<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 November 30, 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 -  16,475,968  outstanding shares as of January 7, 1997
Class B Common -  10,544,113  outstanding shares as of January 7, 1997



<PAGE>
 
<PAGE>

                         PART 1 - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)

<TABLE>
<CAPTION>

                                                                      November 30,   May 31,
                                                                         1996         1996
                                                                      -----------    ------

<S>                                                                   <C>           <C>
ASSETS

CURRENT ASSETS:
      Cash                                                           $    24,687  $    67,297
      Accounts receivable, less allowance for doubtful
          accounts of $1,615 and $1,471, respectively                     21,018       20,210
      Prepaid expenses and other current assets                            7,997        2,158
                                                                     -----------  -----------

        TOTAL CURRENT ASSETS                                              53,702       89,665

PROPERTY, PLANT AND EQUIPMENT - net                                      127,953       91,417

EQUITY INVESTMENTS IN CELLULAR SYSTEMS - net                              98,641      100,204

DEBT ISSUANCE COSTS, less accumulated amortization of
       $2,711 and $2,081, respectively                                     7,694        7,738

CELLULAR TELEPHONE LICENSES, less accumulated
      amortization of $188,698 and $164,786, respectively                309,422      300,206

PERSONAL COMMUNICATIONS SERVICES LICENSE                                  62,605       60,007

GOODWILL, less accumulated amortization of $21,384
      and $19,343, respectively                                          131,866      133,907

OTHER ASSETS - net                                                        13,465        2,668
                                                                     -----------  -----------

        TOTAL                                                        $   805,348  $   785,812
                                                                     ===========  ===========

</TABLE>



                 See notes to consolidated financial statements




                                        1


<PAGE>
 
<PAGE>

                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                  (CONTINUED)
                    (Amounts in thousands, except share data)

<TABLE>
<CAPTION>
 
                                                                        November 30,        May 31,
                                                                           1996              1996
                                                                        -----------         -------
<S>                                                                     <C>               <C>

LIABILITIES AND STOCKHOLDERS' EQUITY 

CURRENT LIABILITIES:
    Accounts payable                                                  $     10,762      $      4,325
    Accrued interest payable                                                 2,836             2,299
    Other accrued expenses                                                  17,321            14,547
    Payable to affiliate                                                       909               956
    Customers' deposits and prepayments                                      6,286             4,961
                                                                      ------------      ------------
                                                                                                      
        TOTAL CURRENT LIABILITIES                                           38,114            27,088
                                                                                                      
LONG-TERM DEBT                                                             380,000           350,000
DEFERRED LIABILITY                                                           2,200             2,200
DEFERRED INCOME TAXES                                                       51,480            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                                         375,770           383,533
        Accumulated deficit                                               (231,224)         (218,996)
                                                                      ------------      ------------
                                                                           144,816           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                                  140,015           160,006
                                                                      ------------      ------------

                 TOTAL                                                $    805,348      $    785,812
                                                                      ============      ============
</TABLE>



                 See notes to consolidated financial statements



                                        2



<PAGE>
 
<PAGE>

                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

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


<TABLE>
<CAPTION>


                                                         Three Months Ended November 30,  Six Months Ended November 30,
                                                         -------------------------------  -----------------------------
                                                            1996             1995              1996            1995
                                                            ----             ----              ----          ----
<S>                                                     <C>               <C>              <C>              <C>
REVENUE:
    Service revenue                                   $      34,248     $     26,013        $     65,105   $      50,834
    Equipment sales                                             633              607               1,399           1,300
    Interest income                                             478            1,093               1,220           2,501
                                                      -------------     ------------        ------------   -------------
                                                             35,359           27,713              67,724          54,635
                                                      -------------     ------------        ------------   -------------

COSTS AND EXPENSES:
    Cost of services                                          4,927            3,681               9,693           7,238
    Cost of equipment sold                                    3,966            3,143               6,669           5,299
    Selling, general and administrative                      11,868            8,200              21,682          16,083
    Depreciation and amortization                            19,310           17,511              37,791          35,541
                                                      -------------     ------------        ------------   -------------
                                                             40,071           32,535              75,835          64,161
                                                      -------------     ------------        ------------   -------------
 
OPERATING LOSS                                               (4,712)          (4,822)             (8,111)         (9,526)
                                                      -------------     ------------        ------------   -------------

