content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  (Mark One)
  
  (X)  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
       Act of 1934 for the Quarterly Period Ended:
  
                                 SEPTEMBER 30, 1998
                                         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 333-31009
  
                            COMCAST CELLULAR CORPORATION
               (Exact name of registrant as specified in its charter)
  
            DELAWARE                                           23-2687447
  --------------------------------------------------------------------------------
  (State or other jurisdiction of                            (I.R.S. Employer
   incorporation or organization)                           Identification No.)
  
                1105 North Market Street, Wilmington, Delaware 19801
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
                                     (Zip Code)
  
  Registrant's telephone number, including area code:  (302) 427-8991
  
                             --------------------------
  
  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  twelve months (or for such shorter period that the registrant was
  required to file such  reports),  and (2) has been subject to such  requirements
  for the past 90 days.
  
           Yes  X                                          No __
  
                             --------------------------
  
  As of September 30, 1998, there were 100 shares of Common Stock outstanding.
  
  The Registrant  meets the conditions set forth in General  Instructions H (1)(a)
  and (b) of Form  10-Q  and is  therefore  filing  this  form  with  the  reduced
  disclosure format.
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
                                  TABLE OF CONTENTS
  
  
  
  
                                                                          Page
                                                                         Number
  
  PART I. FINANCIAL INFORMATION
  
          Item 1. Financial Statements
  
                  Condensed Consolidated Balance
                  Sheet as of September 30, 1998 and December 31,
                  1997 (Unaudited)...........................................2
  
                  Condensed Consolidated Statement of
                  Operations and Accumulated Deficit for
                  the Nine and Three Months Ended September 30,
                  1998 and 1997 (Unaudited)..................................3
  
                  Condensed Consolidated Statement of Cash
                  Flows for the Nine Months Ended September 30,
                  1998 and 1997 (Unaudited)..................................4
  
                  Notes to Condensed Consolidated
                  Financial Statements (Unaudited).......................5 - 7
  
          Item 2. Management's Discussion and Analysis
                  of Financial Condition and Results of
                  Operations............................................8 - 11
  
  PART II. OTHER INFORMATION
  
          Item 1. Legal Proceedings.........................................12
  
          Item 6. Exhibits and Reports on Form 8-K..........................12
  
          SIGNATURE.........................................................13
  
                         -----------------------------------
  
  This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
  pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
  Reform Act of 1995.  Readers are cautioned that such forward looking  statements
  involve  risks and  uncertainties  which  could  significantly  affect  expected
  results  in the  future  from  those  expressed  in  any  such  forward  looking
  statements  made by, or on behalf,  of the Company.  Certain  factors that could
  cause actual  results to differ  materially  include,  without  limitation,  the
  effects of  legislative  and  regulatory  changes;  the  potential for increased
  competition;  technological  changes; the need to generate substantial growth in
  the subscriber base by successfully launching,  marketing and providing services
  in  identified  markets;  pricing  pressures  which could affect  demand for the
  Company's services; the Company's ability to expand its distribution; changes in
  labor, equipment and capital costs; future acquisitions,  strategic partnerships
  and  divestitures;  general  business and economic  conditions;  and other risks
  detailed  from time to time in the  Company's  periodic  reports  filed with the
  Securities and Exchange Commission.
  
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  PART I.           FINANCIAL INFORMATION
  
  ITEM 1.           FINANCIAL STATEMENTS
  <TABLE>
  <CAPTION>
                                             CONDENSED CONSOLIDATED BALANCE SHEET
                                                          (Unaudited)
                                                                                     (Dollars in thousands, except share data)
                                                                                         September 30,        December 31,
                                                                                             1998                1997
                                                                                             ----                ----
  ASSETS
  <S>                                                                                       <C>                <C>   
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $14,150            $4,692
     Accounts receivable, less allowance for doubtful accounts
       of $7,112 and $6,356.......................................................           75,664            59,252
     Inventories..................................................................           10,544            14,154
     Other current assets.........................................................            3,449             3,147
                                                                                         ----------        ----------
       Total current assets.......................................................          103,807            81,245
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           28,641            28,570
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          636,278           595,861
     Accumulated depreciation.....................................................         (243,682)         (182,632)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          392,596           413,229
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,277,196         1,275,861
     Accumulated amortization.....................................................         (347,429)         (321,450)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          929,767           954,411
                                                                                         ----------        ----------
                                                                                         $1,454,811        $1,477,455
                                                                                         ==========        ==========
  
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $80,219          $100,159
     Accrued interest.............................................................           40,469            17,388
     Current portion of long-term debt............................................              453               430
     Due to affiliates............................................................              913            47,116
                                                                                         ----------        ----------
       Total current liabilities..................................................          122,054           165,093
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,234,249         1,224,511
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................                             99,014
                                                                                         ----------        ----------
  DUE TO AFFILIATE................................................................           13,725
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          236,828           227,944
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            7,216             5,878
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          189,430           173,602
                                                                                         ----------        ----------
  
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares;
       issued, 100 shares ........................................................
     Additional capital...........................................................          542,857           488,301
     Accumulated deficit..........................................................         (891,548)         (906,888)
                                                                                         ----------        ----------
       Total stockholder's deficiency.............................................         (348,691)         (418,587)
                                                                                         ----------        ----------
                                                                                         $1,454,811        $1,477,455
                                                                                         ==========        ==========
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          2
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                    (Dollars in thousands)
                                                                          Nine Months Ended        Three Months Ended
                                                                            September 30,             September 30,
                                                                         1998         1997          1998         1997
  <S>                                                                  <C>          <C>           <C>          <C>     
  SERVICE INCOME, net...........................................       $338,049     $335,380      $116,775     $115,107
                                                                      ---------    ---------     ---------    --------- 
  
  COSTS AND EXPENSES
     Operating..................................................         28,898       28,242        10,076        9,311
     Selling, general and administrative........................        178,182      170,849        61,106       56,102
     Depreciation and amortization..............................         88,451       80,662        30,768       27,080
                                                                      ---------    ---------     ---------    --------- 
                                                                        295,531      279,753       101,950       92,493
                                                                      ---------    ---------     ---------    --------- 
  
  OPERATING INCOME..............................................         42,518       55,627        14,825       22,614
  
  OTHER (INCOME) EXPENSE
     Interest expense...........................................         83,782       89,061        27,707       27,896
     Investment income..........................................         (1,056)      (1,898)         (390)        (328)
     Equity in net (income) losses of affiliates................           (242)       4,524          (251)       1,004
     Other......................................................            992        1,173           366          733
                                                                      ---------    ---------     ---------    --------- 
                                                                         83,476       92,860        27,432       29,305
                                                                      ---------    ---------     ---------    --------- 
  LOSS BEFORE INCOME TAX BENEFIT AND
     EXTRAORDINARY ITEM.........................................        (40,958)     (37,233)      (12,607)      (6,691)
  
  INCOME TAX BENEFIT............................................        (14,991)     (13,015)       (4,607)      (2,067)
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE EXTRAORDINARY ITEM................................        (25,967)     (24,218)       (8,000)      (4,624)
  
  EXTRAORDINARY ITEM............................................                      (7,313)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS......................................................        (25,967)     (31,531)       (8,000)      (4,624)
  
  PREFERRED DIVIDENDS...........................................        (15,828)      (7,105)       (5,412)      (4,844)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER...............................       ($41,795)    ($38,636)     ($13,412)     ($9,468)
  
  ACCUMULATED DEFICIT
     Beginning of period .......................................      ($906,888)   ($856,280)    ($883,548)   ($883,187)
     Dividend of AWACS Garden State, Inc. to Parent.............         41,307
     Net loss...................................................        (25,967)     (31,531)       (8,000)      (4,624)
                                                                      ---------    ---------     ---------    --------- 
     End of period..............................................      ($891,548)   ($887,811)    ($891,548)   ($887,811)
                                                                      =========    =========     =========    ========= 
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          3
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                             (Dollars in thousands)
                                                                                         Nine Months Ended September 30,
                                                                                             1998               1997
                                                                                             ----               ----
  <S>                                                                                      <C>               <C>      
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($25,967)         ($31,531)
     Adjustments to reconcile net loss to net cash provided
       by operating activities:
       Depreciation and amortization..............................................           88,451            80,662
       Non-cash interest expense..................................................            1,469            29,337
       Equity in net (income) losses of affiliates................................             (242)            4,524
       Minority interest..........................................................            1,029             1,149
       Deferred management fees...................................................                              2,211
       Deferred income taxes and other............................................          (14,554)          (15,781)
       Extraordinary item.........................................................                              7,313
                                                                                         ----------        ---------- 
                                                                                             50,186            77,884
  
