FORM 10-QSBA
    

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

  (Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                                       OR

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934 FOR THE TRANSITION

                     PERIOD FROM                    TO


                       Commission file number 0-25194


                    INTERAMERICAS COMMUNICATIONS CORPORATION
       (Exact Name of Small Business Issuer as Specified in Its Charter)

                  Texas                                   87-0464860
     (State or Other Jurisdiction of          (IRS Employer Identification No.)
      Incorporation or Organization)

   
                2600 Douglas Road
              Coral Gables, Florida                             33134
     (Address of Principal Executive Offices)               (Zip Code)

                                 (305) 448 4422
                (Issuer's Telephone Number, Including Area Code)
    

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period than that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                  Yes      [X]                  No      [ ]



State the number of shares outstanding of each of the issuer's classes of
common equity, as of October 27, 1997: 18,984,300

   
This amendment is being filed to reflect 850,000 shares of the Company's common
stock issued to certain officers during October 1997 as not outstanding as of
September 30, 1997. The Company was legally liable at September 30, 1997 to
issue such shares of its Common Stock, as such the fair value of such shares has
been reflected as accrued compensation expense at September 30, 1997.

During August 1998 the Company restated its December 31, 1997 and 1996 annual
financial statements and second and third quarter 1996 and all 1997 quarterly
unaudited financial statements to reflect the effect of revising the price per
share of Company common stock issued in connection with the May 1996 acquisition
of Resetel from $2.25 to $5.99 per share. The revised price per share is based
on the average closing price of the Company's common stock for the period of 14
days before and after the date the terms of the acquisition were announced. The
previously recorded purchase price was based on the Company's March 1996 private
placement.
    

NOTE: Page 1 of 22 sequentially numbered pages.

<PAGE>   

                  INTERAMERICAS COMMUNICATIONS CORPORATION

                                    INDEX

<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----

<S>          <C>                                                                                              <C>
PART I.      FINANCIAL INFORMATION

             ITEM 1.     CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                         CONSOLIDATED BALANCE SHEETS -- AS OF SEPTEMBER 30, 1997 (UNAUDITED)
                              AND DECEMBER 31, 1996 (AUDITED)                                                  3

                         CONSOLIDATED STATEMENTS OF OPERATIONS -- NINE MONTHS AND THREE MONTHS
                              ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)                                    4

                         CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY -- NINE MONTHS ENDED
                              SEPTEMBER 30, 1997 (UNAUDITED)                                                   5

                         CONSOLIDATED STATEMENTS OF CASH FLOWS -- NINE MONTHS ENDED SEPTEMBER 30, 1997
                              AND 1996 (UNAUDITED)                                                             6

                         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)                      7

             ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

                         RESULTS OF OPERATIONS                                                                11

PART II.     OTHER INFORMATION

             ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K                                                     21
</TABLE>

                                      2

<PAGE>   

                    INTERAMERICAS COMMUNICATIONS CORPORATION

                          CONSOLIDATED BALANCE SHEETS
                  (THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
   
                                                             SEPTEMBER 30,      DECEMBER 31,
                                                                 1997               1996
                                                              (AS RESTATED)    (AS RESTATED)
                                                              -----------      -------------
                                                              (UNAUDITED)        (AUDITED)
<S>                                                           <C>                 <C>
ASSETS
Current assets:
  Cash and cash equivalents...............................    $      299          $    723
  Restricted bank deposits................................           164                --
  Accounts receivable.....................................            76               113
  Other receivables.......................................            80                97
  Prepaid expenses........................................           467               330
  Due from related parties................................            27                26
  Other current assets....................................            29                38
                                                              ----------          --------
          Total current assets............................         1,142             1,327
Property and equipment at cost, net.......................         5,956             3,956
Intangible assets, net....................................         9,189             9,568
Deferred financing and offering costs.....................         1,797                42
                                                              ----------          --------
          Total assets....................................    $   18,084          $ 14,893
                                                              ==========          ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Bank lines of credit and Bridge Notes...................    $    1,407          $     --
  8% Convertible debentures...............................           532                --
  7% Convertible debentures...............................           861                --
  Accounts payable........................................         2,700               299
  Accrued expenses........................................         2,620               674
  Due to related parties..................................            47               416
  Lease obligations, current..............................            45               114
  Other current liabilities...............................            85               171
                                                              ----------          --------
          Total current liabilities.......................         8,297             1,674
Lease obligations, less current portion...................           463               248
Deferred income taxes.....................................           152               152
                                                              ----------          --------
          Total liabilities...............................         8,912             2,074
                                                              ----------          --------
Commitments and contingencies.............................            --                --
                                                              ----------          --------
Stockholders' equity
  Preferred stock, $.001 par value, authorized 10,000,000
     shares, none issued
  Common stock, $.001 par value, authorized 50,000,000 shares, issued and
     outstanding as of December 31, 1996 and September 30, 1997,
     16,152,518 and 18,134,300 Shares, respectively.......            19                16
  Additional paid in capital..............................        29,363            23,168
  Warrants................................................           298                --
  Accumulated deficit.....................................       (20,356)          (10,287)
  Cumulative translation adjustments......................          (152)              (78)
                                                              ----------          --------
          Total stockholders' equity......................         9,172            12,819
                                                              ----------          --------
          Total liabilities and stockholders' equity......    $   18,084          $ 14,893
                                                              ==========          ========
</TABLE>
    

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

                                        3

<PAGE>   

                    INTERAMERICAS COMMUNICATIONS CORPORATION

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                  (THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)
   
<TABLE>
<CAPTION>
                                            NINE MONTHS ENDED         THREE MONTHS ENDED
                                               SEPTEMBER 30,             SEPTEMBER 30,
                                         -----------------------    -----------------------
                                            1997         1996          1997          1996
                                        (AS RESTATED)(AS RESTATED) (AS RESTATED) (AS RESTATED)
                                         ----------   ----------    ----------    ----------
                                                                         (UNAUDITED)
<S>                                     <C>           <C>           <C>         <C>             
Sales................................   $      853    $      477    $      268   $      364

Operating expenses:
  Cost of sales......................          942           618           274          245
  Selling, general and administrative
     expenses........................        7,651         2,154         5,897        1,073
  Depreciation and amortization......          834           616           285          309
                                        ----------    ----------    ----------   ----------
                                             9,427         3,388         6,456        1,627
                                        ----------    ----------    ----------   ----------
Loss from operations.................       (8,574)       (2,911)       (6,188)      (1,264)
Interest expense.....................       (1,543)          (96)       (1,012)         (18)
Interest income......................           48            36            15           22
Other income (expense)...............           --           (10)           --          (10)
                                        ----------    ----------    ----------   ----------
Net loss.............................   $  (10,069)   $   (2,981)   $   (7,185)  $   (1,270)
                                        ==========    ==========    ==========   ==========
Net loss per share...................   $     (.61)   $     (.20)   $     (.44)  $     (.08)
                                        ==========    ==========    ==========   ==========
Weighted average common shares
  outstanding........................   16,123,074    14,345,509    16,064,184   16,152,518
                                        ==========    ==========    ==========   ==========
</TABLE>
    

