<PAGE>
 
<PAGE>

                                  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 August 31, 1996
                                       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 0-19603

                            CENTENNIAL CELLULAR CORP.
             (Exact name of registrant as specified in its charter)

              Delaware                                      06-1242753
   (State or other jurisdiction of                       (I.R.S. Employer
    incorporation or organization)                       Identification No.)

                                50 Locust Avenue
                              New Canaan, CT 06840
          (Address of principal executive offices, including zip code)
                                 (203) 972-2000
              (Registrant's telephone number, including area code)

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 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 [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.

Class A Common -  16,475,116  outstanding shares as of October 4, 1996
Class B Common -  10,544,113  outstanding shares as of October 4, 1996


<PAGE>
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                 August 31,         May 31,
                                                                                   1996              1996
                                                                               ------------      -----------
<S>                                                                              <C>               <C>
ASSETS

CURRENT ASSETS:
         Cash                                                                  $   42,088        $   67,297
         Accounts receivable, less allowance for doubtful
                  accounts of $1,576 and $1,471, respectively                      22,493            20,210
         Prepaid expenses and other current assets                                  2,870             2,158
                                                                               ------------      -----------

                  TOTAL CURRENT ASSETS                                             67,451            89,665

PROPERTY, PLANT AND EQUIPMENT - net                                               112,267            91,417

EQUITY INVESTMENTS IN CELLULAR SYSTEMS - net                                       99,622           100,204

DEBT ISSUANCE COSTS, less accumulated amortization of
         $2,357 and $2,081, respectively                                            7,462             7,738

CELLULAR TELEPHONE LICENSES, less accumulated
         amortization of $176,410 and $164,786, respectively                      288,577           300,206

PERSONAL COMMUNICATIONS SERVICES LICENSE                                           61,306            60,007

GOODWILL, less accumulated amortization of $20,483
         and $19,343, respectively                                                132,767           133,907

OTHER ASSETS - net                                                                 13,586             2,668
                                                                               ------------      -----------
                  TOTAL                                                        $  783,038        $  785,812
                                                                               ============      ===========
</TABLE>









                 See notes to consolidated financial statements


<PAGE>
<PAGE>


                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                  (CONTINUED)
                    (Amounts in thousands, except share data)
 
<TABLE>
<CAPTION>
                                                                                         August 31,                  May 31,
                                                                                           1996                       1996
                                                                                        ----------                 ----------
<S>                                                                                     <C>                        <C>
LIABILITIES AND STOCKHOLDERS' EQUITY 

CURRENT LIABILITIES:
         Accounts payable                                                               $    5,147                 $    4,325
         Accrued interest payable                                                           10,377                      2,299
         Other accrued expenses                                                             11,001                     14,547
         Payable to affiliate                                                                  966                        956
         Customers' deposits and prepayments                                                 5,489                      4,961
                                                                                        ----------                 ----------
                  TOTAL CURRENT LIABILITIES                                                 32,980                     27,088
          
LONG-TERM DEBT                                                                             350,000                    350,000
DEFERRED LIABILITY                                                                           2,200                      2,200
DEFERRED INCOME TAXES                                                                       54,070                     56,588

PREFERRED STOCK:

Convertible redeemable preferred stock 
         (at aggregate liquidation value which approximates
         the fair market value), par value $.01 per share, 
         102,187 shares authorized; issued and outstanding
         102,187 shares (redemption value of $1,823.00 per share)                          186,287                    182,813

Second series convertible redeemable preferred stock
         (at aggregate liquidation value which approximates the
         fair market value), par value $.01 per share, 3,978 shares                          7,252                      7,117
         authorized; issued and outstanding 3,978 shares 
         (redemption value of $1,823.00 per share)
          
Senior preferred stock, par value $.01 per share, dividend
         rate 14%, 250,000 shares authorized, none issued                                        -                          -

Additional preferred stock, par value $.01 per share, authorized
         10,000,000 shares, 3,978 shares issued as second series
         convertible redeemable preferred stock                                                  -                          -

COMMON STOCKHOLDERS' EQUITY:
         Common stock par value $.01 per share:
                  Class A, 1 vote per share, 100,000,000 shares authorized,                    165                        165
                     issued and outstanding 16,475,116 and 16,461,858 shares,
                     respectively
                  Class B, 15 votes per share, 50,000,000 shares authorized,
                     issued and outstanding 10,544,113 shares                                  105                        105
                  Additional paid-in capital                                               379,883                    383,533
                  Accumulated deficit                                                     (225,103)                  (218,996)
                                                                                        ----------                 ----------
                                                                                           155,050                    164,807
                  Less:  Cost of 83,940 Class A common shares in treasury                   (1,801)                    (1,801)
                             Shareholder note receivable                                    (3,000)                    (3,000)
                                                                                        ----------                 ----------

                  TOTAL COMMON STOCKHOLDERS' EQUITY                                        150,249                    160,006
                                                                                        ----------                 ----------
                           TOTAL                                                        $  783,038                 $  785,812
                                                                                        ==========                 ==========
</TABLE>

 

                 See notes to consolidated financial statements

<PAGE>
<PAGE>


                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                   (Amounts in thousands, except share data)
 


<TABLE>
<CAPTION>
                                                              Three Months Ended August 31
                                                             ----------------------------
                                                                 1996              1995
                                                             ----------        ----------
<S>                                                            <C>               <C>
REVENUES
         Service revenue                                     $   30,857        $   24,821
         Equipment sales                                            766               693
         Interest income                                            742             1,408
                                                             ----------        ----------
                                                                 32,365            26,922
                                                             ----------        ----------

COSTS AND EXPENSES:
         Cost of services                                         4,766             3,557
         Cost of equipment sold                                   2,703             2,156
         Selling, general and administrative                      9,814             7,883
         Depreciation and amortization                           18,481            18,030
                                                             ----------        ----------
                                                                 35,764            31,626
                                                             ----------        ----------
OPERATING LOSS                                                   (3,399)           (4,704)
                                                             ----------        ----------
INCOME FROM EQUITY INVESTMENTS                                    3,662             2,315
GAIN ON SALE OF ASSETS                                               48             4,176
INTEREST                                                          7,041             8,302
                                                             ----------        ----------
LOSS BEFORE INCOME TAX BENEFIT
         AND MINORITY INTEREST                                   (6,730)           (6,515)

INCOME TAX BENEFIT                                                 (755)           (3,080)
                                                             ----------        ----------
         LOSS BEFORE MINORITY INTEREST                           (5,975)           (3,435)

