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

                     FORM 10-KSB/A

(Mark One)

/X/  Annual report pursuant to Section 13 or 15(d) of the Securities and 
     Exchange Act of 1934

     For the fiscal year ended December 31, 1996

                           or

/ /  Transition  report  under  Section  13 or  15(d) of the  Securities  and
     Exchange Act of 1934 For the transition period from _____ to ______.


                COMMISSION FILE NUMBER:  33-97876


                       USTN HOLDINGS, INC.
    (Exact name of small business issuer as specified in its charter)


           Delaware                         36-4042177
     (State or other jurisdiction        (I.R.S. Employer
      of incorporation or organization)   Identification No.)


               4501 Intelco Loop, Lacey, Washington      98503
              (Address of principal executive office)  (Zip code)

                                 (360) 493-6000
              (Issuer's telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:  None
Securities registered under Section 12(g) of the Exchange Act:  None

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange Act during the past 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 past 90 days. Yes _X_ No ___


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<PAGE>



Check if there is no disclosure of delinquent filers in response to Item 405 of 
Regulation S-B contained in this form, and no disclosure will be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $37,887,878

Indicate the number of shares of each of the  registrant's  classes  of common
stock, as of the latest practicable date.

Voting stock held by  non-affiliates  has no currently  quoted market value. No
voting stock held by non-affiliates  has been sold or been the subject of bid or
ask prices in the past 60 days.

At December 31, 1996, 5,262,354 shares of common stock, $0.01 per share par 
value.

Transitional Small Business Disclosure Format (check one):  Yes __No  X

ITEM 10:   EXECUTIVE COMPENSATION

    The following table sets forth for each of the last three  completed  fiscal
years the compensation received by USTN Holdings, Inc.'s Chief Executive Officer
and four other most highly  compensated  executive  officers based on salary and
bonus for the last completed fiscal year.

               Summary Compensation Table


                                          Long-Term Compensation
                                          -----------------------

                        Annual Compensation           Awards      Payouts
                        --------------------          ------      -------
Name and Principal                                             All Other
  Position          Year      Salary ($)   Bonus($)  LTIP($)   Compensation ($)
------------------  ----      ----------   --------  -------   ----------------
Roger H. Moore,     1996(1)   225,000     118,750(3)   --(4)     5,600(6)
President and Chief
Executive Officer
Daniel E. Weiss,    1996      110,863      22,643     15,095(5) 14,430(7)
President           1995      106,074      14,500       --       9,220(8)
                    1994      102,341      11,573       --       9,540(9)
Raymond E.          1996(2)   122,062      22,469     14,979(5) 20,287(10)
Donnelly, Vice 
President
Bruce E. Johnson    1996(2)   105,676      19,936     13,290(5) 16,893(11)
Vice President


                          2



<PAGE>



David Nicol, Vice   1996(2)    103,292    20,642       13,761(5)  16,344(12)
President
------------------------
  (1) Mr. Moore was hired effective January 1, 1996.

  (2) Messrs. Donnelly,  Johnson and Nicol were deemed hired effective February
      23, 1996, the effective date of the Merger. As such, the reported amounts
      only include payments made by ILLUMINET subsequent to such date.

  (3) Includes $100,000 in 1996 short-term cash incentive awards and $18,750 in
      hiring bonus.

  (4) A long-term incentive award for the year 1996 has not yet been determined.

  (5) Long-term  cash  incentive  awards  for the year 1996 that will be due and
      payable on December 31, 1998 if executive is still  employed by ILLUMINET,
      or has not been terminated for cause through December 31, 1998.

  (6) Includes $5,600 in ILLUMINET 401(k) matching contributions.  Mr. Moore was
      not eligible for an ILLUMINET qualified retirement trust profit sharing 
      plan contribution in 1996 as he had not met the length of service 
      requirement.

  (7) Includes $4,479 in ILLUMINET 401(k) matching  contributions and $9,951 in
      ILLUMINET qualified retirement trust profit sharing plan contributions.

  (8) Includes $3,182 in U.S. Intelco 401(k) matching contributions and $6,038 
      in U.S. Intelco qualified retirement trust profit sharing contributions.

  (9) Includes $3,067 in U.S. Intelco 401(k) matching contributions and $6,473 
      in U.S. Intelco qualified retirement trust profit sharing contributions.

  (10)Includes $5,841 in ILLUMINET 401(k) matching  contributions and $14,446 
      in ILLUMINET qualified retirement trust profit sharing plan contributions.

  (11)Includes $5,057 in ILLUMINET 401(k) matching  contributions and $11,836 
      in ILLUMINET qualified retirement trust profit sharing plan contributions.

  (12)Includes $4,925 in ILLUMINET 401(k) matching contributions and $11,419 in
      ILLUMINET qualified retirement trust profit sharing plan contributions. 
    


                          3



<PAGE>



                                              EXHIBIT 99
                     USTN HOLDINGS, INC.

             ANNUAL MEETING PROXY MATERIALS

                      April 7, 1997


Dear Shareholder:

  It is a pleasure to report a successful 1996 for Illuminet and to provide 
information regarding our upcoming  annual  shareholder  meeting.  Enclosed is 
an invitation to attend the annual  meeting  from  Richard A.  Lumpkin,  
Chairman  of the  Board,  the proxy statement  containing details of the
meeting,  ballots to vote on two proposals, and our annual report for the year 
ending December 31, 1996.

  The year began with the merger in February, 1996 of Independent 
Telecommunications Network, Inc. and U.S. Intelco Holdings, Inc. and its two 
subsidiaries, U.S. Intelco Networks, Inc. and U.S. Intelco Wireless, Inc. into 
USTN Holdings. The merger enabled the new company to deliver a comprehensive 
line of intelligent network and clearinghouse services designed to satisfy 
customer requirements in local, interexchange and wireless markets.  With a 
unified focus and emphasis on the customer, the company has delivered 
significant operating results and provided a solid foundation for business 
expansion as evidenced by:

     1)  Earning $2,952,982 net profit on revenues of $37,887,878.

