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:
  
                                   MARCH 31, 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 March 31, 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 MARCH 31, 1998
  
                                  TABLE OF CONTENTS
  
  
                                                                            Page
                                                                           Number
  
  PART I.   FINANCIAL INFORMATION
  
            Item 1.  Financial Statements
  
                     Condensed Consolidated Balance
                     Sheet as of March 31, 1998 and December 31,
                     1997 (Unaudited)..........................................2
  
                     Condensed Consolidated Statement of
                     Operations and Accumulated Deficit for
                     the Three Months Ended March 31,
                     1998 and 1997 (Unaudited).................................3
  
                     Condensed Consolidated Statement of Cash
                     Flows for the Three Months Ended March 31,
                     1998 and 1997 (Unaudited).................................4
  
                     Notes to Condensed Consolidated
                     Financial Statements (Unaudited)......................5 - 6
  
            Item 2.  Management's Discussion and Analysis
                     of Financial Condition and Results of
                     Operations............................................7 - 8
  
  PART II.  OTHER INFORMATION
  
            Item 1.  Legal Proceedings.........................................9
  
            Item 6.  Exhibits and Reports on Form 8-K..........................9
  
            SIGNATURE.........................................................10
  
                         -----------------------------------
  
  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 MARCH 31, 1998
  
  PART I.   FINANCIAL INFORMATION
  
  ITEM 1.   FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                   (Dollars in thousands, except share data)
                                                                                          March 31,       December 31,
                                                                                             1998             1997
  <S>                                                                                    <C>               <C>       
  ASSETS
  
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $10,766            $4,692
     Accounts receivable, less allowance for doubtful accounts
       of $6,469 and $6,356.......................................................           57,118            59,252
     Inventories..................................................................           11,643            14,154
     Other current assets.........................................................            2,972             3,147
                                                                                         ----------        ----------
       Total current assets.......................................................           82,499            81,245
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           28,379            28,570
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          600,326           595,861
     Accumulated depreciation.....................................................         (202,777)         (182,632)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          397,549           413,229
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,275,769         1,275,861
     Accumulated amortization.....................................................         (329,192)         (321,450)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          946,577           954,411
                                                                                         ----------        ----------
                                                                                         $1,455,004        $1,477,455
                                                                                         ==========        ==========
  
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $75,886          $100,159
     Accrued interest.............................................................           40,884            17,388
     Current portion of long-term debt............................................              542               430
     Due to affiliates............................................................           53,238            47,116
                                                                                         ----------        ----------
       Total current liabilities..................................................          170,550           165,093
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,214,425         1,224,511
                                                                                         ----------        ----------
  INVESTMENT IN AND DUE TO AFFILIATE..............................................           98,843            99,014
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          221,126           227,944
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            6,854             5,878
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          178,708           173,602
                                                                                         ----------        ----------
  
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares;
       issued, 100 shares ........................................................
     Additional capital...........................................................          483,195           488,301
     Accumulated deficit..........................................................         (918,697)         (906,888)
                                                                                         ----------        ----------
       Total stockholder's deficiency.............................................         (435,502)         (418,587)
                                                                                         ----------        ----------
                                                                                         $1,455,004        $1,477,455
                                                                                         ==========        ==========
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          2
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                              (Dollars in thousands)
                                                                                           Three Months Ended March 31,
                                                                                             1998               1997
  <S>                                                                                      <C>               <C>     
  SERVICE INCOME, net.............................................................         $105,386          $104,079
                                                                                          ---------         --------- 
  
  COSTS AND EXPENSES
     Operating....................................................................            9,356             9,884
     Selling, general and administrative..........................................           58,117            57,119
     Depreciation and amortization................................................           27,994            28,005
                                                                                          ---------         --------- 
                                                                                             95,467            95,008
                                                                                          ---------         --------- 
  
  OPERATING INCOME................................................................            9,919             9,071
  
  OTHER (INCOME) EXPENSE
     Interest expense.............................................................           28,578            29,448
     Investment income............................................................             (330)             (451)
     Equity in net losses of affiliates...........................................               20             2,121
     Other........................................................................              228               169
                                                                                          ---------         --------- 
                                                                                             28,496            31,287
                                                                                          ---------         --------- 
  
