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 June 30, 1997

                                       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 0-57495


                               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)

                               011-353-91-526611
              (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.  Yes |x|  No  |_|


Number of shares  outstanding of the registrant's class of Ordinary Shares as of
July 29, 1997 was 18,296,067.



<PAGE>



                               SAVILLE SYSTEMS PLC

                                FORM 10-Q REPORT

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION                     PAGE

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets as at June 30, 1997 (unaudited) 
          and December 31, 1996                                                3
         
         Consolidated Statements of Income for the three months                4
          and for the six months ended June 30, 1997 and 1996 (unaudited)

         Consolidated Statements of Cash Flows for the six months ended        5
          June 30, 1997 and 1996 (unaudited)

         Notes to Consolidated Financial Statements (unaudited)              6-7

Item 2.  Management's Discussion and Analysis of Financial Condition and 
          Results of Operations                                             8-12


                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings                                                    13

Item 2.  Changes in Securities                                                13

Item 3.  Defaults Upon Senior Securities                                      13

Item 4.  Submission of Matters to a Vote of Security Holders                  13

Item 5.  Other Information                                                    13

Item 6.  Exhibits and Reports on Form 8-K                                     13


SIGNATURES                                                                    14



<PAGE>
<TABLE>

Saville Systems PLC


CONSOLIDATED BALANCE SHEETS


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

                                                                                      June 30       December 31
                                                                                        1997           1996
                                                                                     (unaudited)
--------------------------------------------------------------------------------      --------       --------
<S>                                                                                   <C>            <C>
ASSETS

Current Assets:
  Cash and short-term investments ..............................................      $ 49,701       $ 35,395
  Accounts receivable, less allowance for doubtful accounts
  of $1,365 and $756, respectively .............................................        23,690         15,308
  Prepaid expenses and other assets ............................................         3,064          1,511

    Total current assets .......................................................        76,455         52,214
Property and equipment, net ....................................................         5,205          4,275

Total assets ...................................................................      $ 81,660       $ 56,489


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Accounts payable .............................................................      $  2,665       $  1,711
  Accrued compensation and related benefits ....................................         3,547          2,704
  Income taxes payable .........................................................         4,828          2,910
  Deferred revenue .............................................................         8,792          1,420
  Accrued expenses and other liabilities ` .....................................         2,883            770
  Current portion of long-term debt ............................................           --              43
                                                                                                     

Total current liabilities ......................................................        22,715          9,558


Minority interest ..............................................................           383            320

Shareholders' equity:
Ordinary Shares, nominal value $0.0025 per share
  Authorized: 75,000,000 and 40,000,000
  Issued and outstanding: 18,296,067 (unaudited) and 18,081,571 ................            46             45
Deferred Ordinary Shares, nominal value(pound)1.00 per share
  Authorized, issued and outstanding: 30,000 ...................................            48             48
Additional paid-in capital .....................................................        29,911         27,778
Retained earnings ..............................................................        28,656         18,813
Cumulative translation account .................................................           (99)           (73)

  Total shareholders' equity ...................................................        58,562         46,611

Total liabilites and shareholders' equity ......................................      $ 81,660       $ 56,489

See accompanying notes

</TABLE>
<PAGE>
<TABLE>

Saville Systems PLC


CONSOLIDATED STATEMENTS OF INCOME


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

                                                            Three months ended   Six months ended
                                                            June 30   June 30   June 30   June 30
                                                              1997      1996     1997       1996 
---------------------------------------------------------   -------   -------   -------   -------
<S>                                                         <C>       <C>       <C>       <C>

REVENUE
Services ................................................   $20,088   $10,237   $36,603   $19,269
License fees ............................................     5,405     2,068     9,020     3,591

                                                             25,493    12,305    45,623    22,860


EXPENSES
Cost of services ........................................     9,448     5,112    17,485     9,590
Cost of license fees ....................................       128        26       216        48
Sales and marketing .....................................     1,522       819     2,724     1,456
Research and development ................................     2,530     1,021     4,011     1,881
General and administrative ..............................     4,913     2,476     8,822     4,797