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

                                        4

<PAGE>  

                    INTERAMERICAS COMMUNICATIONS CORPORATION

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
                  (THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                              COMMON STOCK       ADDITIONAL                 CUMULATIVE       ACCRUED
                                          --------------------    PAID-IN     ACCUMULATED   TRANSLATION   DISTRIBUTIONS
                                            SHARES     AMOUNTS    CAPITAL       DEFICIT     ADJUSTMENTS   AND WARRANTS     TOTAL
                                          ----------   -------   ----------   -----------   -----------   -------------   -------
<S>                                       <C>          <C>       <C>          <C>           <C>           <C>             <C>
   
Balances at December 31, 1996
  (as restated) ........................  16,152,518     $ 16     $23,168      $(10,287)       $ (78)        $    --      $12,819
Warrants to purchase common stock.......          --       --          --            --           --             298          298
Beneficial conversion features related
  to convertible debentures.............          --       --         810            --           --              --          810
Currency translation adjustment.........          --       --          --            --          (74)             --          (74)
Conversion of debt......................   1,101,782        1       1,993                                                   1,994
Stock issued to certain officers and
  former directors......................     500,000        1       2,301                                                   2,302
Stock issued for financial assistance
  and extinguishment of liability to
  related parties.......................     380,000        1       1,091                                                   1,092
Net loss................................          --       --          --       (10,069)          --              --      (10,069)
                                          ----------     ----     -------      --------        -----         -------      -------
Balances at September 30, 1997
  (as restated) ........................  18,134,300     $ 19     $29,363      $(20,356)       $(152)        $   298      $ 9,172
                                          ==========     ====     =======      ========        =====         =======      =======
</TABLE>
    

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

                                        5

<PAGE>   
                    INTERAMERICAS COMMUNICATIONS CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  (THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)

   
                                                         NINE MONTHS ENDED
                                                           SEPTEMBER 30,
                                                        ------------------
                                                         1997       1996
                                                        -------    -------
                                                            (UNAUDITED)
                                                           (AS RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss.........................................    $(10,069)   $(2,981)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
    Depreciation and amortization expense..........         834        616
    Amortization of deferred financing costs and
      original issue discounts.....................          91        216
    Beneficial conversion features on convertible
      debentures...................................         810         --
    Capitalized interest related to network
      construction.................................        (600)        --
    Non-cash compensation and consulting expense...       4,640         --
    Financial assistance exchanged for
      common stock.................................         852         --
    Changes in assets and liabilities:
      Accounts receivable..........................          37       (272)
      Due from related parties.....................          (1)        --
      Other receivables............................          17         --
      Prepaid expenses.............................        (137)        --
      Other current assets.........................           9       (127)
      Accounts payable and accrued expenses........         297       (950)
      Due to related parties.......................        (129)        --
      Other current liabilities....................         (86)        27
                                                        -------    -------
         Cash used in operating activities.........      (3,435)    (3,471)
                                                        -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment...............      (1,855)      (334)
  Acquisition of Visat.............................          --         --
  Acquisition of Hewster...........................          --     (1,500)
                                                        -------    -------
         Cash used in investing activities.........      (1,855)    (1,834)
                                                        -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock.........................          --      7,443
  Proceeds from issuance of convertible
    debentures.....................................       3,500         --
  Net proceeds from issuance of notes payable
    and Bridge Notes ..............................         950        203
  Deferred financing and offering costs............                     51
  Proceeds from bank line of credit, net of
    restricted bank deposits.......................         343         --
  Proceeds from leasing obligations................         147         --
                                                        -------    -------
         Cash provided by financing activities.....       4,940      7,697
                                                        -------    -------
Net increase (decrease) in cash and cash

  equivalents......................................        (350)     2,392
Effect of exchange rate changes on cash............         (74)        57
Cash and cash equivalents at beginning of year.....         723         57
                                                        -------    -------
Cash and cash equivalents at end of period.........     $   299    $ 2,506
                                                        =======    =======
    

Supplemental Non-cash Investing and Financing Activities:

a. During the nine months ended September 30, 1997, the company authorized the
   issuance of 1,101,782 shares of Common Stock to convert outstanding debt, and
   related accrued interest, totaling $1,994,000. See Note 3 herein.
b. During the nine months ended September 30, 1997, the Company issued 80,000
   shares of Common Stock to extinguish a $240,000 liability with a related
   party.
c. During the nine months ended September 30, 1997 the Company issued warrants
   to purchase shares of Common Stock valued at $298,000.
d. During the nine months ended September 30, 1997 the Company deferred
   approximately $1,755,000 of offering costs that were not paid as of the end
   of this period.

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

                                        6
<PAGE>   
                          PART I FINANCIAL INFORMATION

                         ITEM 1 - FINANCIAL STATEMENTS

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

      The unaudited condensed consolidated financial statements included herein
have been prepared by the Company. The foregoing statements contain all
adjustments, consisting only of normal recurring adjustments which are, in the
opinion of the Company's management, necessary to present fairly the
consolidated financial position of the Company as of September 30, 1997 and the
consolidated results of its operations and its consolidated cash flows for the
three month and nine month periods ended September 30, 1997 and 1996.

     Certain information and footnote disclosures normally included in financial
statements have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. These unaudited condensed
consolidated financial statements should be read in conjunction with the
December 31, 1996 audited financial statements of the Company and the notes
thereto.
   
AMENDED QUARTERLY FINANCIAL INFORMATION

         During August 1998, the Company restated its financial statements to
reflect the effect of revising the price per share of Company common stock
issued in connection with the May 1996 acquisition of Resetel from $2.25 to
$5.99 per share. The revised price per share is based on the average closing
price of the Company's common stock for the period of 14 days before and after
the date the terms of the acquisition were announced. The previously recorded
purchase price was based on the Company's March 1996 private placement. The
effect of the change in price per share increased the reported purchase price
from approximately $2,800 to $7,500.

         During October 1997 and August 1998 the Company amended certain
financial information as reported on its September 30, 1997 and 1996 Form
10-QSB. A summary of the original and amended unaudited financial information
and a description of the related impact of the Company's statement of operations
follows:

                                            NINE MONTHS         NINE MONTHS
                                               ENDED               ENDED
                                           SEPTEMBER 30,       SEPTEMBER 30, 
                                                1997                1996
                                           -------------      ---------------
Revenues .................................   $     853           $      477
Loss from Operations .....................      (8,574)              (2,911)
Net loss, as amended .....................   $ (10,069)          $   (2,981)
                                             =========           ==========
Net basic and diluted loss per
 share, as amended .......................   $   (0.61)          $    (0.21) 
                                             =========           ==========
General and administrative
 expenses ................................                              247 (a)
Depreciation expense .....................                              240 (a)
Interest expense .........................                               36 (a)
Amortization expenses ....................         176 (b)              122 (b)
                                             ---------           ----------
Net loss, as originally reported .........   $  (9,893)          $   (2,336)
                                             =========           ==========
Net basic and diluted loss per
 share, as originally reported ...........   $   (0.61)          $    (0.16)
                                             =========           ==========
----------------
(a) Reflects (i) adjustment identified in the fourth quarter of 1996 to provide
    depreciation on assets placed in use during the first quarter of 1996, for 
    which depreciation initially had not commenced until the second quarter of
    1996 and (ii) adjustments for various expenses and costs identified by the
    Company in the fourth quarter fo 1996 as relating to earlier 1996 quarters.

