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 September 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
October 28, 1997 was  18,640,401.  (Increases  to  37,280,802  to give effect to
stock split announced on October 28, 1997.)



<PAGE>



                               SAVILLE SYSTEMS PLC

                                FORM 10-Q REPORT

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                                TABLE OF CONTENTS

                                                               

                         PART I - FINANCIAL INFORMATION                     PAGE
Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets as at September 30, 1997                  3
          (unaudited) and December 31, 1996 
         
         Consolidated Statements of Income for the three months 
          and for the nine months ended September 30, 1997 
          and 1996 (unaudited)                                                 4
         
         Consolidated Statements of Cash Flows for the nine months ended
          September 30, 1997 and 1996 (unaudited)                              5

         Notes to Consolidated Financial Statements (unaudited)              6-8

Item 2.  Management's Discussion and Analysis of Financial Condition 
          and Results of Operations                                         9-14


                           PART II - OTHER INFORMATION



Item 1.  Legal Proceedings                                                    15

Item 2.  Changes in Securities                                                15

Item 3.  Defaults Upon Senior Securities                                      15

Item 4.  Submission of Matters to a Vote of Security Holders                  15

Item 5.  Other Information                                                    15

Item 6.  Exhibits and Reports on Form 8-K                                     15

SIGNATURES                                                                    16


<PAGE>


Saville Systems PLC


CONSOLIDATED BALANCE SHEETS



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

<TABLE>

                                                                   September 30    December 31
                                                                      1997             1996
                                                                   (unaudited)
<S>                                                                <C>              <C>   

ASSETS

Current Assets:
  Cash and short-term investments ..............................      $ 56,528       $ 35,395
  Accounts receivable, less allowance for doubtful accounts
  of $1,760 and $756, respectively .............................        28,074         15,308
  Prepaid expenses and other assets ............................         3,100          1,511

    Total current assets .......................................        87,702         52,214
Property and equipment, net ....................................         7,179          4,275

Total assets ...................................................      $ 94,881       $ 56,489


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Accounts payable .............................................      $  4,556       $  1,711
  Accrued compensation and related benefits ....................         5,126          2,704
  Income taxes payable .........................................         5,158          2,910
  Deferred revenue .............................................         5,442          1,420
  Accrued expenses and other liabilities .......................         2,781            813

Total current liabilities ......................................        23,063          9,558


Minority interest ..............................................           306            320

Shareholders' Equity:
Ordinary Shares, nominal value $0.0025 per share
  Authorized: 75,000,000 and 40,000,000

Issued and outstanding: 37,280,802 (unaudited)
  and 36,163,142 [note 2] ......................................            93             90
Deferred Ordinary Shares, nominal value(pound)1.00 per share
  Authorized, issued and outstanding: 30,000 ...................            48             48
Additional paid-in capital .....................................        36,534         27,733
Retained earnings ..............................................        34,940         18,813
Cumulative translation account .................................          (103)           (73)


Total shareholders' equity ...................................          71,512         46,611

Total liabilites and shareholders' equity ......................      $ 94,881       $ 56,489

</TABLE>

See accompanying notes


Note:    The  balance  sheet at  December  31,  1996 has been  derived  from the
         audited  financial  statements at that date but does not include all of
         the information and footnotes required by generally accepted accounting
         principles for complete financial statements.



<PAGE>


Saville Systems PLC


CONSOLIDATED STATEMENTS OF INCOME


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

<TABLE>

                                                             Three months ended  Nine months ended
                                                             Sept.30   Sept.30   Sept.30   Sept.30       
                                                               1997      1996      1997      1996
<S>                                                           <C>       <C>       <C>      <C>  
REVENUE
Services .................................................   $22,575   $12,051   $59,178   $31,320
License fees .............................................     6,006     2,696    15,026     6,287

                                                              28,581    14,747    74,204    37,607


EXPENSES
Cost of services .........................................    10,852     5,932    28,337    15,522
Cost of license fees .....................................       165       140       381       188
Sales and marketing ......................................     1,600       920     4,324     2,376
Research and development .................................     2,805     1,085     6,816     2,966
General and administrative ...............................     5,325     2,830    14,147     7,627