                                                             18,541     9,454    33,258    17,772


Income from operations ..................................     6,952     2,851    12,365     5,088
Other income, net .......................................       559       383       913       626

Income before income taxes ..............................     7,511     3,234    13,278     5,714
Provision for income taxes ..............................     1,995       597     3,320     1,037

Income before minority interest .........................     5,516     2,637     9,958     4,677
Minority interest share in subsidiaries' net income .....        75        75       115        73

Net income ..............................................   $ 5,441   $ 2,562   $ 9,843   $ 4,604

Net income per share ....................................   $  0.28   $  0.14   $  0.51   $  0.25

Weighted average share and share equivalents (in
thousands) ..............................................    19,566    18,892    19,421    18,788

</TABLE>

See accompanying notes


<PAGE>
<TABLE>

Saville Systems PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands of U.S. dollars)

                                                                                     Six Months Ended
                                                                                   June 30     June 30
                                                                                    1997        1996
--------------------------------------------------------------------------------  --------    --------
                                                                                 (unaudited) (unaudited)
<S>                                                                               <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .....................................................................   $  9,843    $  4,604
Adjustments to reconcile net income to net cash provided by operating
activities:
  Depreciation and amortization ................................................        600         318
  Allowance for doubtful accounts ..............................................        614         116
  Minority interest in net income ..............................................        115          73
   Gain on sale of property and equipment ......................................        (24)       --
   Stock based compensation expense, net of related taxes ......................         60        --
Changes in operating assets and liabilities:
  Accounts receivable ..........................................................     (8,997)     (2,715)
  Prepaid expenses and other assets ............................................     (1,555)       (280)
  Accounts payable .............................................................        955         533
  Accrued compensation and related benefits ....................................        843         465
  Accrued royalties ............................................................       --          (329)
  Income taxes payable .........................................................      1,918         104
   Deferred revenue ............................................................      7,371       1,129
   Accrued expenses and other liabilities ......................................      2,113         104

Net cash provided by operating activities ......................................     13,856       4,122


CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of property and equipment .........................................     (1,525)     (1,203)
Net purchase of short-term investments .........................................    (18,059)     (5,000)

Net cash used in investing activities ..........................................    (19,584)     (6,203)


CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt ....................................................        (43)        (26)
Proceeds from share issuances ..................................................      1,439       2,930
Public offering costs ..........................................................        (63)       (413)
Tax benefit on employee stock transactions .....................................        645        --

Net cash provided by financing activities ......................................      1,978       2,491

Effect of exchange rate changes on cash ........................................         (3)          9


Net (decrease) increase in cash and cash equivalents ...........................     (3,753)        419
Cash and cash equivalents, beginning of period .................................     34,395      23,722

Cash and cash equivalents, end of period .......................................     30,642      24,141


Short-term investments .........................................................     19,059       5,000

Cash and short-term investments ................................................   $ 49,701    $ 29,141


  Supplement disclosure of cash flow information:
  Cash paid for income taxes ...................................................        833         933
  Repayment of  note receivable from share issuance ............................       --          (100)

</TABLE>

See accompanying notes


<PAGE>


Saville Systems PLC

Notes to Consolidated Financial Statements at June 30, 1997.  (unaudited)

1.       Basis of Presentation

The accompanying consolidated financial statements are unaudited, except for the
balance  sheet  dated as of December  31,  1996,  and have been  prepared by the
Company  in  accordance  with U.S.  generally  accepted  accounting  principles.
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 June 30, 1997 and 1996 and the financial  position at June
30, 1997.

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, 1996.

2.       Net Income Per Share

The net income per share is computed  based upon the weighted  average number of
Ordinary  Shares and  dilutive  share  equivalents  outstanding.  The  Financial
Accounting Standards Board has issued Statement of Financial Accounting Standard
No. 128 "Earnings  per Share"  (`SFAS 128').  SFAS 128 will be effective for the
Company's quarter and year ending December 31, 1997.

