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                    CERTIFICATE OF DESIGNATIONS, PREFERENCES

                                       AND

              RIGHTS OF SERIES E JUNIOR CONVERTIBLE PREFERRED STOCK

                                       OF

                          WINSTAR COMMUNICATIONS, INC.

                   ------------------------------------------

                        Under Section 151 of the General

                    Corporation Law of the State of Delaware

                   ------------------------------------------

            WINSTAR COMMUNICATIONS, INC., a Delaware corporation (the
"Corporation"), hereby certifies that, pursuant to the authority vested in the
Board of Directors of the Corporation under ARTICLE FOURTH of the Corporation's
Certificate of Incorporation, and in accordance with Section 151 of the Delaware
General Corporation Law, the Board of Directors has adopted the following
resolution creating the Corporation's Series E Junior Convertible Preferred
Stock, par value $.01 per share:

         RESOLVED, that a series of the class of Preferred Stock, $.01 par
value, of the Corporation be hereby created and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof are as follows:

         A. Designation. A Series of Preferred Stock shall be designated and
known as the Series E Junior Convertible Preferred Stock (hereinafter called
"Preferred Stock E"). Each share of Preferred Stock E shall be identical in all
respects with the other shares of Preferred Stock E.

         B. Number of Shares. The number of shares of Preferred Stock E shall
initially be 75,100 shares, which number from time to time may be increased or
decreased (but not decreased below the number of shares of the series then
outstanding) by the Board of Directors. The Preferred Stock E is not subject to
a right of redemption by the Corporation.

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         C. Dividends. The holder of the Preferred Stock E shall not be entitled
to receive any dividends on the Preferred Stock E.

         1. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, then,
before any distribution or payment shall be made to the holders of any junior
stock (as defined in Section 8 hereinbelow), but after all distributions and
payments required to be made to the holders of senior stock (as defined in
Section 9 hereinbelow), the holder of Preferred Stock E shall be entitled to be
paid the amount of $59.93 per share. If such payment shall have been made in
full to the holder of Preferred Stock E then, the holder of the Preferred Stock
E shall not be entitled to receive any other assets or funds. If, upon any
liquidation, dissolution or winding up of the affairs of the Corporation, the
amounts so payable are not paid in full to the holder of all outstanding shares
of Preferred Stock E, then the holder of Preferred Stock E and the holders of
all other parity stock (as defined in Section 8 hereinbelow) shall share ratably
in any distribution of assets in proportion to the full amounts to which they
would otherwise be respectively entitled according to their respective rights
and preferences. The merger or consolidation of the Corporation with or into one
or more other entities or the sale, lease or conveyance of all or a part of its
assets shall not be deemed to be a liquidation, dissolution or winding up of the
affairs of the Corporation within the meaning of the foregoing provisions of
this Section 4.

         D.       Conversion.

                  1. A holder of shares of Preferred Stock E may convert all,
but not less then all, of its Preferred Stock E shares, on a one-for-one basis
("Conversion Rate"), into the Corporation's common stock par value $.01 per
share ("Common Stock"), at any time on or after August 28, 1999.

                  2. Each share of Preferred Stock E shall automatically be
converted ("Mandatory Conversion") into one share of Common Stock on the first
to occur of (i) August 28, 2010; (ii) the record date for the first meeting of
security holders or written consent of security holders with respect to which
the holder of shares of Preferred Stock E shall be entitled to vote (other than
a vote pursuant to Section 11 hereof), in which event the holder of shares of
Preferred Stock E shall be deemed a holder as of such record date of the shares
of Common Stock into which the shares of Preferred Stock E are converted; or
(iii) the earlier of (y) the execution by the Corporation of a definitive
agreement providing for a "Corporate Event" or (z) the consummation of a
"Corporate Event." A Corporate Event shall mean (A) a merger or consolidation of
the Corporation with or into another corporation or entity; (B) any "person" or
"group" within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Exchange Act") becoming the "beneficial
owner" (within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock
having fifteen percent (15%) or more of the total voting power of all of the
Corporation's voting capital stock then outstanding, unless such person or group
is an underwriter who obtains such fifteen percent (15%) interest in connection
with its participation in a public offering; or (C) the sale, lease, conveyance
or other disposition of fifteen percent (15%) or more of the Corporation's or
its subsidiaries' assets.

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                  3. In order to voluntarily convert shares of Preferred Stock E
into Common Stock, the holder thereof shall surrender the certificate(s)
representing all of its Preferred Stock E shares, duly endorsed or in blank, to
the Corporation at its principal office (or such other place as may be
reasonably designated by the Corporation), shall give written notice to the
Corporation at said office that it elects to convert the same, shall state in
writing therein the name or names in which it wishes the certificate for Common
Stock to be issued and shall make payment to the Corporation of any applicable
transfer or other taxes. The Corporation will, as soon as practicable
thereafter, deliver at said office to such holder of shares of the Preferred
Stock E or to its nominee or nominees, certificates for the number of full
shares of Common Stock to which it shall be entitled as aforesaid and, if
applicable, a check in lieu of any fractional share of Common Stock as provided
in Subsection (5)(g). Shares of the Preferred Stock E shall be deemed to have
been converted as of the date of the surrender of such certificate or
certificates for conversion as provided above, or, in the case of a Mandatory
Conversion, on the date such Mandatory Conversion occurs, and the person
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes, including, but not limited to, with respect to the
right to vote the Common Stock, as the record holder of such Common Stock on
such date.