                                                              20,747    10,907    54,005    28,679


Income from operations ...................................     7,834     3,840    20,199     8,928
Other income, net ........................................       596       393     1,509     1,019

Income before income taxes ...............................     8,430     4,233    21,708     9,947
Provision for income taxes ...............................     2,096       910     5,416     1,947

Income before minority interest ..........................     6,334     3,323    16,292     8,000
Minority interest share in subsidiaries' net income ......        50        12       165        85

Net income ...............................................   $ 6,284   $ 3,311   $16,127   $ 7,915

Net income per share .....................................   $  0.16   $  0.09   $  0.41   $  0.21

Weighted average share and share equivalents (in
thousands) ...............................................    39,597    38,096    39,093    37,750

</TABLE>

See accompanying notes


<PAGE>


Saville Systems PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

<TABLE>
                                                                                      Nine Months Ended
                                                                                    Sept.30       Sept. 30
                                                                                      1996          1997            
<S>                                                                                <C>            <C>  

CASH FLOWS FROM OPERATING ACTIVITIES
Net income .....................................................................    $ 16,127     $  7,915
Adjustments to reconcile net income to net cash provided by operating
activities:
  Depreciation and amortization ................................................         975          530
  Allowance for doubtful accounts ..............................................       1,010          301
  Minority interest in net income ..............................................         165           85
   Loss on sale of property and equipment ......................................          54         --
   Stock based compensation expense, net of related taxes ......................          60         --
Changes in operating assets and liabilities:
  Accounts receivable ..........................................................     (13,777)      (7,247)
  Prepaid expenses and other assets ............................................      (1,592)        (258)
  Accounts payable .............................................................       2,372        1,004
  Accrued compensation and related benefits ....................................       2,422        1,092
  Accrued royalties ............................................................        --           (496)
  Income taxes payable .........................................................       2,248        1,058

   Deferred revenue ............................................................       4,022         --
   Accrued expenses and other liabilities ......................................       1,939          227

Net cash provided by operating activities ......................................      16,025        4,211

CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of property and equipment .........................................      (3,450)      (2,166)
Net purchase of short-term investments .........................................     (21,004)        --

Net cash used in investing activities ..........................................     (24,454)      (2,166)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from share issuances ..................................................       8,059        3,487
Share issue costs ..............................................................        (140)        (583)
Tax benefit on employee stock transactions .....................................         645         --

Net cash provided by financing activities ......................................       8,564        2,904

Effect of exchange rate changes on cash ........................................          (6)          10

Net increase in cash and cash equivalents ......................................         129        4,959
Cash and cash equivalents, beginning of period .................................      34,395       23,722

Cash and cash equivalents, end of period .......................................    $ 34,524     $ 28,681

Short-term investments .........................................................      22,004         --

Cash and short-term investments ................................................    $ 56,528     $ 28,681

Supplementary  disclosure of cash flow information:
Cash paid for income taxes .....................................................       2,600          936
Repayment of note receivable from share issuance ...............................        --           (100)

</TABLE>


See accompanying notes


<PAGE>


Saville Systems PLC

Notes to Consolidated Financial Statements at September 30, 1997.  (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 the  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  September  30, 1997 and 1996 and the
financial position at September 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.       Share Capital

On October  28,  1997 the  Company  announced  that its Board of  Directors  has
effected a two-for-one share split of the Company's  Ordinary Shares by way of a
share  dividend.  Shares will be  distributed  on or about  November 17, 1997 to
shareholders of record on November 7, 1997.

All  references in these  financial  statements  to number of shares,  per share
amounts and share  option  data have been  restated to give effect to this share
dividend for all periods presented. The number of Ordinary Shares outstanding at
September 30, 1997 and December 31, 1996 has been  retroactively  increased from
18,640,401 and 18,081,571 to 37,280,802 and 36,163,142, respectively, to account
for the split.  The amount of  Ordinary  Share  capital  has been  retroactively
restated by an amount  equal to $0.0025  par value times the  increase in shares
outstanding.  Therefore,  approximatedly $2,000 and $45,000 has been transferred
from  additional paid in capital to Ordinary Share capital for the periods ended
September 30, 1997 and December 31, 1996, respectively.