     2)  More than 100% growth in message volumes in combined wireless and 
         wireline network services.

     3)  Connecting  a  major  PCS  provider  to our  network,  establishing an
         opportunity for future services in this rapidly emerging market.

     4)  Gaining   commitments   from  two  RBOCs  for  SS7  usage   measurement
         installations, positioning those products for future growth.

     5)  Signing Calling Name Data Base access agreements with several RBOCs and
         major  independents and offering  Calling Name Delivery  services on an
         interLATA basis.

     6)  Demonstrating our focus on the partnership with our customers' services
         across  our  intelligent  network  platform  such as a #800  toll  free
         service  for  wireless  subscribers  and  a  roaming  fraud  prevention
         service.

  The challenge now is to grow Illuminet at a faster pace. This means developing
new  services  which  have  a  solid  chance  for  success.   These  development
investments will require  increasing amounts of financial  resources,  which, in
part means reinvestment of all profits to support the growth of the company. For
this  reason,  the  Company  is  not  paying  a  dividend.  This  investment  is
anticipated to enhance shareholder value longer term.


                          4



<PAGE>



  The  accomplishments  of 1996  show  Illuminet  is  focused  and ready to step
forward as an  important  resource  in the  dynamic  telecommunications  market.
Credit for this progress goes to our employees who worked diligently through the
merger to maintain  high  standards  of service to our  customers  as well as to
deploy new products.  Special recognition goes to our Board of Directors who had
the vision to create a stronger company and to our shareholders who saw value in
the vision presented by the merger and continue to support the Company's growth.
I also extend the  gratitude of Illuminet  employees  to Richard  Ares,  Michael
Coltrane, William Lee Dillard, Samuel Leftwich, Robert Rierson and Dean Swanson.
These Directors resigned from their positions as part of the Board restructuring
which  followed  the  merger.   We  appreciate  their  vision,   dedication  and
inspiration.

  1997 will be an  exciting  year and I look  forward  to leading  Illuminet  in
meeting our objectives to grow and increase the value of our company.

Sincerely,

/s/  Roger H. Moore

Roger H. Moore
President & CEO


                          5



<PAGE>


                                                           USTN HOLDINGS, INC.
-------------------------------------------------------------------------------
                                                             4501 Intelco Loop
                            April 7, 1997                        P.O. BOX 2909
                                                            Olympia, WA  98507  
                                                                (360) 493-6000
Dear Shareholder:

You are cordially invited to attend the second Annual Meeting of Shareholders of
USTN Holdings,  Inc. (the "Company")  that will be held on Wednesday,  April 30,
1997 at 8:00 a.m.  local time, at the Buena Vista Palace Resort  located in Lake
Buena Vista, Florida.

Enclosed are a Notice of the Annual Meeting, a Proxy Card, and a Proxy Statement
containing  information  about  the  matters  to be acted  upon at the  meeting.
Directors  and officers of the Company will be present at the Annual  Meeting to
respond to any questions our shareholders may have.

Shareholders will be asked to elect directors as set forth in the enclosed Proxy
Statement.  In addition,  shareholders  will be asked to approve an amendment to
the Company's  Certificate  of  Incorporation  to change the  company's  name to
Illuminet Holdings, Inc. Illuminet, Inc. is an active wholly-owned subsidiary of
USTN  Holdings,  Inc.  Illuminet,  Inc.  has  significantly  promoted  its  name
recognition in the marketplace  and wishes to further  enhance name  recognition
and align more closely the two  entities.  The Board of  Directors  recommends a
vote "FOR" the nominees for director, and "FOR" the amendment of the Certificate
of Incorporation to change the name of the company.

The  current  Board of  Directors  is being  reduced to a total of nine  members
effective with this Annual Meeting. David C. Southwick has reached the mandatory
retirement age per the Company's  by-laws and the respective Board seat will not
be filled. On behalf of the shareholders, Board members, officers and employees,
I  express  our  appreciation  and  gratitude  for the  vision,  dedication  and
inspiration Mr. Southwick has provided over his many years of service.

It is  important  that  your  shares  be  represented  at  the  Annual  Meeting.
Accordingly,  even if you are planning to attend the Annual Meeting, we urge you
to mark,  sign and date the enclosed Proxy Card and promptly return it by FAX to
Daniel E. Weiss,  Secretary at (360) 923-3440, and thereafter mail the executed,
original Proxy Card in the enclosed,  self-addressed,  postage-paid envelope to:
USTN Holdings,  Inc., P.O. Box 2909, Olympia, WA 98507. If you attend the Annual
Meeting,  you may vote in person even if you have previously returned your Proxy
Card, in which event the signed proxy will be revoked.

If you have any questions prior to the Annual Meeting,  please call  Shareholder
Relations at (360) 493-6226.  We look forward to visiting with you at the Annual
Meeting.

Sincerely,

/s/  Richard A. Lumpkin

Richard A. Lumpkin
Chairman of the Board

                          6



<PAGE>



                      USTN HOLDINGS, INC.
                         P.O. Box 2909
                       Olympia, WA 98507

         NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
                          TO BE HELD
                   WEDNESDAY, APRIL 30, 1997

TO THE SHAREHOLDERS:

NOTICE IS HEREBY  GIVEN THAT the 1997  Annual  Meeting of  Shareholders  of USTN
Holdings,  Inc., a Delaware corporation ( the "Company" or "USTN"), will be held
at 8:00 a.m., local time, on Wednesday,  April 30, 1997 (the "Annual  Meeting"),
at the Buena Vista Palace  Resort  located in Lake Buena Vista,  Florida for the
following purposes:

     1. To amend the Company's Certificate of Incorporation to change the 
        Company's name to Illuminet Holdings, Inc.;

     2. To elect two (2) Directors; and

     3. To transact  such other  business as may properly come before the Annual
        Meeting or at any adjournment or postponement thereof.