INCOME FROM EQUITY INVESTMENTS                                4,422            3,151               8,084           5,466
GAIN ON SALE OF ASSETS                                            0               27                  48           4,203
INTEREST                                                      7,718            8,249              14,759          16,551
                                                      -------------     ------------        ------------   -------------

LOSS BEFORE INCOME TAX BENEFIT
    AND MINORITY INTEREST                                    (8,008)          (9,893)            (14,738)        (16,408)

INCOME TAX BENEFIT                                           (2,019)          (2,472)             (2,774)         (5,552)
                                                      -------------     ------------        ------------   -------------

    LOSS BEFORE MINORITY INTEREST                            (5,989)          (7,421)            (11,964)        (10,856)

MINORITY INTEREST IN (INCOME) LOSS OF SUBSIDIARIES             (132)              72                (264)             89
                                                      -------------     ------------        ------------   -------------

        NET LOSS                                      $      (6,121)    $     (7,349)       $    (12,228)  $     (10,767)
                                                      =============     ============        ============   ============= 

DIVIDEND REQUIREMENT ON PREFERRED STOCK               $       4,113     $      3,397        $      7,723   $       6,688
                                                      =============     ============        ============   =============

LOSS APPLICABLE TO COMMON SHARES                      $     (10,234)    $    (10,746)       $    (19,951)  $     (17,455)
                                                      =============     ============        ============   ============= 

LOSS PER COMMON SHARE                                 $        (.38)    $       (.40)       $       (.74)   $       (.65)
                                                      =============     ============        ============    ============ 

WEIGHTED AVERAGE NUMBER OF COMMON 
    SHARES AND COMMON SHARE EQUIVALENTS
    OUTSTANDING DURING THE PERIOD                        26,935,000       26,793,000          26,932,000      26,772,000
                                                       ============      ===========        ============    ============ 

</TABLE>


                 See notes to consolidated financial statements

                                        3


<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    Additional           Shareholder
                                --------------------     ------------------  Paid-In    Treasury     Note     (Accumulated
                                  Shares     Dollars     Shares     Dollars  Capital     Stock     Receivable  Deficit)      Total
                                ----------   --------  ----------   -------  -------   ----------  ---------- -----------    -----
<S>                            <C>           <C>      <C>            <C>   <C>       <C>         <C>         <C>          <C>
Balance at June 1, 1995         15,741,752 $   157     10,544,113  $   105  $ 395,735  $ (1,801)   $(3,000)   $(202,365)   $188,831

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

Common stock 
   issued in conjuction with       493,441       5              -        -        448         -          -            -         453
   acquisitions

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         16,461,858     165     10,544,113      105    383,533    (1,801)    (3,000)    (218,996)    160,006

Common Stock issued in
   connection with incentive 
   plans                            13,258       -              -        -       (40)         -          -           -          (40)

Dividends payable on preferred           -       -              -        -     (4,113)        -          -           -       (4,113)

Net loss                                 -       -              -        -         -          -          -     (12,228)     (12,228)

Accretion in liquidation value
   of preferred stock                    -       -              -        -     (3,610)        -          -           -       (3,610)
                                ---------- -------     ----------  -------  ---------  --------    -------    ---------    --------

Balance at November 30, 1996    16,475,116 $   165     10,544,113  $   105  $ 375,770 $  (1,801)  $ (3,000)  $(231,224) $   140,015
                                ========== =======     ==========  =======  ========= =========   ========   =========  ===========


</TABLE>

                 See notes to consolidated financial statements


                                        4


<PAGE>
 
<PAGE>



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

                                                                          Six Months Ended November 30,
                                                                          -----------------------------
                                                                             1996               1995
                                                                          ----------         ----------
<S>                                                                       <C>                 <C>
OPERATING ACTIVITIES:

   Cash received from subscribers and others                              $   82,631         $    59,835
   Cash paid to suppliers, employees and                                              
      governmental agencies                                                  (54,878)            (38,447)
   Interest paid                                                             (16,336)            (16,057)
                                                                          ----------         -----------

      NET CASH PROVIDED BY OPERATING ACTIVITIES                               11,417               5,331
                                                                          ----------         -----------

INVESTING ACTIVITIES:

   Capital expenditures                                                      (40,903)            (21,591)
   Acquisition of other assets                                               (11,072)             (1,522)
   Acquisition, disposition and exchange of cellular telephone systems       (34,928)              1,358
   Acquistion of personal communications service license                           -             (44,334)
   Capital returned from equity investments                                    3,738               3,584
   Capital contributed to equity investments                                    (236)               (421)
                                                                          ----------         -----------