       Changes in working capital accounts........................................          (11,158)           22,819
                                                                                         ----------        ---------- 
  
             Net cash provided by operating activities............................           39,028           100,703
                                                                                         ----------        ---------- 
  
  FINANCING ACTIVITIES
     Proceeds from borrowings of long-term debt...................................           35,000         1,018,370
     Repayments of long-term debt.................................................          (25,320)       (1,155,076)
     Deferred financing costs.....................................................             (120)          (28,353)
     Proceeds from issuance of mandatorily redeemable preferred stock.............                            161,478
     Net transactions with affiliates.............................................            4,343              (932)
                                                                                         ----------        ---------- 
  
             Net cash provided by (used in) financing activities..................           13,903            (4,513)
                                                                                         ----------        ---------- 
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................          (41,702)          (87,213)
     Other........................................................................           (1,771)           (1,476)
                                                                                         ----------        ---------- 
  
             Net cash used in investing activities................................          (43,473)          (88,689)
                                                                                         ----------        ---------- 
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            9,458             7,501
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,692             4,980
                                                                                         ----------        ---------- 
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $14,150           $12,481
                                                                                         ==========        ==========
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          4
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Basis of Presentation
       The condensed  consolidated  balance sheet as of December 31, 1997 has been
       condensed from the audited  consolidated balance sheet as of that date. The
       condensed  consolidated  balance  sheet  as  of  September  30,  1998,  the
       condensed  consolidated statement of operations and accumulated deficit for
       the  nine  and  three  months  ended  September  30,  1998 and 1997 and the
       condensed  consolidated  statement  of cash flows for the nine months ended
       September  30,  1998  and 1997  have  been  prepared  by  Comcast  Cellular
       Corporation  (the  "Company")  and have not been  audited by the  Company's
       independent  auditors.  In  the  opinion  of  management,  all  adjustments
       necessary to present fairly the financial  position,  results of operations
       and cash flows as of September 30, 1998 and for all periods  presented have
       been made.
  
       Certain information and note disclosures normally included in the Company's
       annual financial  statements prepared in accordance with generally accepted
       accounting  principles  have been  condensed  or omitted.  These  condensed
       consolidated  financial  statements  should be read in conjunction with the
       financial  statements and notes thereto included in the Company's  December
       31, 1997 Annual Report on Form 10-K filed with the  Securities and Exchange
       Commission.  The results of operations for the periods ended  September 30,
       1998 are not necessarily indicative of operating results for the full year.
  
  2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
       New Accounting Pronouncement
       In June 1998, the Financial  Accounting Standards Board issued Statement of
       Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
       Instruments  and Hedging  Activities."  This statement,  which  establishes
       accounting and reporting  standards for derivatives and hedging activities,
       is effective  for fiscal  years  beginning  after June 15,  1999.  Upon the
       adoption of SFAS No. 133, all  derivatives are required to be recognized in
       the  statement of financial  position as either assets or  liabilities  and
       measured at fair value. The Company is currently  evaluating the impact the
       adoption of SFAS No. 133 will have on its financial position and results of
       operations.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1998.
  
  3.   LONG-TERM DEBT
  
       As of September 30, 1998, Comcast Cellular Communications, Inc. ("CCCI"), a
       wholly-owned  subsidiary of the Company,  had  outstanding  $235.0  million
       under its $400.0 million  revolving  credit  facility,  which consists of a
       $300.0  million five and one quarter year  revolving  credit  facility (the
       "Tranche A Credit  Facility") and a $100.0 million 364-day revolving credit
       facility (the "Tranche B Credit Facility").  In October 1998, CCCI extended
       the Tranche B Credit  Facility for an  additional  364 days.  The Tranche B
       Credit  Facility  will  expire in October  1999.  In  November  1998,  CCCI
       borrowed an additional  $40.0 million under its revolving  credit facility,
       the  proceeds of which were used,  together  with  available  cash,  to pay
       semi-annual  interest related to the Company's 9 1/2% Senior Notes due 2007
       (the "Senior Notes").
  
       As of September  30, 1998 and December 31, 1997,  the  Company's  effective
       weighted  average interest rate on its long-term debt outstanding was 8.82%
       and 8.88%, respectively.
  
       In May 1997, the Company  canceled  $575.0 million of its revolving  credit
       loan. In connection  with the reduction of the revolving  credit loan,  the
       Company  expensed  unamortized  debt  acquisition  costs of $11.3  million,
       resulting in an extraordinary  loss, net of tax, of $7.3 million during the
       nine months ended September 30, 1997.
  
                                          5
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
  4.   INVESTMENT IN AND DUE TO AFFILIATE
  
       In 1992,  AWACS Garden State,  Inc.  ("AWACS  Garden  State"),  an indirect
       subsidiary of the Company, issued a note (the "AWACS Note") with an initial
       principal amount of $51.0 million to purchase, from a subsidiary of Comcast
       Corporation  ("Comcast"),  the Company's parent, a 40% limited  partnership
       interest in Garden State Cablevision L.P. ("Garden State Cablevision"). The
       AWACS Note bears  interest at a rate of 11% per annum.  Interest is payable
       on a  quarterly  basis to the  extent of  available  cash,  with any unpaid
       interest  added to principal.  Interest  expense on the AWACS Note was $1.4
       million and $3.8 million for the nine months ended  September  30, 1998 and
       1997,  respectively,  and $1.3 million for the three months ended September
       30,  1997.  The  balance of the AWACS  Note,  classified  as current due to
       affiliates,  was $50.4  million as of December 31, 1997. As of December 31,
       1997, the Company's  investment in Garden State Cablevision,  classified as
       investment in affiliate, was ($99.0) million.
  
       Effective  April 1, 1998,  the Company  transferred,  via a  dividend,  its
       indirect  interest in AWACS Garden State to a wholly  owned  subsidiary  of
       Comcast at its net book value of $41.3 million.
  
       As of September 30, 1998,  long-term  due to affiliate  consists of amounts
       due to AWACS Garden State in  connection  with tax savings  received by the
       Company  during  prior year periods in which AWACS Garden State joined with
       an indirect  subsidiary of the Company in filing  consolidated  federal tax
       returns.
  
  5.   RELATED PARTY TRANSACTIONS
  
       Comcast and Comcast Cellular Communications,  Inc. ("CCCI"), a wholly owned
       subsidiary of the Company, were parties to a management agreement (the "Old
       Management  Agreement")  pursuant to which Comcast managed the business and
       operations  of  CCCI.  In  May  1997,  the  Old  Management  Agreement  was
       terminated  and  replaced  with  a  new  management   agreement  (the  "New
       Management  Agreement") which provides for an annual management fee of 1.5%
       of revenues.  The New Management  Agreement eliminated the prior management
       fee which was limited to $5.0 million, subject to annual increases based on
       the consumer price index. The New Management Agreement has a ten year term.
       Management  fees of $5.0  million,  $4.7  million,  $1.7  million  and $1.7
       million were charged to selling, general and administrative expenses during
       the nine and three months ended  September 30, 1998 and 1997,  respectively
       (on a pro  forma  basis,  giving  effect to the New  Management  Agreement,
       management  fees for the nine and three  months  ended  September  30, 1997
       would have been $5.0 million and $1.7 million, respectively).
  
       During  1997,  the  Company  authorized  10,000  shares  of $.01 par  value
       preferred  stock and designated  5,200 of such shares as Series A Preferred
       Stock. In May 1997, the Company issued  1,614.775 shares of its mandatorily
       redeemable  Series A Preferred Stock to Comcast  Financial  Corporation,  a
       wholly owned  subsidiary of Comcast.  Each holder of the Series A Preferred
       Stock is entitled to receive  cumulative  cash dividends at the annual rate
       of $12,000 per share,  payable  semi-annually  on May 1 and November 1 each
       year,  in arrears.  At the option of the  Company,  by  declaration  of the
       Company's Board of Directors, dividends may be paid in additional shares of
       Series A Preferred Stock (the "Additional  Shares") instead of cash through
       May 1, 2007. To the extent  dividends are paid in Additional  Shares,  such
       Additional  Shares shall be valued at $100,000 per share with a liquidation
       value of $100,000 per share. The Series A Preferred Stock is redeemable, at
       the  option  of the  Company,  at any  time  prior  to  May 2,  2007,  at a
       redemption price of $100,000 per share,  plus accrued and unpaid dividends,
       and is  mandatorily  redeemable on May 2, 2007 after final  maturity of the
       Senior Notes,  subject to certain conditions.  The Series A Preferred Stock
       is generally  non-voting.  During the nine and three months ended September
       30, 1998 and 1997, the Company  accrued $15.8 million,  $7.1 million,  $5.4
       million  and $4.8  million,  respectively,  of  dividends  on the  Series A
       Preferred Stock, with a corresponding reduction in additional capital. Such
       amounts  have  been  excluded  from the  Company's  condensed  consolidated
       statement of cash flows due to their noncash nature.
  