Information concerning the matters to be acted upon at the Annual Meeting is set
forth in the  accompanying  Proxy  Statement.  The Board of Directors  has fixed
February 28, 1997 as the record date for  determining  shareholders  entitled to
receive  notice  of and vote at the  Annual  Meeting  or at any  adjournment  or
postponement  thereof.  Only  shareholders of record at the close of business on
that date will be  entitled  to notice of and to vote at the Annual  Meeting.  A
complete list of shareholders  entitled to vote at the Annual Meeting,  arranged
in alphabetical order and by voting group,  showing the address of and number of
shares held by each  shareholder,  will be kept open at the Buena  Vista  Palace
Resort, Lake Buena Vista,  Florida for examination by any shareholder  beginning
at least ten business days prior to the Annual Meeting.

ALL SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN IF YOU
EXPECT TO BE PRESENT AT THE ANNUAL  MEETING,  YOU ARE  REQUESTED TO MARK,  SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE BY FAX TO DANIEL
E. WEISS, SECRETARY AT (360) 923-3440.  THEREAFTER,  MAIL THE EXECUTED, ORIGINAL
PROXY CARD IN THE  ENCLOSED,  SELF-ADDRESSED,  POSTAGE-PAID  ENVELOPE  TO:  USTN
HOLDINGS,  INC., P.O. BOX 2909, OLYMPIA, WA 98507 TO ENSURE YOUR REPRESENTATION.
SHAREHOLDERS  ATTENDING THE ANNUAL  MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE
PREVIOUSLY SENT IN A PROXY CARD.

                         By Order of the Board of Directors

                         /s/  Daniel E. Weiss
                         Daniel E. Weiss
                         Secretary/Treasurer
Lacey, Washington
April 7, 1997

                          7



<PAGE>



                      USTN HOLDINGS, INC.
                        PROXY STATEMENT
         For The Second Annual Meeting of Shareholders
                        April 30, 1997


This Proxy Statement is being  furnished in connection with the  solicitation of
proxies by the Board of Directors of USTN Holdings, Inc., a Delaware corporation
(the  "Company"),  for use at the Annual Meeting of  Shareholders of the Company
(the "Annual  Meeting")  scheduled to be held Wednesday,  April 30, 1997 at 8:00
a.m.  local time, at the Buena Vista Palace Resort  located in Lake Buena Vista,
Florida and at any adjournment or postponement thereof. This proxy statement and
the enclosed  proxy card were first sent to the  shareholders  of the Company on
April 7, 1997.

At the Annual  Meeting,  shareholders  of the Company will be asked to elect two
persons to the Board of  Directors  of the  Company.  Shareholders  will also be
asked to amend the Company's  Certificate of Incorporation to change the name of
the Company to Illuminet Holdings, Inc.

All Shares represented by proxies, if the proxy card is properly executed and 
returned, will be voted in accordance with the specifications so made.  
ABSENT SUCH SPECIFICATION BY A SHAREHOLDER,  EACH  SIGNED  AND  RETURNED  PROXY
CARD  WILL BE VOTED  "FOR" THE NOMINEES AND AMENDMENT TO THE CERTIFICATE OF 
INCORPORATION.

Any proxy  given  pursuant  to this  solicitation  may be  revoked by the person
giving it at any time  before it is voted.  Proxies may be revoked by (i) filing
with the Company,  at or before the taking of the vote at the Annual Meeting,  a
written  notice of  revocation  bearing a later date than the  proxy,  (ii) duly
executing a subsequent  proxy  relating to the same shares and  delivering it to
the Company before the Annual Meeting, or (iii) attending the Annual Meeting and
voting in person  (although  attendance at the Annual Meeting will not in and of
itself constitute a revocation of a proxy).  Any written notice of revocation or
subsequent  proxy should be sent so as to be delivered,  at or before the taking
of the vote at the Annual Meeting, to the Company's principal executive officer,
addressed as follows: Attention: Roger H. Moore, President, Annual Meeting, USTN
Holdings, Inc., P.O. Box 2909, Olympia, WA 98507.

All expenses of this  solicitation,  including the cost of preparing and mailing
this proxy statement,  will be borne by the Company. In addition to solicitation
by use of the  mails,  proxies  may be  solicited  by  directors,  officers  and
employees of the Company in person or by  telephone,  telegram or other means of
communication.  Such directors,  officers and employees will not be additionally
compensated, but may be reimbursed for out-of-pocket expenses in connection with
such solicitation.

On February  28, 1997,  the record date for the  determination  of  shareholders
entitled  to notice of and to vote at the Annual  Meeting the  Company's  shares
outstanding were as follows:

                  Shares Outstanding
                 at February 28, 1997
                 --------------------

     Common Stock             5,242,287
     Series A Preferred Sto       2,637
     Total Shares Outstandi   5,244,924
                              =========

                          8



<PAGE>



Shareholders of record are entitled  to one (1) vote for each share of Common
Stock, and one hundred (100) votes per share of Series A Preferred  Stock upon
all matters presented at the Annual Meeting including the election of directors.

                      USTN HOLDINGS, INC.
             SECOND ANNUAL MEETING OF SHAREHOLDERS
                        APRIL 30, 1997


THE BOARD OF DIRECTORS OF THE COMPANY RECOMMEND THAT THE SHAREHOLDERS VOTE THEIR
SHARES IN FAVOR OF THE  AMENDMENT TO THE  CERTIFICATE  OF  INCORPORATION  OF THE
COMPANY AND IN FAVOR OF THE NOMINEES FOR DIRECTORS.


        MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

At the Annual  Meeting,  Shareholders  will consider and vote upon the following
proposals:


                             PROPOSAL 1

     AMENDMENT TO CERTIFICATE OF INCORPORATION: COMPANY NAME CHANGE

     USTN  Holdings,  Inc.  is the parent of  Illuminet,  Inc.,  its only active
     wholly-owned  subsidiary.  In the past year, Illuminet,  Inc. significantly
     and  successfully  promoted its name  recognition  in the  marketplace.  To
     further  enhance  that name  recognition  and align  more  closely  the two
     entities,  the Board  recommends  approving an  amendment to the  Company's
     Certificate of Incorporation to change the name of the Company to Illuminet
     Holdings, Inc.

     The Board of Directors recommends a vote "FOR" proposal 1.


                             PROPOSAL 2

                       ELECTION OF DIRECTORS

     The Board of  Directors  of the Company  recommends  that the  shareholders
     elect the  following  nominees  for  directors.  If any of the nominees for
     directors should become  unavailable for election,  it is intended that the
     shares  represented  by the proxy be voted for such  substitute  nominee or
     nominees as may be nominated by the Board of Directors:

         Three Year Term Expiring 2000:

           Kenneth L. Lein
           G.I. (Larry) Ross



                          9



<PAGE>



The Board of  Directors of the Company  recommends  that the  shareholders  vote
their shares in favor of the nominees for directors.


         Officers and Directors

Set  forth  below  is  certain  information  regarding  all of the  current  and
nominated directors and the executive officers of the Company.

        The directors and executive officers of the Company are as follows:

        Name                  Age(as of 3/31/97)  Position
        -------               ------------------  ---------

        Richard A. Lumpkin    62                  Chairman of the Board and
                                                  Director
        Gregory J. Wilkinson  46                  Vice Chairman of the Board and
                                                  Director
        Theodore D. Berns     47                  Director
        Eugene L. Cole        61                  Director
        Aubrey E. Judy        59                  Director
        Kenneth L. Lein       64                  Director
        James S. Quarfortth   42                  Director
        G. I. Ross            63                  Director
        David C. Southwick    66                  Director
        James W. Strand       50                  Director
        Roger H. Moore        55                  President and Chief Executive
                                                  Officer
        Raymond E. Donnelly   63                  Vice President - Marketing and
                                                  Sales
        Bruce E. Johnson      48                  Vice President - Operations 
                                                  and Engineering
        David J. Nicol        51                  Vice President - Product
                                                  Management and Development
        Daniel E. Weiss       49                  Vice President - Finance,
                                                  Secretary and Treasurer

     Election of Directors of the Company

The Board of Directors  of the Company  presently  consists of ten persons.  The
Board is being reduced in size to nine persons at the second  Annual  Meeting of
the Company.  The term of David C. Southwick will expire in accordance  with the
Company's mandatory  retirement age by-law. The Board expresses its appreciation
and gratitude for the years of dedication,  vision and inspiration Mr. Southwick
has  provided  as a  Director.  Proxies  may not be voted  for more than two (2)
persons in the election of directors at the Annual Meeting.



                          10



<PAGE>



Committees of the Board

The Executive  Committee  oversees Board  governance.  The Nominating  Committee
selects nominees for election as directors and recommends  directors to serve as
Chairman,  and Vice Chairman of the Board. The Personnel  Committee  establishes
policies for compensation and the reimbursement of expenses to Board members for
service on the Board and its committees and also establishes  policies regarding
the  compensation  and  benefit  plans  for  executive  officers  and  other key
employees.  The  Audit/Finance  Committee  appoints  and  communicates  with the
independent auditors of the Company, reviews the Company's accounting practices,
internal  accounting  controls and financial  results and reviews and recommends
major financial decisions of the Company.

Compensation of the Board

Each  director  receives a retainer  of $300 per month and the  Chairman  of the
Board  receives a retainer of $500 per month.  Each  director  receives a fee of
$300 per Board and committee meeting attended in person,  not to exceed $600 per
day.  All  directors  are  reimbursed  for  out-of-pocket  expenses  incurred in
connection with attendance at meetings of the Board of Directors and meetings of
committees of the Board of Directors.


Business Experience and Directorships

     Mr. Lumpkin has been a director of USTN Holdings, Inc. since February, 
1996 and currently serves as Chairman of the Board and Chairman of the Executive
Committee.  Prior to that, Mr. Lumpkin served as a director of Independent
Telecommunications Network, Inc. ("ITN") from January 1989 to February 1996 and
Chairman of the Board from February 1989 to February 1996.  Since 1957, Mr. 
Lumpkin has been employed by Consolidated Communications Inc. ("CCI") and its
affiliates.  He is currently serving as a director, Chairman of the Board and 
Chief Executive Officer of CCI and as a director, Chairman of the Board and 
Chief Executive Officer of CCI's ten affiliates.  Mr. Lumpkin is currently a 
director of First Mid-Illinois Bancshares and First Mid-Illinois Bank and Trust
in Mattoon, Illinois, and CIPSCO, Inc. and Central Illinois Public Service Co.,
Springfield, Illinois.  Since 1975, Mr. Lumpkin has been affiliated with United
States Telephone Association ("USTA").  He is a past President of that 
organization and is currently serving as Assistant Treasurer.  Mr. Lumpkin is 
also a past President of the Illinois Telephone Association.