      NET CASH (USED IN) INVESTING ACTIVITIES                                (83,401)            (62,926)
                                                                          ----------         -----------

FINANCING ACTIVITIES:

   Proceeds from long-term debt                                               35,000                   -
   Repayment of long-term debt                                                (5,000)                  -
   Debt issuance costs                                                          (587)               (303)
   Issuance of Class A and B Common Stock and treasury stock purchases           (39)                 36
                                                                          ----------         -----------

      NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                     29,374                (267)
                                                                          ----------         -----------

NET (DECREASE) IN CASH                                                       (42,610)            (57,862)

CASH, BEGINNING OF PERIOD                                                     67,297             121,628
                                                                          ----------         -----------

CASH, END OF PERIOD                                                     $     24,687        $     63,766
                                                                        ============        ============

</TABLE>



                 See notes to consolidated financial statements

                                        5



<PAGE>
 
<PAGE>

                   CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (CONTINUED)
                             (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                           Six Months Ended November 30,
                                                                         --------------------------------
                                                                               1996               1995
                                                                         -------------        ----------
<S>                                                                        <C>                  <C>
RECONCILIATION OF NET LOSS TO NET CASH  PROVIDED BY
    OPERATING ACTIVITIES:

    Net loss                                                             $     (12,228)       $  (10,767)
                                                                         -------------        ---------- 

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

    Depreciation and amortization                                               37,791            35,541
    Minority interest in income (loss) of subsidiaries                             264               (89)
    Deferred income taxes                                                       (4,671)           (6,000)
    Equity in undistributed earnings of investee companies                      (8,084)           (5,466)
    Gain on sale of assets                                                           -            (4,176)
    Other                                                                       (2,482)              494
    Change in assets and liabilities net of effects of
        acquired, exchanged and disposed  cellular telephone systems:
           Accounts receivable - decrease/(increase)                               856            (3,311)
           Prepaid expenses and other current assets -
              (increase)                                                        (5,776)           (3,046)
           Accounts payable and accrued expenses -
              increase                                                           4,443               928
           Customer deposits and prepayments -
              increase                                                           1,304             1,223
                                                                         -------------        ---------- 
     
    Total adjustments                                                           23,645            16,098
                                                                         -------------        ---------- 
Net cash provided by operating activities                                $      11,417        $    5,331
                                                                         =============        ==========
</TABLE>



                 See notes to consolidated financial statements

                                        6



<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
November 30, 1996 and the results of its consolidated  operations and cash flows
for the six  months  ended  November  30,  1996 and  November  30,  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,   Dispositions  and  Exchanges").  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. At November 30, 1996
the Company was in compliance with the covenants of this credit facility.

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.  As of
December 31, 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 December  31, 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 and, completed acquisitions  (purchased/exchanged  from June 1, 1995 and
completed by November 30, 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.


                                       7


<PAGE>
 
<PAGE>

<TABLE>
<CAPTION>

                                           Six Months Ended November 30,
                                           -----------------------------
                                             1996                 1995
                                             ----                 ----
        <S>                             <C>                 <C>

             Revenues                     $ 68,994              $ 56,577
             Net Loss                      (11,188)              (13,995)
             Loss per common share            (.70)                 (.77)
</TABLE>

Pro-forma  loss per common share for the six months ended  November 30, 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 $14,414 and $8,937,
for the six months ended November 30, 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
385,631  shares of common  stock  equivalents  for the six month  periods  ended
November 30, 1996 and November  30,  1995,  respectively.  Loss per common share
includes a charge for the accretion in liquidation  value of preferred stock and
the dividend payable on preferred stock.

NOTE 7. SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During the six months ended November 30, 1995, the Company  reclassified  $3,185
of property, plant and equipment, $2,801 of goodwill, $160 of other assets, $476
of  accounts  receivable  and $672 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

                                       8



<PAGE>
 
<PAGE>


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 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,  a  subsidiary  of  Century   Communications   Corp.
("Century"),  in the Cass and Jackson,  Michigan  systems for the prices paid by
Century Federal for such minority interests in the acquisitions of these systems
($2,000 and $1,000,  respectively).  Upon completion of these transactions,  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  company's 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.

The Company has determined to pursue a strategy to sell or otherwise  dispose of
its minority interests in cellular telephone systems representing  approximately
1,100,000 net pops. The Company has not yet made a final determination as to the
estimated sale proceeds or the timing of such disposition.

