UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q

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


                  For the quarterly period ended March 31, 1999

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM __________ TO __________

                         Commission File Number 0-27176


                               Saville Systems PLC
             (Exact name of registrant as specified in its charter)



                               Republic of Ireland
         (State or other jurisdiction of incorporation or organization)

                                 Not Applicable
                      (I.R.S. Employer Identification No.)

                   IDA Business Park, Dangan, Galway, Ireland
          (Address of principal executive offices, including zip code)


                               011-353-9-152-6611
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. |x| Yes |_| No

Number of shares  outstanding of the registrant's class of Ordinary Shares as of
April 28, 1999 was 39,181,744.


<PAGE>



                               SAVILLE SYSTEMS PLC

                                FORM 10-Q REPORT

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                                TABLE OF CONTENTS

                                                                

                         Part I - Financial Information                     PAGE

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets as of March 31, 1999                      3
         (unaudited) and December 31, 1998                                     

         Consolidated Statements of Income for the three months ended          4
         March 31, 1999 and 1998 (unaudited)

         Consolidated Statements of Cash Flows for the three months ended      5
         March 31, 1999 and 1998 (unaudited)

         Notes to Consolidated Financial Statements (unaudited)              6-8

Item 2.  Management's Discussion and Analysis of Financial Condition        9-16
         and Results of Operations                   

Item 3.  Market Risk                                                          17

                           Part II - Other Information


Item 1.  Legal Proceedings                                                    18

Item 2.  Changes in Securities                                                18

Item 3.  Defaults Upon Senior Securities                                      18

Item 4.  Submission of Matters to a Vote of Security Holders                  18

Item 5.  Other Information                                                    18

Item 6.  Exhibits and Reports on Form 8-K                                     18


Signatures                                                                    19




<PAGE>

Saville Systems PLC

CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars, except share data amounts)

<TABLE>
                                                          March 31  December 31
                                                            1999        1998
                                                         (unaudited)
------------------------------------------------------ ------------ ------------
<S>                                                    <C>          <C>    
ASSETS

Current Assets
  Cash and cash equivalents                                $42,614      $40,330
  Short-term investments                                    44,884       47,492
  Accounts receivable, less allowance for doubtful
    accounts of  $2,850 and $1,943, respectively            38,394       43,729
  Prepaid expenses and other assets                          6,644        4,471
------------------------------------------------------ ------------ ------------
Total current assets                                       132,536      136,022
  Property and equipment, net                               13,207       12,277
  Other assets, net                                         12,814       13,346
------------------------------------------------------ ------------ ------------
Total assets                                              $158,557     $161,645
------------------------------------------------------ ------------ ------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
  Accounts payable                                           4,842        5,377
  Accrued compensation and related benefits                  5,031        7,128
  Accrued expenses and other liabilities                     5,724        4,644
  Income taxes payable                                       6,915        8,804
  Deferred revenue                                           2,891          947
  Current portion of long-term liabilities                   1,138        1,116
------------------------------------------------------ ------------ ------------
Total current liabilities                                   26,541       28,016
  Long-term liabilities                                        146        1,178
  Minority interest                                            254          361
------------------------------------------------------ ------------ ------------
Total liabilities                                           26,941       29,555
------------------------------------------------------ ------------ ------------

Commitments and Contingencies (note 4)

Shareholders' equity
Ordinary Shares, nominal value $0.0025 per share
     Authorized:  75,000,000
     Issued and outstanding: 39,084,894 and 
       38,908,488, respectively                                 98           97
Deferred Ordinary Shares, nominal value IR(pound)
     1.00 per share
     Authorized, issued and outstanding:  30,000                48           48
Additional paid-in capital                                  65,946       63,766
Retained earnings                                           66,633       69,802
Accumulated other comprehensive income                     (1,109)      (1,623)
------------------------------------------------------ ------------ ------------
Total shareholders' equity                                 131,616      132,090
------------------------------------------------------ ------------ ------------
Total liabilities and shareholders' equity                $158,557     $161,645
------------------------------------------------------ ------------ ------------
</TABLE>

See accompanying notes
<PAGE>


Saville Systems PLC

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(unaudited)
(in thousands of U.S. dollars, except share and per share data)

<TABLE>
                                                       Three months ended
                                                   March 31           March 31
                                                      1999              1998
-------------------------------------------- --------------- ------------------
<S>                                          <C>             <C>   
REVENUE
Services                                           $ 26,383           $ 29,939
License fees                                          3,785              8,083
-------------------------------------------- --------------- ------------------
Total revenue                                        30,168             38,022
-------------------------------------------- --------------- ------------------

EXPENSES
Cost of services                                     17,957             14,048
Cost of license fees                                     91                280
Sales and marketing                                   2,457              1,922
Research and development                              6,088              3,931
General and administrative                            8,409              6,543
-------------------------------------------- --------------- ------------------
Total expenses                                       35,002             26,724
-------------------------------------------- --------------- ------------------

(Loss) income from operations                       (4,834)             11,298
Other income, net                                       719                723
-------------------------------------------- --------------- ------------------

(Loss) income before income taxes                   (4,115)             12,021
Income tax (benefit) provision                        (946)              2,825
-------------------------------------------- --------------- ------------------
Net (loss) income                                 $ (3,169)             $9,196
-------------------------------------------- --------------- ------------------

Basic (loss) earnings per share                    $ (0.08)             $ 0.24
Diluted (loss) earnings per share                  $ (0.08)             $ 0.23
-------------------------------------------- --------------- ------------------

(in thousands)
Ordinary shares                                      39,029             37,822
Ordinary shares assuming dilution                    39,029             40,845
-------------------------------------------- --------------- ------------------
</TABLE>

See accompanying notes



<PAGE>

Saville Systems PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)
(in thousands of U.S. dollars)