     Mr. Wilkinson has been a Director of USTN Holdings,  Inc. since August 1995
and  currently  serves  as  Vice  Chairman  of the  Board  and  Chairman  of the
Audit/Finance  Committee.  Prior to that, Mr.  Wilkinson served as a director of
U.S. Intelco Holdings, Inc. ("U.S. Intelco") from June 1994 to February 1996. He
was a Director of Intelco Networks from February 1986 to June 1994. He served as
Treasurer of U.S. Intelco from August 1994 to February 1996 and was Treasurer of
Intelco  Networks  from  January  1987 to June  1994.  Mr.  Wilkinson  has  been
associated with Telephone & Data Systems, Inc. ("TDS"), a communications holding
company with  headquarters in Madison,  Wisconsin,  in various  capacities since
1972.  Since  January  1992,  he has held the  position  of Vice  President  and
Controller with that company and was its Corporate  Controller prior thereto. He
also serves as an officer and director of various subsidiaries of TDS and serves
on various  telephone  industry-related  committees.  Mr.  Wilkinson holds B.S.,
M.B.A.  and J.D.  degrees from the  University of  Wisconsin.  He is licensed to
practice law in the Wisconsin state and federal courts.


                          11



<PAGE>



     Mr. Berns has been a director of USTN Holdings, Inc. since August 1995.  
Prior to that, Mr. Berns served as a director of ITN from October 1991 to 
February 1996.   Mr. Berns currently serves as Chief Executive Officer of OGI 
Telecomm.  From 1993 to October 1995, Mr. Berns served as Director, President 
and Chief Executive Officer of AdVal Communications, Inc. located in Vancouver,
Washington.  During 1993, Mr. Berns served as President and Chief Executive
Officer of TRT Communications, Inc.  From 1986 through 1992, Mr. Berns was 
employed by Pacific Telecom, Inc. (Pacific Telecom), located in Vancouver, 
Washington.  Mr. Berns served as President and Chief Operating Officer of 
Pacific Telecom.  Mr. Berns also served as Manager of Legal Affairs and Vice
President and Corporation Secretary.  From 1984 to 1985, Mr. Berns served as
Vice President of Multivisions, Ltd., located in Anchorage, Alaska.  
In addition, Mr. Berns is a former director of USTA. 

     Mr. Cole has been a director of USTN  Holdings,  Inc.  since February 1996.
Prior to that,  he was a Director  of U.S.  Intelco  from June 1994 to  February
1996.  He was a founder of Intelco  Networks  and served as a Director  from its
formation  in 1981 to June 1994,  and served as  Chairman  of Intelco  Network's
Board of Directors  from 1985 until January 1990.  Prior to that time,  Mr. Cole
had  served  as  Intelco  Networks'  Vice  Chairman  of the  Board of  Directors
beginning in August 1984, and as Vice  President of Intelco  Networks from March
1981 until August 1984. Mr. Cole worked at Canby Telephone  Association,  Canby,
Oregon where in 1968, he was named General Manager and in 1986 became  President
of the Canby  Telephone  Association.  Mr. Cole also served as  President of CTA
Service Corp., and North Willamette  Telecom from 1986 until March 1994. He then
retired on May 1, 1995. Mr. Cole came back and currently  serves as President of
Canby  Telephone  Association,  President of CTA Service Corp.  and President of
North  Willamette  Telecom.  He served as a Director of Western Rural  Telephone
Association from 1976 to 1983 and served as President of that  organization from
1977 to 1978.  Since  1970,  Mr.  Cole has  served  as  Director  of the  Oregon
Independent  Telephone  Association,  of which he was the President from 1980 to
1981.  From 1982  until  1995,  he served as a Trustee of the  N.T.C.A.  Pension
Trust.  Mr.  Cole served as  director  of the Board of Rural  Telephone  Finance
Cooperative  from 1990 to February 1993. From November 1994 until February 1996,
Mr. Cole had been a Director of ITN.

     Mr. Judy has been a Director of USTN  Holdings,  Inc.  since February 1996.
Prior to that,  Mr. Judy served as a director of U.S.  Intelco from June 1994 to
February  1996.  He was a Director of Intelco  Networks  from April 1982 to June
1994.  Mr.  Judy was  employed  with  Farmers  Telephone  Cooperative,  Inc.  in
Kingstree, South Carolina, since 1964 and served as its Executive Vice President
from 1981 until his  retirement  in  December  1993.  He served as a Director of
Rural  Telephone  Finance  Cooperative  from 1987 to 1994,  the  South  Carolina
Telephone  Association from 1984 to 1994,  Williamsburg First National Bank from
1984 to present,  PalmettoNet,  Inc. from 1985 to 1994,  and South Carolina Net,
Inc. from 1992 to 1994. Mr. Judy served on the National Telcom Corporation Board
from 1985 to 1992,  and served on the NTCA Board of Directors from 1976 to 1982,
holding the offices of Secretary, Vice President and President.

     Mr. Lein has been a Director of USTN  Holdings,  Inc.  since February 1996.
Prior to that,  Mr. Lein served as a Director of U.S.  Intelco from June 1994 to
February 1996. He was a Director of Intelco  Networks from 1987 to June 1994. He
served as Secretary of U.S. Intelco from August 1994 to February 1996 and served
as Secretary of Intelco  Networks  from May 1993 to June 1994.  Since 1974,  Mr.
Lein has been Manager of Winnebago  Cooperative Telephone  Association,  a local
exchange  telephone company located in Lake Mills, Iowa. Mr. Lein was a Director
of ITN from 1990  until the merger of ITN and U.S.  Intelco in 1996.  He is past
President  of the  Organization  for the  Protection  and  Advancement  of Small
Telephone Companies ("OPASTCO"). He is a past member of the USTA Board

                          12



<PAGE>



of  Directors  and has  served  as  Secretary  of the USTA  Board  and is a past
Chairman of the USTA Small  Company  Committee.  Mr. Lein is a co-founder of and
past  Director of Iowa Network  Services.  He  presently  serves on the Board of
MEANS Telcom,  an  independent  telco owned  Minnesota-based  centralized  equal
access and long distance company.

