UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

    X  QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
-------
EXCHANGE ACT OF 1934

For the Quarterly period ended June 30, 1999

                                       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 33-95298

                            GALAXY TELECOM, L.P.
            Exact name of Registrant as specified in its charter)

            Delaware                                   43-1697125

----------------------------------------      ---------------------------------
 (States or other jurisdiction of           (IRS Employer Identification Number)
 incorporation or organization)

 1220 North Main, Sikeston, Missouri                     63801
----------------------------------------      ---------------------------------
(Address of principal executive offices)              (zip code)

Registrant telephone number, including area code: (573) 472-8200

Indicate by check mark whether the Registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
previous 12 months (or for such shorter  period that the Registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days:

                          Yes   X                  No

<PAGE>

                              GALAXY TELECOM, L.P.

                                    FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1999

                                      INDEX

                                                                           PAGE

PART I.    Financial Information

Item 1.  Financial Statements

             Galaxy Telecom, L.P. and Subsidiary ...........................3
             Notes to Consolidated Financial Statements.....................6

Item 2.    Management's Discussion and Analysis of

             Financial Condition and Results of Operations.................10

Item 3.   Quantitative and qualitative disclosures

              about market risk............................................17

PART II.  Other Information................................................19

Signatures    .............................................................20

Exhibit Index .............................................................21


                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1. - FINANCIAL STATEMENTS

                       GALAXY TELECOM, L.P. AND SUDSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                                       June 30,    December 31,
                                                         1999          1998
                                                 -------------    -------------
                          ASSETS

Cash and cash equivalents                        $   2,996,736    $   2,213,777
Subscriber receivables, net of allowance
   for doubtful accounts of $150,299 and

   $116,572, respectively                            4,373,849        4,334,563
Systems and equipment, net                          99,455,465      104,197,674
Intangible assets, net                              37,173,154       38,260,678
Prepaids and other                                   1,901,117        2,735,940
                                                 -------------    -------------
       Total assets                              $ 145,900,321    $ 151,742,632
                                                 =============    =============
         LIABILITIES AND PARTNERS' DEFICIT

Accounts payable and accrued expenses            $  15,928,149    $  14,854,052
Subscriber deposits and deferred revenue             4,017,754        4,078,407
Long-term debt and other obligations               147,394,609      152,445,620
                                                 -------------    -------------
       Total liabilities                           167,340,512      171,378,079
                                                 -------------    -------------
Commitments and contingencies (Note 7)

Partners' deficit:

   General partners                                (21,440,191)     (19,635,447)
   Limited partners                                       --               --
                                                 -------------    -------------
       Total partners' deficit                     (21,440,191)     (19,635,447)
                                                 -------------    -------------
       Total liabilities and partners' deficit   $ 145,900,321    $ 151,742,632
                                                 =============    =============

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



                                       3
<PAGE>

                       GALAXY TELECOM, L.P. AND SUDSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                             For the three months ended June 30,    For the six months ended June 30,

                                                 --------------------------------        ------------------- ------------
                                                      1999               1998               1999                1998
                                                 ------------        ------------        ------------        ------------
<S>                                              <C>                 <C>                 <C>                 <C>
Revenues                                         $ 14,516,917        $ 17,471,933        $ 29,086,470        $ 34,803,001

                                                 ------------        ------------        ------------        ------------
Operating expenses:

   Systems operations                               6,911,118           8,207,353          13,584,884          16,195,030
   Selling, general and administrative              1,405,397           1,967,392           2,905,979           4,185,955
   Management fee to affiliate                        568,400             785,904           1,223,077           1,564,122
   Depreciation and amortization                    5,088,515           6,145,303          10,312,791          12,347,246
                                                 ------------        ------------        ------------        ------------
       Total operating expenses                    13,973,430          17,105,952          28,026,731          34,292,353
                                                 ------------        ------------        ------------        ------------
          Operating income                            543,487             365,981           1,059,739             510,648

Interest expense                                   (4,834,458)         (5,343,330)         (9,601,780)        (10,547,793)
Gain (loss) on sale of assets                       5,793,187          (1,523,507)          6,702,366            (254,840)
Interest income and other, net                         15,938             (69,874)             34,931            (136,674)
                                                 ------------        ------------        ------------        ------------
       Net income (loss)                         $  1,518,154        $ (6,570,730)       $ (1,804,744)       $(10,428,659)
                                                 ============        ============        ============        ============
</TABLE>

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


                                       4
<PAGE>



                       GALAXY TELECOM, L.P. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                               For the six months ended June 30,
                                               ---------------------------------
                                                         1999          1998
                                                    ------------   ------------
Cash flows from operating activities:

   Net loss                                         $(1,804,744)   $(10,428,659)
   Adjustments to reconcile net loss to net cash
    provided by operating activities:

    Depreciation expense                              8,968,069      10,396,089
    Amortization expense                              1,344,722       1,951,157
    Amortization included in interest expense           660,000         467,388
    Provision for doubtful accounts receivable          388,567         631,584
    (Gain) loss on sale of assets                    (6,702,366)        254,787
    Changes in assets and liabilities:

     Subscriber receivables                            (427,853)       (351,797)
     Prepaids and other                                 834,823        (196,028)
     Accounts payable and accrued expenses            1,074,097      (2,433,620)
     Subscriber deposits and deferred revenue           (60,653)       (172,187)
                                                    -----------    ------------
       Net cash provided by operating activities      4,274,662         118,714
                                                    -----------    ------------
Cash flows from investing activities:

   Acquisition of cable systems - net of trades            --          (133,633)
   Proceeds from sales of cable systems               9,201,558      12,609,509
   Acquisition of capital assets                     (6,898,379)     (4,801,432)
   Other intangible assets                             (532,065)       (374,172)
                                                    -----------    ------------
       Net cash provided by investing activities      1,771,114       7,300,272
                                                    -----------    ------------
Cash flows from financing activities:

   Borrowings under term debt and revolver            3,000,000       4,425,000
   Payments under term debt and revolver             (7,465,000)    (13,650,000)
   Net borrowings (payments) on other debt             (616,011)      2,613,987
   Payment of debt issue costs                         (181,806)       (183,833)
                                                    -----------    ------------
       Net cash used in financing activities         (5,262,817)     (6,794,846)
                                                    -----------    ------------
Net increase in cash and cash equivalents               782,959         624,140

Cash and cash equivalents, beginning of period        2,213,777       2,403,098
                                                    -----------    ------------
Cash and cash equivalents, end of period            $ 2,996,736    $  3,027,238
                                                    ===========    ============

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


                                       5
<PAGE>



GALAXY TELECOM, L.P. AND SUBSIDIARY
----------------------------------------------

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
---------------

1.  BASIS OF PRESENTATION AND OTHER INFORMATION

      The attached unaudited interim consolidated financial statements of Galaxy
Telecom,  L.P. and its subsidiary  ("Galaxy" or the "Partnership") are presented
in  accordance  with  the  requirements  of  Article  10 of  Regulation  S-X and
consequently do not include all of the footnote disclosures required for audited
financial  statements by generally accepted accounting  principles.  The results
for the three and six month  periods  ended  June 30,  1999 are not  necessarily
indicative  of the results to be expected for the entire 1999 fiscal  year.  The
accompanying  interim  consolidated  financial  statements  should  be  read  in
conjunction with Galaxy's Annual Report on Form 10-K for the year ended December
31, 1998.

      The following  notes,  insofar as they are  applicable to the three months
and six months ended June 30, 1999 and 1998,  are not audited.  In  management's
opinion,  all  adjustments,   consisting  of  only  normal  recurring  accruals,
considered  necessary for a fair  presentation  of such  consolidated  financial
statements are included.

      The  Partnership has incurred losses each year since its inception and has
a  Partnership  deficit of $21.4  million at June 30,  1999.  During  1998,  the
Partnership  began  implementation of a strategy whereby it would sell its cable
television  systems in its non-core regions and focus on improving and acquiring
cable  television  systems in its core regions,  which are primarily  located in
Illinois, Kansas, Kentucky, Mississippi and Nebraska. In fiscal 1998 and for the
six month period ended June 30, 1999, the Partnership received net proceeds from
sales  of its  non-core  cable  television  systems  of $38.6  million  and $9.2
million,  respectively.  These  proceeds  were  primarily  used to pay  down the
amounts due under its revolving line of credit.  Management  intends to seek new
debt and/or equity  financing and reduce its borrowings under its revolving line
of credit through the sales of non-core  systems in order for the Partnership to
meet its business plan and sustain  operations.  However,  there is no assurance
that the  Partnership  will be able to  implement  its  strategy  and  raise new
capital.

2.    RECENT ACCOUNTING PRONOUNCEMENTS

      In June 1998, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS
No. 137, is  effective  for all fiscal  quarters of all fiscal  years  beginning
after  June 15,  2000  (January  1,  2001,  for the  Partnership).  SFAS No. 133
requires  that all  derivative  instruments  be recorded on the balance sheet at
their fair value.  Changes in the fair value of  derivatives  are recorded  each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge  transaction and, if it is, the type
of hedge transaction.

                                       6
<PAGE>

      Management of the Partnership  anticipates that, due to its limited use of
derivative instruments, the adoption of SFAS No. 133 will not have a significant
effect on the Partnership's results of operations or its financial position.

3.    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

      Interest  paid  during  the six months  ended  June 30,  1999 and 1998 was
approximately $8.8 million and $10.5 million, respectively.

      During the first six months of 1998, Galaxy traded four systems located in
and around  Sheridan  County,  Nebraska,  representing  853  subscribers for one
system located in Jefferson  County,  Colorado  representing  approximately  800
subscribers.