The Company's pro forma earnings per share,  giving effect to SFAS 128, would be
as follows:

<TABLE>

                                               Three months ended                 Six months ended
                                            June 30          June 30           June 30          June 30
                                             1997              1996             1997             1996
--------------------------------------- ---------------- ----------------- ---------------- ----------------
<S>                                      <C>             <C>               <C>              <C>
Pro forma basic earnings per share           $0.30            $0.15            $0.54             $0.26

Pro forma diluted earnings per share         $0.28            $0.14            $0.51             $0.25
--------------------------------------- ---------------- ----------------- ---------------- ----------------

</TABLE>

3.       Share Capital


During the three and six month periods ended June 30, 1997,  the Company  issued
132,922 and 214,496  Ordinary  Shares,  respectively,  to officers and employees
pursuant to option  exercises for aggregate cash  consideration of approximately
$733,000 and $1,439,000, respectively.


On April 24, 1997 the  shareholders  authorized  an amendment  to the  Company's
Memorandum  and Articles of  Association  to increase  the number of  authorized
Ordinary Shares from 40,000,000 to 75,000,000.  The shareholders also authorized
an amendment to the  Company's  1995 Share Option Plan to increase the number of
shares authorized to be granted under the plan from 2,980,000 to 5,000,000.



<PAGE>



The  following  table  summarizes  the activity in Ordinary  Share  options from
December 31, 1996 to June 30, 1997:

<TABLE>
                                         Number of Ordinary Share Options
                              ---------------- ---------------- ----------------
                                 Available for      Unexercised      Weighted
                                     grant                         average price
                                                                     per share
<S>                                <C>              <C>              <C>   
Balance at December 31, 1996       2,692,232         1,500,916        $ 8.33

Increase in options available      2,020,000
 for grant                                                              
Options granted                   (1,228,210)        1,228,210         37.44
Options exercised                                     (214,496)         6.71
Options cancelled                     46,249           (46,249)        20.92

Balance at June 30, 1997           3,530,271         2,468,381        $22.72

</TABLE>

During the three  months  ended June 30,  1997,  172,000,  132,922  and 8,074 of
Ordinary Share options were granted, exercised and cancelled, respectively.


A summary  of  Ordinary  Share  options  outstanding  as of June 30,  1997 is as
follows:

<TABLE>

------------------ ----------------- ----------------- ----------------- ----------------- -----------------
Total Outstanding      Range of          Weighted          Weighted       Exercisable at       Weighted
                   Exercise Prices       Average           Average           June 30,          Average
                                      Exercise Price      Remaining            1997         Exercise Price
                                                         Contractual                        of Exercisable
                                                       Life (in years)                         Options
<S>                <C>                  <C>                <C>            <C>                <C>
          341,685           $  2.40       $ 2.40             2.5             341,685            $ 2.40
          829,379      8.66 - 10.00         8.99             8.2             258,175              9.33
           32,425     15.00 - 26.63        17.44             8.6              20,091             16.43
        1,238,892     28.63 - 43.00        37.13             9.2              14,813             33.24
           26,000     43.50 - 52.50        47.25             9.9                -                 -
------------------ ----------------- ----------------- ----------------- ----------------- -----------------
        2,468,381     $2.40 - 52.50       $22.72             8.0             634,764            $ 6.39
------------------ ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>

4.       Contingency

On June  16,  1997  the  Company  received  a  letter  from  one of its  clients
purporting  to  terminate  its  agreements  with  Saville and  alleging  certain
failures  to perform by  Saville.  The client  alleges  damages of $12  million.
Saville  has  categorically  denied  all of the  client's  allegations  and  has
informed  the  client  that  its  claims  are  without  merit.  There  can be no
assurance, however, as to the outcome of this dispute.

5.       Recently Issued Accounting Standards


In addition to SFAS 128, the  Financial  Accounting  Standards  Board has issued
Statement of  Financial  Accounting  Standards  No. 130  "Comprehensive  Income"
(`SFAS  130') and No. 131  "Disclosures  about  Segments  of an  Enterprise  and
Related  Information"  (`SFAS 131'). SFAS 130 and SFAS 131 will be effective for
the  Company's  December 31, 1998 year end. The Company has not  determined  the
impact,  if  any,  of  these   pronouncements  on  its  consolidated   financial
statements.


<PAGE>



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

General


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,  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, 1996.