<TABLE>
                                                           Three months ended
                                                           March 31   March 31
                                                             1999       1998
--------------------------------------------------------- ---------- ----------
<S>                                                       <C>        <C>   
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                         $ (3,169)     $9,196
Adjustments to reconcile net (loss) income to net cash
 provided by operating activities:
  Depreciation of property and equipment                        672        477
  Amortization of other assets                                  804         -
  Provision for doubtful accounts                             1,274        355
  Gain on sale of property and equipment                          -       (97)
  Compensation related to stock transactions                     51         51
  Deferred income taxes                                       (792)         -
Changes in operating assets and liabilities:
  Accounts receivable                                         4,059    (8,824)
  Prepaid expenses and other assets                         (1,375)    (1,240)
  Accounts payable                                            (848)      (565)
  Accrued compensation and related benefits                 (2,096)        511
  Accrued expenses and other liabilities                      1,049      1,083
  Income taxes payable                                      (1,890)      (363)
  Deferred revenue                                            1,944      2,511
--------------------------------------------------------- ---------- ----------
Net cash (used in) provided by operating activities           (317)      3,095
--------------------------------------------------------- ---------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment                          (1,114)    (2,644)
Proceeds on sale of property and equipment                        -        778
Purchase of other assets                                          -    (2,425)
Net maturity (purchase) of short-term investments             2,608   (17,852)
--------------------------------------------------------- ---------- ----------
Net cash provided by (used in) investing activities           1,494   (22,143)
--------------------------------------------------------- ---------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on capital lease obligations                (33)       (31)
Repayment of long-term liabilities                            (981)         -
Proceeds from share issuances                                 2,015      7,955
Share issue costs                                                 -      (121)
Tax benefit on employee stock transactions                       38        204
--------------------------------------------------------- ---------- ----------
Net cash provided by financing activities                     1,039      8,007
--------------------------------------------------------- ---------- ----------
Effect of exchange rate changes on cash                          68       (15)
--------------------------------------------------------- ---------- ----------

Net increase (decrease) in cash and cash equivalents          2,284   (11,056)
Cash and cash equivalents, beginning of period               40,330     55,785
--------------------------------------------------------- ---------- ----------
Cash and cash equivalents, end of period                    $42,614    $44,729
--------------------------------------------------------- ---------- ----------
Short-term investments                                       44,884     30,867
--------------------------------------------------------- ---------- ----------
Cash and short-term investments                             $87,498    $75,596
--------------------------------------------------------- ---------- ----------
</TABLE>


See accompanying notes


<PAGE>

Saville Systems PLC

Notes to Consolidated Financial Statements as of March 31, 1999  (unaudited)


1.       BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
by the Company in accordance with U.S. generally accepted accounting  principles
for  interim   financial   information  and  with  instructions  to  Form  10-Q.
Accordingly,  certain  information and footnote  disclosure normally included in
the  Company's  audited  annual  consolidated  financial  statements  have  been
condensed  or  omitted  in  accordance  with the  rules and  regulations  of the
Securities and Exchange Commission. The unaudited interim consolidated financial
statements,  in the opinion of management,  reflect all adjustments  (consisting
only of normal and recurring  adjustments)  necessary for a fair presentation of
the  results  of the  interim  periods  ended  March  31,  1999 and 1998 and the
financial position as of March 31, 1999.

The results of operations for the interim periods are not necessarily indicative
of the results of operations  to be expected for the fiscal year.  These interim
consolidated financial statements should be read in conjunction with the audited
consolidated  financial  statements  of the Company  which are  contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998.


2.         SUPPLEMENTAL CASH FLOW INFORMATION


<TABLE>
                                                       Three Months Ended
                                                    March 31         March 31
                                                      1999             1998
-------------------------------------------------- ---------------- -----------
<S>                                                <C>              <C>   
Cash Transactions:
  Cash paid for interest                                59                30

  Cash paid for income taxes                         2,729             3,000

Non-Cash Transactions:
  Technology acquired by long-term liabilities         -               2,000

-------------------------------------------------- ---------------- -----------
</TABLE>

3.       LONG-TERM LIABILITIES

Line of credit

During the quarter ended March 31, 1999 the Company received an extension of its
US $15.0 million line of credit until August 31, 2000. This  multi-currency line
of credit was obtained in 1997 from a financial institution and was available to
the Company and its  subsidiaries  for a two year period ending August 31, 1999.
The terms of the line of  credit  including  interest  rates,  standby  fees and
financial  covenants remain unchanged from December 31, 1998. The Company was in
compliance  with the  covenants  at March 31, 1999 and  December 31, 1998 and no
advances were outstanding on either date, respectively.

Minimum Royalty Payments

During the quarter  ended March 31, 1999 the Company  made a royalty  payment of
$982,000  which  was  required  as part of the  purchase  of  telecommunications
interconnect  billing  software  technology  made in 1998.  The  remaining  $1.0
royalty payment (less any royalties paid in 1999) is due in 2000 and is included
in the current portion of long-term liabilities.

4.       COMMITMENTS AND CONTINGENCIES

During the three  months  ended March 31,  1999,  the Company  entered  into new
office leases with commitments totaling $15.7 million through 2010.

On April 19, 1999, the Company received a notice of demand for arbitration filed
by a former customer,  Cellular Holdings, Inc. (also known as Cellular South and
Telepak),  alleging certain failures to perform under the agreements between the
Company and Cellular Holdings. The customer seeks a refund of approximately $6.6
million paid to Saville under the agreements plus additional expenses and costs.
The Company denies Cellular  Holdings'  allegations and believes that its claims
are without merit.  In addition,  Cellular  Holdings  presently owes the Company
approximately  $4.0  million  for work  performed  under these  agreements.  The
Company  intends to assert a counterclaim in arbitration  for, and  aggressively
pursue, the payment of all such amounts, applicable interest and expenses. There
can be no assurance, however, as to the outcome of this dispute.

5.       SHARE CAPITAL

During the three month  period ended March 31, 1999 the Company  issued  176,406
Ordinary  Shares for  approximately  $2.0  million  to  officers  and  employees
pursuant to option  exercises  and stock  purchases  under the 1995 Share Option
Plan ("1995 Plan") and the 1996  Employee  Share  Purchase  Plan ("1996  Plan"),
respectively.