(b) Reflects the quarterly effect of the Resetel purchase price described in
    the introductory language to the table above.
    

NOTE 1 -- SIGNIFICANT SUBSEQUENT EVENT

     On October 27, 1997, the Registrant completed a private offering (the
"Offering") pursuant to Rule 144A and Regulation S promulgated under the U.S.
Securities Act of 1933 (the "Act") of 150,000 Units, consisting of an aggregate
of $150 million aggregate principal amount of 14% Senior Notes due October 27,
2007 and 5,250,000 warrants to purchase 5,250,000 shares of Common Stock of the
Registrant at an exercise price of $4.40 per share. The warrants when exercised
would entitle the holders thereof to acquire an aggregate of 5,250,000 shares of
Common Stock, representing approximately 15.2% of the Common Stock of the
Registrant on a fully diluted basis as of the date of the consummation of the
Offering (assuming full vesting and exercise of all options and warrants
outstanding as of October 22, 1997). In addition, UBS Securities LLC, the
Initial Purchaser of the Units in the Offering, was granted 2,250,000 warrants
to acquire 2,250,000 shares of Common Stock of the Registrant at an exercise
price of $4.40 per share.

      The net proceeds to the Company from the Offering were approximately
$142.5 million, after deducting the underwriting discount and estimated offering
expenses. In addition, approximately $58.0 million of the proceeds were used to
purchase a portfolio of securities that was deposited in escrow for payment of
interest on the Senior Notes through October 27, 2000 and, under certain
circumstances, as security for repayment of principal of the Senior Notes. The
Company expects to use the remaining proceeds as follows (all amounts represent
approximations): (i) $62.0 million to expand and operate the Company's fiber
optic networks in Peru and Chile; (ii) up to $7.2 million to consummate the
Iusatel Acquisition; (iii) $2.9 million to redeem the Convertible Debentures;
(iv) $1.5 million to pay existing short-term liabilities of the Company,
including outstanding bank debt and trade payables; (v) $975,000 to pay
indebtedness under the Bridge Notes (as defined herein); and (vi) the remaining
amounts for general corporate purposes. While the Company currently expects to
use the proceeds of the Offering as set forth above, there can be no assurance
that the Company's actual expenditures will equal the currently anticipated
amounts.

     As part of its business strategy, the Company intends to continue to
evaluate potential acquisitions, joint ventures and strategic alliances in
companies that own existing networks or companies that provide services that
complement the Company's existing businesses. Although the Company continues to
consider potential acquisitions from time to time, other than the pending
acquisition of Iusatel Chile S.A. ("Iusatel"), no agreement in principle to
acquire or effect any acquisition has been reached. Furthermore, there can be no
assurance that the acquisition of Iusatel will be consummated upon the terms
presently contemplated or at all. New sources of capital such as credit
facilities and other borrowings, and additional debt and equity issuances, may
be used to fund such acquisitions and similar strategic investments. See "Note
3."

NOTE 2 -- LEGAL PROCEEDINGS

     On July 3, 1997, NU Investments, LLC and KA Investments LDC (collectively,
"Plaintiffs"), filed suit in the U.S. District Court for the Northern District
of Illinois, Eastern Division against the Company, Mr. Patricio E. Northland,
President, CEO and Chairman of the Board of the Company, and each of Phillip S.
Magiera and Paul A. Moore, former directors of the Company, alleging breach of
contract, violation of Section 10(b) of the Securities Exchange Act of 1934, and
Rule 10b-5 promulgated thereunder, and fraudulent misrepresentation for the
Company's failure to file a registration statement to register the resale of
shares of Common Stock issuable upon the conversion of Plaintiffs' 7%
Convertible Debentures and the exercise of warrants to purchase 100,000 shares
of Common Stock. See Note 4 included herein for additional details on the 7%
Convertible Debentures. Plaintiffs have demanded compensatory damages in the
amount of $1.5 million plus prejudgment interest and costs. The Company believes
that it has meritorious defenses to the Plaintiffs' claims, and intends to
defend this action fully and vigorously. Moreover, even if the Company is found
to be liable in this action, it does not believe that any such liability will
have a material adverse effect on the Company's business, financial condition
and results of operations.

NOTE 3 -- THE PENDING IUSATEL ACQUISITION

     During August 1997, the Company entered into an agreement to acquire
Iusatel Chile, S.A. ("Iusatel"), a Chilean long distance carrier based in
Santiago, Chile. Iusatel is controlled by a shareholder of the Company. Iusatel
currently provides national and international long distance services in Chile
through its own gateway switch and satellite earth station as well as through
interconnection with other Chilean long distance carriers.

     The Iusatel Agreement provides for the purchase by the Company of 100% of
the issued and outstanding capital stock of Iusatel for $5,250,000 in cash (the
"Iusatel Purchase Price"). The Iusatel Purchase Price may be reduced to the
extent that the net worth of Iusatel as of August 31, 1997 is less than $1,582,
as determined pursuant to an audited balance sheet. The Iusatel Purchase Price
may be increased by up to a maximum of $2,000,000 (the "Additional Payment")
based upon Iusatel's EBITDA for the four months ended December 31, 1997. The
Iusatel Agreement also provides for the election of Hernan Streeter, the
principal shareholder of Iusatel and the former Chairman and Chief Executive
Officer of the Company, to Iusatel's Board of Directors for a term until the
earlier to occur, of (A) December 31, 1997 or (B) the date of the Additional
Payment, if any. The consummation of the Iusatel acquisition is subject to a
number of conditions, many of which, including governmental consent, are beyond
the Company's control. The Company currently is in the process of renegotiating
certain provisions of the Iusatel Agreement. There can be no assurance that the
acquisition of Iusatel will be consummated upon the terms presently contemplated
or at all. In connection with the acquisition of Iusatel, the Company has agreed
to pay a director of the Company a fee in the aggregate amount of 100,000 shares
of Common Stock for his services in facilitating the transaction.

