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:
  
                                    JUNE 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 June 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 JUNE 30, 1998
  
                                  TABLE OF CONTENTS
  <TABLE>
  <CAPTION>
                                                                                                   Page
                                                                                                  Number
  <S>                             <C>                                                             <C>
  PART I.           FINANCIAL INFORMATION
  
                    Item 1.       Financial Statements
  
                                  Condensed Consolidated Balance
                                  Sheet as of June 30, 1998 and December 31,
                                  1997 (Unaudited)......................................................2
  
                                  Condensed Consolidated Statement of
                                  Operations and Accumulated Deficit for
                                  the Six and Three Months Ended June 30,
                                  1998 and 1997 (Unaudited).............................................3
  
                                  Condensed Consolidated Statement of Cash
                                  Flows for the Six Months Ended June 30,
                                  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 - 9
  
  PART II.          OTHER INFORMATION
  
                    Item 1.       Legal Proceedings....................................................10
  
                    Item 6.       Exhibits and Reports on Form 8-K.....................................10
  
                    SIGNATURE..........................................................................11
  </TABLE>
                             --------------------------
  
  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 JUNE 30, 1998
  
  PART I.           FINANCIAL INFORMATION
  
  ITEM 1.           FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                  (Dollars in thousands, except share data)
                                                                                           June 30,       December 31,
                                                                                             1998             1997
                                                                                             ----             ----
  <S>                                                                                       <C>                <C>   
  ASSETS
  
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $10,379            $4,692
     Accounts receivable, less allowance for doubtful accounts
       of $6,597 and $6,356.......................................................           69,721            59,252
     Inventories..................................................................           14,938            14,154
     Due from affiliates..........................................................              660
     Other current assets.........................................................            3,678             3,147
                                                                                         ----------        ----------
       Total current assets.......................................................           99,376            81,245
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           28,390            28,570
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          612,174           595,861
     Accumulated depreciation.....................................................         (222,413)         (182,632)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          389,761           413,229
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,276,150         1,275,861
     Accumulated amortization.....................................................         (338,042)         (321,450)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          938,108           954,411
                                                                                         ----------        ----------
                                                                                         $1,455,635        $1,477,455
                                                                                         ==========        ==========
  
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $77,770          $100,159
     Accrued interest.............................................................           16,820            17,388
     Current portion of long-term debt............................................              552               430
     Due to affiliates............................................................                             47,116
                                                                                         ----------        ----------
       Total current liabilities..................................................           95,142           165,093
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,249,338         1,224,511
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................                             99,014
                                                                                         ----------        ----------
  DUE TO AFFILIATE................................................................           13,725
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          241,485           227,944
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            7,206             5,878
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          184,018           173,602
                                                                                         ----------        ----------
  
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares;
       issued, 100 shares ........................................................
     Additional capital...........................................................          548,269           488,301
     Accumulated deficit..........................................................         (883,548)         (906,888)
                                                                                         ----------        ----------
       Total stockholder's deficiency.............................................         (335,279)         (418,587)
                                                                                         ----------        ----------
                                                                                         $1,455,635        $1,477,455
                                                                                         ==========        ==========
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          2
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                    (Dollars in thousands)
                                                                          Six Months Ended         Three Months Ended
                                                                              June 30,                  June 30,
                                                                         1998         1997         1998         1997
  <S>                                                                  <C>          <C>           <C>          <C>     
  SERVICE INCOME, net...........................................       $221,274     $220,273      $115,888     $116,194
                                                                      ---------    ---------     ---------    --------- 
  
  COSTS AND EXPENSES
     Operating..................................................         18,822       18,931         9,466        9,047
     Selling, general and administrative........................        117,076      114,747        58,959       57,628
     Depreciation and amortization..............................         57,683       53,582        29,689       25,577
                                                                      ---------    ---------     ---------    --------- 
                                                                        193,581      187,260        98,114       92,252
                                                                      ---------    ---------     ---------    --------- 
  
  OPERATING INCOME..............................................         27,693       33,013        17,774       23,942
  
  OTHER (INCOME) EXPENSE
     Interest expense...........................................         56,075       61,165        27,497       31,717
     Investment income..........................................           (666)      (1,570)         (336)      (1,119)
     Equity in net losses (income) of affiliates................              9        3,520           (11)       1,399
     Other......................................................            626          440           398          271
                                                                      ---------    ---------     ---------    --------- 
                                                                         56,044       63,555        27,548       32,268
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE INCOME TAX BENEFIT AND
     EXTRAORDINARY ITEM.........................................        (28,351)     (30,542)       (9,774)      (8,326)
  