Results of Operations

Revenue

Total  revenue  increased  107.2 % from $12.3  million in the three months ended
June 30, 1996 to $25.5  million in the three  months  ended June 30,  1997,  and
increased  99.6 % from $22.9  million in the six months  ended June 30,  1996 to
$45.6  million in the six months ended June 30, 1997.  Both services and license
fees revenue increased as described below.

Services  revenue  increased 96.2 % from $10.2 million in the three months ended
June 30, 1996 to $20.1  million in the three  months  ended June 30,  1997,  and
increased  90.0 % from $19.3  million in the six months  ended June 30,  1996 to
$36.6  million  in the  six  months  ended  June  30,  1997.  The  increase  was
attributable  primarily to additional  development services for existing clients
in both the AS/400 and UNIX  development  environments  and, to a lesser extent,
initial   customization   services  for  new  clients,   including   requirement
definitions.

License  fees  revenue  increased  161.4 % from $2.1 million in the three months
ended June 30, 1996 to $5.4 million in the three months ended June 30, 1997, and
increased  151.2 % from $3.6  million in the six months  ended June 30,  1996 to
$9.0 million in the six months  ended June 30,  1997.  Depending on the level of
customization or enhancements  required,  license fees are recognized at time of
delivery,  or recognized  over the expected term of initial  customization.  The
1997 change was  attributable  to increased  license fee recognition on existing
customization projects and on new installations in the United States and Europe.


Cost of Services


Cost of services  increased  84.8% from $5.1  million in the three  months ended
June 30,  1996 to $9.4  million in the three  months  ended June 30,  1997,  and
increased 82.3% from $9.6 million in the six months ended June 30, 1996 to $17.5
million in the six months  ended June 30,  1997.  As a  percentage  of  services
revenue,  cost  of  services  remained  relatively  constant  in  both  periods,
decreasing  from 49.9% and 49.8 % in the three  months and six months ended June
30, 1996 to 47.0% and 47.8 % in the same periods in 1997.  The overall  increase
in cost of services was primarily due to additional  personnel  hired to support
the increased volume of business.  The number of personnel primarily responsible
for consulting  services increased 29.2% in the three months ended June 30, 1997
over the comparative period in 1996.


Cost of License Fees

Cost of license fees  increased  from $26,000 in the three months ended June 30,
1996 to $128,000 in the three  months ended June 30, 1997,  and  increased  from
$48,000 in the six  months  ended June 30,  1996 to  $216,000  in the six months
ended June 30, 1997. This increase was due to employee sales commissions  earned
on new license fee agreements.


<PAGE>



Sales and Marketing


Sales and marketing  expenses increased 85.8 % from $819,000 in the three months
ended June 30, 1996 to $1.5 million in the three months ended June 30, 1997, and
increased 87.1 % from $1.5 million in the six months ended June 30, 1996 to $2.7
in the six months ended June 30, 1997.  This  increase was  primarily due to the
Company's  expansion  of sales  efforts  in the  United  States,  Europe,  Latin
American,  and Asia Pacific.  New sales  offices in England and  Singapore  were
established  in the three  months ended June 30,  1997.  As well,  an office was
created shortly after the quarter end in Germany to address the central European
market.  The Company has also increased its advertising and promotional  efforts
during 1997.  Global  marketing,  updating the corporate  logo and attendance at
various  billing and customer  care  conferences  represent  the majority of the
marketing expense increase.  The Company anticipates that continued expansion of
its sales  efforts and emphasis on  international  marketing  will  increase its
sales and marketing  expenses  through the remainder of 1997,  which may have an
adverse effect on the Company's results of operations.


Research and Development

Research and  development  expenses  increased  147.8 % from $1.0 million in the
three  months ended June 30, 1996 to $2.5 million in the three months ended June
30, 1997,  and increased  113.2 % from $1.9 million in the six months ended June
30, 1996 to $4.0 million in the six months ended June 30,  1997.  The  continued
increase in research and  development  expenses in 1997 resulted  primarily from
costs  associated with planned  increases in personnel  dedicated to development
efforts in creating new and enhanced billing and customer care products for both
the  AS/400 and UNIX  platforms.  The  Company  intends  to  continue  to invest
resources to expand its product  offerings in the future and  therefore  expects
that research and development expenses will continue to increase.