                                       7
<PAGE>   

NOTE 4 -- CONVERTIBLE DEBENTURES

     On February 3, 1997, ICCA issued $1.5 million aggregate principal amount of
7% Convertible Debentures (the "7% Convertible Debentures") due February 3, 2000
and warrants to purchase an aggregate of 100,000 shares of Common Stock. On May
6, 1997, ICCA issued $2.0 million aggregate principal amount of 8% Convertible
Debentures (the "8% Convertible Debentures") due April 30, 1998 and warrants to
purchase an aggregate of 20,000 shares of Common Stock. Original issue discounts
of $167,000 and $31,000 related to the 7% Convertible Debentures and the 8%
Convertible Debentures, respectively, resulted from proceeds allocated to the
related warrants. The 7% Convertible Debentures and the 8% Convertible
Debentures are collectively referred to as the "Convertible Debentures." The net
proceeds of the Convertible Debentures were used to pay for (i) capital
expenditures related to the Company's fiber optic networks, (ii) operating
expenses of ICCA's wholly owned subsidiaries and (iii) corporate expenses
primarily related to salaries, professional fees, travel, rent, and similar
items.

     At the option of the Company, the Convertible Debentures may be redeemed at
predetermined premiums, at any time or from time to time, upon not less than ten
nor more than twenty days prior written notice. The prepayment price for the 7%
Convertible Debentures and 8% Convertible Debentures shall equal 117% and 130%,
respectively, of the principal amount to be prepaid plus accrued interest. In
addition, the Convertible Debentures are convertible based on predetermined
formulas, at the option of the holders, into Common Stock at any time prior to
maturity at a conversion price that will be less than the closing bid price as
reported by the Nasdaq SmallCap Market at time of conversion. The Company may be
required to pay certain penalties if it fails to convert the Convertible
Debentures, in a timely manner, pursuant to written notices received from the
holders.

     In connection with the Convertible Debentures, the Company is required to
file with the Commission a registration statement covering a sufficient number
of shares of Common Stock into which the Convertible Debentures may be converted
(the "Registered Shares"). As of November 12, 1997, the Company had not filed
such registration statements with the Commission. Pursuant to the terms of the
Convertible Debentures, the Company may be required to pay the holders certain
penalties until such time as the Company either files the registration statement
or redeems the Convertible Debentures. On July 3, 1997 the holders of the 7%
Convertible Debentures filed suit against the Company and certain of its
officers for failure to file a registration statement to register the shares of
Common Stock issuable upon the conversion of the 7% Convertible Debentures and
warrants to purchase 100,000 shares of Common Stock. See Note 1 included herein.

     During September 1997, the Company authorized the issuance of 851,162
shares of Common Stock in connection with the conversion of $1.45 million
aggregate principal amount of its 8% Convertible Debentures, plus related
accrued interest and authorized the issuance of 250,620 shares of Common Stock
in connection with the conversion of $500,000 aggregate principal amount of its
7% Convertible Debentures, plus, related accrued interest. The Company's
September 30, 1997 balance sheet reflects the impact of this conversion.

     The Company intends to redeem all outstanding Convertible Debentures. The
Company estimates that $1.0 million and $550,000 in aggregate principal amount
of the 7% Convertible Debentures and 8% Convertible Debentures, respectively,
will be outstanding at such time. The Company estimates that its extraordinary
loss on debt extinguishment will approximate $1.2 million. However, the
magnitude of the Company's loss on debt extinguishment, could be lower or higher
than the aforementioned amounts. Because the Convertible Debentures had not been
redeemed at September 30, 1997, no extraordinary loss has been recorded in the
Registrant's 1997 third quarter financial statements.

                                       8

<PAGE>   

NOTE 5 -- STOCK OPTIONS AND GRANTS

     During July 1997 the Company issued 80,000 shares of Common Stock pursuant
to an agreement made in March 1997 to a related party in order to extinguish a
$240,000 obligation for consulting services that were rendered and accrued for
as of December 31, 1996. The value assigned to the Shares approximated the
quoted market price of the Nasdaq SmallCap Market on date of grant.

     During September 1997, the Company agreed to issue the following shares of
Common Stock to the following officers of the Company: (i) 600,000 shares of
Common Stock to Patricio E. Northland, President, Chief Executive Officer and
Chairman of the Board and (ii) 250,000 shares of Common Stock to Douglas G. Geib
II, Chief Financial Officer of the Company. In addition, on the same date, the
Company granted the following stock options to the following officers at an
exercise price of $2.13 per share: (i) Patricio E. Northland, President, Chief
Executive Officer and Chairman of the Board, was granted options to acquire
600,000 shares of Common Stock, one-third of which vested immediately and the
remainder in equal annual installments over the next two years; and (ii) Douglas
G. Geib II, Chief Financial Officer and a director of the Company, was granted
options to acquire 250,000 shares of Common Stock, one third of which vested
immediately and the remainder vest in equal annual installments over the next
two years. Also, the Company agreed upon consummation of the Offering to grant
options to acquire an additional 714,000 and 286,000 shares to Mr. Northland and
Mr. Geib, respectively, at an exercise price of $4.40 per share. The Company
recognized a non-cash charge to its Statement of Operations for the third
quarter of 1997 in the amount of approximately $2,865,000 related to the
issuance of such shares and grant of such options.

                                       9

<PAGE>   

NOTE 6 -- BRIDGE NOTES

     During August and September 1997, ICCA entered into Bridge Loan Agreements
with certain lenders (some of which are related parties) pursuant to which such
lenders provided the Company loans of $950,000 aggregate principal amount of the
Company's 10% Senior Notes (the "Bridge Notes"). As additional consideration for
such loans, the Company issued warrants to acquire, for a period of five years
from the date of the Bridge Notes, 95,000 shares of the Company's Common Stock
at an exercise price equal to the closing market price of ICCA's Common Stock on
the day of issuance. On October 27, 1997 the Company redeemed the Bridge Notes
with the proceeds from the Offering.

NOTE 7 -- AGREEMENT WITH MAROON BELLS AND CERTAIN MAROON BELLS AFFILIATES

     During October 1997, the Company entered into an agreement with Maroon
Bells, Theodore Swindells, Paul Moore and Phillip Magiera, to compensate them
for past services rendered to ICCA. Pursuant to such agreement, the Company made
a cash payment to Maroon Bells of $500,000 upon consummation of the Offering and
issued to each of Messrs. Moore and Magiera 250,000 shares of Common Stock and
options to acquire 250,000 shares of Common Stock at an exercise price of $2.13
per share. Messrs. Moore and Magiera resigned from ICCA's Board of Directors
effective as of the date of the agreement. The Company recognized a non-cash
charge in its Statement of Operations for the third quarter of 1997 in the
amount of approximately $1,775,000 relating to these payments.

NOTE 8 -- DONOSO AGREEMENT

     During October 1997, the Company issued 300,000 shares of Common Stock to
Eleazar Donoso for certain financial assistance Mr. Donoso provided to ICCA
during its development stage. Mr. Donoso is a co-founder with Mr. Cargill, a
director of ICCA, of Telectronic S.A. and its President. Mr. Donoso is also a
shareholder of ICCA. The Company recorded a non-cash expense in its Statement of
Operations for the third quarter of 1997 of $852,000 related to the aggregate
fair value of such shares of Common Stock based on the date of the Settlement
Agreement.