  INCOME TAX BENEFIT............................................        (10,384)     (10,948)       (3,616)      (3,024)
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE EXTRAORDINARY ITEM................................        (17,967)     (19,594)       (6,158)      (5,302)
  
  EXTRAORDINARY ITEM............................................                      (7,313)                    (7,313)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS......................................................        (17,967)     (26,907)       (6,158)     (12,615)
  
  PREFERRED DIVIDENDS...........................................        (10,416)      (2,261)       (5,310)      (2,261)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER...............................       ($28,383)    ($29,168)     ($11,468)    ($14,876)
                                                                      =========    =========     =========    =========
  
  ACCUMULATED DEFICIT
     Beginning of period........................................      ($906,888)   ($856,280)    ($918,697)   ($870,572)
     Dividend of AWACS Garden State, Inc. to Parent.............         41,307                     41,307
     Net loss...................................................        (17,967)     (26,907)       (6,158)     (12,615)
                                                                      ---------    ---------     ---------    --------- 
     End of period..............................................      ($883,548)   ($883,187)    ($883,548)   ($883,187)
                                                                      =========    =========     =========    ========= 
  </TABLE>
  See notes to condensed consolidated financial statements.
  
                                          3
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                                             (Dollars in thousands)
                                                                                            Six Months Ended June 30,
                                                                                             1998             1997
                                                                                             ----             ----
  <S>                                                                                      <C>               <C>      
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($17,967)         ($26,907)
     Adjustments to reconcile net loss to net cash (used in) provided
       by operating activities:
       Depreciation and amortization..............................................           57,683            53,582
       Non-cash interest expense..................................................            1,441            27,997
       Equity in net losses of affiliates.........................................                9             3,520
       Minority interest..........................................................              663               702
       Deferred management fees...................................................                              3,006
       Deferred income taxes and other............................................           (9,819)           (9,750)
       Extraordinary item.........................................................                              7,313
                                                                                            -------           -------
                                                                                             32,010            59,463
  
       Changes in working capital accounts........................................          (36,077)           14,165
                                                                                            -------           -------
  
             Net cash (used in) provided by operating activities..................           (4,067)           73,628
                                                                                            -------           -------
  
  FINANCING ACTIVITIES
     Proceeds from borrowings of long-term debt...................................           35,000         1,018,370
     Repayments of long-term debt.................................................          (10,104)       (1,143,474)
     Deferred financing costs.....................................................             (120)          (27,572)
     Proceeds from issuance of mandatorily redeemable preferred stock.............                            161,478
     Net transactions with affiliates.............................................            2,770               570
                                                                                            -------           -------
  
             Net cash provided by financing activities............................           27,546             9,372
                                                                                            -------           -------
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................          (17,377)          (57,897)
     Other........................................................................             (415)           (1,101)
                                                                                            -------           -------
  
             Net cash used in investing activities................................          (17,792)          (58,998)
                                                                                            -------           -------
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            5,687            24,002
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,692             4,980
                                                                                            -------           -------
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $10,379           $28,982
                                                                                            =======           =======
  </TABLE>
  
  See notes to condensed consolidated financial statements.
  
                                          4
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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 June 30, 1998,  the condensed
       consolidated  statements of operations and accumulated  deficit for the six
       and  three  months  ended  June  30,  1998  and  1997  and  the   condensed
       consolidated statement of cash flows for the six months ended June 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 June 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 June 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 June 30, 1998 and December 31, 1997, the Company's effective weighted
       average  interest  rate on its  long-term  debt  outstanding  was 8.80% 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
       six and three months ended June 30, 1997.
  
  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 $2.5  million for the six months  ended June 30, 1998 and 1997,
       respectively,  and $1.3  million for the three  months ended June 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.
  
                                          5
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
       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 June 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 $3.3  million,  $3.0  million,  $1.7  million  and $1.6
       million were charged to selling, general and administrative expenses during
       the six and three months ended June 30, 1998 and 1997,  respectively  (on a
       pro forma basis, giving effect to the New Management Agreement,  management
       fees for the six and three  months ended June 30, 1997 would have been $3.3
       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 six and three  months ended June 30,
       1998 and 1997,  the Company  accrued  $10.4  million,  $2.3  million,  $5.3
       million  and $2.3  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.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The  Company  made cash  payments  for  interest  of $55.2  million,  $22.2
       million,  $51.5 million and $11.0  million  during the six and three months
       ended June 30, 1998 and 1997, respectively.
  