  
  LOSS BEFORE INCOME TAX BENEFIT..................................................          (18,577)          (22,216)
  
  INCOME TAX BENEFIT..............................................................           (6,768)           (7,924)
                                                                                          ---------         --------- 
  
  NET LOSS........................................................................          (11,809)          (14,292)
  
  PREFERRED DIVIDENDS.............................................................           (5,106)
                                                                                          ---------         --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER.................................................         ($16,915)         ($14,292)
                                                                                          =========         ========= 
  
  ACCUMULATED DEFICIT
     Beginning of period..........................................................        ($906,888)        ($856,280)
     Net loss.....................................................................          (11,809)          (14,292)
                                                                                          ---------         --------- 
  
     End of period................................................................        ($918,697)        ($870,572)
                                                                                          =========         ========= 
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          3
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                             (Dollars in thousands)
                                                                                          Three Months Ended March 31,
                                                                                             1998              1997
  <S>                                                                                      <C>               <C>      
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($11,809)         ($14,292)
     Adjustments to reconcile net loss to net cash provided
      by operating activities:
       Depreciation and amortization..............................................           27,994            28,005
       Non-cash interest expense..................................................            1,414            17,504
       Equity in net losses of affiliates.........................................               20             2,121
       Minority interest..........................................................              265               227
       Deferred management fees...................................................                              1,428
       Deferred income taxes and other............................................           (6,107)           (8,569)
                                                                                           --------          -------- 
                                                                                             11,777            26,424
  
       Decrease in net accounts receivable, inventories and other current assets..            4,820             6,905
       Decrease in accounts payable and accrued expenses..........................          (24,273)          (10,092)
       Increase in accrued interest...............................................           23,496               720
                                                                                           --------          -------- 
  
             Net cash provided by operating activities............................           15,820            23,957
                                                                                           --------          -------- 
  
  FINANCING ACTIVITIES
     Proceeds from borrowings of long-term debt...................................                             20,000
     Repayments of long-term debt.................................................          (10,000)              (98)
     Deferred financing costs.....................................................              (79)
     Net transactions with affiliates.............................................            4,734              (689)
                                                                                           --------          -------- 
  
             Net cash (used in) provided by financing activities..................           (5,345)           19,213
                                                                                           --------          -------- 
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................           (4,389)          (17,906)
     Other........................................................................              (12)              195
                                                                                           --------          -------- 
  
             Net cash used in investing activities................................           (4,401)          (17,711)
                                                                                           --------          -------- 
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            6,074            25,459
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,692             4,980
                                                                                           --------          -------- 
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $10,766           $30,439
                                                                                           ========          ======== 
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          4
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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 March 31, 1998 and the condensed
       consolidated  statements of operations and accumulated  deficit and of cash
       flows for the three months ended March 31, 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  March  31,  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 period ended March 31, 1998
       are not necessarily indicative of operating results for the full year.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1998.
  
  2.   LONG-TERM DEBT
  
       As of March 31, 1998, Comcast Cellular  Communications,  Inc.  ("CCCI"),  a
       wholly-owned  subsidiary of the Company,  had  outstanding  $215.0  million
       under  its  revolving  credit  facility.  In May  1998,  CCCI  borrowed  an
       additional $35.0 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 March  31,  1998 and  December  31,  1997,  the  Company's  effective
       weighted  average interest rate on its long-term debt outstanding was 8.87%
       and 8.88%, respectively.
  
  3.   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 $1.2  million  during the three months ended March 31, 1998 and
       1997, respectively. From the date of issuance through March 31, 1998, $35.5
       million of principal  and interest has been paid on the AWACS Note with the
       proceeds from distributions  from Garden State Cablevision.  The balance of
       the AWACS Note of $51.8 million and $50.4 million, as of March 31, 1998 and
       December  31,  1997,  respectively,  is due on  demand.  Accordingly,  such
       balance  has  been  classified  as  current  in  the  Company's   condensed
       consolidated balance sheet.
  