MINORITY INTEREST IN (INCOME) LOSS OF SUBSIDIARIES                 (132)               17
                                                             ----------        ----------
                  NET LOSS                                   $   (6,107)       $   (3,418)
                                                             ==========        ==========
DIVIDEND REQUIREMENT ON PREFERRED STOCK                      $    3,610        $    3,291
                                                             ==========        ==========
LOSS APPLICABLE TO COMMON SHARES                             $   (9,717)       $   (6,709)
                                                             ==========        ==========
LOSS PER COMMON SHARE                                         $    (.36)        $    (.25)
                                                             ==========        ==========
WEIGHTED AVERAGE NUMBER OF COMMON 
         SHARES AND COMMON SHARE EQUIVALENTS
         OUTSTANDING DURING THE PERIOD                       26,932,000        26,694,000
                                                             ==========        ==========
</TABLE>



                 See notes to consolidated financial statements

<PAGE>
<PAGE>


                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
                   (Amounts in thousands, except share data)

<TABLE>
<CAPTION>
                                                              Common Stock                           
                                 -----------------------------------------------------------------------
                                            Class A                                   Class B      
                                 ----------------------------              -----------------------------
                                   Shares           Dollars                  Shares            Dollars
                                 ----------        ----------              ----------        -----------
<S>                          <C>                     <C>               <C>                     <C>        
Balance at June 1, 1995          15,741,752        $      157              10,544,113        $      105

Common Stock
   issued in conjunction with
   incentive plans                  226,665                 3                       -                 -

Common stock
   issued in conjuction with
   acquisitions                     493,441                 5                       -                 -

Vesting of stock options                  -                 -                       -                 -

Net loss                                  -                 -                       -                 -

Accretion in liquidation value
   of preferred stock                     -                 -                       -                 -
                                 ----------        ----------              ----------        -----------
Balance at May 31, 1996          16,461,858               165              10,544,113               105
Common Stock issued in
   conjunction with incentive
   plans                             13,258                 -                       -                 -

Net loss                                  -                 -                       -                 -
 
Accretion in liquidation value
   of preferred stock                     -                 -                       -                 -
                                 ----------        ----------              ----------        -----------
Balance at August 31, 1996       16,475,116        $      165              10,544,113        $      105
                                 ==========        ==========              ==========        ===========

<CAPTION>

                                   Additional                          Shareholder
                                    Paid-In            Treasury           Note          (Accumulated
                                    Capital             Stock          Receivable          Deficit)           Total
                                   ----------        -----------       -----------       -----------       -----------
<S>                                <C>               <C>               <C>               <C>               <C>
Balance at June 1, 1995            $  395,735        $   (1,801)       $   (3,000)       $ (202,365)       $  188,831

Common Stock
   issued in conjunction with
   incentive plans                          -                 -                 -                 -                 3

Common stock
   issued in conjuction with
   acquisitions                           448                 -                 -                 -               453

Vesting of stock options                  940                 -                 -                 -               940

Net loss                                    -                 -                 -           (16,631)          (16,631)

Accretion in liquidation value
   of preferred stock                 (13,590)                -                 -                 -           (13,590)
                                   ----------        -----------       -----------       -----------       -----------
Balance at May 31, 1996               383,533            (1,801)           (3,000)         (218,996)          160,006
Common Stock issued in
   conjunction with incentive
   plans                                  (40)                -                 -                 -               (40)

Net loss                                    -                 -                 -
                                                                                             (6,107)           (6,107)
Accretion in liquidation value
   of preferred stock                  (3,610)                -                 -                 -            (3,610)
                                   ----------        -----------       -----------       -----------       -----------
Balance at August 31, 1996         $  379,883        $   (1,801)       $   (3,000)       $ (225,103)       $  150,249
                                   ==========        ===========       ===========       ===========       ===========
</TABLE>





                 See notes to consolidated financial statements

<PAGE>
<PAGE>



                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)


<TABLE>
<CAPTION>
                                                                                               Three Months Ended August 31,
                                                                                               -----------------------------
                                                                                                     1996         1995
                                                                                                  ---------    ---------
<S>                                                                                               <C>          <C>
OPERATING ACTIVITIES:

         Cash received from subscribers and others                                                $  37,087    $  28,491
         Cash paid to suppliers, employees and
                  governmental agencies                                                             (28,888)     (15,805)
         Debt issuance costs                                                                           -            (277)
         Interest paid                                                                                 -             (11)
                                                                                                  ---------    ---------
                  NET CASH PROVIDED BY OPERATING ACTIVITIES                                           8,199       12,398
                                                                                                  ---------    ---------
INVESTING ACTIVITIES:

         Capital expenditures                                                                       (23,481)      (6,350)
         Acquisition of other assets                                                                (11,059)        (217)
         Acquisition, disposition and exchange of cellular telephone systems                           -           9,914
         Acquisition of personal communications service license                                        -         (44,026)
         Capital returned from equity investments                                                     1,385        2,114
         Capital contributed to equity investments                                                     (213)         (91)
                                                                                                  ---------    ---------
                  NET CASH (USED IN) INVESTING ACTIVITIES                                           (33,368)     (38,656)
                                                                                                  ---------    ---------
FINANCING ACTIVITIES:

         Issuance of Class A and B Common Stock and treasury stock purchases                            (40)           1
                                                                                                  ---------    ---------
                  NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                   (40)           1
                                                                                                  ---------    ---------


NET (DECREASE), INCREASE IN CASH                                                                    (25,209)     (26,257)

CASH, BEGINNING OF PERIOD                                                                            67,297      121,628
                                                                                                  ---------    ---------
CASH, END OF PERIOD                                                                               $  42,088    $  95,371
                                                                                                  =========    =========
</TABLE>









                 See notes to consolidated financial statements

<PAGE>
<PAGE>



                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (CONTINUED)
                             (Amounts in thousands)


<TABLE>
<CAPTION>
                                                                               Three Months Ended August 31,
                                                                               -----------------------------
                                                                                    1996        1995
                                                                                  --------    --------
<S>                                                                               <C>         <C>
RECONCILIATION OF NET LOSS TO NET CASH  PROVIDED BY
         OPERATING ACTIVITIES:

         Net loss                                                                 $ (6,107)   $ (3,418)
                                                                                  --------    --------

Adjustments to reconcile net loss to net cash
         provided by operating activities:

         Depreciation and amortization                                              18,481      18,030
         Minority interest in income (loss) of subsidiaries                            132         (17)
         Deferred income taxes                                                      (2,517)     (3,250)
         Equity in undistributed earnings of investee companies                     (3,662)     (2,315)
         Debt issuance costs paid                                                      -          (277)
         Gain on sale of assets                                                        -        (4,176)
         Other                                                                      (1,077)        213
         Change in assets and liabilities net of effects of
                  acquired, exchanged and disposed  cellular telephone systems:
                           Accounts receivable - (increase)                         (2,229)     (2,774)
                           Prepaid expenses and other current assets -
                              (increase)                                              (712)       (260)
                           Accounts payable and accrued expenses -
                              increase                                               5,362      10,313
                           Customer deposits and prepayments -
                              increase                                                 528         329
                                                                                  --------    --------

         Total adjustments                                                          14,306      15,816
                                                                                  --------    --------

Net cash provided by operating activities                                         $  8,199    $ 12,398
                                                                                  ========    ========
</TABLE>








                 See notes to consolidated financial statements





<PAGE>
 
<PAGE>


                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (amounts in thousands except share data)

Note 1.  Interim Financial Statements

In the opinion of management,  the accompanying  interim unaudited  consolidated
financial  statements  contain  all  adjustments   (consisting  only  of  normal
recurring  accruals)  necessary  to present  fairly the  consolidated  financial
position of  Centennial  Cellular  Corp.  and  Subsidiaries  (the Company) as of
August 31, 1996 and the results of its  consolidated  operations  and cash flows
for the three months ended August 31, 1996 and August 31, 1995.  It is suggested
that the  statements  be read in  conjunction  with the  consolidated  financial
statements  and notes  thereto  included  in the  Company's  May 31, 1996 Annual
Report on Form 10-K.

