SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C.  20549
                                  
                             FORM 10-K
                                  
           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
               OF THE SECURITIES EXCHANGE ACT OF 1934
                                  
For the fiscal year ended December 31, 1996  Commission File Number 0-24064
                                  
                                  
                                  
                    CONESTOGA ENTERPRISES, INC.
                                  
a Pennsylvania Corporation                       Employer IRS No. 23-2565087

       202 East First Street, Birdsboro, Pennsylvania  19508
                                  
 Registrant's telephone number, including area code (610) 582-8711
                                  
    SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                  
Common Stock (par value $5.00 per share)

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 by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.   []


Indicate the number of shares outstanding of each of the issuers' classes of 
Common Stock, as of the close of the period covered by this report. 

          Class                       Outstanding at December 31, 1996

     Common Stock, $5.00 par value                     4,510,100

The aggregate market value of the voting stock held by non-affiliates on 
February 28, 1997, was $104,697,777. The stock of the Company is traded on 
NASDAQ Small Cap market (ticker symbol "CENI").  Therefore, the price is 
based on the most recent price at which the Company's stock has been traded.
     
     DOCUMENTS INCORPORATED BY REFERENCE
          
          Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held on May 3, 1997, are incorporated by reference into
Part III of this report.

                               PART I

ITEM 1.  BUSINESS

          Conestoga Enterprises, Inc. (CEI, or the Company) is a 
Pennsylvania corporation that is doing business as a holding company owning 
all of the outstanding shares of the Conestoga Telephone and Telegraph 
Company (CTT), Buffalo Valley Telephone Company (BVT), Northern 
Communications, Inc. (NCI),  Conestoga Mobile Systems, Inc. (CMS), and 
Conestoga Investment Corporation (CIC).  CEI has a 1% general partnership 
interest in the Berks and Reading Area Cellular Enterprises Partnership 
(BRACE) and a 10% partnership interest in the Lancaster Area Cellular 
Enterprises Partnership (LACE). It also has a 60% interest in Conestoga 
Wireless Company (CWC), a limited liability company, formed during 1995 to 
provide personal communication services (PCS).  CEI was incorporated on 
January 27, 1989 under the provisions of the Business Corporation Law
of Pennsylvania, Act of May 5, 1933, P.L. 364, as amended and supplemented, 
to do all things and exercise all powers, rights and privileges which a 
business corporation may now or hereafter be organized or authorized to do or 
exercise under such act.

          CEI owns all of the outstanding shares of CTT and BVT.  Both 
companies are independent local exchange carriers, which furnish communication 
services, mainly local and toll telephone service in their respective service 
areas.  CTT serves an area of approximately 300 square miles which includes 
parts of the counties of Berks, Chester, Lancaster, and Montgomery, in the 
Commonwealth of Pennsylvania. BVT serves an area in Union and Northumberland 
Counties.  Both Companies services' are distributed through their telephone 
exchanges and systems of overhead and underground wire and cables.  CTT's and 
BVT's  entire telephone systems are digitally equipped.  The population of
CTT's service area is estimated to be 120,400, with an average annual growth 
rate of .76%.  The population of BVT's service area is estimated to be 36,500, 
with an average annual growth rate of .45%.

          CEI became the owner of all of the outstanding stock of CTT on 
December 31, 1989, pursuant to a plan of merger in which the owners of all of 
the outstanding shares of voting stock of CTT exchanged their shares for 
outstanding shares of CEI.  CEI's shares are registered under the Securities 
Act of 1933.

           CEI acquired BVT on May 31, 1996, pursuant to an Agreement and 
Plan of Merger in which  (1)  the original BVT was merged into a subsidiary of 
CEI; (2) the name of the subsidiary was changed to BVT; and (3) the owners of 
all of the outstanding shares of common stock of BVT received for each share 
of BVT common stock one of the following,  $65.00 in cash; 1 share of CEI 
$3.42 Series A Convertible Preferred Stock, par value $65.00; or 2.4 shares of 
CEI Common Stock.  
         
         CTT was organized and incorporated on August 20, 1902.  Old BVT which 
was merged into the CEI merger subsidiary in the merger transaction, was 
incorporated on September 13, 1904.  