      During the first six  months of 1999,  Galaxy  traded 18 cable  television
systems  located  primarily in  Colorado,  Iowa and South  Dakota,  representing
approximately  7,500  subscribers  for seven cable  television  systems  located
primarily in Mississippi, representing approximately 7,100 subscribers .

4.  RELATED PARTY TRANSACTIONS

      Galaxy  incurs  management  fees and  expenses  pursuant to the terms of a
management  agreement  with Galaxy Systems  Management,  Inc., an affiliate of a
general  partner,  under which it manages  Galaxy's  business.  Management  fees
totaled  $568,400  for the three months ended June 30, 1999 and $785,904 for the
three months ended June 30, 1998. Management fees totaled $1,223,077 for the six
months  ended June 30,  1999 and  $1,564,122  for the six months  ended June 30,
1998.

5.  LONG-TERM DEBT

      Long-term debt consisted of the following:

                                           June 30,     December 31,
                                             1999          1998
                                      -------------    -------------

          Revolving Credit Facility   $  26,035,000    $  30,500,000
          Senior Subordinated Notes     120,000,000      120,000,000
             Unamortized discount          (375,000)        (405,000)
          Other                           1,734,609        2,350,620

                                      -------------    -------------
                   Total              $ 147,394,609    $ 152,445,620
                                      =============    =============


      In  March  1999,  Galaxy  amended  the  Revolving  Credit  Facility  ("the
Revolver").  The amendment allowed the Partnership to borrow up to $55.9 million
until June 1999 when the outstanding balance converted to a term loan. The first
principal  payment is due on December 31, 1999, in an amount equal to 22% of the
converted balance, and in subsequent quarterly installments  escalating annually
from 22 percent to 30 percent of the converted  balance  through  December 2002.
The Revolver will require Galaxy to maintain  compliance with certain  financial
ratios and other  covenants,  such as total debt to annualized  cash flow,  cash
flow to interest expense,  capital expense limits and basic subscribers to total
long term debt. The financial  covenants in the Revolver may significantly limit
Galaxy's ability to borrow under the Revolver.

                                       7
<PAGE>

6.    SALES, ACQUISITIONS AND TRADES

     On February 12, 1999,  Galaxy sold one satellite master antenna  television
system ("SMATV") located in Spring Creek,  Georgia,  representing  approximately
1,000  subscribers for  approximately  $1,220,000,  or approximately  $1,220 per
subscriber,  and recorded a gain on sale of approximately  $1.0 million.  Galaxy
used the proceeds from this sale to pay down principal of the revolving note.

      On May 1, 1999,  Galaxy traded 18 cable television  systems,  representing
approximately 7,500 subscribers for seven cable television systems, representing
approximately 7,100 subscribers from Mississippi  Cablevision,  Inc. ("MCI"), an
affiliate of  Telecommunications,  Inc. The Galaxy cable television  systems are
located  primarily  in  Colorado,  Iowa and  South  Dakota,  while the MCI cable
television systems are located in Mississippi.  The trade was accounted for as a
business combination in accordance with the Accounting  Principles Board Opinion
No. 16 "Business  Combinations."  The  estimated  fair market value of the cable
television  systems  received was  approximately  $9.4 million or  approximately
$1,300 per  subscriber.  The fair market value of the cable  television  systems
received was estimated by using the purchase  price (price per  subscriber)  for
similar cable television  systems bought from MCI by an affiliate of Galaxy. The
net historical cost of the cable television  systems given up was  approximately
$5.8 million, resulting in Galaxy recording a gain on sale of approximately $3.5
million, net of expenses.

     On  June  23,  1999,  Galaxy  sold 24  cable  television  systems,  located
primarily  in  Alabama,   representing   approximately   5,500  subscribers  for
approximately $8.4 million, or approximately $1,540 per subscriber, and recorded
a gain on sale of approximately $2.2 million. Galaxy used the proceeds from this
sale to pay down principal of the revolving note.

7.   COMMITMENTS AND CONTINGENCIES

      LITIGATION

      Galaxy is subject to various legal and  administrative  proceedings in the
ordinary  course  of  business.  Management  believes  the  outcome  of any such
proceedings  will  not  have a  material  adverse  effect  on the  Partnership's
consolidated financial position, or future results of operations or cash flows.

                                      8
<PAGE>

      In addition, certain customers in Mississippi have filed a class action in
the U.S. District Court for the Northern  District of Mississippi  alleging that
Galaxy illegally  charged a late fee on monthly cable bills. The Partnership has
denied any  liability  with respect to this claim and is defending  this action.
Similar class actions  against other cable  companies have been filed in several
states, some of which have been successful.  At this point, management is unable
to predict the likely outcome or the potential for an adverse judgment,  if any.
An adverse  judgment  against the  Partnership  could have a  material,  adverse
effect on the Partnership's  consolidated  financial position, or future results
of  operations or cash flows.  Management  has not recorded any liability in the
consolidated  financial  statements that may arise from the adjudication of this
lawsuit.