                                          6
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
  6.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The  Company  made cash  payments  for  interest  of $59.2  million,  $24.7
       million,  $4.0  million and $2.5  million  during the nine and three months
       ended September 30, 1998 and 1997, respectively.
  
       The Company  made cash  payments  for income taxes of $0.4 million and $0.2
       million during the nine and three months ended September 30, 1997.
  
  7.   CONTINGENCIES
  
       The Company is subject to legal  proceedings  and claims which arise in the
       ordinary course of its business.  In the opinion of management,  the amount
       of ultimate  liability  with respect to these  actions will not  materially
       affect the  financial  position,  results of operations or liquidity of the
       Company.
  
                                          7
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  
  ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS
  
  Information  for this  item is  omitted  pursuant  to  Securities  and  Exchange
  Commission General Instruction to Form 10-Q, except as noted below.
  
  Results of Operations
  
  Summarized  consolidated  financial information for Comcast Cellular Corporation
  (the  "Company") for the nine and three months ended September 30, 1998 and 1997
  is as follows (dollars in millions, "NM" denotes percentage is not meaningful):
  <TABLE>
  <CAPTION>
                                                          Nine Months Ended
                                                            September 30,                   Increase / (Decrease)
                                                       1998              1997               $                 %
  <S>                                                   <C>              <C>               <C>               <C> 
  Service income, net..............................     $338.0           $335.4            $2.6              0.8%
  Operating, selling, general and administrative
       expenses....................................      207.0            199.1             7.9              4.0
                                                        ------           ------           
  Operating income before depreciation and
       amortization (1)............................      131.0            136.3            (5.3)            (3.9)
  Depreciation and amortization....................       88.5             80.7             7.8              9.7
                                                        ------           ------           
  Operating income.................................       42.5             55.6           (13.1)           (23.6)
                                                        ------           ------           
  Interest expense.................................       83.8             89.1            (5.3)            (5.9)
  Investment income................................       (1.1)            (1.9)           (0.8)           (42.1)
  Equity in net (income) losses of affiliates......       (0.2)             4.5            (4.7)              NM
  Other............................................        1.0              1.1            (0.1)            (9.1)
  Income tax benefit...............................      (15.0)           (13.0)            2.0             15.4
  Extraordinary item...............................                        (7.3)           (7.3)              NM
                                                        ------           ------           
       Net loss....................................     ($26.0)          ($31.5)          ($5.5)           (17.5%)
                                                        ======           ======     
  
  
                                                         Three Months Ended
                                                            September 30,                   Increase / (Decrease)
                                                       1998              1997               $                 %
  
  Service income, net..............................     $116.7           $115.1            $1.6              1.4%
  Operating, selling, general and administrative
       expenses....................................       71.1             65.4             5.7              8.7
                                                        ------           ------           
  Operating income before depreciation and
       amortization (1)............................       45.6             49.7            (4.1)            (8.2)
  Depreciation and amortization....................       30.8             27.1             3.7             13.7
                                                        ------           ------           
  Operating income.................................       14.8             22.6            (7.8)           (34.5)
                                                        ------           ------           
  Interest expense.................................       27.7             27.9            (0.2)            (0.7)
  Investment income................................       (0.5)            (0.3)            0.2             66.7
  Equity in net (income) losses of affiliates......       (0.2)             1.0            (1.2)              NM
  Other............................................        0.4              0.7            (0.3)           (42.9)
  Income tax benefit...............................       (4.6)            (2.1)            2.5               NM
                                                        ------           ------           
       Net loss....................................      ($8.0)           ($4.6)           $3.4             73.9%
                                                        ======           ======     
  ----------
  <FN>
  (1)  Operating income before  depreciation and amortization is commonly referred
       to in the cellular  industry as "operating cash flow."  Operating cash flow
       is a measure  of a  company's  ability  to  generate  cash to  service  its
       obligations, including debt service obligations, and to finance capital and
       other  expenditures.  In part due to the  capital  intensive 
  
                                          8
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
       nature of the cellular  industry  and the  resulting  significant  level of
       non-cash  depreciation  and  amortization  expense,  operating cash flow is
       frequently  used as one of the bases for  evaluating  cellular  businesses,
       although the Company's measure of operating cash flow may not be comparable
       to similarly titled measures of other  companies.  Operating cash flow does
       not  purport to  represent  net income or net cash  provided  by  operating
       activities,  as those terms are defined under generally accepted accounting
       principles,  and  should  not  be  considered  as an  alternative  to  such
       measurements as an indicator of the Company's performance.
  </FN>
  </TABLE>
  
  Service income increased by $2.6 million and $1.6 million for the nine and three
  month periods from 1997 to 1998, as  subscriber  growth was offset,  in part, by
  the effects of increased  use of  promotional  and free minute plans  offered to
  subscribers.  These plans  generally  have higher  access fees and  increase the
  minutes of use per subscriber while lowering the average rate per minute of use.
  
  The respective  $7.9 million and $5.7 million  increases in operating,  selling,
  general and  administrative  expenses for the nine and three month  periods from
  1997 to 1998  are  primarily  attributable  to  increases  in  commission  costs
  associated with more gross sales in 1998.
  
  Comcast  Corporation  ("Comcast"),  the Company's  parent,  and Comcast Cellular
  Communications,  Inc. ("CCCI"),  a wholly owned subsidiary of the Company,  were
  parties to a management  agreement (the "Old Management  Agreement") pursuant to
  which Comcast  managed the business and operations of CCCI. In May 1997, the Old
  Management Agreement was terminated and replaced with a new management agreement
  (the "New Management  Agreement") which provides for an annual management fee of
  1.5% of revenues.  The New Management  Agreement eliminated the prior management
  fee which was limited to $5.0 million,  subject to annual increases based on the
  consumer  price  index.  The  New  Management  Agreement  has a ten  year  term.
  Management  fees of $5.0 million,  $4.7  million,  $1.7 million and $1.7 million
  were charged to selling, general and administrative expenses during the nine and
  three months ended  September  30, 1998 and 1997,  respectively  (on a pro forma
  basis,  giving effect to the New Management  Agreement,  management fees for the
  nine and three months ended  September 30, 1997 would have been $5.0 million and
  $1.7 million, respectively).
  
  The  respective  $7.8 million and $3.7 million  increases  in  depreciation  and
  amortization  expense for each of the nine and three month  periods from 1997 to
  1998 are  primarily  attributable  to the  effects of capital  expenditures  and
  losses on asset disposals offset, in part, by a decrease in amortization expense
  as a result of certain intangible assets becoming fully amortized in 1997.
  
  The respective $5.3 million and $0.2 million  decreases in interest  expense for
  the nine and three  month  periods  from 1997 to 1998 are  primarily  due to the
  effects of a decrease in the Company's  effective weighted average interest rate
  and the transfer of AWACS Garden State (see below).
  
  In 1992, AWACS Garden State, Inc. ("AWACS Garden State"), an indirect subsidiary
  of the  Company,  issued a note (the  "AWACS  Note")  with an initial  principal
  amount of $51.0 million to purchase, from a subsidiary of Comcast, a 40% limited
  partnership in Garden State Cablevision L.P. ("Garden State  Cablevision").  The
  AWACS Note bears  interest at a rate of 11% per annum.  Interest is payable on a
  quarterly  basis to the extent of available cash, with any unpaid interest added
  to  principal.  Interest  expense  on the AWACS Note was $1.4  million  and $3.8
  million for the nine months ended September 30, 1998 and 1997, respectively, and
  $1.3 million for the three months ended September 30, 1997.
  