       The Company made cash payments for income taxes of $0.2 million  during the
       six and three months ended June 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.
  
                                          6
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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 six and three months ended June 30, 1998 and 1997 is as
  follows (dollars in millions, "NM" denotes percentage is not meaningful):
  <TABLE>
  <CAPTION>
                                                          Six Months Ended
                                                              June 30,                      Increase / (Decrease)
                                                       1998              1997               $                 %
                                                       ----              ----               -                 -
  <S>                                                  <C>              <C>                <C>               <C> 
  Service income, net..............................    $221.3           $220.3             $1.0              0.5%
  Operating, selling, general and administrative
       expenses....................................     135.9            133.7              2.2              1.6
                                                        -----            ----- 
  Operating income before depreciation and
       amortization (1)............................      85.4             86.6             (1.2)            (1.4)
  Depreciation and amortization....................      57.7             53.6              4.1              7.6
                                                        -----            ----- 
  Operating income.................................      27.7             33.0             (5.3)           (16.1)
                                                        -----            ----- 
  Interest expense.................................      56.1             61.2             (5.1)            (8.3)
  Investment income................................      (0.6)            (1.6)            (1.0)           (62.5)
  Equity in net losses of affiliates...............                        3.5             (3.5)              NM
  Other............................................       0.6              0.4              0.2             50.0
  Income tax benefit...............................     (10.4)           (10.9)            (0.5)            (4.6)
  Extraordinary item...............................                       (7.3)            (7.3)              NM
                                                        -----            ----- 
       Net loss....................................    ($18.0)          ($26.9)           ($8.9)           (33.1%)
                                                       ======           ======          
  
                                                         Three Months Ended
                                                              June 30,                      Increase / (Decrease)
                                                       1998              1997               $                 %
                                                       ----              ----               -                 -
  Service income, net..............................    $115.9           $116.2            ($0.3)            (0.3%)
  Operating, selling, general and administrative
       expenses....................................      68.4             66.7              1.7              2.5
                                                        -----            ----- 
  Operating income before depreciation and
       amortization (1)............................      47.5             49.5             (2.0)            (4.0)
  Depreciation and amortization....................      29.7             25.6              4.1             16.0
                                                        -----            ----- 
  Operating income.................................      17.8             23.9             (6.1)           (25.5)
                                                        -----            ----- 
  Interest expense.................................      27.5             31.7             (4.2)           (13.2)
  Investment income................................      (0.3)            (1.1)            (0.8)           (72.7)
  Equity in net losses of affiliates...............                        1.4             (1.4)              NM
  Other............................................       0.4              0.2              0.2            100.0
  Income tax benefit...............................      (3.6)            (3.0)             0.6             20.0
  Extraordinary item...............................                       (7.3)            (7.3)              NM
                                                        -----            ----- 
       Net loss....................................     ($6.2)          ($12.6)           ($6.4)           (50.8%)
                                                       ======           ======          
  </TABLE>
  ----------
  (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 
  
                                          7
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
  
       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 was flat for the six 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  $2.2 million and $1.7 million  increases in operating,  selling,
  general and  administrative  expenses  for the six and three month  periods from
  1997 to 1998  are  primarily  attributable  to  increases  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 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 $3.3 million,  $3.0  million,  $1.7 million and $1.6 million
  were charged to selling,  general and administrative expenses during the six and
  three months ended June 30, 1998 and 1997,  respectively  (on a pro forma basis,
  giving effect to the New Management  Agreement,  management fees for the six and
  three months ended June 30, 1997 would have been $3.3 million and $1.7  million,
  respectively).
  
  The $4.1 million increase in depreciation  and amortization  expense for each of
  the six and three month periods from 1997 to 1998 is 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 $5.1 million and $4.2 million  decreases in interest  expense for
  the six 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 $2.5
  million for the six months ended June 30, 1998 and 1997, respectively,  and $1.3
  million for the three months ended June 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 six
  months  ended  June 30,  1998 and 1997,  the  Company  recognized  equity in net
  (income) loss of Garden State  Cablevision  of ($0.2)  million and $3.0 million,
  respectively.  During  the  three  months  ended  June  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.
  