Also during the period,  the Company  granted  approximately  2,219,000  options
under the 1995 Plan to employees at weighted average exercise price of $19.92.

6.       COMPREHENSIVE (LOSS) INCOME

The Company's comprehensive (loss) income was as follows:

(in thousands of U.S. dollars)

<TABLE>
                                                            Three Months Ended
                                                           March 31    March 31
                                                             1999        1998
--------------------------------------------------------- ----------- ---------
<S>                                                       <C>         <C>  
Net (loss) income                                          $(3,169)     $9,196
Foreign currency translation adjustment, net of NIL tax         514         31
--------------------------------------------------------- ----------- ---------

Comprehensive (loss) income                                $(2,655)     $9,227
--------------------------------------------------------- ----------- ---------
</TABLE>

The earnings of the Company's non-Irish foreign subsidiaries, which give rise to
the foreign currency  translation  adjustments,  are reinvested with no plan for
repatriation.  Therefore,  there is no tax  effect  on this  component  of other
comprehensive income.


7.       (LOSS) EARNINGS PER SHARE

<TABLE>
                                                        Three Months Ended
                                                     March 31        March 31
                                                       1999            1998
--------------------------------------------------- ----------- --------------
<S>                                                 <C>         <C>    
Numerator:
Net (loss) income                                     $(3,169)         $9,196
Denominator:
Denominator for basic earnings per share -
   Weighted average shares outstanding                  39,029         37,822
--------------------------------------------------- ----------- --------------
Effect of dilutive securities:
Stock options                                              -            3,023
--------------------------------------------------- ----------- --------------
Denominator for diluted earnings per share              39,029         40,845
Basic earnings per share                               $(0.08)         $ 0.24
Diluted earnings per share                             $(0.08)         $ 0.23
--------------------------------------------------- ----------- --------------
</TABLE>

Options to purchase approximately 7,369,000 shares,  outstanding as of March 31,
1999,  were not included in the above  computation of diluted loss per share for
the three  months  ended  March  31,  1999  because,  given the net loss for the
quarter,  the effect of such options would be  anti-dilutive  on an earnings per
share basis.

Options to purchase  approximately  15,000  shares,  outstanding as of March 31,
1998,  were excluded in the above  computation  for the three months ended March
31, 1998 because the exercise price of such options was greater than the average
market price of the common shares and therefore would be anti-dilutive.

8.       SEGMENT INFORMATION

The Company  operates in a single business segment which offers similar products
and services.  The Company's products are similar in nature,  providing customer
care  and   billing   solutions   software   for   service   providers   in  the
telecommunications  and energy industries.  The Company distributes its products
throughout the world through a direct sales force.

<PAGE>

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

Overview

Saville Systems PLC (together with its subsidiaries, "Saville" or the "Company")
provides  innovative  convergent  customer care and billing solutions to service
providers in the global  telecommunications  and energy markets.  Saville offers
products and services designed to enable  telecommunications  and energy service
providers  to  bring  new  service  offerings  to  market  quickly,  and to bill
accurately  and reliably for multiple  services on one  convergent  invoice.  In
order to meet the current and evolving  billing  requirements  of its customers,
the Company continuously  refines its sophisticated  convergent billing platform
(CBP(R)) software products for both the  UNIX/Oracle(R)  and DB2/400  platforms.
The  customer  can either  license CBP from  Saville or CBP can be provided by a
Company-operated   service  bureau.   Saville  has  also  introduced  facilities
management services,  which allow customers to license CBP from Saville and have
Saville  manage the  operation  of the  software  on  customer  owned  hardware.
Additionally, Saville has developed relationships with authorized integrators to
assist it in providing implementation services to purchasers of CBP products.

Saville also offers its  interconnect  billing platform (IBPTM) software product
which  allows  telecommunications   companies  to  bill  for  carrier-to-carrier
transactions. In addition, during the three months ended March 31, 1999, Saville
released its SavilleCareTM  product and its SavilleExpressTM GSM product module.
SavilleCare  allows  telecommunications   service  providers  to  integrate  the
SavilleCare  call center desktop with the providers'  billing and other business
support systems. SavilleExpress GSM is a pre-configured module that, through the
SavilleExpress modular billing platform,  supports the billing of services using
the  Global  System  for  Mobile  Communications  (GSM)  standard  for  wireless
telecommunications. Each of these three products was developed from technologies
purchased in 1998.

In addition to its product offerings, Saville provides its customers with a full
range of professional services,  including assisting a customer in analyzing its
requirements and then designing, developing and implementing a customer care and
billing  solution.  The Company  assists its  customers  on an ongoing  basis by
addressing  their  changing  business  needs  through  future  enhancements  and
developments to their customer care and billing solutions.

The  following  information  should be read in  conjunction  with the  Unaudited
Consolidated  Financial  Statements and Notes thereto included in Item 1 of this
Quarterly  Report and the Audited  Consolidated  Financial  Statements and Notes
thereto and  Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations  contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.


Results of Operations

         Revenue.  Total revenue decreased 20.7% from $38.0 million in the three
months ended March 31, 1998 to $30.2 million in the three months ended March 31,
1999. Both first quarter  license and services  revenue were lower due primarily
to fewer new customers being added during the quarter,  as well as some delay in
previously initiated projects.

Services  revenue  decreased  11.9% from $29.9 million in the three months ended
March 31, 1998 to $26.4  million in the three months ended March 31, 1999.  This
decrease   was   primarily   due  to  several   existing   customers'   changing
implementation  schedules,  additional work required during the quarter to bring
several  UNIX/Oracle sites into production and a decline in new services revenue
resulting from the shortfall in new license sales.

License fees revenue decreased 53.2% from $8.1 million in the three months ended
March 31, 1998 to $3.8 million in the three  months  ended March 31,  1999.  The
decrease was due primarily to fewer new license  sales and, to a lesser  extent,
to a delay in the  recognition  of license fees from projects that  commenced in
late 1998 due to changes in customer implementation schedules. The Company's new
license sales were  adversely  affected by a lengthening of the sales cycle due,
in part,  to  uncertainty  caused by recent  consolidation  among the  Company's
competition,  as well as the  marketing  issues  related to the  Company's  UNIX
customers going into production later in the quarter than expected.