  Under  the  terms  of  the   partnership   agreement,   49.5%  of  Garden  State
  Cablevision's net (income) losses were allocated to the Company. During the nine
  months ended September 30, 1998 and 1997, the Company  recognized  equity in net
  (income) loss of Garden State  Cablevision  of ($0.2)  million and $4.1 million,
  respectively.  During the three months  ended  September  30, 1997,  the Company
  recognized equity in net loss of Garden State Cablevision of $1.1 million.
  
  Effective April 1, 1998, the Company transferred,  via a dividend,  its indirect
  interest in AWACS Garden State to a wholly  owned  subsidiary  of Comcast at its
  net book value of $41.3 million.
  
                                          9
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  The respective $2.0 million and $2.5 million increases in income tax benefit for
  the nine and three month periods from 1997 to 1998 are primarily attributable to
  fluctuations  in the Company's loss before income tax benefit and  extraordinary
  item.
  
  In May 1997, the Company  canceled $575.0 million of its revolving  credit loan.
  In  connection  with the  reduction of the  revolving  credit loan,  the Company
  expensed  unamortized debt acquisition  costs of $11.3 million,  resulting in an
  extraordinary  loss,  net of tax, of $7.3  million  during the nine months ended
  September 30, 1997.
  
  For the nine and three months ended  September 30, 1998 and 1997,  the Company's
  earnings before  extraordinary item, income tax benefit,  equity in net (income)
  losses of affiliates  and fixed charges  (interest  expense) was $42.6  million,
  $56.4 million, $14.9 million and $22.2 million, respectively. Such earnings were
  not  adequate  to cover the  Company's  fixed  charges of $83.8  million,  $89.1
  million, $27.7 million and $27.9 million for these periods, respectively.  Fixed
  charges include non-cash interest expense of $1.5 million,  $29.3 million,  $0.1
  million and $1.3 million for the nine and three months ended  September 30, 1998
  and 1997, respectively.  The inadequacy of the Company's earnings to cover fixed
  charges is primarily due to substantial  non-cash  charges for  depreciation and
  amortization  expense of $88.5 million,  $80.7 million,  $30.8 million and $27.1
  million  during the nine and three  months  ended  September  30, 1998 and 1997,
  respectively.
  
  The  Company  anticipates  that,  for  the  foreseeable  future,   depreciation,
  amortization  and interest expense will continue to be significant and will have
  a significant  adverse effect on the Company's  ability to realize net earnings.
  The  Company  believes  that  its  losses  will  not  significantly  affect  the
  performance of its normal business  activities  because of its existing cash and
  cash equivalents,  its ability to generate operating income before  depreciation
  and amortization and its ability to obtain external financing.
  
  The  Company  believes  that  its  operations  are not  materially  affected  by
  inflation.
  
  Year 2000 Issue
  
  The Year 2000 Issue is the result of computer  programs  being written using two
  digits rather than four to define the applicable year.  Certain of the Company's
  computer programs that have  date-sensitive  software may recognize a date using
  "00" as the year 1900 rather than the year 2000 (the "Year 2000 Issue"). If this
  situation   occurs,   the  potential  exists  for  computer  system  failure  or
  miscalculations   by  computer   programs,   which  could  cause  disruption  of
  operations.
  
  The Company is in the process of  evaluating  and  addressing  the impact of the
  Year 2000 Issue on its operations to ensure that its information  technology and
  business  systems  recognize  calendar Year 2000.  The Company is utilizing both
  internal and external  resources in  implementing  its Year 2000 program,  which
  consists of the following phases:
  
  Assessment Phase
  Structured evaluation,  including a detailed inventory outlining the impact that
  the Year 2000 Issue may have on current operations.
  
  Detailed Planning Phase
  Establishment of priorities, development of specific action steps and allocation
  of resources to address the issues identified in the Assessment Phase.
  
  Conversion Phase
  Implementation of the necessary system modifications as outlined in the Detailed
  Planning Phase.
  
  Testing Phase
  Verification that the modifications  implemented in the Conversion Phase will be
  successful  in resolving  the Year 2000 Issue so that all  inventory  items will
  function properly, both individually and on an integrated basis.
  
  Implementation Phase
  Final roll-out of fully tested components into an operational unit.
  
                                         10
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  Based on an inventory  conducted in 1997,  the Company has  identified  computer
  systems that will require modification or replacement so that they will properly
  utilize dates beyond December 31, 1999. Many of the Company's  critical  systems
  are new and are already Year 2000 compliant as a result of the Company's  recent
  implementation of a fully digital cellular  communications network. In addition,
  the Company has initiated  communications  with all of its significant  software
  suppliers and service  bureaus to determine their plans for remediating the Year
  2000 Issue in their software which the Company uses or relies upon.
  
  As of September  30, 1998,  the Company is in the  Conversion  Phase of its Year
  2000  remediation  program and has entered  the  Testing  Phase with  respect to
  certain of its key systems. Through September 30, 1998, the Company has incurred
  $0.7 million in connection with its Year 2000 remediation  program.  The Company
  estimates that it will incur between  approximately  $2 million to $3 million of
  additional  expense  through  December  1999 in  connection  with its Year  2000
  remediation  program.  The Company's  estimate to complete the remediation  plan
  includes the estimated time  associated  with mitigating the Year 2000 Issue for
  third party  software.  However,  there can be no guarantee  that the systems of
  other companies on which the Company relies will be converted on a timely basis,
  or that a failure  to  convert  by  another  company  would not have a  material
  adverse effect on the Company.
  
  Management of the Company will continue to  periodically  report the progress of
  its Year 2000  remediation  program to the Audit Committee of Comcast's Board of
  Directors.  The Company plans to complete the Year 2000  mitigation by the third
  quarter of 1999.  Management  of the Company has  investigated  and may consider
  potential   contingency  plans  in  the  event  that  the  Company's  Year  2000
  remediation program is not completed by that date.
  
  The costs of the project and the date on which the Company plans to complete the
  Year  2000  modifications  and  replacements  are  based  on  management's  best
  estimates,  which were derived using  assumptions of future events including the
  continued   availability  of  resources  and  the  reliability  of  third  party
  modification plans. However, there can be no guarantee that these estimates will
  be  achieved  and actual  results  could  differ  materially  from those  plans.
  Specific factors that may cause such material  differences  include, but are not
  limited to, the availability  and cost of personnel with  appropriate  necessary
  skills and the  ability to locate and  correct all  relevant  computer  code and
  similar uncertainties.
  
  The  Company  believes  that  with   modifications  to  existing   software  and
  conversions to new software,  the Year 2000 Issue can be mitigated.  However, if
  such  modifications and conversions are not made, or are not completed within an
  adequate time frame, the Year 2000 Issue could have a material adverse impact on
  the operations of the Company.
  
                                         11
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  PART II.     OTHER INFORMATION
  
  ITEM 1.      LEGAL PROCEEDINGS
  
       The Company is subject to legal  proceedings  and claims which arise in the
       ordinary course of its business.  In the opinion of management,  the amount
       of ultimate  liability  with respect to these  actions will not  materially
       affect the  financial  position,  results of operations or liquidity of the
       Company.
  
  ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K
  
       (a) Exhibits required to be filed by Item 601 of Regulation S-K:
  
           27.1     Financial Data Schedule.
  
       (b) Reports on Form 8-K - none.
  
  
  
  
  
  
  
                                         12
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
                                      SIGNATURE
  
           Pursuant to the  requirements  of the  Securities  and  Exchange Act of
  1934,  the  Registrant has duly caused this report to be signed on its behalf by
  the undersigned thereunto duly authorized.
  