  The  respective  $0.5 million  decrease and $0.6 million  increase in income tax
  benefit  for the six 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 six and three months
  ended June 30, 1997.
  
                                          8
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
  
  For the six and  three  months  ended  June 30,  1998 and  1997,  the  Company's
  earnings before  extraordinary  item,  income tax benefit,  equity in net losses
  (income) of affiliates and fixed charges  (interest  expense) was $27.7 million,
  $34.1 million, $17.7 million and $24.8 million, respectively. Such earnings were
  not  adequate  to cover the  Company's  fixed  charges of $56.1  million,  $61.2
  million, $27.5 million and $31.7 million for these periods, respectively.  Fixed
  charges include non-cash  interest expense of $1.4 million and $28.0 million for
  the six months ended June 30, 1998 and 1997, respectively, and $10.5 million for
  the three months ended June 30, 1997. 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 $57.7 million,  $53.6 million,  $29.7
  million and $25.6  million  during the six and three  months ended June 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.
  
  
                                          9
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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.
  
  
  
  
  
  
  
                                         10
  <PAGE>
                    COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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
                                                     Executive Vice President
                                                    (Principal Accounting Officer)
  
  
  
  Date: August 14, 1998
  
                                         11
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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": "98688303"}, "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:
  
                                    JUNE 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 June 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 JUNE 30, 1998
  
                                  TABLE OF CONTENTS
  Page
                                                                                                  Number
  PART I.           FINANCIAL INFORMATION
  
                    Item 1.       Financial Statements
  
                                  Condensed Consolidated Balance
                                  Sheet as of June 30, 1998 and December 31,
                                  1997 (Unaudited)......................................................2
  
                                  Condensed Consolidated Statement of
                                  Operations and Accumulated Deficit for
                                  the Six and Three Months Ended June 30,
                                  1998 and 1997 (Unaudited).............................................3
  
                                  Condensed Consolidated Statement of Cash
                                  Flows for the Six Months Ended June 30,
                                  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 - 9
  
  PART II.          OTHER INFORMATION
  
                    Item 1.       Legal Proceedings....................................................10
  
                    Item 6.       Exhibits and Reports on Form 8-K.....................................10
  
                    SIGNATURE..........................................................................11
  --------------------------
  
  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 JUNE 30, 1998
  
  PART I.           FINANCIAL INFORMATION
  
  ITEM 1.           FINANCIAL STATEMENTS
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                     (Unaudited)
  (Dollars in thousands, except share data)
                                                                                           June 30,       December 31,
                                                                                             1998             1997
                                                                                             ----             ----
  ASSETS
  
  CURRENT ASSETS
     Cash and cash equivalents....................................................          $10,379            $4,692
     Accounts receivable, less allowance for doubtful accounts
       of $6,597 and $6,356.......................................................           69,721            59,252
     Inventories..................................................................           14,938            14,154
     Due from affiliates..........................................................              660
     Other current assets.........................................................            3,678             3,147
                                                                                         ----------        ----------
       Total current assets.......................................................           99,376            81,245
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................           28,390            28,570
                                                                                         ----------        ----------
  PROPERTY AND EQUIPMENT..........................................................          612,174           595,861
     Accumulated depreciation.....................................................         (222,413)         (182,632)
                                                                                         ----------        ----------
     Property and equipment, net..................................................          389,761           413,229
                                                                                         ----------        ----------
  DEFERRED CHARGES AND OTHER......................................................        1,276,150         1,275,861
     Accumulated amortization.....................................................         (338,042)         (321,450)
                                                                                         ----------        ----------
     Deferred charges and other, net..............................................          938,108           954,411
                                                                                         ----------        ----------
                                                                                         $1,455,635        $1,477,455
                                                                                         ==========        ==========
  