     Mr. Quarforth has been a Director of USTN Holdings, Inc. since February 
1996.  Prior to that, Mr. Quarforth served as a Director of ITN from January 
1989 to February 1996.  Mr. Quarforth currently serves as President and Chief 
Executive Officer of CFW Communications Company ("CFW") and Chairman and Chief 
Executive Officer of its affiliates, which include CFW Telephone Company, CFW 
Network, Inc., CFW Cellular, Inc., CFW Communications Services, Inc., CFW 
Information Services, Inc., CFW Cable, Inc., and CFW PCS, Inc.  Mr. Quarforth 
is also a Director of American Telecasting, Inc. and Virginia Financial 
Corporation. Mr. Quarforth is a past Director and President of the Virginia 
Telecommunications Industry Association.  Mr. Quarforth is also Chairman of the
Virginia PCS Alliance, L.C.

     Mr. Ross has been a Director of USTN Holdings, Inc. since February 1996.
Prior to that, Mr. Ross was a Director of ITN from January 1989 to February 
1996 and served as its Treasurer from 1990 to 1996.  Since 1970, Mr. Ross has 
been President, Chief Executive Officer and a director of Lufkin-Conroe
Communications Company, and Chairman & CEO of its operating companies, located 
in Texas.  Mr. Ross has served on the Boards of the Texas Association of 
Business since 1980 and First Bank of Conroe, Texas, since 1983.  In 1972, Mr. 
Ross became a director and member of the Executive Committee of the Texas 
Telephone Association and in 1975 its Chairman.  Mr. Ross has served as
Chairman of the Board of TECA since 1988.  Mr. Ross has been a member of the 
Electronic Engineering Technical Advisory Committee at Texas A&M University 
since 1974 and holds an MBA in Finance.

     Mr. Strand has been a Director of USTN Holdings, Inc. since February 1996.
Prior to that, Mr. Strand served as a member of the Board of Directors of ITN 
from  May 1992 to February 1996.  Since 1990, Mr. Strand has been President of 
Diversified Operations and a director of Aliant Communications, Inc. (formerly 
Lincoln Telecommunications Company) located in Lincoln, Nebraska.  Mr. Strand 
has served on the Board of the Cellular Telecommunications Industry Association
(CTIA) and was elected to the Executive Committee in 1993.  He also serves as
subcommittee Chairman for operations in the small operators caucus, Vice 
Chairman of the CTIA Foundation and is a member of the CTIA Technology 
Operations Policy Council (TOPS) of the Board of Directors.

     Mr. Moore has been President and Chief Executive Officer of USTN Holdings,
Inc. and Illuminet, Inc. since January 1996.  Prior to that, Mr. Moore served
as Vice President of Major Accounts of Northern Telecom from 1994 to December 
1995.  He was President of Northern Telecom Japan from 1991 to 1994 and from 
1989 to 1991 he was Vice President of Northern Telecom's Western Region.  Mr.
Moore has held other senior positions with Northern Telecom since joining the 
company in 1985. Prior to joining Northern Telecom, Mr. Moore was, from 
1982-1985, the President of AT&T Canada.  Mr. Moore has over 30 years of 
experience in the telecommunications and business systems industry.  Mr.
Moore received a Bachelor of Science degree in general science from Virginia 
Polytechnic Institute.

     Mr. Donnelly has been USTN Holdings, Inc. Vice President-Marketing and 
Sales since February 1996.  He also serves Illuminet, Inc. as Vice 
President-Marketing and Sales. Prior to that, Mr. Donnelly was ITN's Vice 
President-Marketing and Sales from November 1989 to February 1996.  Prior to 
joining ITN, Mr. Donnelly was employed by Timeplex, Inc. of Woodcliff Lake, 
New Jersey, for two years, where he served as Assistant Vice President in
charge of marketing and business planning.  From April


                          13



<PAGE>



1974 to January 1987, Mr. Donnelly was employed as a division manager, in 
various product line management and development positions, with AT&T 
Information Systems and AT&T Marketing in Morristown, New Jersey.  Mr. Donnelly 
has over 30 years of experience in the telecommunications industry.  Mr. 
Donnelly earned an undergraduate degree from the University of California, 
Berkeley, and a Masters of Business Administration (MBA) from Farleigh
Dickinson University.

     Mr.  Johnson  has been  Illuminet,  Inc.'s  Vice  President-Operations  and
Engineering  since  February  1996.  Prior  to that,  he  served  as ITN's  Vice
President-Operations  and Engineering  from July 1992 to February 1996. Prior to
joining ITN,  Mr.  Johnson was  employed by NYNEX  Telecommunications  for eight
years,  where he served as Staff Director  responsible for planning,  deployment
and  compliance  testing of NYNEX's SS7 network.  From 1970 to 1984, Mr. Johnson
worked  for  New  England  Telephone  in  various   engineering  and  operations
assignments.  Mr. Johnson earned an undergraduate degree in computer science and
mathematics  from  Worcester  State  College and an MBA from the  University  of
Kansas.  Mr.  Johnson has over 27 years of experience in the  telecommunications
industry.

  Mr. Nicol has been  Illuminet,  Inc.'s Vice  President-Product  Management and
Development  since  February  1996.  Prior  to that,  he  served  as ITN's  Vice
President-Planning and Administration from February 1994 to February 1996. Prior
to ITN,  Mr.  Nicol was Chief  Operating  Officer of a  privately-held  computer
network  integrator  on  the  West  Coast,  where  he  was  instrumental  in its
acquisition by a NYSE company.  Earlier in a similar  capacity,  he had likewise
engineered  the  acquisition  of a leading  LAN/WAN  systems  integrator  in the
Midwest.  From 1987 to 1990, he was Vice President Corporate Planning for United
Telecom (now Sprint),  having served since 1984 as its Vice  President  Planning
Telephone Group.  Prior to Sprint,  Mr. Nicol was a consultant to a wide variety
of  Fortune  500 and  other  companies.  Mr.  Nicol's  undergraduate  degree  in
Aeronautical  Engineering is from Ohio State  University.  He holds a masters in
Business  Economics  from Case  Institute  of  Technology,  and a  doctorate  in
Industrial  Economics and Finance from Case Western Reserve  University.  All of
his thirty year career has been in technology industry sectors, the last fifteen
directly in telecommunications.