       Effective  April 1, 1998, the Company  transferred  AWACS Garden State to a
       wholly owned  subsidiary of Comcast at net book value. As of March 31, 1998
       and for the three months then ended,  the  Company's  investment  in Garden
       State  Cablevision,  classified as investment in and due to affiliate,  and
       its equity in net income of Garden State  Cablevision was $98.8 million and
       $0.2 million, respectively.
  
                                          5
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
  4.   RELATED PARTY TRANSACTIONS
  
       Comcast  and  CCCI  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 $1.6  million and $1.4 million were charged to selling,
       general and administrative expenses during the three months ended March 31,
       1998 and 1997, respectively (on a pro forma basis, giving effect to the New
       Management Agreement,  management fees for the three months ended March 31,
       1997 would have been $1.6 million).
  
       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 three months ended March 31, 1998, the
       Company accrued $5.1 million of dividends on the Series A Preferred  Stock,
       with a corresponding  reduction in additional capital. Such amount has been
       excluded from the Company's condensed  consolidated statement of cash flows
       due to its noncash nature.
  
  5.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The Company  made cash  payments  for  interest  of $3.7  million and $11.2
       million   during  the  three   months   ended  March  31,  1998  and  1997,
       respectively.
  
  6.   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.
  
                                          6
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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 three months ended March 31, 1998 and 1997 is as follows
  (dollars in millions, "NM" denotes percentage is not meaningful):
  <TABLE>
  <CAPTION>
                                                         Three Months Ended
                                                              March 31,                     Increase / (Decrease)
                                                       1998              1997               $                 %
  <S>                                                  <C>              <C>                <C>             <C> 
  Service income, net..............................    $105.4           $104.1             $1.3            1.2%
  Operating, selling, general and administrative
       expenses....................................      67.5             67.0              0.5            0.7
                                                       ------           ------
  Operating income before depreciation and
       amortization (1)............................      37.9             37.1              0.8            2.2
  Depreciation and amortization....................      28.0             28.0
                                                       ------           ------
  Operating income.................................       9.9              9.1              0.8            8.8
                                                       ------           ------
  Interest expense.................................      28.6             29.4             (0.8)          (2.7)
  Investment income................................      (0.3)            (0.4)            (0.1)         (25.0)
  Equity in net losses of affiliates...............                        2.1             (2.1)            NM
  Other............................................       0.2              0.2
  Income tax benefit...............................      (6.8)            (7.9)            (1.1)         (13.9)
                                                       ------           ------
       Net loss....................................    ($11.8)          ($14.3)           ($2.5)         (17.5%)
                                                       ======           ======
  <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  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>
  
  Of the $1.3 million  increase in service  income for the three month period from
  1997 to 1998,  $2.2 million is  attributable to subscriber  growth,  offset,  in
  part, by a decrease of $0.9 million primarily  attributable to the 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 $0.5 million  increase in  operating,  selling,  general and  administrative
  expenses for the three month period from 1997 to 1998 is primarily  attributable
  to an increase in commission  costs associated with more gross sales in 1998 and
  increased  labor costs,  offset,  in part, by improved bad debt  experience as a
  result of stronger credit procedures.
  
  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
  
                                          7
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
  
  
  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 $1.6 million and $1.4 million were charged to selling,
  general and administrative expenses during the three months ended March 31, 1998
  and  1997,  respectively  (on a pro  forma  basis,  giving  effect  to  the  New
  Management Agreement,  management fees for the three months ended March 31, 1997
  would have been $1.6 million).
  
  The $0.8  million  decrease in interest  expense for the three month period from
  1997  to  1998  is  primarily  due  to the  effects  of  lower  levels  of  debt
  outstanding,  offset,  in part,  by the effects of an increase in the  Company's
  effective weighted average interest rate.
  
  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   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 $1.2  million  during the three months ended March 31, 1998 and
  1997, respectively.
  
  Under  the  terms  of  the   partnership   agreement,   49.5%  of  Garden  State
  Cablevision's net (income) losses are allocated to the Company. During the three
  months  ended March 31,  1998 and 1997,  the  Company  recognized  equity in net
  (income) losses of Garden State  Cablevision of ($0.2) million and $1.8 million,
  respectively.
  