  LIABILITIES AND STOCKHOLDER'S DEFICIENCY
  
  CURRENT LIABILITIES
     Accounts payable and accrued expenses........................................          $77,770          $100,159
     Accrued interest.............................................................           16,820            17,388
     Current portion of long-term debt............................................              552               430
     Due to affiliates............................................................                             47,116
                                                                                         ----------        ----------
       Total current liabilities..................................................           95,142           165,093
                                                                                         ----------        ----------
  LONG-TERM DEBT, less current portion............................................        1,249,338         1,224,511
                                                                                         ----------        ----------
  INVESTMENT IN AFFILIATE.........................................................                             99,014
                                                                                         ----------        ----------
  DUE TO AFFILIATE................................................................           13,725
                                                                                         ----------        ----------
  DEFERRED INCOME TAXES...........................................................          241,485           227,944
                                                                                         ----------        ----------
  MINORITY INTEREST AND OTHER.....................................................            7,206             5,878
                                                                                         ----------        ----------
  
  COMMITMENTS AND CONTINGENCIES
  
  MANDATORILY REDEEMABLE PREFERRED STOCK HELD BY AFFILIATE........................          184,018           173,602
                                                                                         ----------        ----------
  
  STOCKHOLDER'S DEFICIENCY
     Common stock, $.01 par value - authorized, 1,000 shares;
       issued, 100 shares ........................................................
     Additional capital...........................................................          548,269           488,301
     Accumulated deficit..........................................................         (883,548)         (906,888)
                                                                                         ----------        ----------
       Total stockholder's deficiency.............................................         (335,279)         (418,587)
                                                                                         ----------        ----------
                                                                                         $1,455,635        $1,477,455
                                                                                         ==========        ==========
  See notes to condensed consolidated financial statements.
  
                                          2
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
                                     (Unaudited)
  (Dollars in thousands)
                                                                          Six Months Ended         Three Months Ended
                                                                              June 30,                  June 30,
                                                                         1998         1997         1998         1997
  SERVICE INCOME, net...........................................       $221,274     $220,273      $115,888     $116,194
                                                                      ---------    ---------     ---------    --------- 
  
  COSTS AND EXPENSES
     Operating..................................................         18,822       18,931         9,466        9,047
     Selling, general and administrative........................        117,076      114,747        58,959       57,628
     Depreciation and amortization..............................         57,683       53,582        29,689       25,577
                                                                      ---------    ---------     ---------    --------- 
                                                                        193,581      187,260        98,114       92,252
                                                                      ---------    ---------     ---------    --------- 
  
  OPERATING INCOME..............................................         27,693       33,013        17,774       23,942
  
  OTHER (INCOME) EXPENSE
     Interest expense...........................................         56,075       61,165        27,497       31,717
     Investment income..........................................           (666)      (1,570)         (336)      (1,119)
     Equity in net losses (income) of affiliates................              9        3,520           (11)       1,399
     Other......................................................            626          440           398          271
                                                                      ---------    ---------     ---------    --------- 
                                                                         56,044       63,555        27,548       32,268
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE INCOME TAX BENEFIT AND
     EXTRAORDINARY ITEM.........................................        (28,351)     (30,542)       (9,774)      (8,326)
  
  INCOME TAX BENEFIT............................................        (10,384)     (10,948)       (3,616)      (3,024)
                                                                      ---------    ---------     ---------    --------- 
  
  LOSS BEFORE EXTRAORDINARY ITEM................................        (17,967)     (19,594)       (6,158)      (5,302)
  
  EXTRAORDINARY ITEM............................................                      (7,313)                    (7,313)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS......................................................        (17,967)     (26,907)       (6,158)     (12,615)
  
  PREFERRED DIVIDENDS...........................................        (10,416)      (2,261)       (5,310)      (2,261)
                                                                      ---------    ---------     ---------    --------- 
  
  NET LOSS FOR COMMON STOCKHOLDER...............................       ($28,383)    ($29,168)     ($11,468)    ($14,876)
                                                                      =========    =========     =========    =========
  
  ACCUMULATED DEFICIT
     Beginning of period........................................      ($906,888)   ($856,280)    ($918,697)   ($870,572)
     Dividend of AWACS Garden State, Inc. to Parent.............         41,307                     41,307
     Net loss...................................................        (17,967)     (26,907)       (6,158)     (12,615)
                                                                      ---------    ---------     ---------    --------- 
     End of period..............................................      ($883,548)   ($883,187)    ($883,548)   ($883,187)
                                                                      =========    =========     =========    =========
  See notes to condensed consolidated financial statements.
  