ITEM 1.  BUSINESS  (Continued)
 
 Both were incorporated under the laws of the Commonwealth of Pennsylvania as 
telephone utility companies.  Their geographic service areas are authorized 
and established by the Pennsylvania Public Utility Commission (PUC).  Such 
authorization is perpetual.  Within their areas, at the present time, they are  
not in competition with any other company in providing local exchange 
telephone service.  The PUC has approved petitions of several Competitive 
Local Exchange Carriers (CLEC's) to offer local exchange telephone service in 
Bell of Pennsylvania areas.  The Telecommunications Act of 1996 does contain 
provisions which open the telephone utilities' local exchange
markets to competition as well as provisions which permit the telephone 
utilities'local exchange carriers to provide long distance service outside 
their regions. CTT and BVT are subject to the jurisdiction of the Federal 
Communications Commission (FCC) with respect to interstate services.  CTT and 
BVT are also subject to the jurisdiction of the Pennsylvania Public Utility 
Commission (PUC) with respect to intrastate services.
          
          
          The earnings for 1996 were impacted by several events as follows:

          1. During the second and fourth quarter of 1996, CTT expensed 
          additional Signaling system 7 (SS7) software for CLASS type 
          services, which include Caller ID, Return Call and Repeat Call. 
  
          2. During the second quarter of 1996 BVT was added to the 
          consolidated financial reporting of the Company. 

          3. During the third  quarter of 1996 CTT recorded a positive 
          retroactive access billing adjustment.

          4.  The partnerships providing cellular telephone service in both 
          the Reading metropolitan area as well as the Harrisburg, Lancaster, 
          York metropolitan area recorded substantial increases in the 
          undistributed net income for the year.

          On January 1, 1991, CTT transferred to CEI 100% stock ownership of 
Northern Communications, Inc. (NCI), which had been organized in March 1981 
as a non-regulated commercial enterprise operated for the resale of long 
distance service.  This transfer had no effect on the consolidated financial 
statements.

          The net operating profits of NCI for 1996, 1995, and 1994 were  
$498,778, $491,703, and $475,762 respectively.
                                    
          On January 1, 1991, CTT assigned to CEI, CTT's interests in two 
joint ventures which provide cellular telephone services.  The assigned 
interests consist of:

ITEM 1.  BUSINESS (Continued)

          1. A 70% partnership interest in the Berks and Reading Area Cellular 
Enterprises Partnership (BRACE) which in turn owns a 39% limited partnership 
interest in the Reading SMSA Limited Partnership providing cellular telephone 
service in the Reading Metropolitan Area; and

          2. A 10% partnership interest in the Lancaster Area Cellular 
Enterprises Partnership (LACE) which in turn owns an 18.4% limited partnership 
interest in the Susquehanna Cellular Communications Limited Partnership 
providing cellular telephone service in the Harrisburg, Lancaster, and York 
metropolitan areas.

            In December, 1996 BRACE was converted to a limited partnership.   
CEI then assigned  its 69% limited partnership interest in the Berks and 
Reading Area Cellular Enterprises Partnership (BRACE) to CIC, a holding 
company, organized and incorporated in the state of Delaware, as an investment 
company. 

          These transfers had no effect on the consolidated financial 
statements of CEI. As of December 31, 1996.  CEI's investment in BRACE is 
$2,555,292 and in LACE is $731,279.   BRACE has in turn invested $3,634,583 
in the Reading SMSA Limited Partnership; and LACE has invested $7,318,118 in 
the Susquehanna Cellular Communications Limited Partnership.

          During 1995, CTT acquired an 11.85% interest in the PenTeleData 
Limited Partnership I, which provides certain data transmission and 
interconnection services, including Internet services.  As of December 31, 
1996 and December 31, 1995, CTT had a net investment of $90,456 and $201,349 
respectively.  CTT's share of the losses for 1996 and 1995 were $110,892 and 
$118,651 respectively.

           Conestoga Mobile Systems, Inc. (CMS) was incorporated on April 1, 
1991 to provide pager services. It began operating on June 1, 1992 in the 
central Pennsylvania region, after receiving regulatory approvals to acquire 
and operate certain radio paging systems formerly owned by United Telephone 
Company of Pennsylvania. 
       