                                      9
<PAGE>

Item 2. --  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND

      RESULTS OF OPERATIONS

      RECENT DEVELOPMENTS

     On February 12, 1999,  Galaxy sold one satellite master antenna  television
system ("SMATV") located in Spring Creek,  Georgia,  representing  approximately
1,000  subscribers for  approximately  $1,220,000,  or approximately  $1,220 per
subscriber,  and recorded a gain on sale of approximately  $1.0 million.  Galaxy
used the proceeds from this sale to pay down principal of the revolving note.

      On May 1, 1999,  Galaxy traded 18 cable television  systems,  representing
approximately 7,500 subscribers for seven cable television systems, representing
approximately 7,100 subscribers from Mississippi  Cablevision,  Inc. ("MCI"), an
affiliate of  Telecommunications,  Inc. The Galaxy cable television  systems are
located  primarily  in  Colorado,  Iowa and  South  Dakota,  while the MCI cable
television systems are located in Mississippi.  The trade was accounted for as a
business combination in accordance with the Accounting  Principles Board Opinion
No. 16 "Business  Combinations."  The  estimated  fair market value of the cable
television  systems  received was  approximately  $9.4 million or  approximately
$1,300 per  subscriber.  The fair market value of the cable  television  systems
received was estimated by using the purchase  price (price per  subscriber)  for
similar cable television  systems bought from MCI by an affiliate of Galaxy. The
net historical cost of the cable television  systems given up was  approximately
$5.8 million, resulting in Galaxy recording a gain on sale of approximately $3.5
million, net of expenses.

     On  June  23,  1999,  Galaxy  sold 24  cable  television  systems,  located
primarily  in  Alabama,   representing   approximately   5,500  subscribers  for
approximately $8.4 million, or approximately $1,540 per subscriber, and recorded
a gain on sale of approximately $2.2 million. Galaxy used the proceeds from this
sale to pay down principal of the revolving note.


                                       10
<PAGE>

      RESULTS OF OPERATIONS

      The following  table sets forth the  percentage  relationship  of selected
income  statement items as a percentage of revenues for the three months and six
months ended June 30, 1999 and June 30, 1998. Amounts shown are in thousands.

<TABLE>
<CAPTION>

                                                 For the three months ended                  For the six months ended

                                          ---------------------------------------     ---------------------------------------
                                              June 30, 1999        June 30, 1998        June 30, 1999         June 30, 1998
                                          -----------------     -----------------     -----------------     -----------------
                                           Amount        %       Amount       %        Amount       %        Amount       %
                                          --------    -----     --------    -----     --------    -----     --------    -----
<S>                                       <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
Revenues                                  $ 14,517    100.0%    $ 17,472    100.0%    $ 29,087    100.0%    $ 34,803    100.0%
                                          --------    -----     --------    -----     --------    -----     --------    -----

Operating expenses:

    Systems operations                       6,911     47.6%       8,207     47.0%      13,585     46.7%      16,195     46.5%
    Selling, general and administrative      1,405      9.7%       1,967     11.2%       2,906     10.0%       4,186     12.0%
    Management fees to affiliate               568      3.9%         786      4.5%       1,223      4.2%       1,564      4.5%
    Depreciation and amortization            5,089     35.1%       6,146     35.2%      10,313     35.5%      12,347     35.5%
                                          --------    -----     --------    -----     --------    -----     --------    -----
    Total operating expenses                13,973     96.3%      17,106     97.9%      28,027     96.4%      34,292     98.5%
                                          --------    -----     --------    -----     --------    -----     --------    -----
      Operating income                         544      3.7%         366      2.1%       1,060      3.6%         511      1.5%

Interest expense                            (4,835)   (33.3%)     (5,343)   (30.6%)     (9,602)   (33.0%)    (10,548)   (30.3%)
Gain (loss) on sale of assets                5,793     39.9%      (1,523)    (8.7%)      6,702     23.0%        (255)    (0.8%)
Other income (expense), net                     16      0.1%         (70)    (0.4%)         35      0.1%        (137)    (0.4%)
                                          --------    -----     --------    -----     --------    -----     --------    -----
Net income (loss)                         $  1,518     10.5%    $ (6,570)   (37.6%)   $ (1,805)    (6.2%)   $(10,429)   (30.0%)
                                          ========    =====     ========    =====     ========    =====     ========    =====
</TABLE>

      The following table sets forth demographic information as of September 30,
1998, December 31, 1998, March 31, 1999 and June 30, 1999.