                                          3
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (Unaudited)
  (Dollars in thousands)
                                                                                            Six Months Ended June 30,
                                                                                             1998             1997
                                                                                             ----             ----
  OPERATING ACTIVITIES
     Net loss.....................................................................         ($17,967)         ($26,907)
     Adjustments to reconcile net loss to net cash (used in) provided
       by operating activities:
       Depreciation and amortization..............................................           57,683            53,582
       Non-cash interest expense..................................................            1,441            27,997
       Equity in net losses of affiliates.........................................                9             3,520
       Minority interest..........................................................              663               702
       Deferred management fees...................................................                              3,006
       Deferred income taxes and other............................................           (9,819)           (9,750)
       Extraordinary item.........................................................                              7,313
                                                                                            -------           -------
                                                                                             32,010            59,463
  
       Changes in working capital accounts........................................          (36,077)           14,165
                                                                                            -------           -------
  
             Net cash (used in) provided by operating activities..................           (4,067)           73,628
                                                                                            -------           -------
  
  FINANCING ACTIVITIES
     Proceeds from borrowings of long-term debt...................................           35,000         1,018,370
     Repayments of long-term debt.................................................          (10,104)       (1,143,474)
     Deferred financing costs.....................................................             (120)          (27,572)
     Proceeds from issuance of mandatorily redeemable preferred stock.............                            161,478
     Net transactions with affiliates.............................................            2,770               570
                                                                                            -------           -------
  
             Net cash provided by financing activities............................           27,546             9,372
                                                                                            -------           -------
  
  INVESTING ACTIVITIES
     Capital expenditures.........................................................          (17,377)          (57,897)
     Other........................................................................             (415)           (1,101)
                                                                                            -------           -------
  
             Net cash used in investing activities................................          (17,792)          (58,998)
                                                                                            -------           -------
  
  INCREASE IN CASH AND CASH EQUIVALENTS...........................................            5,687            24,002
  
  CASH AND CASH EQUIVALENTS, beginning of period..................................            4,692             4,980
                                                                                            -------           -------
  
  CASH AND CASH EQUIVALENTS, end of period........................................          $10,379           $28,982
                                                                                            =======           =======
  See notes to condensed consolidated financial statements.
  
                                          4
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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 June 30, 1998,  the condensed
       consolidated  statements of operations and accumulated  deficit for the six
       and  three  months  ended  June  30,  1998  and  1997  and  the   condensed
       consolidated statement of cash flows for the six months ended June 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 June 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 June 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 June 30, 1998 and December 31, 1997, the Company's effective weighted
       average  interest  rate on its  long-term  debt  outstanding  was 8.80% 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
       six and three months ended June 30, 1997.
  
  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 $2.5  million for the six months  ended June 30, 1998 and 1997,
       respectively,  and $1.3  million for the three  months ended June 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.
  
                                          5
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
                                     (Unaudited)
  
       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 June 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 $3.3  million,  $3.0  million,  $1.7  million  and $1.6
       million were charged to selling, general and administrative expenses during
       the six and three months ended June 30, 1998 and 1997,  respectively  (on a
       pro forma basis, giving effect to the New Management Agreement,  management
       fees for the six and three  months ended June 30, 1997 would have been $3.3
       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 six and three  months ended June 30,
       1998 and 1997,  the Company  accrued  $10.4  million,  $2.3  million,  $5.3
       million  and $2.3  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.   STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
  
       The  Company  made cash  payments  for  interest  of $55.2  million,  $22.2
       million,  $51.5 million and $11.0  million  during the six and three months
       ended June 30, 1998 and 1997, respectively.
  
       The Company made cash payments for income taxes of $0.2 million  during the
       six and three months ended June 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.
  
                                          6
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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 six and three months ended June 30, 1998 and 1997 is as
  follows (dollars in millions, "NM" denotes percentage is not meaningful):
  Six Months Ended
                                                              June 30,                      Increase / (Decrease)
                                                       1998              1997               $                 %
                                                       ----              ----               -                 -
  Service income, net..............................    $221.3           $220.3             $1.0              0.5%
  Operating, selling, general and administrative
       expenses....................................     135.9            133.7              2.2              1.6
                                                        -----            ----- 
  Operating income before depreciation and
       amortization (1)............................      85.4             86.6             (1.2)            (1.4)
  Depreciation and amortization....................      57.7             53.6              4.1              7.6
                                                        -----            ----- 
  Operating income.................................      27.7             33.0             (5.3)           (16.1)
                                                        -----            ----- 
  Interest expense.................................      56.1             61.2             (5.1)            (8.3)
  Investment income................................      (0.6)            (1.6)            (1.0)           (62.5)
  Equity in net losses of affiliates...............                        3.5             (3.5)              NM
  Other............................................       0.6              0.4              0.2             50.0
  Income tax benefit...............................     (10.4)           (10.9)            (0.5)            (4.6)
  Extraordinary item...............................                       (7.3)            (7.3)              NM
                                                        -----            ----- 
       Net loss....................................    ($18.0)          ($26.9)           ($8.9)           (33.1%)
                                                       ======           ======          
  