     Cost of Services.  Cost of services  increased  27.8% from $14.0 million in
the three months ended March 31, 1998 to $18.0 million in the three months ended
March 31, 1999. As a percentage of services revenue,  cost of services increased
from 46.9% in the three months ended March 31, 1998 to 68.1% in the three months
ended March 31, 1999.  The overall  dollar  increase in cost of services was due
primarily to an increased  level of expenses to support the Company's  growth in
1998. Specifically,  additional personnel hired during 1998, including personnel
at the Company's  Australian  subsidiary hired as a result of the acquisition of
the net assets of BHA Pty Ltd.  ("BHA") and its majority  owned  subsidiary  BHA
Computer Pty Ltd.  ("BHAC") in April 1998, as well as increased  costs to retain
qualified personnel contributed to this increase. Additionally,  computer system
costs to support  headcount  growth and the growth of Saville's  service  bureau
initiative during 1998 also contributed to the increase. The increase in cost of
services as a  percentage  of services  revenue was due  primarily to the higher
overall services costs and lower services revenue, each as described above, and,
to a lesser extent, higher costs of services as a percentage of services revenue
at the  Company's  Australian  subsidiary.  As the market  demands  for  skilled
employees  and  contractors  increase,  the  Company  expects  that the costs to
attract, retain and train personnel will continue to increase.  Total costs as a
percentage  of revenue are expected to decrease to the extent  services  revenue
increases throughout the remainder of 1999.

         Cost of  License  Fees.  Cost of  license  fees  decreased  67.5%  from
$280,000 in the three months ended March 31, 1998 to $91,000 in the three months
ended March 31, 1999. This decrease was due primarily to an overall  decrease in
license fees revenue.

     Sales and Marketing. Sales and marketing expenses increased 27.8% from $1.9
million in the three  months  ended March 31, 1998 to $2.5  million in the three
months  ended  March 31,  1999.  As a  percentage  of total  revenue,  sales and
marketing  expenses increased from 5.1% in the three months ended March 31, 1998
to 8.1% in the three months ended March 31, 1999.  The overall  dollar  increase
was  primarily  due to the growth of the  Company's  worldwide  sales  force and
marketing  efforts  during 1998,  and to a lesser  extent,  the inclusion of the
sales and  marketing  costs in Australia as a result of the  acquisition  of the
assets of BHA and BHAC in April 1998.  The increase in costs as a percentage  of
total revenue was due primarily to higher overall sales and marketing  costs and
lower  revenue,  each as  described  above.  The  Company  anticipates  that the
continued  emphasis on its North  American and European  marketing  efforts will
increase its sales and marketing  expenses in absolute  dollars  throughout  the
remainder of 1999 but expects such expenses to decrease as a percentage of total
revenue to the extent total revenue increases in 1999.

         Research and Development.  Research and development  expenses increased
54.9% from $3.9 million in the three months ended March 31, 1998 to $6.1 million
in the three  months ended March 31, 1999.  As a  percentage  of total  revenue,
research and development expenses increased from 10.3% in the three months ended
March 31, 1998 to 20.2% in the three months  ended March 31,  1999.  The overall
dollar  increase  was  due to  development  efforts  by the  Company  on its CBP
products on both the  UNIX/Oracle  platform and to a lesser extent,  the DB2/400
platform,  as well as increased  development efforts for the product releases of
SavilleCare and SavilleExpress in 1999, and the continued development of Saville
IBP, technologies  purchased during 1998. In addition,  the increase in research
and development expenses as a percentage of revenue was due primarily to overall
decreases in total revenue and, to a lesser extent, additional development costs
of  technologies  purchased in 1998.  The Company  intends to continue to invest
resources  to expand  and  enhance  its  product  offerings  in the  future  and
therefore expects that research and development  expenses will remain at similar
or slightly lower levels in absolute dollars during the remainder of 1999.

         General  and  Administrative.   General  and  administrative   expenses
increased  28.5% from $6.5  million in the three  months ended March 31, 1998 to
$8.4 million in the three months ended March 31, 1999.  As a percentage of total
revenue,  general and  administrative  expenses also increased from 17.2% in the
three  months  ended March 31, 1998 to 27.9% in the three months ended March 31,
1999.  The overall  increase in total  general and  administrative  expenses was
attributable,  in part, to the increased levels of infrastructure  costs in 1999
associated  with the growth in the Company's  employee base and the expansion of
the Company's business  throughout 1998,  including the BHA acquisition in April
1998.  Additional general and administrative  expenses in the three months ended
March 31, 1999 were due to increased  provisions  for  doubtful  accounts due to
uncertainty  regarding the collectibility of certain specific customer accounts,
as well as  amortization of goodwill and completed  technology  arising from the
acquisition  of the assets of BHA.  In  addition  to the  overall  increases  in
general and administrative expenses discussed above, the increase in general and
administrative  expenses as a  percentage  of total  revenue was also due to the
decrease in total revenue as compared to 1998. Although the Company expects that
general and administrative expenses will remain fairly consistent throughout the
remainder of 1999 to support the Company's operations, the Company will continue
to review  outstanding  amounts owed by the  Company's  customers and assess its
provision for doubtful accounts  accordingly.  However, the Company expects such
expenses to decrease  as a  percentage  of total  revenue,  to the extent  total
revenue increases in 1999.

         Other Income,  Net. Other income, net, decreased slightly from $723,000
in the three  months  ended March 31, 1998 to $719,000 in the three months ended
March  31,  1999.  Increased  interest  income  on  larger  cash and  short-term
investment  balances  offset  by  losses  on  revaluation  of  foreign  currency
denominated  items due to fluctuations of market rates accounted for the overall
small change.