During 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 5,960,000 to 10,000,000.

During the three and nine month  periods ended  September 30, 1997,  the Company
issued  688,668 and 1,117,660  Ordinary  Shares,  respectively,  to officers and
employees  pursuant to option  exercises for  aggregate  cash  consideration  of
approximately $6,620,000 and $8,059,000, respectively.




<PAGE>



Saville Systems PLC

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


2.       Share Capital (continued)

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

<TABLE>

                                                   Number of Ordinary Share Options
----------------------------------------------  ----------    ----------        ------
<S>                                             <C>            <C>          <C>    

                                                Available for  Unexercised   Weighted
                                                   grant                   average price
                                                                            per share


Balance at December 31, 1996 ................    3,998,464     3,001,832    $    4.17

Increase in options available for grant .....    4,040,000
Options granted .............................   (2,547,420)    2,547,420        19.19
Options exercised ...........................   (1,117,660)                      7.22
Options cancelled ...........................      152,544      (152,544)       12.14

Balance at September 30, 1997 ...............    5,643,588     4,279,048    $   12.03

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

During the three months ended  September 30, 1997,  options to purchase  91,000,
688,668  and 60,046  Ordinary  Shares were  granted,  exercised  and  cancelled,
respectively.


A summary of Ordinary  Share options  outstanding as of September 30, 1997 is as
follows:
<TABLE>

------------------ ----------------- ----------------- ----------------- ----------------- -----------------
Total Outstanding      Range of          Weighted          Weighted       Exercisable at       Weighted
                   Exercise Prices       Average           Average        September 30,        Average
                                      Exercise Price      Remaining            1997         Exercise Price
                                                         Contractual                        of Exercisable
                                                       Life (in years)                         Options
------------------ ----------------- ----------------- ----------------- ----------------- -----------------
<S>                 <C>               <C>               <C>              <C>                 <C>    

          462,734           $  1.20       $ 1.20             2.3             462,734            $ 1.20
        1,473,088     4.33 -   5.00          4.51            8.0             841,078              4.52
           53,924      7.50 - 13.31         8.64             8.3               31,256             8.22
        2,172,302     14.06 - 21.50        18.51             8.9             311,880             18.67
           58,000     21.75 - 32.56        28.02             9.8                -                 -
           59,000     33.50 - 35.63        33.74             9.9                -                 -
------------------ ----------------- ----------------- ----------------- ----------------- -----------------
        4,279,048   $  1.20 - 35.63       $12.03             7.9            1,646,948           $ 6.34
------------------ ----------------- ----------------- ----------------- ----------------- -----------------
</TABLE>

3.       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.


<PAGE>



Saville Systems PLC

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


3.       Net Income Per Share (continued)



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

<TABLE>

                                               Three months ended                 Nine months ended
                                         September 30      September 30     September 30     September 30
                                             1997              1996             1997             1996
--------------------------------------- ---------------- ----------------- ---------------- ----------------
<S>                                     <C>               <C>               <C>               <C>   

Pro forma basic earnings per share           $0.17            $0.09             $0.44            $0.22

Pro forma diluted earnings per share         $0.16            $0.09             $0.41            $0.21

--------------------------------------- ---------------- ----------------- ---------------- ----------------
</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  and as a result,  no
provision for any liability has been made in the financial statements.


5.       Subsequent Events

On October 6, 1997, the Company organized a wholly-owned subsidiary Saville C.I.
Limited in the Channel Islands to hold short-term investments.


On October 23, 1997,  the Company  obtained a  multi-currency  operating line of
credit  of $15  million  from a  financial  institution.  This line of credit is
available to the Company and its subsidiaries on a joint and several basis for a
period ending August 31, 1999 and bears  interest at rates varying from 0.25% to
1% above the base  rate.  This base rate  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.