NOTE 9 -- NEW EMPLOYMENT AGREEMENT WITH PATRICIO E. NORTHLAND

      In September 1997, the Company entered into an employment and severance
agreement (the "Northland Agreement") with Patricio E. Northland, President,
Chief Executive Officer and Chairman of the Board of Directors of the Company,
which replaced his former employment agreement with the Company. The Northland
Agreement has a term of three years unless terminated earlier for cause, death
or disability, and provides for an initial annual base salary of $350,000,
subject to an increase of $50,000 in each of the second and third year of the
agreement. In addition, Mr. Northland was granted non-qualified stock options to
purchase 300,000 shares of ICCA's Common Stock in the following manner: 100,000
shares which vest on the date of employment at an exercise price of $4.00 per
share; 100,000 shares which vest one year thereafter at an exercise price of
$6.00 per share; and 100,000 shares which vest two years after the date of
employment at an exercise price of $8.00 per share. In consideration of Mr.
Northland's agreement to terminate his former employment agreement with the
Company, which would have provided for a substantial bonus to Mr. Northland upon
consummation of the Offering, the Company agreed to pay Mr. Northland a
performance bonus of $250,000 and vest all of his existing options to acquire
1,000,000 shares of Common Stock granted under his prior employment agreement.
The performance bonus of $250,000 was expensed by the Company in its 1997 third
quarter.

                                       10

<PAGE>   

ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

      Certain statements set forth herein including information with respect to
the Company's plans and strategy for its business, acquisitions and related
financings, are forward-looking statements. Such forward-looking statements are
subject to material risks, uncertainties and contingencies, many of which are
beyond control of the Company. As a result, the actual results, performance or
achievements of the Company, may be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Given these uncertainties, investors and creditors
are cautioned not to place undue reliance on such forward-looking statements.

COMPANY OVERVIEW

     InterAmericas Communications Corporation (the "Company" or "ICCA") is a new
provider of high bandwidth integrated telecommunication services to high volume
users through state of the art fiber optic networks located in Santiago, Chile
and Lima, Peru. The Company began development of its networks in Chile and Peru
in 1994 and 1996, respectively. As of September 30, 1997, the Company had (i)
constructed a 120 kilometer fiber optic network which extends through most of
Santiago's downtown business district and the outlying industrial and airport
corridor and (ii) completed construction of 60 kilometers of its fiber optic
network in Lima. The Lima network, when completed, is expected to be
approximately 230 kilometers in length and will extend throughout the major
commercial and industrial districts of Lima, and the port city of Callao.

     The Company has historically operated as a Latin American
telecommunications development stage company which has developed its operations
in Latin America through the acquisition of holding and operating companies that
own licenses, concessions or rights-of-way in what the Company believes to be
attractive markets. The following table sets forth the name, principal market
and date of acquisition of each entity acquired by the Company.

<TABLE>
<CAPTION>
NAME                                                          MARKET           DATE OF ACQUISITION
-----                                                         ------           -------------------
<S>                                                           <C>              <C>
Hewster Servicios Intermedios, S.A. ("HSI").................  Santiago         July 15, 1994
VISAT, S.A. ("VISAT").......................................  Santiago         September 23, 1994
Red de Servicios de Telecomunicaciones, S.A. ("Resetel")....  Lima             May 7, 1996
Hewster, S.A. ("HSA").......................................  Santiago         July 31, 1996
Iusatel Chile S.A. ("Iusatel")..............................  Santiago         pending
</TABLE>

     HSI is a Chilean corporation engaged in the development of a fiber optic
network in Santiago, Chile. VISAT is a Chilean corporation that holds a
government concession to provide intermediate telecommunications services,
including the installation and operation of a network of 12 satellite earth
stations and a switch throughout Chile, which allows the Company to transmit
either "C" or "KU" bands for satellite communications and broad band
distribution. Resetel is a Peruvian corporation that holds a concession to build
and operate a fiber-optic telecommunications network in Lima and Callao, Peru.
HSA is a Chilean corporation that provides various network installation and
systems integration services. HSI and HSA were combined to operate under the
name of Hewster Chile, S.A. ("Hewster Chile") Currently, Hewster Chile, Visat,
and Resetel are substantially wholly-owned subsidiaries of ICCA. Iusatel is a
Chilean corporation which currently provides domestic and international long
distance services in Chile through its own gateway switch and satellite earth
station, as well as through interconnections with other Chilean long distance
carriers.

     Due to lack of capital, the Company has been unable to complete its fiber
optic networks and last mile connections in order to provide meaningful revenue
generation. Thus, to date, the majority of the Company's revenues have been
generated through systems integration and consulting fees provided by the
Company's Hewster Chile operations. With the proceeds of the Offering, the
Company anticipates that it will have the capital necessary to complete and
leverage its networks to provide significant, sustainable network-based
telecommunications revenues. Due to the changing scope of its operations, the
Company believes that its historical operating results and statistics may not be
indicative nor representative of future results and statistics.

                                       11

<PAGE>   

  Sales

     Today, the Company derives its sales primarily from services provided by
Hewster Chile which provides voice and data communications services on a private
line basis, and supplies its customers with local and wide-area network design,
engineering, systems integration and support services. The Company expects sales
to increase significantly over the next few years due to the continued expansion
of its operations.

  Costs of Sales

     Cost of sales include both the cost of services provided and the cost of
equipment sold. At present, cost of sales relate principally to the Company's
operations in Chile. Such costs of services include payments under lease
agreements to install and operate the Company's fiber optic network in the
Santiago subway system. The lease agreement requires payments based on monthly
invoicing of the Company, subject to minimum amounts. The Company anticipates
that the cost of sales will increase with the expansion of its operations.
However, as a percentage of sales, the Company anticipates that the cost of
sales will decrease over time as a result of achieving economies of scale in its
operations.

  Selling, General and Administrative Expenses

     Selling, general and administrative expenses consist principally of
compensation expense, professional fees, consulting services, travel costs,
office rent and other general corporate expenses. As ICCA's subsidiaries expand
their operations, complete construction of their fiber optic networks and add
new customers, the Company expects a larger portion of selling, general and
administrative expenses to be incurred at the subsidiary level. The Company
expects selling, general and administrative expenses to increase over time as it
continues to expand its operations. However, selling, general, and
administrative expenses as a percentage of sales is expected to decrease over
time with the expansion of the Company's operations, although during the next
several years such costs could represent a higher percentage of sales compared
to historical amounts, as the Company funds the infrastructure necessary to
enhance sales in the future.

     Selling, general and administrative expenses for the three and nine month
periods ended September 30, 1997 include non-cash compensation and consulting
expense of $4,640,000 related to the value of shares of Common Stock and stock
options issued to certain officers and former directors of the Company. See
Notes 4 and 6 included herein and the Company's Form 8-K filed on October 16,
1997 for additional details.