                       September 30,  December 31,   March 31,     June 30,
                            1998         1998          1999       1999 (1)
                       -------------  ------------   ---------     --------

Homes Passed               259,012      228,861      227,620      225,226
Basic Subscribers          152,395      135,991      135,977      134,233
Basic Penetration            58.84%       59.42%       59.74%       59.60%
Revenue per Subscriber     $ 35.62      $ 35.62      $ 36.52      $ 35.94

Premium Subscribers         72,185       63,152       61,870       61,133
Premium Penetration          47.37%       46.44%       45.50%       45.54%

(1) Includes the  demographic  information of the Alabama systems sold effective
June 25, 1999.

      Galaxy generated revenues in the amount of $14,516,917 and $29,086,470 for
the three-month and six-month periods ended June 30, 1999, respectively. For the
three-month and six-month periods ended June 30, 1998, Galaxy generated revenues
in the amount of  $17,471,933  and  $34,803,001,  respectively.  The decrease in
revenue from 1998 to 1999 was a result of a reduction in subscribers  due to the
sale of non-core cable systems.  Galaxy was able to realize  additional  revenue
per  subscriber  by  increasing  basic  rates in certain  systems.  As a result,
average revenues per subscriber increased from $34.32 for the three months ended
June 30, 1998 to $35.94 for the three months ended June 30, 1999.

                                       11
<PAGE>

      For the  three  months  ended  June 30,  1999 and 1998,  system  operating
expenses,   consisting  of  subscriber   costs,   technician  costs  and  system
maintenance costs, were $6,911,118 and $8,207,353, respectively. As a percentage
of revenues, these expenses increased from 47.0% for the three months ended June
30, 1998 to 47.6% in the  comparable  period of 1999.  For the six months  ended
June  30,  1999  and  1998,  system  operating  expenses  were  $13,584,884  and
$16,195,030,  respectively,  and, as a percentage  of revenues,  increased  from
46.5% for the six months ended June 30, 1998 to 46.7% in the  comparable  period
of 1999.  These expenses  increased as a percentage of revenue  primarily due to
increased programming costs to Galaxy.

      Selling,  general and administrative  expenses, which include office rents
and  maintenance,   marketing  costs  and  corporate  expenses,  decreased  from
$1,967,392 to  $1,405,397  for the three months ended June 30, 1999, as compared
to the three  months ended June 30, 1998.  Selling,  general and  administrative
expenses  decreased from  $4,185,955 to $2,905,979 for the six months ended June
30, 1999 as compared to the six months ended June 30, 1998. For the  three-month
period ended June 30, these  expenses  decreased as a percentage of revenue from
11.2% in 1998 to 9.7% in 1999.  For the  six-month  period  ended June 30, these
expenses  decreased  from 12.0% in 1998 to 10.0% in 1999.  The decrease in these
expenses is attributable to a decrease in marketing costs and a decrease in call
center and other administrative costs due to the sale of non-core cable systems.

      For the  three  months  ended  June 30,  1999 and 1998,  depreciation  and
amortization expense was $5,088,515,  or 35.1% of revenues,  and $6,145,303,  or
35.2% of  revenues,  respectively.  For the six months  ended June 30,  1999 and
1998,  depreciation  and  amortization  expense  was  $10,312,791,  or  35.5% of
revenues, and $12,347,246, or 35.5% of revenues,  respectively.  The decrease in
these expenses is  attributable to the sale of cable  television  systems in the
Partnership's non-core areas.

      For the three  months ended June 30, 1999 and 1998,  interest  expense was
$4,834,458 and $5,343,330,  respectively. For the six months ended June 30, 1999
and 1998,  interest  expense was $9,601,780 and $10,547,793,  respectively.  The
decrease in interest  expense is primarily due to a reduction in the outstanding
balance of the Revolving Credit Facility. During 1998, Galaxy paid $28.7 million
towards the principal of the  Revolving  Credit  Facility.  During the first six
months of 1999, Galaxy paid $13.7 million towards the principal of the Revolving
Credit Facility.

      Gain (loss) on sale of assets  went from a net loss on sale of  $1,523,507
for the three months ended June 30,  1998,  to a net gain on sale of  $5,793,187
for the three  months  ended June 30,  1999.  Gain (loss) on sale of assets went
from a net loss on sale of $254,840 for the six months ended June 30, 1998, to a
net gain on sale of $6,702,366 for the six months ended June 30, 1999.

      Interest income and other,  net, which includes  interest income and other
expenses,  reflected a net income of $15,938 for the three months ended June 30,
1999 and a net expense of $69,874 for the three months ended June 30, 1998.  For
the six months ended June 30, 1999 interest income and other,  net,  reflected a
net income of $34,931,  compared to a net expense of $136,674 for the six months
ended June 30, 1998. This was mainly due to a decrease of other expenses.

                                       12
<PAGE>

      Galaxy as an entity pays no income taxes,  although it is required to file
federal and state income tax returns for informational purposes only. All income
or  loss  "flows  through"  to  the  partners  of  Galaxy  as  specified  in the
Partnership agreement.