A standby fee of 0.25% per annum is payable on the daily  unused  portion of the
facility.  The credit  arrangement  contains  financial  covenants  relating  to
certain  financial ratios.  The financial  institution has the right to register
security over any outstanding  balances if the covenants are not maintained.  No
advances have been drawn on this facility at September 30, 1997.



6.       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.  Other than that as disclosed in Note
3, Net Income Per Share,  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  93.8% from $14.7  million in the three  months  ended
September  30, 1996 to $28.6  million in the three  months ended  September  30,
1997, and increased  97.3% from $37.6 million in the nine months ended September
30, 1996 to $74.2  million in the nine months ended  September  30,  1997.  Both
services and license fees revenue increased as described below.

Services  revenue  increased  87.3% from $12.1 million in the three months ended
September  30, 1996 to $22.6  million in the three  months ended  September  30,
1997, and increased  88.9% from $31.3 million in the nine months ended September
30, 1996 to $59.2  million in the nine months  ended  September  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  122.8% from $2.7  million in the three months
ended September 30, 1996 to $6.0 million in the three months ended September 30,
1997, and increased  139.0% from $6.3 million in the nine months ended September
30, 1996 to $15.0 million in the nine months ended September 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 increase was attributable to earning license fee revenue
on customization  projects  commencing in late 1996 and new installations in the
U.S. and Europe in 1997.



Cost of Services


Cost of services  increased  82.9% from $5.9  million in the three  months ended
September  30, 1996 to $10.9  million in the three  months ended  September  30,
1997, and increased  82.6% from $15.5 million in the nine months ended September
30, 1996 to $28.3  million in the nine months ended  September  30,  1997.  As a
percentage  of services  revenue,  cost of services  decreased  slightly in both
periods,  decreasing  from 49.2% and 49.6% in the three  months and nine  months
ended September 30, 1996, respectively, to 48.1% and 47.9%, respectively, in the
same  periods in 1997.  The overall  dollar  increase  in cost of  services  was
primarily due to additional  personnel hired to support the increased  volume of
business,  as well as costs  incurred to train  individuals  under the Company's
internally  developed  Accelerating  Success  education  program.  The number of
personnel  primarily  responsible for consulting services increased 50.4% in the
three months ended September 30, 1997 over the comparable period in 1996.



<PAGE>



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



Cost of License Fees


Cost of license  fees  increased  17.9% from  $140,000 in the three months ended
September 30, 1996 to $165,000 in the three months ended September 30, 1997, and
increased  102.7% from  $188,000 in the nine months ended  September 30, 1996 to
$381,000 in the nine months ended  September 30, 1997.  This increase was due to
employee sales commissions earned on new license fee agreements.


Sales and Marketing


Sales and marketing  expenses  increased 73.9% from $920,000 in the three months
ended September 30, 1996 to $1.6 million in the three months ended September 30,
1997, and increased  82.0% from $2.4 million in the nine months ended  September
30, 1996 to $4.3  million in the nine months  ended  September  30,  1997.  As a
percentage of total revenue,  sales and marketing expenses decreased  marginally
in both  periods,  decreasing  from 6.2% and 6.3% in the  three and nine  months
ended September 30, 1997, respectively,  to 5.6% and 5.8%, respectively,  in the
same  periods in 1997.  The overall  dollar  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  second  quarter  of the  year.  In the three  months  ended
September  30,  1997,  an office was opened in  Germany to address  the  central
European  market.  Increased 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 and
into 1998.


Research and Development

Research  and  development  expenses  increased  158.5% from $1.1 million in the
three months ended  September 30, 1996 to $2.8 million in the three months ended
September 30, 1997,  and  increased  129.8% from $3.0 million in the nine months
ended  September 30, 1996 to $6.8 million in the nine months ended September 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  88.2% from $2.8 million in the
three months ended  September 30, 1996 to $5.3 million in the three months ended
September  30, 1997,  and  increased  85.5% from $7.6 million in the nine months
ended September 30, 1996 to $14.1 million in the nine months ended September 30,
1997.  Increases were  experienced  primarily in management  and  administrative
salaries,  recruitment  expenses and facilities and other related expenses.  The
increases were attributable to growth and development in the Company's  internal
systems and number of people necessary to support overall increases in the scope
of the Company's operations.