           During the last half of 1992, CTT transferred its non-regulated 
paging and cellular property and equipment to CEI as a non-cash dividend and 
CEI in turn transferred the same to CMS as additional paid in capital.  Since 
the end of 1992 all paging operations of CEI and its subsidiaries have been 
provided by CMS.  The transactions described above had no effect on 
consolidated financial statements. During the second  quarter of 1994, CTT 
instituted monthly  bulk rates for paging access lines, and established CMS 
as a reseller of pager access lines.  The net operating loss for CMS for 1996, 
1995, and 1994 was  $52,353, $72,557, and $56,189 respectively.

          Conestoga Wireless Company (CWC) was formed on March 17, 1995 as a 
Limited Liability Company (Organized in Pa.). CEI has 60% interest and 
Infocore, Inc., a telecommunications company with headquarters in King of 
Prussia, Pa., has 40% interest.  CWC participated in the Federal 
Communications PCS Spectrum Auction and was successful in acquiring licenses 
to provide personal communications services in the Eastern and
Central Pa. regions.  


 ITEM 1.  BUSINESS (Continued)
          Percentages of the Company's consolidated operating revenue in 
 local, long distance, nonregulated, and other services are shown on the 
 following table:

                    1996      1995      1994      1993      1992
Local*               17%       18%       18%       19%       20%
Long Distance       
 and Access          67%       67%       68%       67%       67%
Nonregulated**       14%       13%       12%       11%       10%           
Other***              2%        2%        2%        3%        3% 
                    100%      100%      100%      100%      100%

             * CTT and BVT bill for local service on a flat rate basis.
        
            ** Includes revenues from CTT and  BVT for their nonregulated 
business, (sales and lease of equipment and directory advertising) and CMS 
nonregulated business (sale and lease of pager and cellular equipment and 
wide area pager service).        
                                
          *** Includes rent revenues, billing and collection revenues, and
uncollectible revenues.  

     The regulated local, long distance and access services' gross revenues
contribute a greater percentage to net income than  the more competitive 
nonregulated service gross revenues.

     The Company had 72,266 access lines in service on December 31, 1996.  
CTT had 48,133 access lines in service, BVT had 19,086 and CMS 5,047 access 
lines. Approximately 21,000 access lines served business customers.

     CTT had a total of 127 employees as of December 31, 1996, of which 83 
are covered by one collective bargaining agreement.  BVT had a total of 61 
employees, none of which are covered by a bargaining agreement.

ITEM 2.  PROPERTIES

     Since the business of CTT and BVT  is that of furnishing communication
service, and as their plant is widely distributed in the territories serviced 
by them, their properties do not lend themselves to description by character 
and location of principal unit.

     As of December 31, 1996, digital switching equipment represented 
approximately 35% of CTT'S and BVT's investment in telephone plant in service; 
land and buildings (occupied principally by digital switching equipment) 4%; 
connecting lines not on subscribers' premises (a majority of which are on or 
under public highways, streets, and alleys, and the remainder on or under 
private property)  55%; general purpose computers  2%; and motor vehicles, 
other work equipment and furniture and office equipment 4% of such investment.

     Conestoga Mobile Systems, Inc.'s business is that of furnishing radio 
paging service, and as its plant is widely distributed in the territory 
serviced by it, its properties do not lend themselves to description by 
character and location of principal unit.
 

ITEM 2.  PROPERTIES (Continued)
              
     As of December 31, 1996, Land, Buildings, and Towers represented 
approximately 33% of CMS's investment in plant; transmitters and terminal 
equipment 58%, and computers and other plant 9%.

     CTT and BVT own most of their occupied buildings as well as most of the 
land on which the buildings are located.  Several of the remote switching 
center buildings are located on properties which are leased.  During 1995 and 
1996, CTT  leased office space for its customer service and marketing 
departments.

     The following tables set forth additional information in connection with 
the properties of the Company:


                     TELEPHONE PLANT STATISTICS
                                   
  YEAR   MILES OF  MILES OF       MILES OF   MILES OF           CENTRAL       
   END   POLE      WIRE IN        AERIAL     FIBER OPTICS       DIAL
  12/31  LINES     AERIAL CABLE   WIRES      CABLE              OFFICES

  1992    651      345,770         694       249                10
  1993    651      355,914         665       256                10
  1994    651      364,761         637       271                10
  1995    651      369,971         620       298                10
  1996*   892      582,439       2,132       434                14              
        *Includes BVT

             ACCESS LINES BY COMPANY

              YEAR
              END          CTT                CMS             BVT
              12/31        TOTAL              TOTAL           TOTAL
              1992         44,028              1,249                 
              1993         45,359              1,190                 
              1994*        44,176              4,138                 
              1995         45,696              4,716                
              1996         48,133              5,047           19,086

Standard practices prevailing in the telephone industry are followed by both 
CTT and BVT in the construction and maintenance of their plant and facilities, 
and both consider their  plant and facilities are, as a whole, in sound 
physical and operating condition.