      LIQUIDITY AND CAPITAL RESOURCES

      The  Partnership has incurred losses each year since its inception and has
a  Partnership  deficit of $21.4  million at June 30,  1999.  During  1998,  the
Partnership  began  implementation of a strategy whereby it would sell its cable
television  systems in its non-core regions and focus on improving and acquiring
cable  television  systems in its core regions,  which are primarily  located in
Illinois,  Kansas, Kentucky,  Mississippi and Nebraska. . In fiscal 1998 and for
the six month period ended June 30, 1999, the Partnership  received net proceeds
from sales of its non-core  cable  television  systems of $38.6 million and $9.2
million,  respectively.  These  proceeds  were  primarily  used to pay  down the
amounts due under its revolving line of credit.  Management  intends to seek new
debt and/or equity  financing and reduce its borrowings under its revolving line
of credit through the sales of non-core  systems in order for the Partnership to
meet its business plan and sustain  operations.  However,  there is no assurance
that the  Partnership  will be able to  implement  its  strategy  and  raise new
capital.

      As of June 30, 1999,  Galaxy had $2,996,736 in cash and cash  equivalents.
As of such date,  total  liabilities  less long-term debt exceeded cash and cash
equivalents by $16,949,167.  Galaxy expects to fund this deficiency  through its
operating  cash flows,  the  Revolving  Credit  Facility  and new equity or debt
financing.

      Operating cash flows is defined as earnings before interest,  depreciation
and amortization  expense,  and other extraordinary items. Due to the results of
operations discussed above, Galaxy generated operating cash flows of $5,632,002,
or 38.8% of operating revenues, and $6,511,284,  or 37.3% of operating revenues,
for the  three  months  ended  June 30,  1999  and  1998,  respectively.  Galaxy
generated  operating cash flows of $11,372,530,  or 39.1% of operating revenues,
and $12,857,894,  or 37.0% of operating revenues,  for the six months ended June
30, 1999 and 1998, respectively.

      Galaxy had aggregate  indebtedness of approximately $147.4 million (net of
unamortized  discount of  $375,000)  as of June 30,  1999,  representing  $120.0
million of 12.375% Senior  Subordinated  Notes due in 2005 (the "Notes"),  $26.0
million outstanding debt under its Revolving Credit Facility and $1.7 million of
other bank debt.  The Revolving  Credit  Facility,  which has been  periodically
amended,  with the  latest  amendment  occurring  in March,  1999,  allowed  the
Partnership  to borrow up to $55.9 million until June 1999 when the  outstanding
balance converted to a term loan. The first principal payment is due on December
31, 1999, in an amount equal to 22% of the converted balance,  and in subsequent
quarterly installments  escalating annually from 22 percent to 30 percent of the
converted  balance through December 2002. Net proceeds from any system sale will
be used to reduce the outstanding  balance under the Revolving  Credit Facility.
The Revolving  Credit  Facility will require Galaxy to maintain  compliance with
certain  financial ratios and other covenants,  such as total debt to annualized
cash flow,  cash flow to  interest  expense,  capital  expense  limits and basic
subscribers to total  long-term  debt. The financial  covenants in the Revolving
Credit Facility may significantly limit Galaxy's ability to borrow under it.

                                       13
<PAGE>

        As of June 30, 1999,  Galaxy had $99.5  million in systems and equipment
consisting  of $93.7  million of cable  television  systems and $5.8  million of
vehicles,  equipment,  buildings and office  equipment,  all net of  accumulated
depreciation. Galaxy had capital expenditures (exclusive of system acquisitions)
of $6.9 million for the six months ended June 30, 1999. For the six months ended
June  30,  1998,   Galaxy  had  capital   expenditures   (exclusive   of  system
acquisitions) of $4.8 million.  These capital  expenditures were financed mainly
through the Revolving Credit Facility and cash flows from operations. During the
first six months of 1999,  Galaxy's capital  expenditures were primarily used to
add  channels,  eliminate  headends by  interconnecting  adjacent  systems  with
fiber-optic  cable, and construct  wide-area  networks for distance learning and
data services.

      Galaxy's net cash provided from  operating  activities  was $4,274,661 and
$118,714  for the six months  ended  June 30,  1999 and 1998,  respectively,  an
increase in net cash  provided  by  operating  activities  of  $4,155,947.  This
increase is due to an increase in accounts  payable and accrued  expenses  and a
decrease in prepaids and other during the periods.

      Galaxy provided net cash in investing activities of $1,771,114 for the six
months ended June 30, 1999,  and  provided net cash by investing  activities  of
$7,300,272  for the six months  ended  June 30,  1998,  a  decrease  in net cash
provided by investing  activities of $5,529,158.  This decrease is primarily due
to the  purchase  of the MCI  cable  television  systems  in 1999,  offset by an
increase in cash  provided by proceeds  from sale of assets during the first six
months of 1999.

      Galaxy used net cash in financing  activities of $5,262,816 and $6,794,846
for the six months ended June 30, 1999 and 1998, respectively, a decrease in net
cash used in investing activities of $1,532,030. This decrease was mainly due to
less payments made under the Revolver during the first six months of 1999.