     Mr.  Weiss  has been  USTN  Holdings,  Inc.  Vice  President-Finance  since
February,  1996 and the Company's  Secretary and Treasurer since April 1996. Mr.
Weiss also serves as the Vice President- Finance for Illuminet,  Inc. as well as
its Secretary and Treasurer.  Prior to that, Mr. Weiss served as U.S.  Intelco's
Vice  President-Finance  from May  1994 to  February  1996 and as its  Assistant
Treasurer   from  May  1994  to   February   1996.   He  has   served   as  Vice
President-Finance and Assistant Treasurer of Intelco Networks from 1986 to 1994.
Mr. Weiss also served as a director and Treasurer of Intelco Networks. He served
as Business and Financial  Manager of Intelco Networks from 1985 to 1986 and was
Allied  Data's  Vice  President-Administration  from  1981 to 1985 and  Business
Manager  from  1979 to  1981.  From  1988 to  1990,  he  served  ITN in  various
capacities  including  director  and  Secretary/Treasurer.  Mr.  Weiss served in
various capacities for The Evergreen State College,  Olympia,  Washington,  from
1971 to 1979, including Accounting Manager, Assistant Director of Facilities and
Academic  Operations  Officer.  Mr.  Weiss  graduated  from  Western  Washington
University  with a Bachelor of Science  degree in Accounting  and is a member of
the American  Institute  of  Certified  Public  Accountants  and the  Washington
Society of Certified Public Accountants.


            INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

Ernst & Young LLP has been appointed the Company's  independent certified public
accountant for the year ending December 31, 1997.

                          14



<PAGE>




                     SHAREHOLDER PROPOSALS

The shareholders who wish to present  proposals for action at the Annual Meeting
of  Shareholders  to be  held in  1998  should  submit  their  proposals  to the
Secretary  of the  Company at the  address of the Company set forth on the first
page of this proxy statement. Proposals must be received by the Company no later
than  January 31, 1998 for  consideration  for  inclusion  in next year's  proxy
statement and proxy.


            ANNUAL REPORT AND FINANCIAL STATEMENTS

USTN Holdings, Inc. was formed to effect the merger between U.S. Intelco and 
ITN effective February 23, 1996.  For accounting purposes, U.S. Intelco was 
treated as the "acquirer"  resulting in the assets and liabilities of ITN being
entered into U.S. Intelco's financial records at February 29, 1996.  The annual
report including audited financial statements for the year ending December 31, 
1996 is enclosed with this mailing.  Additionally, shareholders will have access
to USTN Holdings, Inc. SEC Form 10-KSB which includes the annual audited 
financial statements for the year ending December 31, 1996 via the Internet 
at the following address:  http://WWW.SEC.gov/cgi-bin/srch-edgar - 
Then enter:  USTN


                         OTHER MATTERS

No other  matters are intended to be brought  before the meeting by the Company,
nor does the  Company  know of any  matters to be brought  before the meeting by
others.  If, however,  any other matter  properly comes before the meeting,  the
persons  named  in the  proxy  will  vote  the  shares  represented  thereby  in
accordance with their judgment.

                           By order of the Board of Directors


                           /s/  Daniel E. Weiss

                           Daniel E. Weiss
                           Secretary/Treasurer



                          15



<PAGE>



ALL SHAREHOLDERS ARE URGED TO SIGN, DATE AND MAIL THEIR PROXIES PROMPTLY.

                    SERIES A PREFERRED STOCK

                              PROXY
                       USTN HOLDINGS, INC.
                          P.O. Box 2909
                        Olympia, WA 98507

     The undersigned  hereby appoints Richard A. Lumpkin and Roger H. Moore, and
each of them  proxies,  with power of  substitution  and  revocation,  acting by
majority of those present and voting,  or if only one is present and voting then
that  one,  to vote the  shares  of  stock  of USTN  Holdings,  Inc.  which  the
undersigned  is entitled to vote at the special  meeting of  shareholders  to be
held in Lake Buena Vista at the Buena Vista Palace on Wednesday,  April 30, 1997
at 8:00 a.m. Florida time, and at any adjournment  thereof,  with all the powers
the undersigned would possess if present.

     This  proxy is  solicited  on  behalf  of the  Board of  Directors  of USTN
Holdings, Inc.

     Please mark your vote, sign, date and return promptly in the enclosed, self
addressed,  stamped  envelope,  or fax both  sides  of Proxy to (360)  923-3440,
Attention Daniel Weiss.

     This proxy, when properly  executed,  will be voted as instructed herein by
the undersigned  shareholder.  If no instructions are given,  this Proxy will be
voted "FOR" the proposals herein.

     Please mark your vote as in this example:  X

 A vote FOR proposal 1 is recommended by the Board of Directors

1.To amend the Certificate of Incorporation to change the name of the Company to
Illuminet Holdings, Inc.

         For      Against       Abstain

     A vote FOR proposal 2 is recommended by the Board of Directors

2. To elect the  following  nominees for  directors.  If any of the nominees for
directors should become unavailable for election, it is intended that the shares
represented by the proxy be voted for such substitute nominee or nominees as may
be nominated by the Board of Directors:

         Three Year Term Expiring 2000:

              Kenneth L. Lein
              G.I. (Larry) Ross

         For all nomineAgainst all nomineAbstain

         Withhold authority to vote with respect to:___________________________
                  (please fill in name)

                          16



<PAGE>



The  undersigned  hereby revokes any proxy or proxies  heretofore  given to vote
such shares at said meeting or at any adjournment thereof.

Please sign  exactly as name  appears on this Proxy.  When  signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by an authorized officer. If a
partnership, please sign in partnership name by an authorized person.