Note 2.  Credit Facility

On September 12 ,1996,  the Company  entered into a $50,000 credit facility with
Citibank, N.A. The facility terminates on March 20, 1998.  Approximately $34,000
of the facility was used to fund the Benton Harbor,  Michigan cellular telephone
system  acquisition (see  acquisitions).  The remainder will be used for working
capital and general corporate purposes.  The interest rate payable on borrowings
under the new credit facility are based on, at the election of the Company,  (a)
"Base  Rate" plus a margin of 2% or (b)  "Eurodollar  Rate" plus a margin of 3%.
The  facility is secured by the stock of certain of the  Company's  subsidiaries
not otherwise  subject to  restrictions  under its Senior Note  Indentures.  The
credit  facility  restricts  the  incurrence of certain  additional  debt of the
Company, limits the Company's ability to pay dividends and requires that certain
operating tests be met.

Note 3.  Registration Statements

The  Company  filed a shelf  registration  statement  with  the  Securities  and
Exchange  Commission  ("SEC") for up to  8,000,000  shares of its Class A Common
Stock that may be offered from time to time in connection with acquisitions. The
registration statement became effective July 14, 1994. As of September 30, 1996,
4,239,231 shares remain available for future acquisitions.

On April 5, 1995, the Company filed a shelf registration  statement with the SEC
for the  issuance  of  $500,000  of the  Company's  debt  securities.  The  debt
securities may be issued from time to time in series on terms to be specified in
one or more prospectus  supplements at the time of the offering. If so specified
with respect to any particular  series,  the debt  securities may be convertible
into shares of the  Company's  Class A Common  Stock.  As of September 30, 1996,
$400,000 remain available for issuance.

Note 4.  Pro forma Information

The summary  pro-forma  information  includes the accounts and operations of the
Company,  completed  acquisitions  (purchased/exchanged  from  June 1,  1995 and
completed by August 31,  1996),  in each case as if such  acquisitions/exchanges
had been  consummated  as of the  beginning  of the  respective  period  for the
combined statements of operations  (amounts in thousands,  except per share data
and unaudited).


<PAGE>
 
<PAGE>


<TABLE>
<CAPTION>
                                        Three Months Ended August 31,
                                        -----------------------------
                                         1996                  1995
                                         ----                  ----
<S>                                    <C>                   <C>     
          Revenues                     $ 33,635              $ 27,893
          Net Loss                       (5,607)               (7,105)
          Loss per common share            (.33)                 (.38)
</TABLE>

Pro forma loss per common  share for the three  months ended August 31, 1996 and
1995 is calculated  on a fully diluted basis using the pro forma average  number
of  common  shares  outstanding  during  the  period,   including  common  stock
equivalents.

Note 5.  Revenue Recognition

Cellular  telephone  service income  includes  service  revenues and charges for
installation and connections,  net of land line charges of $7,212 and $4,681 for
the three months ended August 31, 1996 and 1995, respectively.

Note 6.  Loss per Common Share

Loss per common share is  calculated on a fully diluted basis and includes 0 and
397,760  shares of common stock  equivalents  for the three month  periods ended
August 31,  1996 and  August  31,  1995,  respectively.  Loss per  common  share
includes a charge for the accretion in liquidation value of preferred stock.

Note 7. Supplemental Disclosure of Non-Cash Investing and Financing Activities

During the three months ended August 31, 1995, the Company  reclassified  $4,429
of  property  plant and  equipment,  $3,065  of  goodwill,  $1,259  of  accounts
receivable  and $690 of  accounts  payable to  cellular  telephone  license as a
result of the exchange of cellular markets described at Note 8.

Note 8.  Acquisitions, Exchanges, Dispositions

On June 30, 1995,  the Company  acquired  the  non-wireline  cellular  telephone
systems  serving  (a)  Newtown,  LaPorte,  Starke,  Pulaski,  Jasper  and White,
Indiana,  (b) Kosciusko,  Noble,  Steuben and Lagrange,  Indiana,  (c) Williams,
Defiance, Henry and Paulding, Ohio and (d) Copiah, Simpson, Lawrence,  Jefferson
Davis,   Walthall  and  Marion,   Mississippi,   representing  an  aggregate  of
approximately 608,100 Net Pops. The above-described systems were acquired by the
Company in exchange for the Company s non-wireline  cellular  telephone  systems
serving the Roanoke,  Virginia MSA, the Lynchburg,  Virginia MSA, North Carolina
RSA #3 and Iowa RSA #5,  representing an aggregate of approximately  644,000 Net
Pops.  Simultaneously with the consummation of the transaction  described above,
the Company  sold its 72.2%  interest  in the  non-wireline  cellular  telephone
system serving the Charlottesville,  Virginia MSA,  representing an aggregate of
approximately 94,700 Net Pops, for a cash purchase price of approximately $9,914
subject to adjustment.  The Company recognized a gain of approximately $4,176 as
a result of the sale.

The Company was the successful  bidder for one of two Metropolitan  Trading Area
(MTA)  licenses   (granted  June  23,  1995)  to  provide   broadband   personal
communications  services in the  Commonwealth of Puerto Rico and the U.S. Virgin
Islands.  The licensed area  represents  approximately  3,623,000 Net Pops.  The
amount of the final bid submitted and paid by the Company was $54,672.

On  October  31,  1995,  the  Company  acquired  (i) a  94.3%  interest  in  the
non-wireline  cellular  telephone  system serving the Lafayette,  Louisiana MSA,
representing  approximately  205,700  net pops,  in exchange  for the  Company's
non-wireline  cellular  telephone  system  serving the  Jonesboro,  Arkansas RSA
(comprising 


<PAGE>
 
<PAGE>

approximately  205,00 Net Pops),  the license  rights and assets  located in and
covering  the Desoto  and Red River  Parishes  of  Louisiana  3 RSA  (comprising
approximately  34,700 Net Pops),  the license  rights and assets  located in and
covering  a  section  of  Morehouse   Parish  of  Louisiana  2  RSA  (comprising
approximately   24,100  Net  Pops)  and  a  cash   payment  by  the  Company  of
approximately  $5,580,  subject  to  adjustment,  and (ii) an  additional  14.3%
minority interest in the Elkhart, Indiana RSA, a market in which the Company now
has a 91.4% interest and an additional 12.7% equity  investment  interest in the
Lake  Charles,  Louisiana  MSA,  a market in which the  Company  now has a 25.1%
interest, for a cash payment of approximately $2,951.