  Effective April 1, 1998, the Company  transferred AWACS Garden State to a wholly
  owned  subsidiary  of  Comcast  at net book  value.  As of March 31,  1998,  the
  Company's  investment in Garden State  Cablevision,  classified as investment in
  and due to affiliate in the Company's condensed  consolidated balance sheet, was
  $98.8 million.
  
  The $1.1 million  decrease in income tax benefit for the three month period from
  1997 to 1998 is primarily  attributable  to the decrease in the  Company's  loss
  before income tax benefit.
  
  For the three  months  ended March 31,  1998 and 1997,  the  Company's  earnings
  before income tax benefit,  equity in net losses of affiliates and fixed charges
  (interest  expense)  was $10.0  million  and $9.4  million,  respectively.  Such
  earnings were not adequate to cover the Company's fixed charges of $28.6 million
  and $29.4  million  for  these  periods,  respectively.  Fixed  charges  include
  non-cash interest expense of $1.4 million and $17.5 million for the three months
  ended March 31, 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 $28.0 million during each of the
  three months ended March 31, 1998 and 1997.
  
  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.
  
                                          8
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
  
  
  PART II.  OTHER INFORMATION
  
  ITEM 1.   LEGAL PROCEEDINGS
  
       The  Company  is not  party to  litigation  which,  in the  opinion  of the
       Company's management,  will have a material adverse effect on the Company's
       financial position, results of operations or liquidity.
  
  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:
  
            (i)  The Registrant filed a Current Report on Form 8-K under Item 5 on
                 February  9, 1998  relating  to the  merger of  Comcast  Cellular
                 Holdings,  Inc.  into  Comcast  Cellular  Corporation,  effective
                 December 23, 1997.
  
  
                                          9
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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
                                                    Executive Vice President
                                                    (Principal Accounting Officer)
  
  
  
  Date: May 14, 1998
  
                                         10
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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": "98620932"}, "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:
  
                                   MARCH 31, 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 March 31, 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 MARCH 31, 1998
  
                                  TABLE OF CONTENTS
  
                                                                            Page
                                                                           Number
  
  PART I.   FINANCIAL INFORMATION
  
            Item 1.  Financial Statements
  
                     Condensed Consolidated Balance
                     Sheet as of March 31, 1998 and December 31,
                     1997 (Unaudited)..........................................2
  
                     Condensed Consolidated Statement of
                     Operations and Accumulated Deficit for
                     the Three Months Ended March 31,
                     1998 and 1997 (Unaudited).................................3
  
                     Condensed Consolidated Statement of Cash
                     Flows for the Three Months Ended March 31,
                     1998 and 1997 (Unaudited).................................4
  
                     Notes to Condensed Consolidated
                     Financial Statements (Unaudited)......................5 - 6
  
            Item 2.  Management's Discussion and Analysis
                     of Financial Condition and Results of
                     Operations............................................7 - 8
  
  PART II.  OTHER INFORMATION
  
            Item 1.  Legal Proceedings.........................................9
  
            Item 6.  Exhibits and Reports on Form 8-K..........................9
  
            SIGNATURE.........................................................10
  
                         -----------------------------------
  
  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 MARCH 31, 1998
  
  PART I.   FINANCIAL INFORMATION
  
  ITEM 1.   FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  (Dollars in thousands, except share data)
                                                                                          March 31,       December 31,
                                                                                             1998             1997
  ASSETS
  
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $10,766            $4,692
     Accounts receivable, less allowance for doubtful accounts
       of $6,469 and $6,356.......................................................           57,118            59,252
     Inventories..................................................................           11,643            14,154
     Other current assets.........................................................            2,972             3,147
                                                                                         ----------        ----------
       Total current assets.......................................................           82,499            81,245
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           28,379            28,570
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          600,326           595,861
     Accumulated depreciation.....................................................         (202,777)         (182,632)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          397,549           413,229
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,275,769         1,275,861
     Accumulated amortization.....................................................         (329,192)         (321,450)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          946,577           954,411
                                                                                         ----------        ----------
                                                                                         $1,455,004        $1,477,455
                                                                                         ==========        ==========
  