         Income Tax (Benefit) Provision. The Company recorded a tax provision of
$2.8 million in the three months ended March 31, 1998  representing an effective
tax rate of 23.5%. Comparatively,  a tax benefit of $946,000 was recorded in the
three months ended March 31, 1999.  The Company's  effective tax rate is largely
dependent on the  proportion  of the  Company's  income  earned in different tax
jurisdictions.  The Company earns a significant portion of its taxable income in
the  Republic of Ireland of which its  "manufacturing  income"  qualifies  for a
reduced tax rate of 10% which is  substantially  lower than  statutory  rates in
Ireland,  Canada,  the United  States,  the United  Kingdom and  Australia.  The
Company  anticipates  that it will continue to benefit from this tax  treatment,
although the extent of the benefit  could vary from period to period,  and there
can be no assurance that the Company's tax situation will not change.  The Irish
Minister of Finance  announced in December 1998 that the standard Irish tax rate
would be reduced to 28% as of January 1, 1999 and will be reduced gradually to a
tax rate of 12.5% for  taxation  years  ending after 2002 (as compared to 32% in
1998).  Under the  announced  plan,  the tax rate on  manufacturing  income will
remain at 10% until the tax relief program is due to terminate in 2010, at which
time the tax rate  would  increase  to the  standard  rate of 12.5%.  Should the
Company no longer  qualify for this lower tax rate or if tax laws were rescinded
or changed, the effect on net income would be materially adversely affected.

Liquidity and Capital Resources

On a combined basis,  cash and cash  equivalents  and short-term  investments of
$87.5 million at March 31, 1999 were relatively  unchanged from $87.8 million at
December  31,1998.  During  the  first  three  months  of  1999,  cash  and cash
equivalents  increased  $2.3 million to $42.6  million at March 31, 1999,  while
short-term  investments  decreased  $2.6  million to $44.9  million at March 31,
1999.

         Operating Activities. During the three months ended March 31, 1999, net
cash used by operating activities was $317,000.  Cash used to fund the Company's
net loss for the period as well as payments of compensation and related benefits
and income tax  installments  were mostly  offset by the non-cash  effect of the
provision for doubtful accounts and a decrease in accounts receivable.

         Investing Activities. The cash provided by investing activities was due
primarily to the maturity of short-term  investments  of $2.6 million  partially
offset by the purchase of property and  equipment of $1.1  million.  The Company
expects to continue to make property and equipment  investments  throughout  the
remainder of 1999 to support the growth and expansion of the Company's  business
and for further development of its internal software programs.

         Financing Activities.  During the three months ended March 31, 1999 net
cash provided from financing  activities  was $1.0 million.  This was due to the
issuance of Ordinary Shares to employees  pursuant to exercises of options under
the 1995 Share Option Plan and to shares  issued under the 1996  Employee  Share
Purchase Plan partially offset by the payment of a royalty of approximately $1.0
million  during  the  period  pursuant  to the  Company's  purchase  of  certain
interconnect billing software in 1998.

The Company and its subsidiaries  have available a $15.0 million  multi-currency
operating  line of credit  (the "Line of Credit")  from a financial  institution
that was to expire on August 31, 1999 but was  extended  during the three months
ended  March 31,  1999 to expire on August 31,  2000.  The Line of Credit  bears
interest at rates  varying from 0.25% to 1% above the base rate which depends on
the currency of the funds drawn on the  facility and includes the Canadian  U.S.
Dollar Base rate, the Canadian Bank Prime rate and LIBOR and DIBOR rates.

At March 31, 1999, the Company had outstanding an irrevocable  standby letter of
credit for $493,000  that  expires on July 30, 1999,  which letter of credit was
issued  to a  customer  to  serve  as  performance  bonds  associated  with  the
completion  of the  Company's  contract.  Before the  customer  can draw on this
letter,  the Company must be provided with sixty days prior written  notice.  No
such notice had been  received by the Company as of March 31,  1999.  During the
three  months ended March 31, 1999, a letter of credit was also issued to one of
the  Company's  lessors  for  approximately  $162,000  which  is due  to  expire
September  30,  2000.  Funds  available  under the Line of Credit are reduced by
amounts  under any letters of credit  outstanding.  No amounts were  outstanding
under the Line of Credit at March 31, 1999.

The Company had capital lease obligations in principal amounts of $284,000 as of
March  31,  1999.  The  current  portion  of  long-term   liabilities   includes
approximately  $1.0  million of royalty  payments  due in 2000  pursuant  to the
Company's purchase agreement relating to certain  interconnect  billing software
in 1998.

The Company believes that existing cash balances,  funds generated by operations
and the  availability  of the  Line of  Credit  will be  sufficient  to meet its
anticipated  liquidity and working  capital  requirements  for at least the next
twelve months.

Foreign Currency Exposure

The Company's  international  sales are predominately  invoiced and paid in U.S.
currency with the exception of certain  customers who are invoiced  primarily in
Canadian dollars,  Pounds Sterling,  Australian dollars, New Zealand dollars and
Swiss Francs.  The impact of foreign currency  translation has not been material
to the Company's operations.

Euro Conversion

On January 1, 1999, eleven of the fifteen member countries of the European Union
established  fixed  conversion rates between their existing  currencies  (legacy
currencies) and one common  currency,  the Euro. The Euro now trades on currency
exchanges and may be used in business  transactions.  Beginning in January 2002,
new  Euro-denominated  bills and coins will be issued and legacy currencies will
be withdrawn from circulation. The Company has begun to identify and ensure that
all Euro  conversion  compliance  issues are  addressed  during this  transition
period  ending in 2001.  The  Company  does not  expect  the  effect of the Euro
conversion  on its business  operations  to be  significant  since the Company's
international sales are predominately invoiced and paid in U.S. currency and the
cost of  modification  to internal  systems is not  expected to be  significant.
Therefore,  based on current  information,  the Company does not expect that the
Euro conversion will have a material adverse impact on its business or financial
condition.