On September 12, 1996, the Company acquired for  approximately  $34,000 in cash,
100% of the  ownership  interests  in the  partnership  owning the  non-wireline
cellular  telephone  system serving the Benton Harbor,  Michigan MSA. The Benton
Harbor market represents approximately 161,400 Net Pops.

Note 9.  Commitments and Contingencies

On  December  21,  1994,  the  Company  announced  that its  Board of  Directors
authorized  the  repurchase  in the  open  market  and in  privately  negotiated
transactions  from time to time,  of up to  1,000,000,  shares of Class A Common
Stock,  depending on prevailing  market  conditions.  To date, no such purchases
have been made by the Company.

The Company also plans to exercise  its right to acquire the minority  interests
held by Century Federal in the Cass and Jackson, Michigan systems for the prices
paid by Century Federal for such minority  interests in the acquisitions of such
systems ($2,000 and $1,000, respectively). Upon completion of these transaction,
the company will own 100% of these systems.

The Company entered into similar letter agreements  relating to the operation of
cellular  telephone  systems in  Elkhart,  Fort Wayne and South  Bend,  Indiana,
Battle Creek and Kalamazoo Michigan, and Roanoke,  Virginia.  Under the terms of
these letter  agreements,  a management company assisted the Company in managing
the daily operations of these cellular telephone systems. In accordance with the
terms of the letter  agreements,  the Company  terminated the management company
effective June 4, 1990.  Under the particular  letter  agreements the terminated
management  company  is  entitled  to a 5%  carried  interest  as defined in the
particular  letter  agreements up to and through December 31, 1996 at which time
the carried  interest  percentage  may be put to the Company.  During  September
1992, all of the management  companys rights  pursuant to the letter  agreements
were  acquired  by  Century  for a  purchase  price of  $2,200,  which  has been
reflected as an adjustment to the purchase price.

On July 31, 1996 the Company filed  applications  to  participate in an upcoming
FCC auction for broadband  personal  communications  services frequency blocks D
and E. The Company  listed Basic Trading  Areas (BTAs ), the market  designation
for PCS license  areas,  that  related to its cellular  operations.  The Company
submitted  a required  refundable  deposit of $11,000 in order to  maintain  its
bidding eligibility for the PCS licenses in which it is interested.  There is no
assurance that the Company will bid in the auction process, and as to the extent
any such participation will be successful.

Note 10.  Segment Information

The Company's  consolidated  financial  statements include two distinct business
segments.  The cellular telephone segment owns, operates and invests in cellular
telephone  systems  and a  specialized  mobile  radio and paging  business.  The
Company's Puerto Rico  telecommunications  segment is in the construction  stage
and not yet operational. Once operational the Company will provide PCS telephone
service and  alternative  telephone  access to Puerto  Rico and the U.S.  Virgin
Islands.


<PAGE>
 
<PAGE>

Information about the Company's  operations in its two business segments for the
three months ended August 31, 1996 and August 31, 1995 is as follows:

<TABLE>
<CAPTION>
                                                  Three Months Ended August 31,
                                                  -----------------------------
                                                    1996                  1995
                                                    ----                  ----
<S>                                              <C>                   <C>      
Gross revenues:

       Cellular telephone                        $  32,365             $  26,922
       Puerto Rico telecommunications                   --                    --
                                                 ---------             ---------
                                                 $  32,365             $  26,922
                                                 =========             =========
Operating (loss):

       Cellular telephone                        $  (2,004)            $  (4,688)
       Puerto Rico telecommunications               (1,395)                  (16)
                                                 ---------             ---------
                                                 $  (3,399)            $  (4,704)
                                                 =========             ========= 
Net Loss:

       Cellular telephone                        $  (4,494)            $  (1,948)
       Puerto Rico telecommunications               (1,613)               (1,470)
                                                 ---------             ---------
                                                 $  (6,107)            $  (3,418)
                                                 =========             ========= 
Assets, at end of period:

       Cellular telephone                        $ 697,035             $ 743,551
       Puerto Rico telecommunications               86,003                57,622
                                                 ---------             ---------
                                                 $ 783,038             $ 801,173
                                                 =========             =========
Depreciation and amortization:

       Cellular telephone                        $  18,464             $  18,014
       Puerto Rico telecommunications                   17                    16
                                                 ---------             ---------
                                                 $  18,481             $  18,030
                                                 =========             =========
Capital expenditures:

       Cellular telephone                        $  14,544             $   4,529
       Puerto Rico telecommunications                8,937                 1,821
                                                 ---------             ---------
                                                 $  23,481             $   6,350
                                                 =========             =========
</TABLE>

<PAGE>
 
<PAGE>



ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                       OPERATIONS AND FINANCIAL CONDITION
          (Dollars in thousands, except subscriber, pop and share data)

Results of Operations

Three Months ended August 31, 1996 and August 31, 1995

Revenue for the three months ended August 31, 1996 was $32,365, an increase of $
5,443 or 20% over revenue of $26,922 for the three months ended August 31, 1995.
The  increase  in  revenue  was the  result of growth  in  subscriptions  to and
increased  usage of  cellular  telephone  service.  Acquisitions  accounted  for
approximately $2,836 or 52% of the increase in revenue.

Revenue from the sale of cellular telephones to subscribers for the three months
ended  August 31, 1996  increased by $73 to $766 or 10% as compared to the three
months ended  August 31, 1995.  The increase in such revenue was due to a larger
number of telephone units sold during the current three month period offset,  in
part, by a reduction in the retail prices of cellular telephones.

Continued  growth in revenue is  dependent  upon  increased  levels of  cellular
subscriptions as well as maintenance of the current  subscriber  base.  Cellular
subscribers  at August  31,  1996 were  approximately  140,600.  During the most
recent  twelve  month  period ended  August 31,  1996,  the  Company's  cellular
subscriber  base has been  affected by (i)  acquisitions  of cellular  telephone
markets,  (ii) the exchange and  disposition of cellular  telephone  markets and
(iii)  internal  growth of subscribers in systems which it owned and operated at
August 31, 1995.