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $75,886          $100,159
     Accrued interest.............................................................           40,884            17,388
     Current portion of long-term debt............................................              542               430
     Due to affiliates............................................................           53,238            47,116
                                                                                         ----------        ----------
       Total current liabilities..................................................          170,550           165,093
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,214,425         1,224,511
                                                                                         ----------        ----------
  INVESTMENT IN AND DUE TO AFFILIATE..............................................           98,843            99,014
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          221,126           227,944
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            6,854             5,878
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          178,708           173,602
                                                                                         ----------        ----------
  
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares;
       issued, 100 shares ........................................................
     Additional capital...........................................................          483,195           488,301
     Accumulated deficit..........................................................         (918,697)         (906,888)
                                                                                         ----------        ----------
       Total stockholder's deficiency.............................................         (435,502)         (418,587)
                                                                                         ----------        ----------
                                                                                         $1,455,004        $1,477,455
                                                                                         ==========        ==========
  See notes to condensed consolidated financial statements.
  
                                          2
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  (Dollars in thousands)
                                                                                           Three Months Ended March 31,
                                                                                             1998               1997
  SERVICE INCOME, net.............................................................         $105,386          $104,079
                                                                                          ---------         --------- 
  
  COSTS AND EXPENSES
     Operating....................................................................            9,356             9,884
     Selling, general and administrative..........................................           58,117            57,119
     Depreciation and amortization................................................           27,994            28,005
                                                                                          ---------         --------- 
                                                                                             95,467            95,008
                                                                                          ---------         --------- 
  
  OPERATING INCOME................................................................            9,919             9,071
  
  OTHER (INCOME) EXPENSE
     Interest expense.............................................................           28,578            29,448
     Investment income............................................................             (330)             (451)
     Equity in net losses of affiliates...........................................               20             2,121
     Other........................................................................              228               169
                                                                                          ---------         --------- 
                                                                                             28,496            31,287
                                                                                          ---------         --------- 
  
  LOSS BEFORE INCOME TAX BENEFIT..................................................          (18,577)          (22,216)
  
  INCOME TAX BENEFIT..............................................................           (6,768)           (7,924)
                                                                                          ---------         --------- 
  
  NET LOSS........................................................................          (11,809)          (14,292)
  
  PREFERRED DIVIDENDS.............................................................           (5,106)
                                                                                          ---------         --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER.................................................         ($16,915)         ($14,292)
                                                                                          =========         ========= 
  
  ACCUMULATED DEFICIT
     Beginning of period..........................................................        ($906,888)        ($856,280)
     Net loss.....................................................................          (11,809)          (14,292)
                                                                                          ---------         --------- 
  
     End of period................................................................        ($918,697)        ($870,572)
                                                                                          =========         =========
  See notes to condensed consolidated financial statements.
  
                                          3
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  (Dollars in thousands)
                                                                                          Three Months Ended March 31,
                                                                                             1998              1997
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($11,809)         ($14,292)
     Adjustments to reconcile net loss to net cash provided
      by operating activities:
       Depreciation and amortization..............................................           27,994            28,005
       Non-cash interest expense..................................................            1,414            17,504
       Equity in net losses of affiliates.........................................               20             2,121
       Minority interest..........................................................              265               227
       Deferred management fees...................................................                              1,428
       Deferred income taxes and other............................................           (6,107)           (8,569)
                                                                                           --------          -------- 
                                                                                             11,777            26,424
  
       Decrease in net accounts receivable, inventories and other current assets..            4,820             6,905
       Decrease in accounts payable and accrued expenses..........................          (24,273)          (10,092)
       Increase in accrued interest...............................................           23,496               720
                                                                                           --------          -------- 
  
             Net cash provided by operating activities............................           15,820            23,957
                                                                                           --------          -------- 
  