  Depreciation and Amortization

     The Company depreciates its property and equipment over their estimated
useful lives, which approximate twenty years for its fiber optic networks.
Intangible assets acquired in the acquisition of HSI, HSA and Visat are being
amortized over ten years. The concession purchased in the acquisition of Resetel
is being amortized over its estimated useful life of twenty years. The Company
believes that depreciation and amortization will continue to increase with the
expansion of its operations.

  Interest Expense

     The Company currently incurs interest expense on capital leases and also
incurs interest and related expenses attributable to the Company's Convertible
Debentures that were issued during the nine months ended September 30, 1997.
Interest expense has been reduced for amounts capitalized related to the
Company's construction of its fiber optic networks.

     Interest costs reported with respect to the Company's Convertible
Debentures include interest expense related to the stated coupon rate of
interest, the value attributable to the ability of the holders to convert the
debentures at a share price less than the closing bid price (as reported by the
Nasdaq SmallCap Market) at time of conversion ("beneficial conversion features")
and amortization of (i) deferred financing costs and (ii) original issue
discounts related to detachable warrants. The value attributable to the
beneficial conversion features have been expensed at date of issuance because
the agreements could allow holders of the Convertible Debentures to convert at
that date. As a result, for the nine months ended September 30, 1997 the Company
incurred noncash interest cost of $810,000 related to the fair value of the
beneficial conversion features. See also Note 3 included herein.

                                       12

<PAGE>   

      Interest expense for the three and nine month periods ended September 30,
1997 include non-cash costs of $852,000 related to the value of 300,000 shares
of Common Stock issued to an individual for certain financial assistance
provided to the Company. See Note 7 included herein and the Company's Form 8-K
filed on October 16, 1997 for additional details.

     The Company expects interest expense to increase significantly in the
future due to the impact attributable to the Offering.

  Income Taxes

     The Company is subject to federal, state and foreign income taxes but has
incurred no liability for such taxes due to net operating losses incurred. These
net operating losses could be used to offset future taxable income. The
Company's net deferred tax assets, which result primarily from the future
benefit of these net operating losses, are fully offset by a valuation allowance
for the same amount because of the uncertainty surrounding the future
realization of these net operating loss carryforwards. However, as the Company
expands its fiber optic networks in Chile and Peru, the Company expects to
generate taxable income. Certain tax benefits could expire prior to the time the
Company generates taxable income.

                                       13

<PAGE>   

RESULTS OF OPERATIONS

     NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996

     SALES. The Company's sales were $853,000 for the nine months ended
September 30, 1997 as compared to $477,000 for the nine months ended September
30, 1996. This increase of approximately $376,000 was attributable to the
acquisition of HSA on July 31, 1996.

     COST OF SALES. The Company's cost of sales, relating principally to the
Company's operations in Chile, was $942,000 for the nine months ended September
30, 1997 as compared to $618,000 for the nine months ended September 30, 1996.
This increase of approximately $324,000 was attributable to the services
provided by HSA.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. The Company's selling,
general and administrative expenses were $7,651,000 for the nine months ended
September 30, 1997 as compared to $2,154,000 for the nine months ended September
30, 1996. This increase of approximately $5,497,000 was primarily attributable
to non-cash compensation and consulting expense of $4,640,000 related to the
value of shares of Common Stock and stock options issued to certain officers and
former directors of the Company, an increase in corporate expenses related to
salaries, professional fees and travel attributable to the ongoing support of
the Company's subsidiary operations, as well as corporate development
opportunities, and expenses attributable to the Company's Resetel and Hewster
subsidiaries which were acquired by the Company in May and July 1996,
respectively.

     DEPRECIATION AND AMORTIZATION. The Company's depreciation and amortization
expenses were $834,000 for the nine months ended September 30, 1997 as compared
to $518,000 for the nine months ended September 30, 1996. This increase of
approximately $316,000 was primarily attributable to an increase in amortization
expense related to the intangible assets purchased in the acquisitions of
Resettle and Hester.

     INTEREST EXPENSE. The Company's interest expense was $1,543,000 for the
nine months ended September 30, 1997 as compared to $96,000 for the nine months
ended September 30, 1996. This increase of approximately $1,447,000 was due to
additional financing costs related to the issuance of Convertible Debentures in
February and May 1997 and the non-cash charge of $852,000 related to the value
of 300,000 shares of Common Stock issued to an individual for certain financial
assistance provided to the Company. Of the total interest cost incurred by the
Company for the nine month period ended September 30, 1997, $600,000 of such
costs were capitalized in connection with the Company's construction of its
fiber optic network in Lima, Peru.

RESULTS OF OPERATIONS

     THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996

     SALES. The Company's sales were $268,000 for the three months ended
September 30, 1997 as compared to $364,000 for the three months ended September
30, 1996.  This

                                       14

<PAGE>   

decrease of approximately $96,000 was attributable to the lack of cash resources
available to expand the Company's business.

     COST OF SALES. The Company's cost of sales, relating principally to the
Company's operations in Chile, was $274,000 for the three months ended September
30, 1997 as compared to $245,000 for the three months ended September 30, 1996.
This increase of approximately $29,000 was attributable to lower margins on
Company sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. The Company's selling,
general and administrative expenses were $5,897,000 for the three months ended
September 30, 1997 as compared to $1,073,000 for the three months ended
September 30, 1996. This increase of approximately $4,824,000 was primarily
attributable to non-cash compensation and consulting expense of $4,640,000
related to the value of shares of Common Stock and stock options issued to
certain officers and an increase in corporate expenses related to salaries and
professional fees.

   
     DEPRECIATION AND AMORTIZATION. The Company's depreciation and amortization
expenses were $285,000 for the three months ended September 30, 1997 as compared
to $251,000 for the three months ended September 30, 1996. This increase of
approximately $34,000 was primarily attributable to an immaterial refinement in
the Company's estimates for depreciation.
    

     INTEREST EXPENSE. The Company's interest expense was $1,012,000 for the
three months ended September 30, 1997 as compared to $18,000 for the three
months ended September 30, 1996. This increase of approximately $994,000 was due
to additional financing costs related to the issuance of Convertible Debentures
in February and May 1997 and the non-cash charge of $852,000 related to the
value of 300,000 shares of Common Stock issued to an individual for certain
financial assistance provided to the Company. Of the total interest cost
incurred by the Company for the three month period ended September 30, 1997,
$100,000 of such costs were capitalized in connection with the Company's
construction of its fiber optic network in Lima, Peru.

                                       15

<PAGE>   

LIQUIDITY AND CAPITAL RESOURCES

   
     Since inception, the Company has been primarily engaged in start-up
activities requiring substantial expenditures. Consequently, the Company has
reported losses from operations, before interest, of approximately $2.2 million,
$2.5 million and $4.5 million for the years ended December 31, 1994, 1995 and
1996, respectively, as well as a loss from operations, before interest, for the
nine months ended September 30, 1997 of approximately $8.4 million. In addition,
the Company has reported cash used in investing activities of approximately $2.0
million, $1.2 million and $3.0 million for the years ended December 31, 1994,
1995 and 1996, respectively, as well as cash used in investing activities for
the nine months ended September 30, 1997 of approximately $1.9 million. Cash
used in investing activities related primarily to the purchase of property and
equipment and the acquisitions of Visat and HSA. Further development of the
Company's business and the expansion of its fiber optic networks, service
offerings and customer base will require significant additional expenditures,
and the Company expects that it will have significant operating losses and net
cash outflows from operating and investing activities in the foreseeable future.
    