On a proforma  basis,  after  giving  effect to  dispositions  and  exchanges of
cellular   telephone  systems  at  August  31,  1995,  the  Company's   cellular
subscribers  were 94,200 as compared to 140,600 at August 31, 1996,  an increase
of 46,400 subscribers or 49%. The increase in subscribers after giving effect to
the exchanged and disposed  markets is the result of 71,700 new  activations and
11,800  subscribers from  acquisitions.  The increases were offset by subscriber
cancellations  of 37,100.  Subscriber  activity  during the twelve  months ended
August 31, 1996 is summarized in the table below:

<TABLE>
<CAPTION>

                                                                    Proforma effect of
                                                    Actual      Exchanged/Disposed Markets
                                                    ------      --------------------------
<S>                                                <C>          <C> 
Beginning Subscribers, August 31, 1995              97,700               94,200
Activations                                         71,900               71,700
Cancellations                                      (37,200)             (37,100)
Acquired                                            11,800               11,800
Disposed/Exchanged                                  (3,600)                --
                                                   -------              -------
Ending Subscribers, August 31, 1996                140,600              140,600
                                                   =======              =======


</TABLE>

The Company has experienced high levels of subscriber  cancellations  which have
been more than offset by new subscriptions. The cancellations experienced by the
Company are primarily the result of competitive  factors.  There is no assurance
that the Company will maintain its historic  level of  subscriber  growth in the
future.



<PAGE>
 
<PAGE>

Revenue per subscriber per month based upon an average number of subscribers for
the three  months ended August 31, 1996 was $74 as compared to $76 for the three
month  period ended  August 31,  1995.  There is no  assurance  that the overall
revenue per subscriber level will be maintained.

Cost of services  during the three months  ended August 31, 1996 was $4,766,  an
increase  of $1,209 or 34% from the three  months  ended  August 31,  1995.  The
reason for the increase was the variable costs  associated with a larger revenue
and  subscription  base as well as increased  cellular  coverage areas resulting
from the  continued  expansion  of the  Company's  network.  Included in cost of
services   during  the  three   months  ended  August  31,  1996  were  $504  of
pre-operating  costs  associated with the start-up of the Company's  Puerto Rico
telecommunications   business.  The  Company's  Puerto  Rico  telecommunications
business is in the construction stage and not yet operational.

Cost of equipment sold during the three months ended August 31, 1996 was $2,703,
an  increase of $547 or 25% as compared  to the three  months  ended  August 31,
1995.  The  primary  reason for the  increase  was an  increase in the number of
telephone  units  sold,  offset  by a  decrease  in the  average  unit  cost  of
telephones sold.

Selling,  general and  administrative  expenses  rose to $9,814,  an increase of
$1,931 or 25% above the $7,883 for the three months  ended August 31, 1995.  The
increase  was the result of an increase in the  Company's  managerial,  customer
service and sales staff to accommodate the larger  subscription and revenue base
and anticipated growth of its cellular telephone business.  Included in selling,
general and  administrative  expenses  during the three  months ended August 31,
1996  were $449 of  pre-operating  costs  associated  with the  start-up  of the
Company's Puerto Rico telecommunications business.

The Company anticipates continued increases in the cost of services and selling,
general  and  administrative  expenses  as the growth of its  existing  cellular
telephone  business  continues.  In  addition,  the  Company  expects  that  the
development of its recently acquired markets as well as its participation in the
Puerto Rico telecommunications business will contribute to an increased level of
expenses.

Depreciation  and  amortization  for the three  months ended August 31, 1996 was
$18,481,  an increase of $451 or 3% over the three months ended August 31, 1995.
The increase results from  acquisitions  completed during fiscal 1996 as well as
capital  expenditures made during fiscal 1996 in connection with the development
and network expansion of the Company's cellular telephone systems.

As a result of the factors  discussed  above,  the operating  loss for the three
months  ended  August 31, 1996 was $3,399,  a decrease of $1,305 or 28% from the
loss of $4,704 for the three months ended August 31, 1995.

During the three  months  ended  August 31,  1995,  the  Company  sold its 72.2%
interest   in  the   non-wireline   cellular   telephone   system   serving  the
Charlottesville,  VA MSA for a cash  purchase  price  of  approximately  $9,914,
subject to  adjustment.  The Company  recognized a gain of $4,176 as a result of
the sale (see Acquisitions, Exchanges, and Dispositions).

Interest  expense  was $7,041 for the three  months  ended  August 31,  1996,  a
decrease  of $1,261 or 15% from the three  months  ended  August 31,  1995.  The
decline in  interest  expense is the result of the  capitalization  of $1,299 of
interest  charges related to the acquisition  cost of the Company's PCS license.
Gross  interest  costs for the three  months ended August 31, 1996 and 1995 were
$8,340 and $8,302, respectively,  reflecting average debt levels of $350,000 and
a weighted average interest rate of 9.5%.

After income  attributable to minority  interests in subsidiaries  for the three
months ended August 31, 1996, a pretax loss of $6,862 was incurred,  as compared
to a pretax loss of $6,498 in the three months ended August 31, 1995. The income
tax benefit of $755 for the three  months ended  August 31, 1996  represents  an
adjust-ment  to the  deferred tax  liability  of the Company,  offset by current
state and local taxes for the period.  The



<PAGE>
 
<PAGE>

tax  benefits  are  non-cash  in nature and are  attributable  to the  Company's
acquisitions and results of operations.

The net loss of $6,107 for the three months ended August 31, 1996  represents an
increase of $2,689 or 79% from the net loss in the three months ended August 31,
1995. The Company expects net losses to continue until such time as the cellular
telephone operations,  the Puerto Rico  telecommunications  business and related
investments  associated  with the  construction  and development of its cellular
telephone  systems  and Puerto Rico  telecommunications  system  plant  generate
sufficient  earnings  to  offset  the  costs  described  above.  There can be no
assurance  that the Company will  generate the earnings  necessary to offset the
costs described and,  accordingly,  there can be no assurance that profitability
will be achieved in the foreseeable future.

Liquidity and Capital Resources

The Company's  cellular  telephone  systems,  primarily serving three geographic
areas,  are considered to be in the early  development  phase of operations.  On
June 23, 1995, the Company acquired one of two  Metropolitan  Trading Area (MTA)
licenses to provide broadband  personal  communications  services ("PCS") in the
Commonwealth  of Puerto  Rico and the U.S.  Virgin  Islands.  The  Company  also
intends to construct and operate a competitive  telephone access business in the
Puerto Rico marketplace.  The Company requires  substantial  capital to operate,
construct,  expand,  and acquire cellular telephone systems and to build out its
recently acquired Puerto Rico telecommunications  business and for debt service.
Historically,  the Company has been dependent upon  borrowings,  the issuance of
its  equity  securities  and  operating  cash  flow to  provide  funds  for such
purposes.

For the three  months  ended  August  31,  1996,  earnings  were less than fixed
charges by $6,862.  Fixed charges consist of interest expense and the portion of
rents deemed  representative  of the interest  portion of leases.  The amount by
which earnings were less than fixed charges reflects non-cash charges of $18,481
relating to depreciation and amortization.