The Company has withdrawn its  application  to participate in the FCC auction of
PCS  frequency  blocks D and E. The Company is  expected  to receive  $11,000 in
return of its deposit with the FCC related to these auctions.

NOTE 10.  NEW ACCOUNTING PRONOUNCEMENTS

In October 1995, the Financial  Accounting  Standards Boards issued Statement of
Financial  Accounting  Standards  ("SFAS") No. 123,  "Accounting for Stock-Based
Compensation",  which will be adopted by the  Company in fiscal 1997 as required
by  the  statement.  The  Company  has  elected  to  continue  to  measure  such
compensation expense using the method prescribed by Accounting  Principles Board
Opinion No. 25,


                                       9


<PAGE>
 
<PAGE>


"Accounting  for Stock Issued to Employees",  as permitted by SFAS No. 123. When
adopted,  SFAs No.  123 will not have  any  effect  on the  Company's  financial
position  or results of  operations,  but will  require  the  Company to provide
expanded disclosure regarding its stock-based employee compensation plans.

NOTE 11.  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  and
start up stage.  Once  completely  operational,  the  Company  will  provide PCS
telephone  service and alternative  telephone access to Puerto Rico and the U.S.
Virgin Islands.

Information about the Company's  operations in its two business segments for the
six months ended November 30, 1996 and 1995 is as follows:

<TABLE>
<CAPTION>

                                                                 Six Months Ended November 30,
                                                                 -----------------------------
                                                                    1996                 1995
                                                                 ---------             -------
<S>                                                             <C>                <C>
Gross revenues:

       Cellular telephone                                        $ 67,724              $  54,635
       Puerto Rico telecommunications                                   -                      -
                                                                 --------              ---------


                                                                 $ 67,724              $  54,635
                                                                 ========              =========
Operating (loss):

       Cellular telephone                                        $ (5,035)             $  (9,497)
       Puerto Rico telecommunications                              (3,076)                   (29)
                                                                 --------              ---------

                                                                 $ (8,111)             $  (9,526)
                                                                 ========              =========
Net loss:

       Cellular telephone                                        $ (8,544)             $  (7,680)
       Puerto Rico telecommunications                              (3,684)                (3,087)
                                                                 ---------             ---------

                                                                 $(12,228)             $ (10,767)
                                                                 =========             =========
Assets, at end of period:

       Cellular telephone                                        $708,161              $ 717,547
       Puerto Rico telecommunications                              97,187                 65,252
                                                                 --------              ---------

                                                                 $805,348              $ 782,799
                                                                 ========              =========
Depreciation and amortization:

       Cellular telephone                                        $ 37,735              $  35,515
       Puerto Rico telecommunications                                  56                     26
                                                                 --------              ---------

                                                                 $ 37,791              $  35,541
                                                                 ========              =========
Capital expenditures:

       Cellular telephone                                        $ 25,187              $  12,934
       Puerto Rico telecommunications                              15,716                  8,657
                                                                 --------              ---------

                                                                 $ 40,903              $  21,591
                                                                 ========              =========
</TABLE>



                                       10
<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

Six Months ended November 30, 1996 and November 30, 1995

Revenue for the six months ended  November 30, 1996 was $67,724,  an increase of
$13,089 or 24% over  revenue of $54,635 for the six months  ended  November  30,
1995. The increase in revenue was the result of growth in  subscriptions  to and
increased  usage of  cellular  telephone  service.  Acquisitions  accounted  for
approximately $812 or 6% of the increase in revenue.

Revenue from the sale of cellular  telephones to subscribers  for the six months
ended  November 30, 1996 increased by $99 to $1,399 or 8% as compared to the six
months ended November 30, 1995. The increase in such revenue was due to a larger
number of telephone  units sold during the current six 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 November 30, 1996 were approximately 159,900 an increase of 37.7%
from the 116,100  subscribers  at November 30, 1995. The increase in subscribers
is the result of 75,300 new activations and 7,500 subscribers from acquisitions.
The increases were offset by subscriber cancellations of 39,000.

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.

Revenue per subscriber per month based upon an average number of subscribers for
the six months  ended  November  30, 1996 was $73 as compared to $78 for the six
month period ended November 30, 1995. The decrease in revenue per subscriber was
primarily the result of a reduction in certain per minute charges as it expanded
its local service areas. The is no assurance that revenue per subscriber will be
maintained.