  
  
                                            COMCAST CELLULAR CORPORATION
                                            ----------------------------
  
  
  
                                            /S/ LAWRENCE S. SMITH
                                            ----------------------------
                                            Lawrence S. Smith
                                            Principal Accounting Officer
  
  
  
                                            /S/ JOSEPH J. EUTENEUER
                                            ----------------------------
                                            Joseph J. Euteneuer
                                            Vice President (Authorized Officer)
  
  
  
  Date: November 16, 1998
  
  
                                         13
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 52320}]
metadata_filer: {"company-data": {"conformed-name": "COMCAST CELLULAR CORP", "cik": "0001041854", "assigned-sic": "4812", "irs-number": "232687447", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "333-31009", "film-number": "98750957"}, "business-address": {"street1": "1105 N MARKET ST", "street2": "SUITE 1219", "city": "WILMINGTON", "state": "DE", "zip": "19801", "phone": "3024278991"}, "mail-address": {"street1": "1105 MARKET ST", "street2": "SUITE 1219", "city": "WILMINGTON", "state": "DE", "zip": "19801"}, "former-company": {"former-conformed-name": "COMCAST CELLULAR HOLDINGS INC", "date-changed": "19970702"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  (Mark One)
  
  (X)  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
       Act of 1934 for the Quarterly Period Ended:
  
                                 SEPTEMBER 30, 1998
                                         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 333-31009
  
                            COMCAST CELLULAR CORPORATION
               (Exact name of registrant as specified in its charter)
  
            DELAWARE                                           23-2687447
  --------------------------------------------------------------------------------
  (State or other jurisdiction of                            (I.R.S. Employer
   incorporation or organization)                           Identification No.)
  
                1105 North Market Street, Wilmington, Delaware 19801
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
                                     (Zip Code)
  
  Registrant's telephone number, including area code:  (302) 427-8991
  
                             --------------------------
  
  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  twelve months (or for such shorter period that the registrant was
  required to file such  reports),  and (2) has been subject to such  requirements
  for the past 90 days.
  
           Yes  X                                          No __
  
                             --------------------------
  
  As of September 30, 1998, there were 100 shares of Common Stock outstanding.
  
  The Registrant  meets the conditions set forth in General  Instructions H (1)(a)
  and (b) of Form  10-Q  and is  therefore  filing  this  form  with  the  reduced
  disclosure format.
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
                                  TABLE OF CONTENTS
  
                                                                          Page
                                                                         Number
  
  PART I. FINANCIAL INFORMATION
  
          Item 1. Financial Statements
  
                  Condensed Consolidated Balance
                  Sheet as of September 30, 1998 and December 31,
                  1997 (Unaudited)...........................................2
  
                  Condensed Consolidated Statement of
                  Operations and Accumulated Deficit for
                  the Nine and Three Months Ended September 30,
                  1998 and 1997 (Unaudited)..................................3
  
                  Condensed Consolidated Statement of Cash
                  Flows for the Nine Months Ended September 30,
                  1998 and 1997 (Unaudited)..................................4
  
                  Notes to Condensed Consolidated
                  Financial Statements (Unaudited).......................5 - 7
  
          Item 2. Management's Discussion and Analysis
                  of Financial Condition and Results of
                  Operations............................................8 - 11
  
  PART II. OTHER INFORMATION
  
          Item 1. Legal Proceedings.........................................12
  
          Item 6. Exhibits and Reports on Form 8-K..........................12
  
          SIGNATURE.........................................................13
  
                         -----------------------------------
  
  This Quarterly  Report on Form 10-Q contains  forward  looking  statements  made
  pursuant to the "safe harbor"  provisions of the Private  Securities  Litigation
  Reform Act of 1995.  Readers are cautioned that such forward looking  statements
  involve  risks and  uncertainties  which  could  significantly  affect  expected
  results  in the  future  from  those  expressed  in  any  such  forward  looking
  statements  made by, or on behalf,  of the Company.  Certain  factors that could
  cause actual  results to differ  materially  include,  without  limitation,  the
  effects of  legislative  and  regulatory  changes;  the  potential for increased
  competition;  technological  changes; the need to generate substantial growth in
  the subscriber base by successfully launching,  marketing and providing services
  in  identified  markets;  pricing  pressures  which could affect  demand for the
  Company's services; the Company's ability to expand its distribution; changes in
  labor, equipment and capital costs; future acquisitions,  strategic partnerships
  and  divestitures;  general  business and economic  conditions;  and other risks
  detailed  from time to time in the  Company's  periodic  reports  filed with the
  Securities and Exchange Commission.
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  PART I.           FINANCIAL INFORMATION
  
  ITEM 1.           FINANCIAL STATEMENTS
  CONDENSED CONSOLIDATED BALANCE SHEET
                                                          (Unaudited)
                                                                                     (Dollars in thousands, except share data)
                                                                                         September 30,        December 31,
                                                                                             1998                1997
                                                                                             ----                ----
  ASSETS
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $14,150            $4,692
     Accounts receivable, less allowance for doubtful accounts
       of $7,112 and $6,356.......................................................           75,664            59,252
     Inventories..................................................................           10,544            14,154
     Other current assets.........................................................            3,449             3,147
                                                                                         ----------        ----------
       Total current assets.......................................................          103,807            81,245
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           28,641            28,570
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          636,278           595,861
     Accumulated depreciation.....................................................         (243,682)         (182,632)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          392,596           413,229
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,277,196         1,275,861
     Accumulated amortization.....................................................         (347,429)         (321,450)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          929,767           954,411
                                                                                         ----------        ----------
                                                                                         $1,454,811        $1,477,455
                                                                                         ==========        ==========
  
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $80,219          $100,159
     Accrued interest.............................................................           40,469            17,388
     Current portion of long-term debt............................................              453               430
     Due to affiliates............................................................              913            47,116
                                                                                         ----------        ----------
       Total current liabilities..................................................          122,054           165,093
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,234,249         1,224,511
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................                             99,014
                                                                                         ----------        ----------
  DUE TO AFFILIATE................................................................           13,725
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          236,828           227,944
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            7,216             5,878
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          189,430           173,602
                                                                                         ----------        ----------
  
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares;
       issued, 100 shares ........................................................
     Additional capital...........................................................          542,857           488,301
     Accumulated deficit..........................................................         (891,548)         (906,888)
                                                                                         ----------        ----------
       Total stockholder's deficiency.............................................         (348,691)         (418,587)
                                                                                         ----------        ----------
                                                                                         $1,454,811        $1,477,455
                                                                                         ==========        ==========
  See notes to condensed consolidated financial statements.
  
                                          2
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  (Dollars in thousands)
                                                                          Nine Months Ended        Three Months Ended
                                                                            September 30,             September 30,
                                                                         1998         1997          1998         1997
  SERVICE INCOME, net...........................................       $338,049     $335,380      $116,775     $115,107
                                                                      ---------    ---------     ---------    --------- 
  
  COSTS AND EXPENSES
     Operating..................................................         28,898       28,242        10,076        9,311
     Selling, general and administrative........................        178,182      170,849        61,106       56,102
     Depreciation and amortization..............................         88,451       80,662        30,768       27,080
                                                                      ---------    ---------     ---------    --------- 
                                                                        295,531      279,753       101,950       92,493
                                                                      ---------    ---------     ---------    --------- 
  
  OPERATING INCOME..............................................         42,518       55,627        14,825       22,614
  
  OTHER (INCOME) EXPENSE
     Interest expense...........................................         83,782       89,061        27,707       27,896
     Investment income..........................................         (1,056)      (1,898)         (390)        (328)
     Equity in net (income) losses of affiliates................           (242)       4,524          (251)       1,004
     Other......................................................            992        1,173           366          733
                                                                      ---------    ---------     ---------    --------- 
                                                                         83,476       92,860        27,432       29,305
                                                                      ---------    ---------     ---------    --------- 
  LOSS BEFORE INCOME TAX BENEFIT AND
     EXTRAORDINARY ITEM.........................................        (40,958)     (37,233)      (12,607)      (6,691)
  
  INCOME TAX BENEFIT............................................        (14,991)     (13,015)       (4,607)      (2,067)
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE EXTRAORDINARY ITEM................................        (25,967)     (24,218)       (8,000)      (4,624)
  
  EXTRAORDINARY ITEM............................................                      (7,313)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS......................................................        (25,967)     (31,531)       (8,000)      (4,624)
  
  PREFERRED DIVIDENDS...........................................        (15,828)      (7,105)       (5,412)      (4,844)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER...............................       ($41,795)    ($38,636)     ($13,412)     ($9,468)
  
  ACCUMULATED DEFICIT
     Beginning of period .......................................      ($906,888)   ($856,280)    ($883,548)   ($883,187)
     Dividend of AWACS Garden State, Inc. to Parent.............         41,307
     Net loss...................................................        (25,967)     (31,531)       (8,000)      (4,624)
                                                                      ---------    ---------     ---------    --------- 
     End of period..............................................      ($891,548)   ($887,811)    ($891,548)   ($887,811)
                                                                      =========    =========     =========    =========
  See notes to condensed consolidated financial statements.
  