As of August 31, 1996, the Company had $112,267 of property, plant and equipment
(net) placed in service.  During the three  months  ended  August 31, 1996,  the
Company  made  capital  expenditures  of  $23,481,  primarily  to  continue  the
construction   of  recently   acquired   cellular   telephone  and  Puerto  Rico
telecommunications  systems,  the  expansion of the  coverage  areas of existing
properties and the upgrade of its cell site and call switching equipment. During
the three months ended August 31, 1996 the buildout of the Company's Puerto Rico
telecommunications network required capital expenditures of $8,937 or 38% of the
Company's total capital expenditures.  The Company's future commitments for such
property and equipment include the addition of cell sites to expand coverage, as
well as enhancements  to the existing  infrastructure  of its cellular  systems.
During the twelve months ended May 31, 1997,  the Company  anticipates  cellular
capital expenditure requirements of approximately $25,000. The Company currently
estimates  that the remaining  cost to build out the  infrastructure  of its PCS
network will be  approximately  $51,000 to be expended  through fiscal 1998. The
Company is exploring  various  sources of external  financing  including but not
limited to bank financing, joint ventures, partnerships and placement of debt or
equity securities of the Company.

In this regard, On September 12, 1996, the Company entered into a $50,000 credit
facility  with  Citibank  N.A.  The  facility  terminates  on  March  20,  1998.
Approximately  $34,000  of the  facility  was  used to fund the  Benton  Harbor,
Michigan cellular telephone system acquisition (see "Acquisitions, Exchanges and
Dispositions").  The  remainder  will be used for  working  capital  and general
corporate  purposes.  The interest rate payable on  borrowings  under the credit
facility  is based  on, at the  election  of the  Company,  (a) Base Rate plus a
margin of 2% or (b)  Eurodollar  Base Rate plus a margin of 3%. The  facility is
secured  by the pledge of stock of certain  of the  Company's  subsidiaries  not
otherwise   restricted  by  its  Senior  Note  Indentures.   These  include  the
subsidiaries  which  operate the Puerto Rico  telecommunications  business,  the
Benton Harbor system and is further guaranteed by certain  subsidiaries  bidding
its  investment  interests.  The credit  facility  restricts  the  incurrence of
certain  additional  debt of the  Company,  limits the  Company s ability to pay
dividends and requires that certain operating tests be met.



<PAGE>
 
<PAGE>

The Company has  outstanding  two classes of  preferred  stock which are held by
Citizens Utilities Co. (Citizens) and Century  Communications Corp. ( Century ).
The preferred stock issues carry no cash dividend  requirement until fiscal 1997
but accrete liquidation  preference and redemption value at the rate of 7.5% per
annum,  compounded  quarterly,  until then.  Assuming no change in the number of
shares of such classes outstanding,  the fully accreted  liquidation  preference
and redemption value of the shares held by Citizens and Century will be $186,287
and $7,252, respectively. Beginning in fiscal 1997, the holders of the preferred
stock will be entitled to receive cash  dividends at the rate of 8.5% per annum.
Assuming  no change in the  number of shares of such  classes  outstanding,  the
annual  dividend  payments,  commencing in fiscal 1997, to be made in respect of
the  preferred  stock will be $15,834 and $616,  respectively.  Both  classes of
preferred  stock are subject to mandatory  redemption in fiscal 2007. Any unpaid
dividends continue to accumulate without additional cost to the Company.

In order to meet its  obligations  with respect to its debt and preferred  stock
obligations, it is important that the Company continue to improve operating cash
flow. In order to do so, the  Company's  revenues must increase at a faster rate
than operating expenses.  Increases in revenue will be dependent upon continuing
growth in the number of subscribers and maximizing  revenue per subscriber.  The
Company has continued the  development  of its  managerial,  administrative  and
marketing  functions,  and is continuing the construction of cellular systems in
its existing and recently acquired markets in order to achieve these objectives.
There is no  assurance  that growth in  subscribers  or revenue  will occur.  In
addition,  the  Company's  participation  in the Puerto Rico  Telecommunications
business is  expected  to be capital  intensive,  requiring  additional  network
buildout costs of  approximately  $51,000 during fiscal 1997 and 1998.  Further,
due to the start-up nature of the Puerto Rico  telecommunications  business, the
Company  expects that it will require  additional  cash  investment  to fund its
operations  over the next  several  years.  The Puerto  Rico  telecommunications
business is expected to be highly  competitive  with the two  existing  cellular
telephone providers as well as the other Puerto Rico telecommunications  license
holders. There is no assurance that the Puerto Rico telecommunications  business
will generate cash flow or reach profitability.  Even if the Company's operating
cash flow  increases,  it is anticipated  that cash generated from the Company's
cellular telephone operations and Puerto Rico  telecommunications  business will
not be  sufficient in the next several  years to cover  interest,  the preferred
stock dividend  requirements  that commence in fiscal 1997 and required  capital
expenditures.  The Company  anticipates  that  shortfalls  may be made up either
through debt and equity issuances or additional financing  arrangements that may
be entered into by the Company.

The  Company  filed a shelf  registration  statement  with  the  Securities  and
Exchange  Commission  ( SEC ) for up to  8,000,000  shares of its Class A Common
Stock that may be offered from time to time in connection with acquisitions. The
registration statement became effective July 14, 1994. As of September 30, 1996,
4,239,231 shares remain available for future acquisitions.

On April 5, 1995 the Company filed a shelf  registration  statement with the SEC
for the  issuance  of  $500,000  of the  Company's  debt  securities.  The  debt
securities may be issued from time to time in series on terms to be specified in
one or more prospectus  supplements at the time of the offering. If so specified
with respect to any particular  series,  the debt  securities may be convertible
into shares of the  Company's  Class A Common  Stock.  As of September 30, 1996,
$400,000 remained available for issuance.

Acquisitions, Exchanges, and Dispositions

The Company's primary acquisition  strategy is to acquire controlling  ownership
interests in cellular  systems  serving  markets  contiguous or proximate to its
current markets. The Company's strategy of clustering its cellular operations in
contiguous and proximate  geographic  areas enables it to achieve  operating and
cost  efficiencies  as  well  as  joint  advertising  and  marketing   benefits.
Clustering  also  allows  the  Company  to offer its  subscribers  more areas of
uninterrupted  service as they travel  through an area or state.  In addition to



<PAGE>
 
<PAGE>

expanding its existing clusters,  the Company may also seek to acquire interests
in cellular systems in other geographic areas. The Company may also pursue other
communications  businesses  related to its cellular  telephone  and other mobile
service operations as well as other  communications  businesses it determines to
be desirable.  The  consideration for such acquisitions may consist of shares of
Class A Common Stock, cash, assumption of liabilities or a combination thereof.