     Since inception, the Company has funded its cash needs through private
placements of its equity and debt securities.

     On October 27, 1997, the Registrant completed a private offering (the
"Offering") pursuant to Rule 144A and Regulation S promulgated under the U.S.
Securities Act of 1933 (the "Act") of 150,000 Units, consisting of an aggregate
of $150 million aggregate principal amount of 14% Senior Notes due October 27,
2007 and 5,250,000 warrants to purchase 5,250,000 shares of Common Stock of the
Registrant at an exercise price of $4.40 per share. The warrants when exercised
would entitle the holders thereof to acquire an aggregate of 5,250,000 shares of
Common Stock, representing approximately 15.2% of the Common Stock of the
Registrant on a fully diluted basis as of the date of the consummation of the
Offering (assuming full vesting and exercise of all options and warrants
outstanding as of October 22, 1997). In addition, UBS Securities LLC, the
Initial Purchaser of the Units in the Offering, was granted 2,250,000 warrants
to acquire 2,250,000 shares of Common Stock of the Registrant at an exercise
price of $4.40 per share.

      The net proceeds to the Company from the Offering were approximately
$142.5 million, after deducting the underwriting discount and estimated offering
expenses. In addition, approximately $58.0 million of the proceeds were used to
purchase a portfolio of securities that was deposited in escrow for payment of
interest on the Senior Notes through October 27, 2000 and, under certain
circumstances, as security for repayment of principal of the Senior Notes. The
Company expects to use the remaining proceeds as follows (all amounts represent
approximations): (i) $62.0 million to expand and operate the Company's fiber
optic networks in Peru and Chile; (ii) up to $7.2 million to consummate the
Iusatel Acquisition; (iii) $2.9 million to redeem the Convertible Debentures;
(iv) $1.5 million to pay existing short-term liabilities of the Company,
including outstanding bank debt and trade payables; (v) $975,000 to pay
indebtedness under the Bridge Notes (as defined herein); and (vi) the remaining
amounts for general corporate purposes. While the Company currently expects to
use the proceeds of the Offering as set forth above, there can be no assurance
that the Company's actual expenditures will equal the currently anticipated
amounts.

     As part of its business strategy, the Company intends to continue to
evaluate potential acquisitions, joint ventures and strategic alliances in
companies that own existing networks or companies that provide services that
complement the Company's existing businesses. Although the Company continues to
consider potential acquisitions from time to time, other than the pending
acquisition of Iusatel Chile S.A. ("Iusatel"), no agreement in principle to
acquire or effect any acquisition has been reached. Furthermore, there can be no
assurance that the acquisition of Iusatel will be consummated upon the terms
presently contemplated or at all. New sources of capital such as credit
facilities and other borrowings, and additional debt and equity issuances, may
be used to fund such acquisitions and similar strategic investments. See "Note
3."

                                       16

<PAGE>   

     Following completion of the Offering, the Company will be highly leveraged
and will have substantial debt service requirements. As of September 30, 1997,
on a pro forma basis after giving effect to the Offering, the application of the
proceeds therefrom and the consummation of the Iusatel Acquisition, the Company
would have had approximately $150.0 million of total long-term indebtedness. In
addition, in each year since its inception the Company had net losses from
operations and therefore had insufficient earnings to cover its fixed charges on
a pro forma basis after giving effect to the Offering, the application of
proceeds therefrom and the consummation of the Iusatel Acquisition. The
Company's annual interest obligations under the Senior Notes substantially
exceeds the Company's net income.

     The ability of ICCA to make scheduled payments with respect to its
indebtedness, including the Senior Notes, will depend upon, among other things,
(i) its ability to implement its business plan, and to expand its operations and
to successfully develop its customer base in its target markets, (ii) the
ability of ICCA's subsidiaries to remit cash to ICCA in a timely manner and
(iii) the future operating performance of ICCA and its subsidiaries. Each of
these factors is, to a large extent, subject to economic, financial,
competitive, regulatory and other factors, many of which are beyond the
Company's control. The Company expects that it will continue to generate cash
losses for the foreseeable future. No assurance can be given that the Company
will be successful in developing and maintaining a level of cash flow from
operations sufficient to permit it to pay the principal of, and the interest on,
its indebtedness, including the Senior Notes. If the Company is unable to
generate sufficient cash flow from operations to service its indebtedness,
including the Senior Notes, it may have to modify its growth plans, restructure
or refinance its indebtedness or seek additional capital. There can be no
assurance that (i) any of these strategies can be effected on satisfactory
terms, if at all, in light of the Company's high leverage or (ii) any such
strategy would yield sufficient proceeds to service the Company's indebtedness,
including the Senior Notes. Any failure by the Company to satisfy its
obligations with respect to the Senior Notes at maturity or prior thereto would
constitute a default under the Indenture and could cause a default under other
agreements governing current or future indebtedness of the Company.

     Substantially all of ICCA's assets are held by its subsidiaries and
substantially all of ICCA's sales are derived from operations of such
subsidiaries. Future acquisitions may be made through present or future
subsidiaries of ICCA. Accordingly, ICCA's ability to pay the principal of, and
interest and Liquidated Damages, if any, when due, on the Senior Notes is
dependent upon the earnings of its subsidiaries and the distribution of
sufficient funds from its subsidiaries. ICCA's subsidiaries will have no
obligation, contingent or otherwise, to make funds available to ICCA for payment
of the principal of, and interest and Liquidated Damages on, if any, the Senior
Notes. In addition, the ability of ICCA's subsidiaries to make such funds
available to ICCA may be restricted by the terms of such subsidiaries' current
and future indebtedness, the availability of such funds and the applicable laws
of the jurisdictions under which such subsidiaries are organized. Furthermore,
ICCA's subsidiaries will be permitted under the terms of the Indenture to incur
indebtedness that may severely restrict or prohibit the making of distributions,
the payment of dividends or the making of loans by such subsidiaries to ICCA.
The failure of ICCA's subsidiaries to pay dividends or otherwise make funds
available to ICCA could have a material adverse effect upon ICCA's ability to
satisfy its debt service requirements including its ability to make payments on
the Senior Notes.

                                       17

<PAGE>   

     The Company believes the net proceeds from the Offering will be sufficient
to satisfy the Company's liquidity needs through the end of 1999; however, there
can be no assurance that the Company will have sufficient resources to meet its
subsequent liquidity requirements.

