected by the
fluctuations in exchange rates and inflation. The Company's foreign currency
risk is mitigated in Mexico due to the fact that many of the Company's customers
are multinational firms that transact and pay in U.S. dollars. In addition, most
of the customers that do pay in pesos pay at the spot exchange rate in effect at
the time of payment as opposed to the exchange rate at the time the receivable
is created. The Company's functional currency in Mexico is the U.S. dollar
because the majority of its transactions are in such currency. However, from
time to time the Company transacts in the local currency and thus faces foreign
currency risk with respect to these transactions. U.S.-originated calls will be
paid in U.S. dollars; however, the Company also expects to derive a certain
portion of its revenues from calls originated outside of the U.S. thus exposing
the Company to additional exchange rate risk. In addition, the Company pays its
termination partners in Latin America in their respective local currencies,
exposing the Company to additional exchange rate risk. The Company may choose to
limit its exposure to foreign currency risk through the purchase of forward
foreign exchange contracts or similar hedging strategies. There can be no
assurance that any foreign currency hedging strategy would be successful in
avoiding exchange-related losses.

YEAR 2000 PLANS

        In anticipation of the year 2000, management has developed a plan to
review software that was internally developed or externally purchased or
licensed, and also to review with its key vendors and service providers their
software, for compliance with Year 2000 processing requirements. In accordance
with Emerging Issues Task Force Opinion No. 96-14, "ACCOUNTING FOR THE COSTS
ASSOCIATED WITH MODIFYING COMPUTER SOFTWARE FOR THE YEAR 2000," the Company will
expense all costs as incurred. The Company does not believe that such costs will
have a material impact on the financial results of the Company.

                                       16
<PAGE>
PART II.       OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

               (a) Exhibits. See Index to Exhibits on page 19.

               (b) Reports on Form 8-K.

        On January 7, 1998, the Company filed a report on Form 8-K, relating to
certain outstanding litigation.

        On February 6, 1998, the Company filed a report on Form 8-K reporting
that the Company had entered into an agreement to acquire all of the outstanding
shares of MSN Communications, Inc.

        On April 7, 1998, the Company filed a report of Form 8-K/A providing
financial statements and pro forma financial information required to be filed in
connection with the MSN acquisition.

                                       17
<PAGE>
                                   SIGNATURES

        In accordance with the requirements of the Exchange Act, the issuer has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                               Telscape International, Inc.
                                              (Registrant)

Date: May 15, 1998                             By:______________________________
                                                   E. Scott Crist
                                                   President and Chief Executive
                                                   Officer

Date: May 15, 1998                             By:______________________________
                                                   Todd M. Binet
                                                   Executive Vice President and 
                                                   Chief Financial Officer 
                                                   (Principal Financial and
                                                   Chief Accounting Officer)

                                       18
<PAGE>
                                INDEX OF EXHIBITS

EXHIBIT NO.           DESCRIPTION

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

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

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

   4.2         -      Form of Warrant Agreement between American Stock Transfer 
                      & Trust Company and the Company (filed as Exhibit 4.2 to 
                      the Company's Registration Statement No. 33-80542-D and 
                      incorporated herein by reference)

   4.3         -      Form of Warrant Certificate evidencing the Warrants (filed
                      as Exhibit 4.3 to the Company's Registration Statement No.
                      33-80542-D and incorporated herein by reference)

  *4.4                Securities Purchase Agreement between Deere Park Capital
                      Management, LLC and Telscape International, Inc. dated as
                      of May 1, 1998; Registration Rights Agreement dated as of
                      May 1, 1998 between Telscape International, Inc. and Deere
                      Park Capital Management, LLC; Form of Convertible
                      Subordinated Debenture for $3,000,000 dated May 1, 1998;
                      Form of Stock Purchase Warrant to Purchase 8,952 shares of
                      Common Sock of Telscape International, Inc. dated May 1,
                      1998.

*27.1          -      Financial Data Schedule
-----------------

*Filed herewith
                                       19