On  September  12, 1996 the Company  acquired  for $34,000 in  cash,100%  of the
ownership  interests  in  the  partnership  owning  the  non-wireline   cellular
telephone  system  serving the  Benton Harbor,  Michigan MSA. The Benton Harbor,
market represents approximately 161,400 Net Pops.

On  October  31,  1995,  the  Company  acquired  (i) a  94.3%  interest  in  the
non-wireline  cellular  telephone  system serving the Lafayette,  Louisiana MSA,
representing  approximately  205,700  net pops,  in  exchange  for the Company s
non-wireline  cellular  telephone  system  serving the  Jonesboro,  Arkansas RSA
(comprising  approximately  205,000  Net Pops),  the  license  rights and assets
located in and  covering  the Desoto and Red River  Parishes of  Louisiana 3 RSA
(comprising  approximately  34,700  Net  Pops),  the  license  rights and assets
located  in and  covering  a section  of  Morehouse  Parish of  Louisiana  2 RSA
(comprising  approximately 24,100 Net Pops) and a cash payment by the Company of
approximately  $5,580,  subject  to  adjustment,  and (ii) an  additional  14.3%
minority interest in the Elkhart, Indiana RSA, a market in which the Company now
has a 91.4% interest and an additional 12.7% equity  investment  interest in the
Lake  Charles,  Louisiana  MSA,  a market in which the  Company  now has a 25.1%
interest, for a cash payment of approximately $2,951.

On June 30, 1995,  the Company  acquired  the  non-wireline  cellular  telephone
systems  serving  (a)  Newtown,  LaPorte,  Starke,  Pulaski,  Jasper  and White,
Indiana,  (b) Kosciusko,  Noble,  Steuben and Lagrange,  Indiana,  (c) Williams,
Defiance, Henry and Paulding, Ohio and (d) Copiah, Simpson, Lawrence,  Jefferson
Davis,   Walthall  and  Marion,   Mississippi,   representing  an  aggregate  of
approximately 608,100 Net Pops. The above-described systems were acquired by the
Company in exchange for the Company's  non-wireline  cellular  telephone systems
serving the Roanoke,  Virginia MSA, the Lynchburg,  Virginia MSA, North Carolina
RSA #3 and Iowa RSA #5,  representing an aggregate of approximately  644,000 Net
Pops.  Simultaneously with the consummation of the transaction  described above,
the Company  sold its 72.2%  interest  in the  non-wireline  cellular  telephone
system serving the Charlottesville,  Virginia MSA,  representing an aggregate of
approximately  94,700  Net  Pops,  for a cash  purchase  price of  approximately
$9,914,  subject to adjustment.  The Company  recognized a gain of approximately
$4,176 as a result of the sale.

The Company was the successful  bidder for one of two Metropolitan  Trading Area
(MTA)  licenses   (granted  June  23,  1995)  to  provide   broadband   personal
communications  services in the  Commonwealth of Puerto Rico and the U.S. Virgin
Islands.  The licensed area  represents  approximately  3,623,000 Net Pops.  The
amount of the final bid submitted and paid by the Company was $54,672.

Commitments and Contingencies

On  December  21,  1994,  the  Company  announced  that its  Board of  Directors
authorized  the  repurchase  in the  open  market  and in  privately  negotiated
transactions,  from time to time,  of up to  1,000,000  shares of Class A Common
Stock,  depending on prevailing market conditions.  The Company has made no such
purchases to date.

The Company also plans to exercise  its right to acquire the  minority  interest
held by Century Federal in the Cass and Jackson,  Michigan  systems from Century
Federal for the prices paid by Century  Federal for such  minority  interests in
the  acquisition  of  such  systems  ($2,000  and  $1,000,  respectively).  Upon
completion of these transactions, the Company will own 100% of these systems.



<PAGE>
 
<PAGE>

The Company entered into similar letter agreements  relating to the operation of
cellular  telephone  systems in  Elkhart,  Fort Wayne and South  Bend,  Indiana,
Battle Creek and Kalamazoo Michigan, and Roanoke,  Virginia.  Under the terms of
these letter  agreements,  a management company assisted the Company in managing
the daily operations of these cellular telephone systems. In accordance with the
terms of the letter  agreements,  the Company  terminated the management company
effective June 4, 1990.  Under the particular  letter  agreements the terminated
management  company  is  entitled  to a 5%  carried  interest  as defined in the
particular  letter  agreements up to and through December 31, 1996 at which time
the carried  interest  percentage  may be put to the Company.  During  September
1992, all of the management  company's rights pursuant to the letter  agreements
were acquired by Century for a purchase price of $2,200,  which was reflected as
an adjustment to the purchase price.

The Company also plans to  participate  in the  alternative  access  business in
Puerto Rico pursuant to FCC requirements for interstate  service and pursuant to
an  authorization  issued to the Company in December 1994 by the Public  Service
Commission of the Commonwealth of Puerto Rico for intrastate service.

On July 31, 1996 the Company filed  applications  to  participate in an upcoming
FCC auction for broadband  personal  communications  services frequency blocks D
and E. The Company  listed Basic Trading  Areas (BTAs ), the market  designation
for PCS license  areas,  that  related to its cellular  operations.  The Company
submitted  a required  refundable  deposit of $11,000 in order to  maintain  its
bidding eligibility for the PCS licenses in which it is interested.  There is no
assurance with respect to the extent any such participation will be successful.

The following tables sets forth (in thousands),  for the periods indicated,  the
Company's net cash used by operating  activities  before interest payments ( net
cash provided ), the Company's principal uses of such cash and the cash required
from financing and investing activities.

<TABLE>
<CAPTION>
                                                                         Three Months Ended August 31,
                                                       ----------------------------------------------------------------
                                                                  1996                                   1995
                                                       ------------------------                ------------------------
                                                        Amount                %                Amount                 %
                                                        ------                -                ------                 -
<S>                                                   <C>                    <C>              <C>                    <C>  
Net cash provided by
operating activities                                  $  8,199               100%             $ 12,398               97.8%

Interest paid (including financing costs)                   --                --                   277                2.2
                                                      --------               ---              --------               ---- 
Net cash provided                                     $  8,199               100%             $ 12,675              100.0%
                                                      ========               ===              ========              ===== 
Principal uses of cash:

Interest paid (including financing costs )            $     --                --%             $    277                2.2%

Property, plant and equipment
 (excluding acquisitions)                               23,481               286.4               6,350               50.1
                                                      --------               ---              --------               ---- 
Total                                                 $ 23,481               286.4%           $  6,627               52.3%
                                                      ========               =====            ========               ==== 
Cash (required from) available for
financing and investing activities                    $(15,282)             (186.4)%          $  6,048               47.7%
                                                      ========              ======            ========               ==== 
</TABLE>

Although  the net cash  provided by  operating  activities  for the three months
ended August 31, 1996 was not sufficient to fund the Company's  expenditures for
property,  plant and equipment of $23,481,  funds  required were  available from
cash on hand.  The  principal  source of such cash was  financing  activities of
prior  fiscal  years.  The Company  will  continue to rely on various  financing
activities to fund these requirements.