  FINANCING ACTIVITIES
     Proceeds from borrowings of long-term debt...................................                             20,000
     Repayments of long-term debt.................................................          (10,000)              (98)
     Deferred financing costs.....................................................              (79)
     Net transactions with affiliates.............................................            4,734              (689)
                                                                                           --------          -------- 
  
             Net cash (used in) provided by financing activities..................           (5,345)           19,213
                                                                                           --------          -------- 
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................           (4,389)          (17,906)
     Other........................................................................              (12)              195
                                                                                           --------          -------- 
  
             Net cash used in investing activities................................           (4,401)          (17,711)
                                                                                           --------          -------- 
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            6,074            25,459
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,692             4,980
                                                                                           --------          -------- 
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $10,766           $30,439
                                                                                           ========          ========
  See notes to condensed consolidated financial statements.
  
                                          4
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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 March 31, 1998 and the condensed
       consolidated  statements of operations and accumulated  deficit and of cash
       flows for the three months ended March 31, 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  March  31,  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 period ended March 31, 1998
       are not necessarily indicative of operating results for the full year.
  
       Reclassifications
       Certain  reclassifications  have  been  made to the  prior  year  condensed
       consolidated  financial statements to conform to those classifications used
       in 1998.
  
  2.   LONG-TERM DEBT
  
       As of March 31, 1998, Comcast Cellular  Communications,  Inc.  ("CCCI"),  a
       wholly-owned  subsidiary of the Company,  had  outstanding  $215.0  million
       under  its  revolving  credit  facility.  In May  1998,  CCCI  borrowed  an
       additional $35.0 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 March  31,  1998 and  December  31,  1997,  the  Company's  effective
       weighted  average interest rate on its long-term debt outstanding was 8.87%
       and 8.88%, respectively.
  
  3.   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 $1.2  million  during the three months ended March 31, 1998 and
       1997, respectively. From the date of issuance through March 31, 1998, $35.5
       million of principal  and interest has been paid on the AWACS Note with the
       proceeds from distributions  from Garden State Cablevision.  The balance of
       the AWACS Note of $51.8 million and $50.4 million, as of March 31, 1998 and
       December  31,  1997,  respectively,  is due on  demand.  Accordingly,  such
       balance  has  been  classified  as  current  in  the  Company's   condensed
       consolidated balance sheet.
  
       Effective  April 1, 1998, the Company  transferred  AWACS Garden State to a
       wholly owned  subsidiary of Comcast at net book value. As of March 31, 1998
       and for the three months then ended,  the  Company's  investment  in Garden
       State  Cablevision,  classified as investment in and due to affiliate,  and
       its equity in net income of Garden State  Cablevision was $98.8 million and
       $0.2 million, respectively.
  
                                          5
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
  4.   RELATED PARTY TRANSACTIONS
  
       Comcast  and  CCCI  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 $1.6  million and $1.4 million were charged to selling,
       general and administrative expenses during the three months ended March 31,
       1998 and 1997, respectively (on a pro forma basis, giving effect to the New
       Management Agreement,  management fees for the three months ended March 31,
       1997 would have been $1.6 million).
  
       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 three months ended March 31, 1998, the
       Company accrued $5.1 million of dividends on the Series A Preferred  Stock,
       with a corresponding  reduction in additional capital. Such amount has been
       excluded from the Company's condensed  consolidated statement of cash flows
       due to its noncash nature.
  
  5.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The Company  made cash  payments  for  interest  of $3.7  million and $11.2
       million   during  the  three   months   ended  March  31,  1998  and  1997,
       respectively.
  
  6.   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.
  