 *  Paging Access Lines transferred to CMS


ITEM 3.  LEGAL PROCEEDINGS

        The Company was not involved in any material legal proceedings as of 
        December 31, 1996.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        There was nothing submitted to a vote of security holders during the 
fourth quarter of the fiscal year covered by this report.


                                  PART II
                                      
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        (a)  On June 9, 1994 CEI's Common Stock began trading  in the NASDAQ
Over-the-Counter Small Cap Market.  The Ticker Symbol is  CENI.  The high and 
low sales prices for each quarter of 1996 and 1995  are listed below.

                         
                         1996                High              Low   
                    1st Quarter             $29.00            $27.50
                    2nd Quarter             $28.75            $24.00
                    3rd Quarter             $24.50            $22.875           
                    4th Quarter             $24.75            $22.875

                         1995                High              Low              
                    1st  Quarter            $27.00            $24.00
                    2nd Quarter             $26.50            $24.50
                    3rd Quarter             $28.25            $25.25         
                    4th Quarter             $29.50            $27.00

       (b)  Approximate Number of Equity Security Holders.
                                        Approximate Number of
                                        Record Holders (as of
               Title of Class           December 31, 1996)
               
               Common Stock                    1,858 (1)

            Preferred Stock                       69 (1)

          (1)  Included in the number of stockholders of record are 
               shares held in "nominee"or "street" name. 


       (C)  Dividends

       Payments of common stock dividends will be within the discretion of 
the Company's Board of Directors and will depend, among other factors, on 
earnings, capital requirements, and the operating and financial condition of 
the Company.  During the years 1995 and 1996, the total cash dividend paid 
each year  by the Company was $1.20 per share.  Dividends were paid quarterly
throughout the years.  A 5% stock dividend was declared by the Board of 
Directors during 1994, payable February 28, 1995 to shareholders of record on 
January 31, 1995.  Under the most restrictive covenants of the Company's debt 
agreement, $11,800,000 of the consolidated retained earnings is available for 
payment of cash dividends in 1997. 
          
          During the second quarter of 1996 the Company issued Series A 
Convertible Preferred Stock.  Cumulative dividends of $3.42 per share per 
annum are paid semi-annually.   During 1996 the total cash dividend paid per 
share was $1.71 per share. 



ITEM 6.  SELECTED FINANCIAL DATA 

Selected Income Statement Data:
                      
                       1996       1995        1994        1993       1992
Operating Revenue  $42,898,943 $32,552,703 $31,702,785 $30,077,940 $29,070,940
Net Income           8,505,814   6,530,858   6,293,983   6,135,813   6,373,077 
Earnings per Common 
Share*                $1.91        $1.70       $1.64      $1.60        $1.66


                          1996       1995        1994        1993       1992
Cash Dividends declared      
per Common Share*         $1.20      $1.20       $1.11       $1.10      $1.09
                      *adjusted for 5% stock dividend February, 1995

 
 Selected Balance Sheet Data:
                      1996       1995        1994        1993       1992

Net Plant        $ 62,934,147 $46,140,262 $45,599,261 $44,989,591 $44,581,057
Total Assets      119,851,818  58,594,725  55,799,116  53,231,772  52,041,087
Long-term Debt 
Less Current 
Maturities         27,218,000   4,645,000   5,035,000   5,425,000   5,815,000
Minority Interest 
in Subsidiary *       400,198     253,367       0            0            0
Stockholders' 
  Equity           63,073,516  42,088,955  39,908,356  37,649,118  35,772,871
              *Conestoga Wireless Company
       
When comparing 1996 with 1995 many of the variances are a direct  result of 
the merger with BVT efffective May 31, 1996.