General and Administrative

General and  administrative  expenses  increased 98.4 % from $2.5 million in the
three  months ended June 30, 1996 to $4.9 million in the three months ended June
30, 1997,  and  increased  83.9 % from $4.8 million in the six months ended June
30, 1996 to $8.8 million in the six months ended June 30, 1997.  Increases  were
experienced  primarily in management and  administrative  salaries,  recruitment
expenses and facilities and other related expenses. The increase is attributable
to growth in the  internal  systems  and number of people  necessary  to support
overall increases in the scope of the Company's operations.


Other Income, net

Other income,  net, increased 46.0% from $383,000 in the three months ended June
30, 1996 to $559,000 in the three months ended June 30, 1997, and increased 45.8
% from  $626,000  in the six months  ended June 30,  1996 to $913,000 in the six
months ended June 30, 1997.  Increased interest income earned on larger cash and
short-term  investment balances was the primary reason for the increase in other
income.  Foreign exchange losses experienced due to fluctuations in the Canadian
and Irish currencies compared to the U.S.

dollar were not significant in the three months ended June 30, 1997.

Provision for Income Taxes


The Company  recorded a tax  provision of $597,000 and $1.0 million in the three
and six months ended June 30, 1996 representing effective tax rates of 18.5% and
18.1%,  respectively.  Comparatively,  tax  provisions  of $2.0 million and $3.3
million  were  recorded  in the  three  and  six  months  ended  June  30,  1997
representing  effective  tax  rates  of  26.6%  and  25.0 %,  respectively.  The
effective  tax rate for the six months  ended  June 30,  1997  approximates  the
annual effective tax rate. The Company's effective tax rate is largely dependent
on the proportion of the Company's income earned in different tax jurisdictions.
The Company is currently eligible for a 10% tax rate on  "manufacturing"  income
earned in the Republic of Ireland.  The rate is not available for other types of
income  such as  income  earned  by the  Company  on its cash  investments.  The
eligibility for the 10% tax rate is the reason that the Company's  effective tax
rate is below the Irish standard rate of 38% (36% effective April 1, 1997),  and
below the  statutory  rates of Canada  and the  United  States.  There can be no
assurances  that the Company will  continue to be eligible for this 10% tax rate
in future periods.


Liquidity and Capital Resources

Cash, cash equivalents and short-term  investments totaled $49.7 million at June
30, 1997  compared to $35.3  million at December  31,  1996.  The  portfolio  is
primarily invested in short-term  securities  (majority maturing within three to
six months) and are  predominantly in U.S. dollar  denominated  securities.  The
Company is investigating  alternative investment vehicles to maximize the return
earned on these short term investments.

The Company has no long-term debt or outstanding bank financing.  The Company is
currently investigating  establishing a multi-currency line of credit to support
cash and foreign currency management efforts.

During the six months ended June 30, 1997, $13.9 million of cash was provided by
operating activities as the primary source of financing of the Company's growth.
Operations  provided  cash  through  increased  net  income,   deferred  revenue
(receipts  in  advance  of  recognition  of  revenues),  and  accrued  and trade
payables, offset by an increase in trade receivables, prepaid expenses and other
assets.

The Company used $1.5 million to purchase  capital  assets during the six months
ended June 30, 1997. The Company continues to make capital asset investments for
infrastructure  to support its business growth.  The Company expects to continue
its capital asset  investments  in the remainder of 1997 as the Company  expands
its locations worldwide.


During the six months  ended June 30, 1997 the Company  issued  Ordinary  Shares
pursuant to exercises of options  under the employee  stock option plans and the
employee stock purchase plan for proceeds of approximately $1.4 million.


As of June 30, 1997 the Company had $23.7  million in net  accounts  receivable.
The average days sales outstanding ("DSO") at June 30, 1997 was approximately 85
days as compared to  approximately  86 at June 30, 1996. DSO is calculated based
on the  average  daily sales of the  immediately  preceding  three month  period
divided by the net accounts receivable balance at the end of the period.