                                          6
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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 three months ended March 31, 1998 and 1997 is as follows
  (dollars in millions, "NM" denotes percentage is not meaningful):
  Three Months Ended
                                                              March 31,                     Increase / (Decrease)
                                                       1998              1997               $                 %
  Service income, net..............................    $105.4           $104.1             $1.3            1.2%
  Operating, selling, general and administrative
       expenses....................................      67.5             67.0              0.5            0.7
                                                       ------           ------
  Operating income before depreciation and
       amortization (1)............................      37.9             37.1              0.8            2.2
  Depreciation and amortization....................      28.0             28.0
                                                       ------           ------
  Operating income.................................       9.9              9.1              0.8            8.8
                                                       ------           ------
  Interest expense.................................      28.6             29.4             (0.8)          (2.7)
  Investment income................................      (0.3)            (0.4)            (0.1)         (25.0)
  Equity in net losses of affiliates...............                        2.1             (2.1)            NM
  Other............................................       0.2              0.2
  Income tax benefit...............................      (6.8)            (7.9)            (1.1)         (13.9)
                                                       ------           ------
       Net loss....................................    ($11.8)          ($14.3)           ($2.5)         (17.5%)
                                                       ======           ======
  ----------
  (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  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.
  Of the $1.3 million  increase in service  income for the three month period from
  1997 to 1998,  $2.2 million is  attributable to subscriber  growth,  offset,  in
  part, by a decrease of $0.9 million primarily  attributable to the 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 $0.5 million  increase in  operating,  selling,  general and  administrative
  expenses for the three month period from 1997 to 1998 is primarily  attributable
  to an increase in commission  costs associated with more gross sales in 1998 and
  increased  labor costs,  offset,  in part, by improved bad debt  experience as a
  result of stronger credit procedures.
  
  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
  
                                          7
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
  
  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 $1.6 million and $1.4 million were charged to selling,
  general and administrative expenses during the three months ended March 31, 1998
  and  1997,  respectively  (on a pro  forma  basis,  giving  effect  to  the  New
  Management Agreement,  management fees for the three months ended March 31, 1997
  would have been $1.6 million).
  
  The $0.8  million  decrease in interest  expense for the three month period from
  1997  to  1998  is  primarily  due  to the  effects  of  lower  levels  of  debt
  outstanding,  offset,  in part,  by the effects of an increase in the  Company's
  effective weighted average interest rate.
  
  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   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 $1.2  million  during the three months ended March 31, 1998 and
  1997, respectively.
  
  Under  the  terms  of  the   partnership   agreement,   49.5%  of  Garden  State
  Cablevision's net (income) losses are allocated to the Company. During the three
  months  ended March 31,  1998 and 1997,  the  Company  recognized  equity in net
  (income) losses of Garden State  Cablevision of ($0.2) million and $1.8 million,
  respectively.
  
  Effective April 1, 1998, the Company  transferred AWACS Garden State to a wholly
  owned  subsidiary  of  Comcast  at net book  value.  As of March 31,  1998,  the
  Company's  investment in Garden State  Cablevision,  classified as investment in
  and due to affiliate in the Company's condensed  consolidated balance sheet, was
  $98.8 million.
  
  The $1.1 million  decrease in income tax benefit for the three month period from
  1997 to 1998 is primarily  attributable  to the decrease in the  Company's  loss
  before income tax benefit.
  
  For the three  months  ended March 31,  1998 and 1997,  the  Company's  earnings
  before income tax benefit,  equity in net losses of affiliates and fixed charges
  (interest  expense)  was $10.0  million  and $9.4  million,  respectively.  Such
  earnings were not adequate to cover the Company's fixed charges of $28.6 million
  and $29.4  million  for  these  periods,  respectively.  Fixed  charges  include
  non-cash interest expense of $1.4 million and $17.5 million for the three months
  ended March 31, 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 $28.0 million during each of the
  three months ended March 31, 1998 and 1997.
  
  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.
  
                                          8
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 1998
  
  PART II.  OTHER INFORMATION
  
  ITEM 1.   LEGAL PROCEEDINGS
  
       The  Company  is not  party to  litigation  which,  in the  opinion  of the
       Company's management,  will have a material adverse effect on the Company's
       financial position, results of operations or liquidity.
  
  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:
  
            (i)  The Registrant filed a Current Report on Form 8-K under Item 5 on
                 February  9, 1998  relating  to the  merger of  Comcast  Cellular
                 Holdings,  Inc.  into  Comcast  Cellular  Corporation,  effective
                 December 23, 1997.
  
                                          9
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                            QUARTER ENDED MARCH 31, 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
                                                    Executive Vice President
                                                    (Principal Accounting Officer)
  
  Date: May 14, 1998
  
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