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

Summary

          The following table sets forth for the periods indicated (a) 
percentages which certain items reflected in the financial data bear to total 
revenues and (b) the percentage increase of such items as compared to the 
indicated prior period.
                         Relationship To             Period to Period 
                         Total Revenues              Increase (Decrease)
                         Year Ended December 31            Years Ended  

                    
                         1996    1995    1994       1996-95      1995-94
Local Service Revenues   17.3%   17.7%   18.0%       28.4%         1.3%
Long Distance and
   Access Revenues       66.8%   66.9%   68.0%       31.6%         1.1%
Nonregulated             13.9%   13.1%   11.6%       40.1%         16.2%    
Other Revenues            2.0%    2.3%    2.4%       15.5%         (6.2%)
                        100.0%  100.0%   100.0%      31.8%          2.7%

                         Relationship to             Period to Period 
                         Total REvenues              Increase (Decrease)
                         Year Ended December 31           Years Ended          

                         1996    1995    1994        1996-95      1995-94
Operating Expenses       67.2%   67.5%   66.4%        31.3%         4.4%

Operating Income         32.8%   32.5%   33.6%        32.9%         (.6%)

Other Income (Net)         .5%    1.0%     .2%       (25.0%)       374.8%

Income Taxes             13.6%    13.4%   13.9%       33.3%         ( .8%)

 Minority Interest         .1%       0        0         N/A            N/A

Net Income               19.8%    20.1%   19.9%        30.2%         3.8%




RESULTS OF OPERATIONS:

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS(Continued)

Operating Revenues:  

     Operating Revenues increased 31.8% during 1996 when compared with 1995, 
a direct result of the addition of BVT during the second quarter of 1996. BVT 
added $7.9 million in operating revenues for the seven month period of 1996, 
or 76% of the increase.  During the 1994-96 period the increase was 35.3%. 
Local Service Revenues, which include regulated revenues from CTT, BVT  and 
CMS, increased 28.4% during 1996, when compared with 1995.  BVT added $1.3 
million in local service revenue during 1996, or 81% of the increase.  The 
increase is partly due  to the record setting increase in access lines added  
for both CTT and BVT throughout the year. 

      The Company's access lines increased 5.9% during 1996, adding 3,853 
lines.  The total access lines in service as of December 31, 1996 are 72,266.   
CTT had 48,133, BVT had 19,086, and CMS had 5,047 access lines in service.  
The Company anticipates that the trend of residential customers installing 
more than one access line to their residence will continue in the near future 
and therefore the growth of access lines should continue.  CTT and BVT were 
very successful in their marketing of  such second line installations  to 
their residential customers during 1996.

     Access Service Revenues increased 39.8% during 1996,  and for the 1994-96 
period increased 46.8%.  BVT provided $3.9 million of access revenue during 
1996, or 70% of the increase.   Interstate Interlata  access minutes of use 
increased 8.8%. Intrastate interlata access minutes of use increased 14.4% 
during 1996.  Intrastate intralata minutes of use increased 9.5% during 1996.  
These increases are  a result of continued  increases in usage on the toll  
network of CTT and BVT.  During the third quarter of 1996  CTT recorded a 
prior period access billing adjustment, which added about $275,000 in access 
revenue for 1996.  It is anticipated that access rates will decline when 
local competition becomes more widespread. 

      Long Distance Service Revenues, which include regulated CTT and BVT 
intralata toll revenue, as well as NCI long distance  reseller revenues, 
increased 16.5% during 1996 when compared with 1995.  BVT provided $1.1 
million of long distance revenue during 1996 or 85% of the increase.  For the 
1994-96 period  they increased 10.0%.  With the enactment of the 
Telecommunications Act of 1996, long distance toll service will become very 
competitive with the potential for loss of customer base and revenue.
 
     Nonregulated Sales and Lease Revenues which include (1)  CTT and BVT 
sale and lease of telephone equipment and directory advertising revenues, and 
(2) CMS sale and lease  of pager and cellular equipment and local and wide 
area reseller operations, increased 40.1%  during 1996 and increased 62.8% 
during the 1994-96 period.  BVT provided nonregulated revenue of $1.5 million 
for 1996, or 88% of the increase. Modest growth was experienced by all 
entities during 1996.

      Miscellaneous Revenues (net of uncollectibles), which include CTT and 
BVT regulated revenues for rents and billing and collection, increased 15.4% 
during 1996 and for the 1994-96 period increased 8.3%.  BVT provided $109,000 
in miscellaneous revenues during 1996, or 96% of the increase.  Both entities 
are experiencing decreases in billing and collection revenue due to an 
interexchange carrier taking back certain billing and collection functions 
previously performed by both. Miscellaneous Revenues continue to be a non 
growth part of the company's revenue stream.   Uncollectible revenues were 
about .4% of total operating revenues for 1996.
           