                                                         Three Months Ended
                                                              June 30,                      Increase / (Decrease)
                                                       1998              1997               $                 %
                                                       ----              ----               -                 -
  Service income, net..............................    $115.9           $116.2            ($0.3)            (0.3%)
  Operating, selling, general and administrative
       expenses....................................      68.4             66.7              1.7              2.5
                                                        -----            ----- 
  Operating income before depreciation and
       amortization (1)............................      47.5             49.5             (2.0)            (4.0)
  Depreciation and amortization....................      29.7             25.6              4.1             16.0
                                                        -----            ----- 
  Operating income.................................      17.8             23.9             (6.1)           (25.5)
                                                        -----            ----- 
  Interest expense.................................      27.5             31.7             (4.2)           (13.2)
  Investment income................................      (0.3)            (1.1)            (0.8)           (72.7)
  Equity in net losses of affiliates...............                        1.4             (1.4)              NM
  Other............................................       0.4              0.2              0.2            100.0
  Income tax benefit...............................      (3.6)            (3.0)             0.6             20.0
  Extraordinary item...............................                       (7.3)            (7.3)              NM
                                                        -----            ----- 
       Net loss....................................     ($6.2)          ($12.6)           ($6.4)           (50.8%)
                                                       ======           ======
  ----------
  (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 
  
                                          7
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
  
       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 was flat for the six 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  $2.2 million and $1.7 million  increases in operating,  selling,
  general and  administrative  expenses  for the six and three month  periods from
  1997 to 1998  are  primarily  attributable  to  increases  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 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 $3.3 million,  $3.0  million,  $1.7 million and $1.6 million
  were charged to selling,  general and administrative expenses during the six and
  three months ended June 30, 1998 and 1997,  respectively  (on a pro forma basis,
  giving effect to the New Management  Agreement,  management fees for the six and
  three months ended June 30, 1997 would have been $3.3 million and $1.7  million,
  respectively).
  
  The $4.1 million increase in depreciation  and amortization  expense for each of
  the six and three month periods from 1997 to 1998 is 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 $5.1 million and $4.2 million  decreases in interest  expense for
  the six 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 $2.5
  million for the six months ended June 30, 1998 and 1997, respectively,  and $1.3
  million for the three months ended June 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 six
  months  ended  June 30,  1998 and 1997,  the  Company  recognized  equity in net
  (income) loss of Garden State  Cablevision  of ($0.2)  million and $3.0 million,
  respectively.  During  the  three  months  ended  June  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.
  
  The  respective  $0.5 million  decrease and $0.6 million  increase in income tax
  benefit  for the six 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 six and three months
  ended June 30, 1997.
  
                                          8
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 30, 1998
  
  For the six and  three  months  ended  June 30,  1998 and  1997,  the  Company's
  earnings before  extraordinary  item,  income tax benefit,  equity in net losses
  (income) of affiliates and fixed charges  (interest  expense) was $27.7 million,
  $34.1 million, $17.7 million and $24.8 million, respectively. Such earnings were
  not  adequate  to cover the  Company's  fixed  charges of $56.1  million,  $61.2
  million, $27.5 million and $31.7 million for these periods, respectively.  Fixed
  charges include non-cash  interest expense of $1.4 million and $28.0 million for
  the six months ended June 30, 1998 and 1997, respectively, and $10.5 million for
  the three months ended June 30, 1997. 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 $57.7 million,  $53.6 million,  $29.7
  million and $25.6  million  during the six and three  months ended June 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.
  
                                          9
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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.
  
                                         10
  COMCAST CELLULAR CORPORATION AND SUBSIDIARIES
                                      FORM 10-Q
                             QUARTER ENDED JUNE 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
                                                     Executive Vice President
                                                    (Principal Accounting Officer)
  
  Date: August 14, 1998
  
                                         11