                                          3
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  (Dollars in thousands)
                                                                                         Nine Months Ended September 30,
                                                                                             1998               1997
                                                                                             ----               ----
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($25,967)         ($31,531)
     Adjustments to reconcile net loss to net cash provided
       by operating activities:
       Depreciation and amortization..............................................           88,451            80,662
       Non-cash interest expense..................................................            1,469            29,337
       Equity in net (income) losses of affiliates................................             (242)            4,524
       Minority interest..........................................................            1,029             1,149
       Deferred management fees...................................................                              2,211
       Deferred income taxes and other............................................          (14,554)          (15,781)
       Extraordinary item.........................................................                              7,313
                                                                                         ----------        ---------- 
                                                                                             50,186            77,884
  
       Changes in working capital accounts........................................          (11,158)           22,819
                                                                                         ----------        ---------- 
  
             Net cash provided by operating activities............................           39,028           100,703
                                                                                         ----------        ---------- 
  
  FINANCING ACTIVITIES
     Proceeds from borrowings of long-term debt...................................           35,000         1,018,370
     Repayments of long-term debt.................................................          (25,320)       (1,155,076)
     Deferred financing costs.....................................................             (120)          (28,353)
     Proceeds from issuance of mandatorily redeemable preferred stock.............                            161,478
     Net transactions with affiliates.............................................            4,343              (932)
                                                                                         ----------        ---------- 
  
             Net cash provided by (used in) financing activities..................           13,903            (4,513)
                                                                                         ----------        ---------- 
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................          (41,702)          (87,213)
     Other........................................................................           (1,771)           (1,476)
                                                                                         ----------        ---------- 
  
             Net cash used in investing activities................................          (43,473)          (88,689)
                                                                                         ----------        ---------- 
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            9,458             7,501
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,692             4,980
                                                                                         ----------        ---------- 
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $14,150           $12,481
                                                                                         ==========        ==========
  See notes to condensed consolidated financial statements.
  
                                          4
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
       Basis of Presentation
       The condensed  consolidated  balance sheet as of December 31, 1997 has been
       condensed from the audited  consolidated balance sheet as of that date. The
       condensed  consolidated  balance  sheet  as  of  September  30,  1998,  the
       condensed  consolidated statement of operations and accumulated deficit for
       the  nine  and  three  months  ended  September  30,  1998 and 1997 and the
       condensed  consolidated  statement  of cash flows for the nine months ended
       September  30,  1998  and 1997  have  been  prepared  by  Comcast  Cellular
       Corporation  (the  "Company")  and have not been  audited by the  Company's
       independent  auditors.  In  the  opinion  of  management,  all  adjustments
       necessary to present fairly the financial  position,  results of operations
       and cash flows as of September 30, 1998 and for all periods  presented have
       been made.
  
       Certain information and note disclosures normally included in the Company's
       annual financial  statements prepared in accordance with generally accepted
       accounting  principles  have been  condensed  or omitted.  These  condensed
       consolidated  financial  statements  should be read in conjunction with the
       financial  statements and notes thereto included in the Company's  December
       31, 1997 Annual Report on Form 10-K filed with the  Securities and Exchange
       Commission.  The results of operations for the periods ended  September 30,
       1998 are not necessarily indicative of operating results for the full year.
  
  2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
       New Accounting Pronouncement
       In June 1998, the Financial  Accounting Standards Board issued Statement of
       Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
       Instruments  and Hedging  Activities."  This statement,  which  establishes
       accounting and reporting  standards for derivatives and hedging activities,
       is effective  for fiscal  years  beginning  after June 15,  1999.  Upon the
       adoption of SFAS No. 133, all  derivatives are required to be recognized in
       the  statement of financial  position as either assets or  liabilities  and
       measured at fair value. The Company is currently  evaluating the impact the
       adoption of SFAS No. 133 will have on its financial position and results of
       operations.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1998.
  
  3.   LONG-TERM DEBT
  
       As of September 30, 1998, Comcast Cellular Communications, Inc. ("CCCI"), a
       wholly-owned  subsidiary of the Company,  had  outstanding  $235.0  million
       under its $400.0 million  revolving  credit  facility,  which consists of a
       $300.0  million five and one quarter year  revolving  credit  facility (the
       "Tranche A Credit  Facility") and a $100.0 million 364-day revolving credit
       facility (the "Tranche B Credit Facility").  In October 1998, CCCI extended
       the Tranche B Credit  Facility for an  additional  364 days.  The Tranche B
       Credit  Facility  will  expire in October  1999.  In  November  1998,  CCCI
       borrowed an additional  $40.0 million under its revolving  credit facility,
       the  proceeds of which were used,  together  with  available  cash,  to pay
       semi-annual  interest related to the Company's 9 1/2% Senior Notes due 2007
       (the "Senior Notes").
  
       As of September  30, 1998 and December 31, 1997,  the  Company's  effective
       weighted  average interest rate on its long-term debt outstanding was 8.82%
       and 8.88%, respectively.
  
       In May 1997, the Company  canceled  $575.0 million of its revolving  credit
       loan. In connection  with the reduction of the revolving  credit loan,  the
       Company  expensed  unamortized  debt  acquisition  costs of $11.3  million,
       resulting in an extraordinary  loss, net of tax, of $7.3 million during the
       nine months ended September 30, 1997.
  
                                          5
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                     (Unaudited)
  
  4.   INVESTMENT IN AND DUE TO AFFILIATE
  
       In 1992,  AWACS Garden State,  Inc.  ("AWACS  Garden  State"),  an indirect
       subsidiary of the Company, issued a note (the "AWACS Note") with an initial
       principal amount of $51.0 million to purchase, from a subsidiary of Comcast
       Corporation  ("Comcast"),  the Company's parent, a 40% limited  partnership
       interest in Garden State Cablevision L.P. ("Garden State Cablevision"). The
       AWACS Note bears  interest at a rate of 11% per annum.  Interest is payable
       on a  quarterly  basis to the  extent of  available  cash,  with any unpaid
       interest  added to principal.  Interest  expense on the AWACS Note was $1.4
       million and $3.8 million for the nine months ended  September  30, 1998 and
       1997,  respectively,  and $1.3 million for the three months ended September
       30,  1997.  The  balance of the AWACS  Note,  classified  as current due to
       affiliates,  was $50.4  million as of December 31, 1997. As of December 31,
       1997, the Company's  investment in Garden State Cablevision,  classified as
       investment in affiliate, was ($99.0) million.
  
       Effective  April 1, 1998,  the Company  transferred,  via a  dividend,  its
       indirect  interest in AWACS Garden State to a wholly  owned  subsidiary  of
       Comcast at its net book value of $41.3 million.
  
       As of September 30, 1998,  long-term  due to affiliate  consists of amounts
       due to AWACS Garden State in  connection  with tax savings  received by the
       Company  during  prior year periods in which AWACS Garden State joined with
       an indirect  subsidiary of the Company in filing  consolidated  federal tax
       returns.
  
  5.   RELATED PARTY TRANSACTIONS
  
       Comcast and Comcast Cellular Communications,  Inc. ("CCCI"), a wholly owned
       subsidiary of the Company, were parties to a management agreement (the "Old
       Management  Agreement")  pursuant to which Comcast managed the business and
       operations  of  CCCI.  In  May  1997,  the  Old  Management  Agreement  was
       terminated  and  replaced  with  a  new  management   agreement  (the  "New
       Management  Agreement") which provides for an annual management fee of 1.5%
       of revenues.  The New Management  Agreement eliminated the prior management
       fee which was limited to $5.0 million, subject to annual increases based on
       the consumer price index. The New Management Agreement has a ten year term.
       Management  fees of $5.0  million,  $4.7  million,  $1.7  million  and $1.7
       million were charged to selling, general and administrative expenses during
       the nine and three months ended  September 30, 1998 and 1997,  respectively
       (on a pro  forma  basis,  giving  effect to the New  Management  Agreement,
       management  fees for the nine and three  months  ended  September  30, 1997
       would have been $5.0 million and $1.7 million, respectively).
  