      Galaxy's cash flows have been sufficient to meet its debt service, working
capital and capital  expenditure  requirements.  Galaxy  expects that it will be
able to meet its short-term and long-term requirements for debt service, working
capital and capital  expenditures  and to fund future cable system  acquisitions
through its operating cash flows, proceeds from sales of non-core assets and its
access to additional capital in the public and private debt markets.

      YEAR 2000

      The year 2000 ("Y2K") issue concerns the inability of information  systems
to properly recognize and process  date-sensitive  information beginning January
1, 2000. This section is a Year 2000 Readiness Disclosure.

                                       14
<PAGE>

      Galaxy has put a program in place  designed to bring  information  systems
and software into Y2K compliance in time to minimize any significant detrimental
effects on operations.  The program covers information  systems  infrastructure,
financial  and  administrative  systems,  process  control and cable  television
systems.  Galaxy's  program  recognizes that date sensitive  systems may fail at
different  points in time  depending  on their  function.  Galaxy  is  utilizing
internal  personnel,  contract  programmers  and vendors to identify Y2K issues,
modify  code  and test the  modifications.  In most  cases,  these  third  party
programmers and vendors have verified their Y2K compliance with Galaxy.  In some
cases,  non-compliant  software and hardware will be replaced.  The steps Galaxy
has taken in this program include (1) planning and awareness, (2) identification
of where failures may occur, (3) resolution  including  repair and upgrade,  and
(4) deployment of compliant systems. The first two steps, planning and awareness
and identification are largely completed.

      The following table  illustrates  Galaxy's present status of completion of
each step of its Y2K program.

                                  Percentage              Expected
                                   completed             Completion
Phase                          within each step              Date
----------------------        -----------------      -----------------
Planning and awareness               100%                    --
Identification                        95%              September 1999
Resolution                            90%              September 1999
Deployment                            80%               December 1999

      The  completion  dates set  forth  above  are  based on  Galaxy's  current
expectations.  However,  due to the uncertainties  inherent in the Y2K issue, no
assurances  can be given as to whether such  projects  will be completed on such
dates.  Galaxy  expects  the  total  incremental  cost  of the Y2K  issue  to be
approximately  $75,000.  This estimated cost does not include any normal ongoing
costs for computer  hardware or software that would be replaced even without the
presence  of the Y2K  issue.  Galaxy has spent  approximately  $2,200 in its Y2K
effort during the first six months of 1999.  The  occurrence of the remainder of
these  costs is  expected  during  1999,  and the payment of a majority of these
costs has been and will be provided from operations.

      Galaxy has been  focusing its efforts on  identification,  resolution  and
deployment  of  its  Y2K  exposures  and  has  not  yet  developed   significant
contingency plans in the event it encounters  unknown events.  Galaxy intends to
examine its status periodically to determine whether such plans are necessary.

      The  failure  to  correct  a  material  Y2K  problem  could  result  in an
interruption or failure of certain  important  business  operations.  Management
believes  that  its  Y2K  program  will  significantly   reduce  Galaxy's  risks
associated  with  the  changeover  to  the  Y2K  and  is  implementing   certain
contingency   plans  to  minimize  the  effect  of  any  potential  Y2K  related
disruptions.  The risks and the uncertainties discussed below and the associated
contingency  plans relate to systems,  software,  equipment,  and services  that
Galaxy has deemed critical in regard to customer service,  business  operations,
financial impact or safety.

                                       15
<PAGE>

      Customer  service networks and/or automated voice response systems failure
could  prevent  access to  customer  account  information,  hamper  installation
scheduling and disable the processing of pay-per-view requests.  Galaxy plans to
have its customer service  representatives answer telephone calls from customers
in the event of outages  and  expects to retrieve  needed  customer  information
manually from the billing service provider.

      Galaxy is  dependent  on  third-party  vendors.  For  example,  if a cable
programmer  encounters  Y2K  problems  that  impede its  ability to deliver  its
programming,  Galaxy  will be unable to provide  that  programming  to its cable
customers. Galaxy has attempted to ascertain its vendors' state of Y2K readiness
through  questionnaires,  interviews,  industry  group  participation  and other
available means.  Galaxy has not received any response from third-party  vendors
that indicate a problem with the Y2K issue. There can be no assurance,  however,
that such a problem will not occur.

      A failure of the services provided by Convergys,  Galaxy's billing service
provider,  could result in a loss of customer  records  which could  disrupt the
ability to bill  customers  for a  protracted  period.  Galaxy  plans to prepare
electronic backup records of its customer billing  information prior to the year
2000 to allow for data recovery.  In addition,  Galaxy  continues to monitor the
Y2K readiness of Convergys.