Cost of services  during the six months ended  November 30, 1996 was $9,693,  an
increase  of $2,455 or 34% from the six months  ended  November  30,  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  six  months  ended  November  30,  1996  were  $1,081  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 start up and construction stage.

Cost of equipment sold during the six months ended November 30, 1996 was $6,669,
an increase of $1,370 or 26% as compared to the six months  ended  November  30,
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 $ 21,682, an increase of
$5,599 or 35% above the $16,083 for the six months ended  November 30, 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



                                       11
<PAGE>
 
<PAGE>

expenses  during  the  six  months  ended  November  30,  1996  were  $1,939  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 six months ended  November 30, 1996 was
$37,791,  an increase  of $2,250 or 6% over the six months  ended  November  30,
1995.  The increase  results from  acquisitions  and capital  expenditures  made
during  fiscal  1996 and 1995 in  connection  with the  development  and network
expansion of the Company's wireless telephone systems.

As a result of the  factors  discussed  above,  the  operating  loss for the six
months ended November 30, 1996 was $8,111,  a decrease of $1,415 or 15% from the
loss of $9,526 for the six months ended November 30, 1995.

During the six months  ended  November  30,  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 $14,759 for the six months  ended  November  30,  1996,  a
decrease  of $1,792 or 11% from the six months  ended  November  30,  1995.  The
decline in  interest  expense is the result of the  capitalization  of $2,598 of
interest  charges related to the acquisition  cost of the Company's  Puerto Rico
PCS license. Gross interest costs for the six months ended November 30, 1996 and
1995 were  $17,357  and  $16,551.  The  increase  is the  result  of  additional
borrowings for the Benton Harbor acquisition,  working capital and debt service.
The average debt  outstanding  during the six months ended November 30, 1996 was
$365,000,  an  increase  of $15,000 as  compared  to the  average  debt level of
$350,000  during the six months ended November 30, 1995. The Company's  weighted
average  interest rate  increased to 9.6% for the six months ended  November 30,
1996 from 9.5% for the six months ended November 30, 1995.

After income  attributable  to minority  interests in  subsidiaries  for the six
months  ended  November  30,  1996,  a pretax loss of $15,002 was  incurred,  as
compared to a pretax loss of $16,319 in the six months ended  November 30, 1995.
The income tax  benefit of $2,774 for the six months  ended  November  30,  1996
represents an adjustment to the deferred tax liability of the Company, offset by
current  state and local taxes for the period.  The tax benefits are non-cash in
nature  and are  attributable  to the  Company's  acquisitions  and  results  of
operations.

The net loss of $12,228 for the six months ended November 30, 1996 represents an
increase of $1,461 or 14% from the net loss in the six months ended November 30,
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.

Three Months Ended  November 30, 1996 and  November 30, 1995

Revenue for the three months ended November 30, 1996,  was $35,359,  an increase
of $7,646 or 28% over the three months ended  November 30, 1995. The increase in
revenue was the result of growth in


                                       12
<PAGE>
 
<PAGE>


subscriptions to and increased usage of cellular telephone service. In addition,
the acquisition of one cellular  telephone  market  accounted for  approximately
$812 of the increase in revenue.

Revenue from the sale of cellular telephones to subscribers for the three months
ended  November 30, 1996 increased by $26 to $633 or 4% as compared to the three
months ended November 30, 1995. The increase in such revenue was due to a larger
number of telephone units sold during the current three month period offset by a
reduction in the retail pricing of telephones.

Service  revenue  per  subscriber  per month,  based  upon an average  number of
subscribers, was $72 for the three months ended November 30, 1996 as compared to
$80 for the three  months ended  November 30, 1995.  The decrease in revenue per
subscriber  was  primarily the result of a reduction in certain of the Company's
per minute charges as its expands its local calling areas. There is no assurance
that the overall revenue per subscriber level will be maintained.

Cost of services during the three months ended November 30, 1996 was $4,927,  an
increase of $1,246 or 34% as compared to the three  months  ended  November  30,
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  both  the  continued   expansion  of  its  network  and
acquisitions  completed  during the fiscal  year ended May 31,  1996 and the six
months ended  November 30, 1996.  Included in cost of services  during the three
months ended November 30, 1996 were $577 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  start  up and
construction stage.

Cost of  equipment  sold during the three  months  ended  November  30, 1996 was
$3,966,  an  increase  of $823 or 26% as  compared  to the  three  months  ended
November  30, 1995.  The primary  reason for the increase was an increase in the
number  of  units  sold,  offset  by a  decrease  in the  average  unit  cost of
telephones sold.