       During  1997,  the  Company  authorized  10,000  shares  of $.01 par  value
       preferred  stock and designated  5,200 of such shares as Series A Preferred
       Stock. In May 1997, the Company issued  1,614.775 shares of its mandatorily
       redeemable  Series A Preferred Stock to Comcast  Financial  Corporation,  a
       wholly owned  subsidiary of Comcast.  Each holder of the Series A Preferred
       Stock is entitled to receive  cumulative  cash dividends at the annual rate
       of $12,000 per share,  payable  semi-annually  on May 1 and November 1 each
       year,  in arrears.  At the option of the  Company,  by  declaration  of the
       Company's Board of Directors, dividends may be paid in additional shares of
       Series A Preferred Stock (the "Additional  Shares") instead of cash through
       May 1, 2007. To the extent  dividends are paid in Additional  Shares,  such
       Additional  Shares shall be valued at $100,000 per share with a liquidation
       value of $100,000 per share. The Series A Preferred Stock is redeemable, at
       the  option  of the  Company,  at any  time  prior  to  May 2,  2007,  at a
       redemption price of $100,000 per share,  plus accrued and unpaid dividends,
       and is  mandatorily  redeemable on May 2, 2007 after final  maturity of the
       Senior Notes,  subject to certain conditions.  The Series A Preferred Stock
       is generally  non-voting.  During the nine and three months ended September
       30, 1998 and 1997, the Company  accrued $15.8 million,  $7.1 million,  $5.4
       million  and $4.8  million,  respectively,  of  dividends  on the  Series A
       Preferred Stock, with a corresponding reduction in additional capital. Such
       amounts  have  been  excluded  from the  Company's  condensed  consolidated
       statement of cash flows due to their noncash nature.
  
                                          6
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
  6.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The  Company  made cash  payments  for  interest  of $59.2  million,  $24.7
       million,  $4.0  million and $2.5  million  during the nine and three months
       ended September 30, 1998 and 1997, respectively.
  
       The Company  made cash  payments  for income taxes of $0.4 million and $0.2
       million during the nine and three months ended September 30, 1997.
  
  7.   CONTINGENCIES
  
       The Company is subject to legal  proceedings  and claims which arise in the
       ordinary course of its business.  In the opinion of management,  the amount
       of ultimate  liability  with respect to these  actions will not  materially
       affect the  financial  position,  results of operations or liquidity of the
       Company.
  
                                          7
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS
  
  Information  for this  item is  omitted  pursuant  to  Securities  and  Exchange
  Commission General Instruction to Form 10-Q, except as noted below.
  
  Results of Operations
  
  Summarized  consolidated  financial information for Comcast Cellular Corporation
  (the  "Company") for the nine and three months ended September 30, 1998 and 1997
  is as follows (dollars in millions, "NM" denotes percentage is not meaningful):
  Nine Months Ended
                                                            September 30,                   Increase / (Decrease)
                                                       1998              1997               $                 %
  Service income, net..............................     $338.0           $335.4            $2.6              0.8%
  Operating, selling, general and administrative
       expenses....................................      207.0            199.1             7.9              4.0
                                                        ------           ------           
  Operating income before depreciation and
       amortization (1)............................      131.0            136.3            (5.3)            (3.9)
  Depreciation and amortization....................       88.5             80.7             7.8              9.7
                                                        ------           ------           
  Operating income.................................       42.5             55.6           (13.1)           (23.6)
                                                        ------           ------           
  Interest expense.................................       83.8             89.1            (5.3)            (5.9)
  Investment income................................       (1.1)            (1.9)           (0.8)           (42.1)
  Equity in net (income) losses of affiliates......       (0.2)             4.5            (4.7)              NM
  Other............................................        1.0              1.1            (0.1)            (9.1)
  Income tax benefit...............................      (15.0)           (13.0)            2.0             15.4
  Extraordinary item...............................                        (7.3)           (7.3)              NM
                                                        ------           ------           
       Net loss....................................     ($26.0)          ($31.5)          ($5.5)           (17.5%)
                                                        ======           ======     
  
                                                         Three Months Ended
                                                            September 30,                   Increase / (Decrease)
                                                       1998              1997               $                 %
  
  Service income, net..............................     $116.7           $115.1            $1.6              1.4%
  Operating, selling, general and administrative
       expenses....................................       71.1             65.4             5.7              8.7
                                                        ------           ------           
  Operating income before depreciation and
       amortization (1)............................       45.6             49.7            (4.1)            (8.2)
  Depreciation and amortization....................       30.8             27.1             3.7             13.7
                                                        ------           ------           
  Operating income.................................       14.8             22.6            (7.8)           (34.5)
                                                        ------           ------           
  Interest expense.................................       27.7             27.9            (0.2)            (0.7)
  Investment income................................       (0.5)            (0.3)            0.2             66.7
  Equity in net (income) losses of affiliates......       (0.2)             1.0            (1.2)              NM
  Other............................................        0.4              0.7            (0.3)           (42.9)
  Income tax benefit...............................       (4.6)            (2.1)            2.5               NM
                                                        ------           ------           
       Net loss....................................      ($8.0)           ($4.6)           $3.4             73.9%
                                                        ======           ======     
  ----------
  (1)  Operating income before  depreciation and amortization is commonly referred
       to in the cellular  industry as "operating cash flow."  Operating cash flow
       is a measure  of a  company's  ability  to  generate  cash to  service  its
       obligations, including debt service obligations, and to finance capital and
       other  expenditures.  In part due to the  capital  intensive 
  
                                          8
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
       nature of the cellular  industry  and the  resulting  significant  level of
       non-cash  depreciation  and  amortization  expense,  operating cash flow is
       frequently  used as one of the bases for  evaluating  cellular  businesses,
       although the Company's measure of operating cash flow may not be comparable
       to similarly titled measures of other  companies.  Operating cash flow does
       not  purport to  represent  net income or net cash  provided  by  operating
       activities,  as those terms are defined under generally accepted accounting
       principles,  and  should  not  be  considered  as an  alternative  to  such
       measurements as an indicator of the Company's performance.
  Service income increased by $2.6 million and $1.6 million for the nine and three
  month periods from 1997 to 1998, as  subscriber  growth was offset,  in part, by
  the effects of increased  use of  promotional  and free minute plans  offered to
  subscribers.  These plans  generally  have higher  access fees and  increase the
  minutes of use per subscriber while lowering the average rate per minute of use.
  
  The respective  $7.9 million and $5.7 million  increases in operating,  selling,
  general and  administrative  expenses for the nine and three month  periods from
  1997 to 1998  are  primarily  attributable  to  increases  in  commission  costs
  associated with more gross sales in 1998.
  
  Comcast  Corporation  ("Comcast"),  the Company's  parent,  and Comcast Cellular
  Communications,  Inc. ("CCCI"),  a wholly owned subsidiary of the Company,  were
  parties to a management  agreement (the "Old Management  Agreement") pursuant to
  which Comcast  managed the business and operations of CCCI. In May 1997, the Old
  Management Agreement was terminated and replaced with a new management agreement
  (the "New Management  Agreement") which provides for an annual management fee of
  1.5% of revenues.  The New Management  Agreement eliminated the prior management
  fee which was limited to $5.0 million,  subject to annual increases based on the
  consumer  price  index.  The  New  Management  Agreement  has a ten  year  term.
  Management  fees of $5.0 million,  $4.7  million,  $1.7 million and $1.7 million
  were charged to selling, general and administrative expenses during the nine and
  three months ended  September  30, 1998 and 1997,  respectively  (on a pro forma
  basis,  giving effect to the New Management  Agreement,  management fees for the
  nine and three months ended  September 30, 1997 would have been $5.0 million and
  $1.7 million, respectively).
  
  The  respective  $7.8 million and $3.7 million  increases  in  depreciation  and
  amortization  expense for each of the nine and three month  periods from 1997 to
  1998 are  primarily  attributable  to the  effects of capital  expenditures  and
  losses on asset disposals offset, in part, by a decrease in amortization expense
  as a result of certain intangible assets becoming fully amortized in 1997.
  
  The respective $5.3 million and $0.2 million  decreases in interest  expense for
  the nine and three  month  periods  from 1997 to 1998 are  primarily  due to the
  effects of a decrease in the Company's  effective weighted average interest rate
  and the transfer of AWACS Garden State (see below).
  
  In 1992, AWACS Garden State, Inc. ("AWACS Garden State"), an indirect subsidiary
  of the  Company,  issued a note (the  "AWACS  Note")  with an initial  principal
  amount of $51.0 million to purchase, from a subsidiary of Comcast, a 40% limited
  partnership in Garden State Cablevision L.P. ("Garden State  Cablevision").  The
  AWACS Note bears  interest at a rate of 11% per annum.  Interest is payable on a
  quarterly  basis to the extent of available cash, with any unpaid interest added
  to  principal.  Interest  expense  on the AWACS Note was $1.4  million  and $3.8
  million for the nine months ended September 30, 1998 and 1997, respectively, and
  $1.3 million for the three months ended September 30, 1997.
  