Recently Issued Accounting Standards

Statement  of  Position  of 98-9  "Modification  of SOP 97-2,  Software  Revenue
Recognition,  with Respect to Certain  Transactions"  ("SOP 98-9") has also been
issued by the AICPA.  Effective  December  15,  1998,  SOP 98-9 amends SOP 98-4,
Deferral of the Effective Date of a Provision of SOP 97-2, and Software  Revenue
Recognition,  to extend the deferral of the  application of certain  passages of
SOP 97-2 provided by SOP 98-4 through fiscal years  beginning on or before March
15,  1999.  All other  provisions  of SOP 98-9 are  effective  for  transactions
entered  into in fiscal years  beginning  after March 15,  1999.  The  Company's
current revenue recognition policies are expected to remain largely unaffected.

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133").  SFAS 133 will be effective  for the Company's  fiscal year ending
December 31, 2000. The Company has not  determined  the impact,  if any, of this
pronouncement on its consolidated financial statements.

Year 2000 Readiness Disclosure

The Company is currently  reviewing  its products and  operations to ensure that
they will not be adversely  affected by year 2000 software  failures,  which can
arise in time-sensitive software applications that utilize a field of two digits
to define the applicable  year. In such  applications,  a date using "00" may be
recognized  as the year 1900  rather than the year 2000.  The Company  considers
"Year  2000  Ready" to mean that a  product,  when used in  accordance  with its
associated documentation,  is capable of correctly processing,  providing and/or
receiving date data within and between the twentieth and twenty-first centuries,
provided that all non-Saville products (i.e.,  hardware,  software and firmware)
used with such product properly exchange accurate date data with it.

The Company's  internal systems include both its information  technology  ("IT")
and non-IT  systems.  The Company has  initiated an  assessment  of its material
internal IT systems  including its accounting and software  development  systems
and its non-IT  systems  including  security  systems,  building  equipment  and
utilities.  The Company expects to complete this assessment in the first half of
1999. To the extent that the Company is not able to test the technology provided
by third-party vendors, the Company is seeking assurances from such vendors that
their systems are Year 2000 Ready.  Although the  assessment is still  underway,
management  currently  believes that all material systems which the Company uses
will be Year 2000 Ready when  necessary  and that the cost to ensure  that those
systems are Year 2000 Ready will not be material.  It should be noted,  however,
that the  Company  depends on timely  and  uninterrupted  interactions  with its
vendors  and its  customers,  through  the use of  banking  systems,  commercial
airline  travel,   telecommunications   via   long-distance  and  local  service
providers,  and local  utilities,  including power. To the extent that Year 2000
Ready  alternatives  are not readily  available  at the time,  any  interruption
caused by a lack of Year 2000 Readiness on the part of such vendors could have a
material  adverse  effect  on the  Company's  business,  operating  results  and
financial condition.

The Company has designed, tested and continues to test the most current versions
of its products to ensure that they are Year 2000 Ready.  However,  a portion of
the Company's  currently  installed  customer base may require  upgrade or other
remediation to become Year 2000 Ready. The Company is currently taking inventory
of its existing customers and assessing on a case-by-case basis whether testing,
upgrade or modification for Year 2000 Readiness is required. The Company expects
to complete this  assessment in the first half of 1999. The Company's total cost
relating to these activities,  and any modifications  required thereby,  has not
been and is not expected to be material to the  Company's  financial  condition,
results of operations,  or cash flows. Any such  expenditures to date have been,
and any such  expenditures  in the future are expected to be,  treated as normal
business  expenses funded out of operating cash flow. The Company  believes that
its exposure to legal  liability  for any such Year 2000  Readiness  failures is
limited and that it will be able to make any necessary modifications on a timely
basis.  There can be,  however,  no  assurance  that there will not be increased
costs  associated  with the  implementation  of any such  activities or required
modifications  and there can be no assurance  that there will not be significant
legal  liabilities,  either of which could have a material adverse effect on the
Company's business, operating results and financial condition.

Despite  testing  by the  Company  and  current  and  potential  customers,  the
Company's new and installed  products and the IT and non-IT  systems used by the
Company may contain  undetected errors or defects associated with Year 2000 date
functions.  Known or  unknown  errors or defects in the  Company's  IT  systems,
non-IT systems, or products could result in delay or loss of revenue,  diversion
of  development  resources,  damage to the Company's  reputation,  and increased
service and warranty costs, any of which could  materially  adversely affect the
Company's business,  operating results, or financial condition. In addition, the
Company is aware of the potential for claims against it and other  companies for
damages  arising  from  products  and  services  provided  by it and third party
suppliers that were not Year 2000 Ready.  Because of the unprecedented nature of
such  litigation,  it is uncertain  whether or to what extent the Company may be
affected by any such claims.

The Company  believes that the most likely worst case  scenario  related to Year
2000  risks  is  a  material   business   interruption   that  leads  to  client
dissatisfaction  and the  termination  of a project or projects by  dissatisfied
clients.  Such an interruption in services could occur due to a breakdown in any
number of the Company's IT or non-IT  Systems,  or the systems of third parties.
The Company currently does not have a contingency plan in the event a particular
system or vendor is not Year 2000  Ready.  Such a plan will be  developed  if it
becomes clear that the Company is not going to achieve its scheduled  objectives
in respect of Year 2000  Readiness.  There can be no assurance  that  unexpected
Year 2000  Readiness  problems  of the  Company or its  vendors,  customers  and
service providers will not materially  adversely affect the Company's  business,
operating results and financial condition.  The foregoing assessment  represents
management's   best   estimates  at  the  present   time,   which  could  change
significantly in the future.

Certain Factors That May Affect Future Results

This Quarterly Report contains forward-looking  statements that involve a number
of  risks  and   uncertainties.   The  Company's   actual   results  may  differ
significantly  from the results  discussed  in the  forward-looking  statements,
including  statements  regarding the  Company's  expectations  regarding  future
growth  in  revenue,  the  Company's  plans to  expand  its  product  lines  and
international  sales presence,  the Company's plans to continue its research and
development  efforts,  the Company's  expectation  that it will continue to make
property  and  equipment  investments  in 1999,  the  Company's  belief that its
existing cash balance and funds  generated by  operations  will be sufficient to
meet its  anticipated  liquidity and working capital  requirements  for the next
twelve months,  the possible  adverse foreign  currency  exposure  involved with
international  expansion,  the  Company's  expectation  that the  result of Euro
conversion will not have a material  adverse effect,  and the Company's  general
expectations of growth.  A number of  uncertainties  exist that could affect the
Company's future operating results, including, without limitation, the Company's
ability to retain existing customers and attract new customers,  fluctuations in
the Company's sales cycle, the Company's ability to attract and retain qualified
employees,  the  Company's  continuing  ability  to  develop  products  that are
responsive  to the  evolving  needs  of its  customers,  increased  competition,
changes in operating  expenses,  foreign currency  exchange rates, the Company's
continued  ability  to take  advantage  of  favorable  tax  treatment  currently
available to the Company and general economic factors.