     To accelerate its growth rate and to finance the launch or build-out of
additional markets, the Company will consider obtaining financing from various
sources, including vendor financing provided by equipment suppliers, project
financing from commercial banks and international agencies, bank lines of credit
and the sale of equity and debt securities. To the extent ICCA or any of its
subsidiaries issues debt, its leverage and debt service obligations will
increase. There can no assurance that the Company will be able to raise such
capital on satisfactory terms, if at all. In addition, the Indenture related to
the Senior Notes will limit the ability of ICCA and its subsidiaries to incur
additional indebtedness.

EFFECTS OF INFLATION

     Inflation and exchange rate variations may have substantial effects on the
Company's results of operations and financial condition. Generally, the effects
of inflation in many Latin American countries, including Chile and Peru, have
been offset in part by a devaluation of the local countries' currencies relative
to the U.S. dollar. Nevertheless, the devaluation of each country's currency may
have an adverse effect on the Company.

     A substantial portion of the Company's purchases of capital equipment and
interest on the Senior Notes, is payable in U.S. dollars. To date, the Company
has not hedged its currency risks with third parties and generally intends to be
paid for its services in U.S. dollars or in local currencies with a pricing
adjustment that is structured to protect the Company against the risk of
fluctuations in exchange rates. However, sales to customers of the Company will
be generally denominated in local currencies, and substantial or continued
devaluations in such currencies relative to the U.S. dollar could have a
negative effect on the ability of customers of the Company to absorb the costs
of devaluation. This could result in the Company's customers seeking to
renegotiate their contracts with the Company or, failing satisfactory
renegotiation, defaulting on such contracts.

     In addition, from time to time, Latin American countries have experienced
shortages in foreign currency reserves and restrictions on the ability to
expatriate local earnings and convert local currencies into U.S. dollars. Also,
currency devaluations in one country may have adverse effects in another
country, as in late 1994 and 1995, when several Latin American countries were
adversely impacted by the devaluation of the Mexican peso. Any devaluation of
local currencies in the country where the Company operates, or restrictions on
the expatriation of earnings or capital from such countries, could have a
material adverse effect on the business, results of operations and financial
condition of the Company.

                                       18

<PAGE>   

EFFECTS OF NEW ACCOUNTING STANDARDS

     In February 1997, the FASB issued SFAS No. 128, EARNINGS PER SHARE. This
statement is effective for financial statements issued for periods ending after
December 15, 1997. SFAS 128 supersedes APB Opinion No. 15 and replaces primary
and fully diluted EPS with basic and diluted EPS. Basic EPS is computed by
dividing net income available to common shareholders by the weighted average
common shares outstanding. Diluted EPS includes all dilutive potential common
shares. The Company does not expect the new standard to have a material impact
on its financial position or results of operations for 1997.

     In February 1997, the FASB issued SFAS No. 129, DISCLOSURE OF INFORMATION
ABOUT CAPITAL STRUCTURE. This statement is effective for financial statements
issued for periods ending after December 15, 1997. SFAS 129 supersedes specific
disclosure requirements of APB Opinion No. 10 and No. 15 and FASB Statement No.
47 and consolidates them into this Statement. FAS 129 contains no change in
disclosure requirements for the Company as the Company was previously subject to
the requirements of the above superseded statements.

     In June 1997, the FASB issued SFAS No. 130, REPORTING COMPREHENSIVE INCOME,
effective for fiscal years beginning after December 15, 1997. This statement
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. This statement requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. This statement does not
require a specific format for that financial statement but requires that an
enterprise display an amount representing total comprehensive income for the
period in that financial statement.

     This statement requires that an enterprise (a) classify items of other
comprehensive income by their nature in a financial statement and (b) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position.

     Management does not expect the new standard to have significant changes in
the disclosure requirements for the Company in 1998.

                                       19

<PAGE>   

     In June 1997, the FASB issued SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION, effective for financial statements for
periods beginning after December 15, 1997. This statement establishes standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
This statement supersedes FASB Statement No. 14, FINANCIAL REPORTING FOR
SEGMENTS OF A BUSINESS ENTERPRISE, but retains the requirement to report
information about major customers. It amends FASB Statement No. 94,
CONSOLIDATION OF ALL MAJORITY-OWNED SUBSIDIARIES, to remove the special
disclosure requirements for previously unconsolidated subsidiaries. In the
initial year of application, comparative information for earlier years is to be
restated. This statement need not be applied to interim financial statements in
the initial year of its application, but comparative information for interim
periods in the initial year of application is to be reported in financial
statements for interim periods in the second year of application. Management
does not expect the new standard to have a material impact on the disclosure
requirements for the Company in 1998.

                                       20

<PAGE>  

                                   PART II

                              OTHER INFORMATION

EXHIBITS AND REPORTS ON FORM 8-K

(a) The exhibits listed below are filed as part of this Report.

<TABLE>
<CAPTION>

    EXHIBITS                                   DESCRIPTION
    --------                   ------------------------------------------------
       <S>                     <C>
       27                      Financial Data Schedule (for SEC use only).
</TABLE>

(b) Reports on Form 8-K

          (i)        During the third quarter of 1997 and preceding the filing
                     of this Form 10Q, the Company filed three reports on Form
                     8-K as follows:

                     September 24, 1997 -- the Company filed a Form 8-K for
                     purposes of disclosing an agreement to acquire Iusatel, a
                     long-distance carrier in Santiago, Chile and to include the
                     audited financial statements of Iusatel for the year ended
                     December 31, 1996 and the unaudited financial statements
                     for the six months ended June 30, 1997.

                     October 16, 1997 -- the Company filed a Form 8-K to
                     announce several significant transactions that included:

                            Commencement of Private Placement

                            New Employment Agreement between the Registrant and
                            Patricio E. Northland

                            Issuance of Shares and Grant of Stock Options to
                            Certain Officers and Directors

                            Settlement Agreement between the Registrant and
                            each of Maroon Bells Capital Partners, Inc.,
                            Theodore Swindells, Phillip Magiera and Paul A.
                            Moore

                            Donoso Settlement Agreement

                            Conversion of Debentures into Common Stock

                            Pro Forma Financial Information to give effect to
                            the Private Placement and the Iusatel Acquisition

                     November 3, 1997 -- the Company filed a Form 8-K to
                     announce the completion of the Private Placement and to
                     include updated pro forma financial statements related
                     thereto.

                                       21

<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 be the
undersigned, thereunto duly authorized.

INTERAMERICAS COMMUNICATIONS CORP.

   
/s/ Patricio E. Northland                                               7/  /98
------------------------------------------------------------        ------------
Patricio E. Northland                                               Date
President, Chairman of the Board and Chief Executive Officer

/s/ Douglas G. Geib II                                                  7/  /98
------------------------------------------------------------        ------------
Douglas G. Geib II                                                  Date
Chief Financial Officer
    

                                      22

<PAGE>

                                 EXHIBIT INDEX


      EXHIBIT                         DESCRIPTION
      -------                         -----------

         27       Financial Data Schedule