     Shareholder:   (Name)

    * USTN Holdings, Inc.
     Common Stock Shares:  (# of shares)



--------------------------------- -------------------------
Name of Shareholder               Date


--------------------------------- -------------------------
Authorized Signature              Title of Authorized Signature

To help us with our planning, please indicate below if you will be attending the
meeting.

   Yes, I/We plan to attend        Number in party _______

   No, I/We will not attend


* All Shares are reported on the basis of the conversion ratios for ITN and U.S.
Intelco  stock  as a  result  of the  merger  approved  by the  shareholders  in
February, 1996.



                          17



<PAGE>




                          COMMON STOCK

                              PROXY
                       USTN HOLDINGS, INC.
                          P.O. Box 2909
                        Olympia, WA 98507

     The undersigned  hereby appoints Richard A. Lumpkin and Roger H. Moore, and
each of them  proxies,  with power of  substitution  and  revocation,  acting by
majority of those present and voting,  or if only one is present and voting then
that  one,  to vote the  shares  of  stock  of USTN  Holdings,  Inc.  which  the
undersigned  is entitled to vote at the special  meeting of  shareholders  to be
held in Lake Buena Vista at the Buena Vista Palace on Wednesday,  April 30, 1997
at 8:00 a.m. Florida time, and at any adjournment  thereof,  with all the powers
the undersigned would possess if present.

     This  proxy is  solicited  on  behalf  of the  Board of  Directors  of USTN
Holdings, Inc.

     Please mark your vote, sign, date and return promptly in the enclosed, self
addressed,  stamped  envelope,  or fax both  sides  of Proxy to (360)  923-3440,
Attention Daniel Weiss.

     This proxy, when properly  executed,  will be voted as instructed herein by
the undersigned  shareholder.  If no instructions are given,  this Proxy will be
voted "FOR" the proposals herein.

     Please mark your vote as in this example:  X

 A vote FOR proposal 1 is recommended by the Board of Directors

1.  To amend the Certificate of Incorporation to change the name of the Company
to Illuminet Holdings, Inc.

         For      Against       Abstain


     A vote FOR proposal 2 is recommended by the Board of Directors

2.  To elect the  following  nominees for  directors.  If any of the nominees 
for directors should become unavailable for election, it is intended that the 
shares represented by the proxy be voted for such substitute nominee or 
nominees as may be nominated by the Board of Directors:

         Three Year Term Expiring 2000:

              Kenneth L. Lein
              G.I. (Larry) Ross

         For all nomineAgainst all nomineAbstain

         Withhold authority to vote with respect to:___________________________
              (please fill in name)

                          18



<PAGE>



The  undersigned  hereby revokes any proxy or proxies  heretofore  given to vote
such shares at said meeting or at any adjournment thereof.

Please sign  exactly as name  appears on this Proxy.  When  signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by an authorized officer. If a
partnership, please sign in partnership name by an authorized person.

     Shareholder:   (Name)

    * USTN Holdings, Inc.
     Common Stock Shares:  (# of shares)

--------------------------------- -------------------------
Name of Shareholder               Date

--------------------------------- -------------------------------
Authorized Signature              Title of Authorized Signature

To help us with our planning, please indicate below if you will be attending the
meeting.

   Yes, I/We plan to attend        Number in party _______

   No, I/We will not attend

* All Shares are reported on the basis of the conversion ratios for ITN and U.S.
Intelco  stock  as a  result  of the  merger  approved  by the  shareholders  in
February, 1996.

  SPECIAL INSTRUCTIONS

Enclosed in your packet are the following items:

   *  Shareholder Letter

   *  Notice of Annual Meeting of Shareholders

   *  Proxy Statement

   *  Proxy Card(s)

   *  Stamped Return Envelope for Proxy

   *  1996 Annual Report

Please mark, sign, date and return the enclosed Proxy as promptly as possible by
fax to (360) 923-3440, and thereafter mail the executed,  original proxy card in
the enclosed, self-addressed, postage-paid envelope.

                          19



<PAGE>



If you have questions concerning your package,
please call Dan Weiss, Vice President-Finance
at (360) 493-6226.      


                          20



<PAGE>




                           SIGNATURES

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

                           USTN HOLDINGS, INC.



                           By:  /s/ Roger H. Moore
                           Roger H. Moore
                           President and Chief Executive
                           Officer
                           Date:  April 16, 1997


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.

       SIGNATURE/TITLE                          DATE
       ---------------                          ----

By:/s/ Roger H. Moore                      April 16, 1997
   ------------------
   Roger H. Moore, President and Chief Executive Officer
   (Principal Executive Officer)


By:/s/ Daniel E. Weiss                     April 14, 1997
   -------------------
   Daniel E. Weiss, Vice President - Finance
   (Principal Financial Officer and Accounting Officer)


By:/s/ Richard A. Lumpkin                  April 14, 1997
   ----------------------
   Richard A. Lumpkin, Chairman of the Board


By:/s/ Gregory J. Wilkinson                April 15, 1997
   ------------------------
   Gregory J. Wilkinson, Vice Chairman of the Board


By:/s/ Theodore D. Berns                   April 16, 1997
   ---------------------
   Theodore D. Berns, Director

By: /s/ Eugene L. Cole                     April 16, 1997
   -------------------
   Eugene L. Cole, Director


                          21



<PAGE>



By:________________________
   Aubrey E. Judy, Director


By:________________________
   Kenneth L. Lein, Director


By:/s/ James S. Quarforth                  April 14, 1997
   ----------------------
   James S. Quarforth, Director

By: /s/ G. I. Ross                         April 14, 1997
   -----------------------
   G. I. Ross, Director

By:/s/ James W. Strand                     April 15, 1997
   -------------------
   James W. Strand, Director

By:/s/ David C. Southwick                  April 14, 1997
   ----------------------
   David C. Southwick, Director



                          22



<PAGE>