Selling,  general and  administrative  expenses rose to $11,868,  an increase of
$3,668 or 45% above the $8,200  recorded  during the three months ended November
30, 1995. The increase was the result of the Company  increasing its managerial,
customer  service and sales  staff to  accommodate  the current and  anticipated
growth of its cellular telephone business.  Secondarily,  variable costs rose in
association with a larger revenue base and acquisitions  made during fiscal 1996
and the six months ended  November 30,  1996.  Included in selling,  general and
administrative  expense  during the three  months  ended  November 30, 1996 were
$1,490 of  pre-operating  costs  associated  with the start up of the  Company's
Puerto Rico telecommunications business.

Depreciation  and  amortization for the three months ended November 30, 1996 was
$19,310,  an increase of $1,799 or 10% over the three months ended  November 30,
1995.  The  increase  results  from  completed  acquisitions  as well as capital
expenditures  made during fiscal 1996 and the first six months of fiscal 1997 in
connection with the development of the Company's cellular telephone systems.

As a result of the factors  discussed  above,  the operating  loss for the three
months ended  November  30, 1996 was $4,712,  a decrease of $110 or 2% below the
three months ended November 30, 1995.



                                       13
<PAGE>
 
<PAGE>


Interest  expense was $7,718 for the three  months  ended  November  30, 1996, a
decrease of $531 or 6% from the comparable period in the prior year. The decline
in interest  expense is the result of the  capitalization  of $1,299 of interest
charges  related to the  acquisition  of the Company's  Puerto Rico PCS license,
offset by the  interest  charged  on  additional  borrowings  for  acquisitions,
capital expenditures, working capital and debt service. As a result, the average
debt  outstanding  during the three months ended November 30, 1996 was $380,000,
an  increase  of $30,000 as compared  to average  debt  outstanding  of $350,000
during the three months ended November 30, 1995. The Company's  weighted average
interest  rate  increased to 9.7% for the three  months ended  November 30, 1996
from 9.5% for the three months ended November 30, 1995.

After losses  attributable to minority  interests in subsidiaries  for the three
months  ended  November  30,  1996,  a pretax  loss of $8,140 was  incurred,  as
compared  to a pretax loss of $9,821 for the three  months  ended  November  30,
1995.  The income tax benefit of $2,019 for the three months ended  November 30,
1996  represents  an  adjustment  to the deferred tax  liability of the Company,
offset by current  state and local taxes for the period.  The tax  benefits  are
non-cash  in nature  and are  attributable  to the  Company's  acquisitions  and
results of operations.

The net loss for the three months ended November 30, 1996 of $6,121 represents a
decrease of $1,228 or 17% from the net loss for the three months ended  November
30,  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  system  and Puerto  Rico  telecommunications  system  plant
generate  sufficient  earnings to offset the costs described above. There can be
no assurance that the Company can 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 six  months  ended  November  30,  1996,  earnings  were less than fixed
charges by $15,002. 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 $37,791
relating to depreciation and amortization.

As of  November  30,  1996,  the Company had  $127,953  of  property,  plant and
equipment  (net)  placed in service.  During the six months  ended  November 30,
1996, the Company made capital  expenditures  of $40,903,  primarily to continue
the construction of recently acquired cellular  telephone systems and its 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 six months ended November 30, 1996 the buildout of the Company's Puerto Rico
telecommunications  network required  capital  expenditures of $15,716 or 38% of



                                       14
<PAGE>
 
<PAGE>


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 $35,000. The Company
currently  estimates that the remaining cost to build out the  infrastructure of
its PCS network  will be  approximately  $45,000 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,  at the  election of the Company,  on, (a) the Base Rate,  as
defined, plus a margin of 2% or (b) the Eurodollar Base Rate, as defined, 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 and the Benton  Harbor  system.  The facility is further  guaranteed by
certain subsidiaries holding 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. The
Company is in compliance with all covenants of the facility.

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 carried no cash dividend  requirements through August
31, 1996 but accreted liquidation preference and redemption value at the rate of
7.5% per annum, compounded quarterly, until then. The fully accreted liquidation
preference  and  redemption  value of the shares held by Citizens and Century at
August 31, 1996 was $186,287 and $7,252,  respectively.  Beginning  September 1,
1996, the holders of the preferred  stock are 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 with respect to 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.  On December  19,  1996 the Company  paid cash
dividends to Citizens and Century of $3,959 and $154, respectively.  The Company
has not made a determination  regarding the timing,  amount, or distribution (if
any) of additional preferred stock dividends.