The  Company  believes  that  existing  cash  balances  and funds  generated  by
operations  will be  sufficient  to meet its  anticipated  liquidity and working
capital requirements for 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  clients who are invoiced  primarily in
Canadian dollars and Pounds Sterling. The impact of foreign currency translation
has not been material to the Company's  operations.  As the Company  expands its
international  operations,  the foreign currency  exposure may increase as sales
may not be invoiced  and paid in U.S.  currency  and  operating  expenses may be
incurred  in other than U.S.  currency.  This may have an adverse  effect on the
Company's results of operation.

Certain Factors That May Affect Future Results

This Quarterly Report contains forward-looking statements that involve 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 plans to expand its  international  sales presence,  the
Company's plans to continue to invest in research and development  efforts,  the
Company's expectation that it will continue to make capital asset investments in
1997, 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 through at least fiscal 1998, the possible adverse foreign
currency  exposure  involved  with  international  expansion,  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,
the  Company's  ability to attract  and retain  qualified  employees,  the costs
associated  with  significant  increases in number of  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.

To date, a substantial  portion of the Company's total revenues has been derived
from a relatively small number of customers. This concentration of customers can
cause the Company's  revenues and earnings to fluctuate from quarter to quarter,
based on these  customers'  requirements  and the  timing  of  their  orders.  A
significant  decrease in business from any of its major  customers  would have a
material  adverse effect on the Company's  business,  financial  condition,  and
results of operations.

The Company  competes  with both  independent  providers of systems and services
like  the   Company  and  with   internal   billing   departments   of  existing
telecommunications  service providers,  many of which have substantially greater
financial,  technical,  sales, marketing and other resources, as well as greater
name recognition,  than 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 Company's future success depends in large part on its ability to develop new
customer  relationships  with successful  telecommunications  service providers.
There  can be no  assurance  that  the  Company  will be able  to  develop  such
relationships  or that service  providers  that become  customers of the Company
will be  successful.  Historically,  the Company has been dependent on long-term
customer relationships and therefore,  the failure of the Company's customers to
compete  effectively  in the  telecommunications  market  could  have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.


Although the Company has developed  software for  UNIX-based  operating  systems
jointly with a  distribution  partner,  the Company's  billing and customer care
software  currently runs primarily on the IBM AS/400 platform which represents a
leading  platform  for existing  and new billing  systems.  If there should be a
rapid  shift  away  from  the  current  use  of  the  AS/400   platform  by  the
telecommunications industry for billing, the Company would be required to expend
substantial  capital  resources to develop new  software  and likely  experience
delays or losses in customer orders.


The  Company's  success  will depend  upon its  ability to enhance its  existing
products and to introduce  new products and features to meet  changing  customer
requirements and to permit it to meet the needs of new customers. The Company is
currently  devoting  significant  resources to refining and  expanding  its base
software modules and to continuing the development of billing software that will
operate on  UNIX-based  operating  systems.  If the Company were unable,  due to
resource,  technological  or other  constraints,  to  adequately  anticipate  or
respond to such changes, 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.

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.
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.

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 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
10% rate, which is substantially lower than U.S. tax rates. If the Company could
no longer  qualify  for this 10% 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 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>




                               SAVILLE SYSTEMS PLC

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         On June 16, 1997 the Company received a letter from one of its clients,
         Billing Information Concepts, Inc. ("BIC"),purporting to terminate its 
         agreements  with  Saville and alleging certain  failures to perform by 
         Saville.  The  client  alleges  damages of $12  million.  Saville  has 
         categorically denied all of BIC's allegations and has informed BIC that
         its claims are without merit. 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

               11.0        Statement re:  Computation of Per Share Earnings

               27.0        Financial Data Schedule

         (b)   Reports on form 8-K

               None


<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:       July 31, 1997                       By:  /s/ John J. Boyle, III
     ---------------------------------------        ----------------------------
                                                    John J. Boyle, III
                                                    President & CEO





Date:        July 31, 1997                      By:  /s/ Christopher A. Hanson
     ---------------------------------------        ---------------------------
                                                    Christopher A. Hanson
                                                    Chief Financial Officer
                                                   (Principal Financial Officer)