                  4. The conversion ratio of the Preferred Stock E and,
accordingly, the number of shares of Common Stock into which the shares of
Preferred Stock E may be converted shall be subject to adjustment from time to
time as follows. In case the Corporation shall (i) subdivide or split its
outstanding shares of Common Stock into a larger number of shares by
recapitalization, reclassification or split-up thereof, or by issuance of shares
of Common Stock as a dividend or distribution on the Common Stock, or (ii)
combine its outstanding shares of Common Stock into a smaller number of shares
by recapitalization, reclassification or combination thereof, the conversion
ratio in effect immediately prior thereto shall be adjusted so that the holder
of any shares of Preferred Stock E thereafter shall be entitled to receive upon
such conversion after the happening of any of the events described above, the
same number of shares of Common Stock as such holder would have received had
such shares of Preferred Stock E been converted immediately prior to the
happening of such event.

                  5. Whenever the number of shares of Common Stock deliverable
upon the conversion of each share of Preferred Stock E shall be adjusted
pursuant to the provisions of subdivision (5)(d), the Corporation shall promptly
(i) file with the transfer agent, if any, for the shares of Preferred Stock E, a
certificate, signed by the Chairman of the Board or the President or a Vice
President of the Corporation, and (ii) mail, or cause the transfer agent to
mail, to the holder of the Preferred Stock E, at its last address as it shall
appear upon the stock records of the Corporation, a notice setting forth in each
case, the increased or decreased number of shares of Common Stock thereafter
deliverable upon the exchange of each share of Preferred Stock E. The
certificate filed with the transfer agent shall show, in addition, in reasonable
detail the method of calculation and the facts requiring such adjustment and
upon which such calculation is based.

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                  6. At all times, a sufficient number of the authorized but
unissued shares and/or treasury shares of Common Stock shall be reserved by the
Corporation for the purpose of conversion of all shares of the Preferred Stock E
at the time outstanding.

                  7. In lieu of fractions of shares of Common Stock issuable
upon conversion of the Preferred Stock E, the Corporation shall pay an amount
determined by multiplying (i) the fractional interest in the share of Common
Stock to which such holder would otherwise be entitled and (ii) the average of
the last sale prices for the Common Stock, as reported by the Nasdaq National
Market, for the ten consecutive trading days ending on the second trading day
immediately preceding the conversion date.

         E. Voting Rights. The holder of the Preferred Stock E shall have no
voting rights and shall not be entitled to vote on any matter, except as
provided herein or unless required by applicable law.

         F. Preemptive Rights. The holder of shares of Preferred Stock E shall,
as such, have no preemptive right to purchase or otherwise acquire shares of any
class of stock or other securities of the Corporation now or hereafter
authorized.

         G. Junior and Parity Stock. As used herein with respect to Preferred
Stock E the following terms shall have the following meanings:

                  1. The term "parity stock" shall mean any class of stock of
the Corporation hereafter authorized which expressly states that it ranks on a
parity with the Preferred Stock E in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.

                  2. The term "junior stock" shall mean the Corporation's Common
Stock, par value $.01 per share, and any other class of stock of the Corporation
hereafter authorized, over which the Preferred Stock E is expressly stated as
having a preference or priority in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.

         H. Senior Stock. The term "senior stock" shall mean the Corporation's
6% Series A Preferred Stock, Series B Preferred Stock, Series C 14 1/4% Senior
Cumulative Preferred Stock due 2007 and Series D 7% Senior Convertible Preferred
Stock due 2010 and to any other class of preferred stock or capital stock which
may be hereafter authorized by the Corporation unless such stock is expressly
made junior to or parity with the Preferred Stock E. The Corporation may, at any
time and without the consent of the holder of the Preferred Stock E, authorize a
new class or series of senior stock.

         J. Transfer Restriction. The Preferred Stock E is transferable only in
accordance with this Section 10. Prior to any transfer (including by operation
of law), sale or conveyance of the Preferred Stock E to a person or entity other
than the Corporation, the holder of the Preferred Stock E shall furnish notice
to the Corporation of the terms of such holder's proposal to transfer, sell or
convey the Preferred Stock E and shall first offer the 

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Preferred Stock E to the Corporation in exchange for that number of shares of
Common Stock into which the Preferred Stock E is convertible at the Conversion
Rate. If the Corporation fails to exercise any such first priority right within
sixty days after receipt of a notice containing such offer, then the holder of
the Preferred Stock E may transfer, sell or otherwise convey the Preferred Stock
E only to one holder ("Transferee") on the terms set forth in the notice, and
only upon a written acknowledgment by the Transferee to the Corporation that
such Transferee will be subject to the terms of this Certificate, including the
Transfer Restrictions set forth in this Section 10. If such proposal is modified
in any material respect, the holder of the Preferred Stock E shall be obligated
to re-offer the Preferred Stock E to the Corporation in accordance with the
procedures set forth in this Section 10.

         K. Amendment. The provisions of this Certificate may be amended upon
the affirmative vote of the holders of the Common Stock, to the extent required
by law, and upon the affirmative vote or written consent of the holder of the
shares of Preferred Stock E.

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                  IN WITNESS WHEREOF, WINSTAR COMMUNICATIONS, INC. has caused
this Certificate of Designations to be duly executed by its Executive Vice
President and attested to by its Assistant Secretary, who affirm that the
information contained in the foregoing Certificate of Designations is true under
the penalties of perjury this 28th day of August 1998.

                                          WINSTAR COMMUNICATIONS, INC.

                                          By: /s/ Timothy R. Graham
                                              ---------------------
                                              Name: Timothy R. Graham
                                              Title:   Executive Vice President

Attested to by:    /s/ Kenneth J. Zinghini
                   -----------------------
                   Name: Kenneth J. Zinghini
                   Title:  Assistant Secretary