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  revenue 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  $45,000 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.



                                       15
<PAGE>
 
<PAGE>


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.  Although  to date the  Company  has been able to  obtain  such
financing  on  satisfactory  terms,  there  can be no  assurance  that this will
continue to be the case in the future.

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.  As
of December 31, 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 December  31, 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
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  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.

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


                                       16
<PAGE>
 
<PAGE>



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.

The Company has determined to pursue a strategy to sell or otherwise  dispose of
its minority interests in cellular telephone systems representing  approximately
1,100,000 net pops. The Company has not yet made a final determination as to the
estimated sale proceeds or the timing of such disposition.

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.

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.

The Company has withdrawn its  application  to participate in the auction of PCS
frequency  blocks D and E and  requested  the return of its  $11,000  refundable
deposit.

The following table 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.



                                       17
<PAGE>
 
<PAGE>


<TABLE>
<CAPTION>


                                                             Six Months Ended November 30,
                                            -------------------------------------------------------------
                                                     1996                                  1995
                                            -----------------------             -------------------------
                                            Amount               %              Amount               %
                                            ------             ----             ------              ---
<S>                                    <C>                <C>                <C>                <C>
Net cash provided by
operating activities                        $10,830            39.9%            $   5,028          23.8%

Interest paid                                16,336            60.1                16,057          76.2
                                           --------         -------             ---------     ---------

Net cash provided                           $27,166           100.0%            $  21,085         100.0%
                                           ========         =======             =========     ---------

Principal uses of cash:

Interest paid                               $16,336            60.1%             $ 16,057          76.2%

Property, plant and equipment
 (excluding acquisitions)                    40,903           150.6                21,591         102.4%
                                           --------         -------              --------      --------

Total                                      $ 57,239           210.7%             $ 37,648         178.6%
                                           ========         =======              ========      ========
Cash (required from)
financing and investing activities         $(30,073)        (110.7)%             $(16,563)        (78.6)%
                                           =========        =======              ========      ========
</TABLE>


Although the net cash provided by operating  activities for the six months ended
November 30, 1996 was not  sufficient  to fund the  Company's  expenditures  for
property,  plant and equipment of $40,903,  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.

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>

                                                                        Six Months Ended November 30,
                                                                        -----------------------------
                                                                          1996                 1995
                                                                        --------             -------
<S>                                                                     <C>                  <C>
Proceeds from long-term debt                                            $ 35,000             $     -
Repayment of long-term debt                                               (5,000)                  -
Financing costs paid                                                        (587)               (303)
(Purchase) and issuance of Class A Common Shares                             (39)                 36
Net capital returned from equity investments, held for sale                3,502               3,163
                                                                        --------             -------
Cash available                                                            32,876               2,896
Acquisition of other assets and wireless telephone systems and licenses  (46,000)            (44,498)
                                                                        --------             -------
Cash required from operating activities or cash on hand                 $(13,124)           $(41,602)
                                                                        ========             =======
</TABLE>



                                       18
<PAGE>
 
<PAGE>



PART II - OTHER INFORMATION

ITEM 4. Submission of Matters to a Vote of Security Holders

        a)  Registrant's annual meeting of shareholders was held on October 29,
            1996.

        b)  The following persons  were  elected as  directors  at said  meeting
            pursuant to the following votes:

<TABLE>
<CAPTION>


                                                   Number of Votes
                                            --------------------------------
        <S>                            <C>                  <C>
               Directors                           For             Withheld
               ---------------------        --------------       -----------
               Bernard P. Gallagher         171,387,526          103,371
               Rudy J. Graf                 171,387,526          103,371
               Scott N. Schneider           171,387,226          103,671
               David Z. Rosensweig          171,387,251          103,646
               Daryl A. Ferguson            171,387,416          103,481
               Peter J. Solomon             171,239,216          251,681
               William M. Kraus             171,387,526          103,371
               Frank Tow                    171,386,416          104,481
</TABLE>

               c)  The following matters were voted upon at said meeting:

                      1. The  shareholders  approved  a  proposal  to ratify the
                      approval  and  adoption  by the Board of  Directors  of an
                      amendment  to  the  Registrant's  1993  Management  Equity
                      Incentive  Plan.  The  following  sets forth the number of
                      votes on this proposal.