Historically,   the   Company  has  been   dependent   on   long-term   customer
relationships. The Company's future success depends in large part on its ability
to maintain its current  relationships  and develop new  customer  relationships
with successful telecommunications and energy service providers. There can be no
assurance  that the Company will be able to develop and maintain such  long-term
relationships,  including obtaining references from such existing customers,  or
that emerging service providers that are or become customers of the Company will
be  successful.   In  addition,  the  telecommunications   market  is  presently
experiencing  significant merger,  consolidation and alliance formation activity
among both  established  and  start-up  carriers.  A  consolidation  or alliance
affecting any of the Company's  customers could result in such customer shifting
to another billing system,  thus decreasing such customer's use of the Company's
products and services as well as the  cancellation of any projects  underway.  A
significant  decrease in business from any of its major customers or the failure
of the  Company to compete  effectively  for new  customers  or  projects in the
telecommunications  and energy markets,  would have a material adverse effect on
the Company's business, financial condition and results of operations.

The Company's  quarterly and annual operating results may fluctuate from quarter
to quarter and year to year depending on various  factors  including new product
development  and other  expenses,  introduction  of new products by competitors,
fluctuations in the numbers and types of customer contracts (i.e. service bureau
or license) signed in any given quarter, the hiring of additional staff, pricing
pressures, the effect of acquisitions,  the evolving and unpredictable nature of
the markets in which the  Company's  products  and services are sold and general
economic  conditions.  The sales cycle for the Company's products has lengthened
recently due, in part, to consolidation  within the industry.  This has made the
timing of revenues  difficult  to predict.  Because of the  significant  size of
customer  projects,  a delay in one or more projects during a particular quarter
could have a material adverse impact on the Company's operating results for that
quarter. Most of the Company's expenses, such as employee compensation, computer
costs and rent, are relatively fixed in the short term. Moreover,  the Company's
expense  levels are based,  in part,  on the  Company's  expectations  regarding
future revenue levels. As a result, if revenue for a particular quarter is below
the  Company's  expectations,  the Company  may not be able to reduce  operating
expenses  proportionately  for  that  quarter,  and,  therefore,   this  revenue
shortfall  would  have a  disproportionately  negative  effect on the  Company's
operating results for that quarter.

The billing and customer  care  industry is intensely  competitive.  The Company
competes  with both  independent  providers of systems and  services  similar to
those offered by the Company and with internal  billing  departments of existing
telecommunications   and   energy   service   providers,   many  of  which  have
substantially  greater  financial,   technical,   sales,   marketing  and  other
resources,  as well as greater name recognition,  than the Company. For example,
in February 1999,  Lucent  Technologies,  Inc., a  telecommunications  equipment
maker with substantially greater resources and name recognition than the Company
and with  which the  Company  had  entered  into  several  alliance  agreements,
purchased Kenan Systems Corp., a customer care and billing  software  competitor
of the  Company.  There can be no  assurance  that the  Company  will be able to
compete successfully with its existing competitors or with new competitors.

The market for the Company's  products is characterized  by rapid  technological
change,  frequent new product  introductions,  evolving  industry  standards and
changing  customer needs. The Company  currently offers both  DB2/400-based  and
UNIX-based CBP products and is devoting significant resources to develop, refine
and enhance these CBP products,  as well as its other  customer care and billing
technology.  The Company  believes that its future  success will depend in large
part on its  ability to maintain  and  enhance  its current  product and service
offerings  and to  continually  develop and  introduce new products and services
that will keep pace with  technological  advances and satisfy evolving  customer
requirements. If the Company is unable to develop and introduce new products and
services in a timely manner, or if the Company's new products,  developments and
enhancements do not perform or gain market  acceptance,  or if there should be a
rapid shift from the telecommunications industry's use of either DB2/400 or UNIX
as a standard platform for billing, the Company's business,  financial condition
and results of operations would be materially adversely affected.

The Company's international business is subject to risks such as fluctuations in
exchange rates,  difficulties or delays in developing and supporting non-English
language versions of the Company's  products,  political and economic conditions
in various jurisdictions, unexpected changes in regulatory requirements, tariffs
and  other  trade  barriers,  difficulties  in  staffing  and  managing  foreign
operations and longer  accounts  receivable  payment cycles.  Specifically,  the
Latin America and Asia Pacific  regions have  experienced a downturn in economic
conditions,  the  continuation  of which could  adversely  affect the  Company's
ability to expand into this  region.  Additionally,  credit  markets for smaller
telecommunications  companies in the U.S. have weakened,  while  competition has
increased,  all of which could adversely  affect the Company's  ongoing projects
for such  customers,  as well as the  Company's  ability to attract and maintain
relationships with such companies.

Recently,  the Company has expanded  its  operations  rapidly,  which has placed
significant demands on the Company's  administrative,  operational and financial
personnel and systems.  Additional  expansion by the Company may further  strain
the  Company's  management,  financial  and  other  resources.  There  can be no
assurance that the Company's  systems,  procedures,  controls and existing space
will be adequate to support expansion of the Company's operations. The Company's
future  operating  results  will  substantially  depend  on the  ability  of its
officers  and key  employees  to  manage  changing  business  conditions  and to
implement and improve its operational,  financial control and reporting systems,
as well as to attract and retain qualified  personnel,  including  highly-sought
UNIX software development personnel.  If the Company is unable to respond to and
manage changing business conditions,  the quality of the Company's services, its
ability  to  retain  key  personnel  and its  results  of  operations  could  be
materially adversely affected.