<PAGE>



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



Other Income, net


Other  income,  net,  increased  51.7% from  $393,000 in the three  months ended
September 30, 1996 to $596,000 in the three months ended September 30, 1997, and
increased 48.1% from $1.0 million in the nine months ended September 30, 1996 to
$1.5 million in the nine months ended  September  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 and nine months ended September 30, 1997.


Provision for Income Taxes


The Company  recorded a tax  provision of $910,000 and $1.9 million in the three
and nine months ended September 30, 1996,  respectively,  representing effective
tax rates of 21.5% and 19.6%,  respectively.  Comparatively,  tax  provisions of
$2.1 million and $5.4  million were  recorded in the three and nine months ended
September 30, 1997, respectively,  representing effective tax rates of 24.9% for
both periods.  The  effective  tax rate for the nine months ended  September 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 36% (38%
prior to 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 $56.5 million at
September 30, 1997 compared to $35.4 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.  On
October 6, 1997, the Company  incorporated the wholly-owned  subsidiary  Saville
C.I. Limited in the Channel Islands to maximize the return earned on these short
term investments in future periods.


Subsequent  to  September  30,  1997,  the  Company  established  a $15  million
multi-currency  line of credit to support cash and foreign  currency  management
efforts. This line of credit is available to the Company and its subsidiaries on
a joint and several  basis.  The facility  bears  interest at rates varying from
0.25% to 1% above the base rate which  includes  the Canadian  U.S.  Dollar Base
Rate,  the Canadian Bank Prime rate and LIBOR and DIBOR rates.  No advances have
been drawn of this facility to date.

During the nine months  ended  September  30,  1997,  $16.0  million of cash was
provided  by  operating  activities  as the  primary  source  of  financing  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 $3.5 million to purchase  capital assets during the nine months
ended  September  30,  1997.  The  Company   continues  to  make  capital  asset
investments  for  infrastructure  to support its business growth in existing and
new locations.  The Company expects to continue its capital asset investments in
the remainder of 1997 and 1998 as the Company expands its locations worldwide.


<PAGE>



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


During the nine months  ended  September  30, 1997 the Company  issued  Ordinary
Shares  pursuant to exercises of options under the  Company's  1995 Share Option
Plan and the 1996 Employee  Share  Purchase  Plan for proceeds of  approximately
$8.1 million.

On October  28,  1997 the  Company  announced  that its Board of  Directors  has
effected a two-for-one share split of the Company's  Ordinary Shares by way of a
share  dividend.  Shares will be  distributed  on or about  November 17, 1997 to
shareholders  of record on  November 7, 1997.  No  additional  proceeds  will be
received on the dividend date and any costs  associated  with the share dividend
will be capitalized as a reduction of additional paid-in capital.

As of  September  30,  1997  the  Company  had  $28.1  million  in net  accounts
receivable. The average days sales outstanding ("DSO") at September 30, 1997 was
approximately 90 days as compared to approximately 94 at September 30, 1996. DSO
is  calculated  based on the average  daily sales of the  immediately  preceding
three month period divided into the net accounts  receivable  balance at the end
of the period.


The Company believes that existing cash balances,  funds generated by operations
and the  availability  of the $15 million line of credit 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 and 1998,  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,  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.


<PAGE>



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



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.


<PAGE>



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



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


              10.0  Lease agreement between Saville Systems PLC and Clybaun
                    Construction Limited dated May 26, 1997.

              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:  November 5, 1997                     By:      /s/ John J. Boyle, III
                                                    ----------------------------
                                                        John J. Boyle, III
                                                        President & CEO




Date:  November 5, 1997                      By:      /s/ Christopher A. Hanson
                                                     ---------------------------
                                                         Christopher A. Hanson
                                                         Chief Financial Officer
                                                         (Principal Financial 
                                                         and Accounting Officer)