<TABLE>
<CAPTION>

                      For                          Against                      Abstain
                      ---                          ---------                    --------
                   <S>                        <C>                        <C>
                      168,208,094                  3,145,787                    21,565
</TABLE>

                      2.  The  shareholders  approved a  proposal  to ratify the
                          selection  by the Board of  Directors  of  Deloitte  &
                          Touche  LLP  as   independent   accountants   for  the
                          Registrant  for the fiscal year  ending May 31,  1997.
                          The  following  sets forth the number of votes on this
                          proposal:


<TABLE>
<CAPTION>

                      For                          Against                      Abstain
                      ---                          ---------                    --------
                   <S>                        <C>                        <C>
                      171,467,990                  14,127                       8,780
</TABLE>



                                       19
<PAGE>
 
<PAGE>

ITEM 5. Other Information

BENTON HARBOR ACQUISITION

On September 12, 1996, the Company acquired for  approximately  $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  Acquisition"  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 at the election of the
Company,  on,  (a) the Base  Rate as,  defined,  plus a margin  of 2% or (b) the
Eurodollar Rate, as defined, 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,  limits the  Company's  ability to pay
dividends and requires that certain operating tests be met.

REGULATORY MATTERS

In implementing the  Telecommunications Act of 1996 (the "1996 Act"), the FCC is
pursuing a  "competitive  trilogy"  which  includes  interconnection,  universal
service  and  access  charges.  As to the first of these  matters,  the 1996 Act
imposes interconnection  obligations on all telecommunications carriers in order
to facilitate the entry of new  telecommunications  providers.  This requirement
has the  potential of realizing  benefits for the  Company's  cellular,  PCS and
other telecommunications  businesses. In August 1996, the FCC released its First
Report and Order implementing this statutory  requirement.  The numerous appeals
from the FCC's decision have been  consolidated in the U.S. Court of Appeals for
the Eighth  Circuit.  On October 15, 1996, the court stayed,  pendente lite, the
effect of the proposed  pricing  provisions and the rule permitting a requesting
carrier to pick and choose the best terms previously obtained by other carriers.
On November 1, 1996 the stay was modified to permit certain of the pricing rules
governing  reciprocal  compensation  arrangements  to go into effect.  Documents
relating  to the  other two parts of the  "competitive  trilogy"  have also been
released.  In the case of universal  service,  a  Recommended  Decision has been
released by the Federal State Joint Board on Universal Service. The FCC has also
released a Notice of Proposed Rulemaking,  Third Report and Order, and Notice of
Inquiry in connection  with access charge reform and related rate  structure and
pricing issues.

On September 12, 1996, the Puerto Rico Telecommunications Act of 1996 was signed
into law by the  Governor of the  Commonwealth  of Puerto  Rico.  On October 17,
1996,  the Company filed with the FCC a petition  seeking a  declaratory  ruling
that this statute,  either in whole or in specified  part,  was preempted by the
Communications  Act of 1934, as amended.  Similar  petitions  were  subsequently
filed with the FCC by two other telecommunications  carriers operating in Puerto
Rico.

On December 11, 1996, the Telecommunication Regulatory Board of Puerto Rico (the
"Board" ) assumed jurisdiction over all intra-island telecommunications matters.
This marks a significant departure from the past when the Company's intra-island
telecommunications  operations were regulated by the Puerto Rico Public Services
Commission and the intra-island telecommunications operations of the Puerto Rico
Telephone  Company  ("PRTC"),   the  incumbent  local  exchange  carrier,   were
effectively unregulated. On December 26, 1996, the Company, on behalf of its PCS
subsidiary,  filed a petition  with the Board  seeking  arbitration  of the many
unresolved  issues  in the  negotiation  with  PRTC for  interconnection  of the
Company's PCS network with PRTC's landline telephone network.



                                       20

<PAGE>
 
<PAGE>




ITEM 6. Exhibits and Report on Form 8-K

<TABLE>
<CAPTION>
                 <S>                 <C>
                 a)  Exhibits

                      Exhibit  10.3  Agreement  with  Peter J.  Solomon  Company  Limited
                      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

</TABLE>

                                       21

<PAGE>
<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.

January 10, 1997

                            CENTENNIAL CELLULAR CORP.

                            /S/    Scott N. Schneider
                            _____________________________________
                            Scott N. Schneider
                            Senior Vice President and Treasurer
                            (Principal Financial Officer)


                                       22




<PAGE>