<PAGE>
 
<PAGE>

The  following  table  sets  forth the  primary  sources  and uses of funds from
financing and investing activities for the periods indicated (in thousands):

<TABLE>
<CAPTION>
                                                                              Three Months Ended August 31,
                                                                              -----------------------------
                                                                                1996                 1995
                                                                                ----                 ----
<S>                                                                          <C>                  <C>
(Purchase) and issuance of Class A Common Shares                              $    (40)            $      1

Net capital returned from equity investments                                     1,172                2,023
                                                                              --------             --------

Cash Available                                                                   1,132                2,024

Acquisition of other assets and wireless telephone system licenses             (11,059)             (34,329)
                                                                              --------             -------- 
Cash required from operating activities or cash on hand                       $ (9,927)            $(32,305)
                                                                              ========             ======== 
</TABLE>



<PAGE>
 
<PAGE>


PART II - OTHER INFORMATION

ITEM 5. Other Information

Benton Harbor Acquisition

On  September  12, 1996 the Company  acquired  for $34,000 in cash,  100% of the
ownership interest in the partnership owning the non-wireline cellular telephone
system  serving the  Benton Harbor,  Michigan  MSA.  The  Benton  Harbor, market
represents approximately 161,400 Net Pops.

New Credit Facility

On September 12 ,1996,  the Company  entered into a $50,000 credit facility with
Citibank, N.A. The facility terminates on March 20, 1998.  Approximately $34,000
of the facility was used to fund the Benton Harbor,  Michigan cellular telephone
system  acquisition (see "Benton Harbor" above).  The remainder will be used for
working  capital and general  corporate  purposes.  The interest rate payable on
borrowings  under  the  credit  facility  is based on,  at the  election  of the
Company,  (a) "Base  Rate" plus a margin of 2% or (b)  "Eurodollar  Rate" plus a
margin of 3%. The  facility is secured by the stock of certain of the  Company's
subsidiaries  not  otherwise  subject  to  restrictions  under its  Senior  Note
Indentures.  The credit facility  restricts the incurrence of certain additional
debt of the Company,  limits the Company's ability to pay dividends and requires
that certain operating tests be met.

Extension of Management Agreement

Century  Communications and the Company have entered into a Services  Agreement,
dated August 30, 1991,  as  subsequently  amended  (the  "Services  Agreement"),
pursuant to which  Century  Communications  through its  personnel  provide such
design,  construction,   management,   operational,  technical  and  maintenance
services  to the  Company  as may be  necessary,  or as  Century  Communications
determines may be appropriate,  for the cellular  telephone,  paging and related
systems  owned and  operated by the Company  ("the  Controlled  Systems").  Such
services  also  include,  but are not limited  to,  providing  all the  services
necessary for the monitoring,  to the extent possible,  of the activities of the
limited  partnerships  in which the Company  has  investment  interests  in such
manner  as  to  protect  the  interests  of  the  Company.  Such  services  have
historically been provided by the Company by Century Communications. The Company
believes that it is in its best interest for Century  Communications to continue
to provide such services until, in the judgment of the Board of Directors of the
Company,  the Company has established its own executive  management team capable
of providing such services. There is no annual fee paid or to be paid to Century
Communications  under the Services Agreement.  As consideration for the services
rendered and to be rendered under the Services Agreement,  the Company issued to
Century  Communications the Second Series Convertible Redeemable Preferred Stock
valued at $5,000,000.

The  Services  Agreement  had an  original  term of five years to  automatically
terminate earlier upon the occurrence of (i) the conversion of 25% or more (on a
cumulative  basis)  of the  shares of  Convertible  Redeemable  Preferred  Stock
originally  issued  to  Citizens  or (ii)  the  determination  by the  Board  of
Directors  of the Company  that the Company had  established  its own  executive
management team to provide all the services and assume all the duties of Century
Communications under the Services Agreement. Because a majority of the Company's
Directors are affiliated with Century Communications,  the Board of Directors of
The company  would face a conflict of interest in  determining  that the Company
had  established  its own management team to provide all the services and assume
all the duties of Century  Communications  under the Services Agreement.  All of
the services rendered by Century Communications under the Services Agreement are
subject to the general approval, authority, oversight and review of the Company.



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The Company is  obligated  to  reimburse  Century  Communications  for all costs
incurred by Century  Communications or its affiliates (excluding the Company and
its subsidiaries)  that are directly  attributable to the design,  construction,
management,  operation  and  maintenance  of the  Controlled  Systems  or to the
performance  by Century  Communications  of its other  duties under the Services
Agreement,  including  all  fees and  expenses  paid to  third  parties  and the
out-of-pocket  expenses  incurred by Century  Communications  or its  affiliates
(excluding the Company and its subsidiaries) in respect of its employees who are
engaged in the  performance of services for the cellular  systems  controlled by
the Company.

The Company  has also  agreed to  indemnify,  defend and hold  harmless  Century
Communications  and its affiliates from any claims,  costs,  damages  (including
consequential  damages),  losses or expenses  (including  reasonable  attorney's
fees)  arising  out  of  or  relating  to  the  Services  Agreement  or  Century
Communications'  performance of its  responsibilities  thereunder,  except where
attributable  to  the  gross   negligence  or  willful   misconduct  of  Century
Communications.  Any  liability  of Century  Communications  to the Company that
results  from its  willful  misconduct  or gross  negligence  is  limited to the
aggregate amount of $5,000,000.

Effective  August 30, 1996,  the term of the Services  Agreement was extended to
August 31, 1997, during which time Century  Communications  and the Company will
confer  regarding  the possible  renewal or extension of the Services  Agreement
beyond such date and will engage in good faith negotiations regarding additional
consideration to be paid to Century  Communications for services rendered beyond
the  expiration  of the original  initial term of the  Services  Agreement.  The
parties have agreed that the amount of such additional compensation will be less
than the value of the services rendered by Century Communications.

ITEM 6. Exhibits and Report on Form 8-K

        a)     Exhibits

               Exhibit 10.1  $50 million credit facility dated September 12,
                             1996, between Centennial Cellular Corp. and
                             Citibank N.A.

               Exhibit 10.2  Agreement, dated as of August 30, 1996, between
                             Century Cellular Holding Corp. and Centennial
                             Cellular Corp.

               Exhibit  11 -  Statement  re  computation  of per share  earnings
               Exhibit 27 - Financial data schedule (EDGAR filing document only)

        b)     Reports on Form 8-K

               None


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                                   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.

October 11, 1996

                                             CENTENNIAL CELLULAR CORP.

                                             [/s/ Scott N. Schneider]
                                             -----------------------------------
                                             Scott N. Schneider
                                             Senior Vice President and Treasurer
                                             (Principal Financial Officer)


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