      Advertising  revenue could be adversely affected by the failure of certain
equipment  which could impede or prevent the insertion of  advertising  spots in
Galaxy's  programming.  Galaxy  anticipates  that it can minimize such effect by
manually resetting the dates each day until the equipment is repaired.

      In the event that the local public  utility  cannot supply  power,  Galaxy
will not be able to supply power to most of its cable headends and office sites.

      The financial impact of any or all of the above  worst-case  scenarios has
not been and cannot be estimated by Galaxy due to the numerous uncertainties and
variables associated with such scenarios.

      Despite  Galaxy's  efforts in  addressing  the Y2K issue,  there can be no
assurance that partial or total systems  interruptions or the costs necessary to
update  hardware  and  software  would not have a material  adverse  effect upon
Galaxy's business,  financial condition,  and results of operations and business
prospects.

      SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

      The statements  contained in this Form 10-Q relating to Galaxy's operating
results, and plans and objectives of management for future operations, including
plans or  objectives  relating to Galaxy's  products  and  services,  constitute
forward  looking  statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Actual results of Galaxy may differ  materially
from those in the forward-looking  statements and may be affected by a number of
factors including the receipt of regulatory  approvals,  the success of Galaxy's
implementation of digital technology,  subscriber equipment availability,  tower
space  availability,  and the absence of interference,  as well as other factors
contained herein and in Galaxy's other securities filings.

                                       16
<PAGE>

      Galaxy's future revenues and profitability are difficult to predict due to
a variety of risks and  uncertainties,  including  (i) business  conditions  and
growth in Galaxy's existing  markets,  (ii) the successful launch of systems and
technologies in new and existing markets,  (iii) Galaxy's existing  indebtedness
and the need for additional  financing to fund subscriber  growth and system and
technological  development,   (iv)  government  regulation,   including  Federal
Communications  Commission  regulations,  (v)  Galaxy's  dependence  on  channel
leases,  (vi) the  successful  integration  of  future  acquisitions  and  (vii)
numerous competitive factors,  including alternative methods of distributing and
receiving video transmissions.

      Galaxy expects to continue its subscriber  growth within existing  systems
and launch additional  systems.  Moderate  increases in revenues and subscribers
are anticipated in 1999; however,  the rate of increase cannot be estimated with
precision or certainty. Galaxy believes that general and administrative expenses
and depreciation  and amortization  expense will continue to increase to support
overall growth.

      Because of the foregoing uncertainties affecting Galaxy's future operating
results, past performance should not be considered to be a reliable indicator of
future performance, and investors should not use historical results or trends as
determinative   of  Galaxy's   future   performance.   In   addition,   Galaxy's
participation in a developing  industry  employing  rapidly changing  technology
could  result  in  significant  volatility  in the  market  value of the  Senior
Subordinated Notes.

      In addition to the matters noted above,  certain other  statements made in
this Form 10-Q are forward  looking.  Such statements are based on an assessment
of a variety of factors,  contingencies  and  uncertainties  deemed  relevant by
management,  including technological changes,  competitive products and services
and management  issues. As a result, the actual results realized by Galaxy could
differ materially from the statements made herein. Readers of this Form 10-Q are
cautioned not to place undue reliance on the forward looking  statements made in
this Form 10-Q or in Galaxy's other securities filings.

      For  information on the impact of recent  accounting  pronouncements,  see
Note 2 to the consolidated financial statements, appearing elsewhere herein.

Item 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Galaxy is not directly  exposed to any foreign exchange rates or commodity
price fluctuations.

      Galaxy is exposed to changes in interest rates due to its variable rate of
interest (LIBOR plus 3.25%) on its revolving line of credit.

                                       17
<PAGE>

     Based on Galaxy's  variable  debt at June 30, 1999, a 1% increase in market
interest rates would increase  yearly  interest  expense and decrease  income by
approximately  $147,300.  This amount was calculated using the variable interest
rate in effect at June 30,  1999,  assuming  a constant  level of  variable-rate
debt. This amount does not include the effects of other events that could affect
interest  rates,  such as a downturn in overall  economic  activity,  or actions
management  could take to lessen risk.  This also does not take into account any
changes in Galaxy's  financial  structure  that may result from higher  interest
rates.

                                       18
<PAGE>

PART II.  OTHER INFORMATION

Items 1 through 5.

None.

Item 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits. The following exhibits are included or incorporated by reference
      below.

      27.  Financial Data Schedule

(b)   Reports of Form 8-K. No reports on Form 8-K were filed  during the quarter
      ended June 30, 1999.

                                       19
<PAGE>

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                      GALAXY TELECOM, L.P.
                                BY:   Galaxy Telecom, Inc.

                                      as General Partner

Date: August 12, 1999                /s/ J. Keith Davidson
                                --------------------------------------------
                                BY:   J. Keith Davidson
                                      Vice President-Finance

(Principal Financial Officer)


                                       20
<PAGE>

                                  EXHIBIT INDEX

Exhibit Number             Description

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

    27            Financial Data Schedule