  Under  the  terms  of  the   partnership   agreement,   49.5%  of  Garden  State
  Cablevision's net (income) losses were allocated to the Company. During the nine
  months ended September 30, 1998 and 1997, the Company  recognized  equity in net
  (income) loss of Garden State  Cablevision  of ($0.2)  million and $4.1 million,
  respectively.  During the three months  ended  September  30, 1997,  the Company
  recognized equity in net loss of Garden State Cablevision of $1.1 million.
  
  Effective April 1, 1998, the Company transferred,  via a dividend,  its indirect
  interest in AWACS Garden State to a wholly  owned  subsidiary  of Comcast at its
  net book value of $41.3 million.
  
                                          9
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  The respective $2.0 million and $2.5 million increases in income tax benefit for
  the nine and three month periods from 1997 to 1998 are primarily attributable to
  fluctuations  in the Company's loss before income tax benefit and  extraordinary
  item.
  
  In May 1997, the Company  canceled $575.0 million of its revolving  credit loan.
  In  connection  with the  reduction of the  revolving  credit loan,  the Company
  expensed  unamortized debt acquisition  costs of $11.3 million,  resulting in an
  extraordinary  loss,  net of tax, of $7.3  million  during the nine months ended
  September 30, 1997.
  
  For the nine and three months ended  September 30, 1998 and 1997,  the Company's
  earnings before  extraordinary item, income tax benefit,  equity in net (income)
  losses of affiliates  and fixed charges  (interest  expense) was $42.6  million,
  $56.4 million, $14.9 million and $22.2 million, respectively. Such earnings were
  not  adequate  to cover the  Company's  fixed  charges of $83.8  million,  $89.1
  million, $27.7 million and $27.9 million for these periods, respectively.  Fixed
  charges include non-cash interest expense of $1.5 million,  $29.3 million,  $0.1
  million and $1.3 million for the nine and three months ended  September 30, 1998
  and 1997, respectively.  The inadequacy of the Company's earnings to cover fixed
  charges is primarily due to substantial  non-cash  charges for  depreciation and
  amortization  expense of $88.5 million,  $80.7 million,  $30.8 million and $27.1
  million  during the nine and three  months  ended  September  30, 1998 and 1997,
  respectively.
  
  The  Company  anticipates  that,  for  the  foreseeable  future,   depreciation,
  amortization  and interest expense will continue to be significant and will have
  a significant  adverse effect on the Company's  ability to realize net earnings.
  The  Company  believes  that  its  losses  will  not  significantly  affect  the
  performance of its normal business  activities  because of its existing cash and
  cash equivalents,  its ability to generate operating income before  depreciation
  and amortization and its ability to obtain external financing.
  
  The  Company  believes  that  its  operations  are not  materially  affected  by
  inflation.
  
  Year 2000 Issue
  
  The Year 2000 Issue is the result of computer  programs  being written using two
  digits rather than four to define the applicable year.  Certain of the Company's
  computer programs that have  date-sensitive  software may recognize a date using
  "00" as the year 1900 rather than the year 2000 (the "Year 2000 Issue"). If this
  situation   occurs,   the  potential  exists  for  computer  system  failure  or
  miscalculations   by  computer   programs,   which  could  cause  disruption  of
  operations.
  
  The Company is in the process of  evaluating  and  addressing  the impact of the
  Year 2000 Issue on its operations to ensure that its information  technology and
  business  systems  recognize  calendar Year 2000.  The Company is utilizing both
  internal and external  resources in  implementing  its Year 2000 program,  which
  consists of the following phases:
  
  Assessment Phase
  Structured evaluation,  including a detailed inventory outlining the impact that
  the Year 2000 Issue may have on current operations.
  
  Detailed Planning Phase
  Establishment of priorities, development of specific action steps and allocation
  of resources to address the issues identified in the Assessment Phase.
  
  Conversion Phase
  Implementation of the necessary system modifications as outlined in the Detailed
  Planning Phase.
  
  Testing Phase
  Verification that the modifications  implemented in the Conversion Phase will be
  successful  in resolving  the Year 2000 Issue so that all  inventory  items will
  function properly, both individually and on an integrated basis.
  
  Implementation Phase
  Final roll-out of fully tested components into an operational unit.
  
                                         10
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  Based on an inventory  conducted in 1997,  the Company has  identified  computer
  systems that will require modification or replacement so that they will properly
  utilize dates beyond December 31, 1999. Many of the Company's  critical  systems
  are new and are already Year 2000 compliant as a result of the Company's  recent
  implementation of a fully digital cellular  communications network. In addition,
  the Company has initiated  communications  with all of its significant  software
  suppliers and service  bureaus to determine their plans for remediating the Year
  2000 Issue in their software which the Company uses or relies upon.
  
  As of September  30, 1998,  the Company is in the  Conversion  Phase of its Year
  2000  remediation  program and has entered  the  Testing  Phase with  respect to
  certain of its key systems. Through September 30, 1998, the Company has incurred
  $0.7 million in connection with its Year 2000 remediation  program.  The Company
  estimates that it will incur between  approximately  $2 million to $3 million of
  additional  expense  through  December  1999 in  connection  with its Year  2000
  remediation  program.  The Company's  estimate to complete the remediation  plan
  includes the estimated time  associated  with mitigating the Year 2000 Issue for
  third party  software.  However,  there can be no guarantee  that the systems of
  other companies on which the Company relies will be converted on a timely basis,
  or that a failure  to  convert  by  another  company  would not have a  material
  adverse effect on the Company.
  
  Management of the Company will continue to  periodically  report the progress of
  its Year 2000  remediation  program to the Audit Committee of Comcast's Board of
  Directors.  The Company plans to complete the Year 2000  mitigation by the third
  quarter of 1999.  Management  of the Company has  investigated  and may consider
  potential   contingency  plans  in  the  event  that  the  Company's  Year  2000
  remediation program is not completed by that date.
  
  The costs of the project and the date on which the Company plans to complete the
  Year  2000  modifications  and  replacements  are  based  on  management's  best
  estimates,  which were derived using  assumptions of future events including the
  continued   availability  of  resources  and  the  reliability  of  third  party
  modification plans. However, there can be no guarantee that these estimates will
  be  achieved  and actual  results  could  differ  materially  from those  plans.
  Specific factors that may cause such material  differences  include, but are not
  limited to, the availability  and cost of personnel with  appropriate  necessary
  skills and the  ability to locate and  correct all  relevant  computer  code and
  similar uncertainties.
  
  The  Company  believes  that  with   modifications  to  existing   software  and
  conversions to new software,  the Year 2000 Issue can be mitigated.  However, if
  such  modifications and conversions are not made, or are not completed within an
  adequate time frame, the Year 2000 Issue could have a material adverse impact on
  the operations of the Company.
  
                                         11
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
  PART II.     OTHER INFORMATION
  
  ITEM 1.      LEGAL PROCEEDINGS
  
       The Company is subject to legal  proceedings  and claims which arise in the
       ordinary course of its business.  In the opinion of management,  the amount
       of ultimate  liability  with respect to these  actions will not  materially
       affect the  financial  position,  results of operations or liquidity of the
       Company.
  
  ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K
  
       (a) Exhibits required to be filed by Item 601 of Regulation S-K:
  
           27.1     Financial Data Schedule.
  
       (b) Reports on Form 8-K - none.
  
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  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                          QUARTER ENDED SEPTEMBER 30, 1998
  
                                      SIGNATURE
  
           Pursuant to the  requirements  of the  Securities  and  Exchange Act of
  1934,  the  Registrant has duly caused this report to be signed on its behalf by
  the undersigned thereunto duly authorized.
  
                                            COMCAST CELLULAR CORPORATION
                                            ----------------------------
  
                                            /S/ LAWRENCE S. SMITH
                                            ----------------------------
                                            Lawrence S. Smith
                                            Principal Accounting Officer
  
                                            /S/ JOSEPH J. EUTENEUER
                                            ----------------------------
                                            Joseph J. Euteneuer
                                            Vice President (Authorized Officer)
  
  Date: November 16, 1998
  
                                         13