The Company's  strategy  includes the acquisition of businesses and technologies
that  complement  or augment  the  Company's  existing  business  and  products.
Promising  acquisitions  are  difficult to identify and complete for a number of
reasons,  including  competition among prospective buyers and the need to obtain
regulatory approvals,  including antitrust approvals.  There can be no assurance
that  the  Company  will be able to  complete  future  acquisitions  or that the
Company will be able to successfully integrate any acquired businesses. In order
to finance  such  acquisitions,  it may be  necessary  for the  Company to raise
additional  funds  through  public  or  private  financing.  Any  equity or debt
financing,  if available  at all, may be on terms that are not  favorable to the
Company,  and in the case of equity  offerings,  may result in  dilution  to the
Company's shareholders.

Fluctuations  in  exchange  rates  may have a  material  adverse  effect  on the
Company's  results of operations,  particularly its operating  margins and could
also result in exchange losses.  The impact of future exchange rate fluctuations
on the Company's results of operations cannot be accurately predicted.  To date,
the Company has not sought to hedge the risks  associated  with  fluctuations in
exchange rates, but may undertake such transactions in the future.  There can be
no  assurance  that any hedging  techniques  implemented  by the Company will be
successful  or that the Company's  results of operations  will not be materially
adversely affected by exchange rate fluctuations.

The Company regards its software products as proprietary and relies primarily on
a combination of statutory and common law copyright,  trademark and trade secret
laws,  customer  licensing  agreements,  employee and third-party  nondisclosure
agreements and other methods to protect its proprietary  rights.  These laws and
contractual   provisions  provide  only  limited  protection  of  the  Company's
proprietary rights. Despite the Company's precautions,  it may be possible for a
third party to copy or otherwise obtain and use the Company's technology without
authorization.  Furthermore,  the laws of certain countries in which the Company
sells its  products do not  protect  the  Company's  software  and  intellectual
property  rights to the same  extent,  as do the laws of the United  States.  If
unauthorized  copying or misuse of the  Company's  products  was to occur to any
substantial degree, the Company's business,  results of operations and financial
condition could be materially adversely affected.

From time to time,  the  Company may  receive  threats of or become  involved in
litigation in the ordinary  course of its business.  In April 1999,  the Company
received a notice of demand for arbitration filed by a customer alleging certain
failures  to  perform  by  the  Company.   The  customer   alleges   damages  of
approximately $6.6 million. The Company denies all such allegations and believes
that they are  without  merit.  There can be no  assurance,  however,  as to the
outcome of this or any other dispute that may arise.

The Company has  significant  operations and generates a substantial  portion of
its taxable  income in the  Republic of Ireland,  and,  under an  incentive  tax
program due to terminate in 2010,  is taxed on its  "manufacturing  income" at a
rate that is  substantially  lower than U.S. tax rates.  If the Company could no
longer  qualify  for this  lower tax rate or if the tax laws were  rescinded  or
changed,  the Company's net income could be materially  adversely  affected.  In
addition,  if U.S.,  Canadian,  Australian,  United Kingdom or other foreign tax
authorities  were to  challenge  successfully  the manner in which  profits  are
recognized among the Company and its subsidiaries,  the Company's  effective tax
rate  could  increase  and its cash  flow and  results  of  operations  could be
materially adversely affected.


<PAGE>



Item 3.  Market Risk

The  Company is exposed  to market  risks,  which  include  changes in  currency
exchange  rates as measured  against the U.S.  dollar and each other which could
positively or negatively affect results of operations and retained earnings.

As of March 31, 1999, the Company has evaluated its risk and determined that any
exposure  to currency  exchange  is not  significant  to the  Company's  overall
consolidated  financial  results.  There can be no assurance  that the Company's
exposure will remain at these levels, especially in the event of significant and
sudden fluctuations in the value of local currencies.




<PAGE>



                               SAVILLE SYSTEMS PLC

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         On April  19,  1999,  the  Company  received  a notice  of  demand  for
         arbitration filed by a former customer,  Cellular Holdings,  Inc. (also
         known as Cellular  South and  Telepak),  alleging  certain  failures to
         perform under the agreements between the Company and Cellular Holdings.
         The  customer  seeks a refund of  approximately  $6.6  million  paid to
         Saville under the agreements  plus additional  expenses and costs.  The
         Company denies  Cellular  Holdings'  allegations  and believes that its
         claims are without merit. In addition, Cellular Holdings presently owes
         the Company  approximately  $4.0 million for work performed under these
         agreements. The Company intends to assert a counterclaim in arbitration
         for,  and  aggressively  pursue,  the  payment  of  all  such  amounts,
         applicable interest and expenses.  There can be no assurance,  however,
         as to the outcome of this dispute.


Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None


Item 5.  Other Information

         None


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              The exhibits listed in the Exhibit Index as part of or included 
              in this report.

         (b)  Reports on form 8-K

              The Company filed  current  reports on Form 8-K dated January 27,
              1999 and March 11, 1999.






<PAGE>



                                   SIGNATURES

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


                                      SAVILLE SYSTEMS PLC
                                      (Registrant)


Date:  May 3, 1999              By:   /s/Christopher A. Hanson
       -----------------              ------------------------
                                      Christopher A. Hanson
                                      Chief Financial Officer
                                      (Principal Financial and 
                                      Accounting Officer)


<PAGE>

                               SAVILLE SYSTEMS PLC

                                FORM 10-Q REPORT

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999


                                INDEX TO EXHIBITS

<TABLE>

Exhibit No.    Description
<S>            <C> 

  10.1         Lease agreement between Saville Systems Canada, Ltd. and Monarch 
               Construction  Limited dated January 26, 1999

  10.2         Employment Agreement between the Company and Lawrence S. Barker, 
               dated  January 4, 1999

  10.3         Employment Agreement between the Company and John J. Kiley, 
               dated January 4, 1999

  27.0         Financial Data Schedule

</TABLE>