Operating Expenses: 

     Operating Expenses increased 31.3% during 1996 when compared with 1995, 
a direct result of the merger with BVT in 1996.  During the 1994-96 period 
operating expenses 


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS(Continued)

increased 37.0%. BVT added $5.6 million in operating expenses, or 81% of the 
increase. Plant Operations Expenses, which are predominantly CTT and BVT 
regulated expenses, increased 29.5% in 1996 and increased over the 1994-96 
period 34.6%.  These expenses include outside plant , digital switching, 
engineering and related administrative expenses.  BVT added plant operation 
expenses of $875,000 during 1996, or 67% of the increase.  The demand for 
enhanced services required that the additional SS7 software additions
planned for the next two years be completed  during 1996.    CTT added
$500,000 of software to its digital switch during the current year.  BVT will 
be adding similar software during 1997.

      Depreciation and Amortization Expenses, for 1996 increased 45.0% over 
1995 and for the 1994-96 period increased 54.5%. BVT added $1.9 million in 
depreciation and amortization expense during 1996, or 83% of the increase.  
Depreciation expense for 1996 from CTT, BVT and CMS was $6.8 million and 
equates to a 6.93% effective composite rate consistent with the two previous 
years.  Amortization expense represents the cost in excess of net assets 
associated with the acquisition of BVT, which is being amortized
over 40 years. 

       Customer Operations Expense, which includes CTT, BVT and CMS regulated, 
and NCI expenses, increased 15.1% during 1996 and increased 17.9% over the 
1994-96  period.  Customer Operations Expenses consist of customer services 
for ordering and billing, as well as marketing  and advertising expenses.  BVT 
added $1.2 million of customer operations expenses, which accounts for all the 
difference when compared with 1995, and the majority of the difference over 
the 1994-96 period.

       Corporate Operations Expense, which includes regulated charges from 
CTT and  BVT as well as charges from CEI, CMS, NCI , CWC and CIC, increased 
51.1% during 1996 when compared with 1995, and increased during the 1994-96 
period 82.2%.  BVT added about $500,000 during 1996 to corporate operation 
charges, or 45% of the increase.  During 1995 CTT began to position its  
corporate structure for change with the addition of a Vice President 
Operations and  Vice President,  Finance & Administration, and continued in 
1996 with the addition of a  Vice President of Regulatory and External
Affairs.  It is anticipated that the Company will experience additional 
charges during 1997 as the Company becomes actively  involved in start up 
operation  PCS service through CWC and the pending acquisition  of Infocore, 
Inc. 

     Labor sensitive operating expenses  increased as a result of the three 
year contract negotiated with the union during 1996. Effective May 10, 1996, 
the first year of the contract, wage rates increased 3.1%, which had the 
effect of increasing labor sensitive benefits as well. 

       Non-regulated Sales and Lease Expenses, which include charges from CTT, 
BVT and CMS, increased 33.7% during 1996, and  during the 1994-96 period 
increased 31.6%.  BVT added  about $800,000 in nonregulated expenses during 
1996, or 32% of the increase.

       Taxes other than income taxes increased 26.2% during 1996 when compared
with 1995.  The increase is primarily due to the addition of BVT which added 
$273,000.
          
Other Income/Expense (net): 

     Interest expense increased substantially during 1996 as a result of the 
acquisition of  BVT when compared with 1995 and during the 1994-96 period.  
External financing in the amount of $22,000,000 was required to provide most 
of the cash needed for those BVT shareholders who chose cash rather than 
preferred or common stock of CEI.  There was some  interim financing required 
throughout 1996 and 1995 against its lines of credit but there was no balance 
remaining at the end of 1996.  CTT has two 10-year unsecured term loans 
obtained through a local bank.  One carries an interest rate at

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS(Continued)

prime and a ceiling of 8.5% , with principal due 1997, the other one carries 
an interest rate at prime with a ceiling  of 8.4% through May 1997, with 
principal payments due quarterly.  Both of these current term loans have been 
refinanced in 1997, through a $5.0 million unsecured loan at an interest rate 
of 6.89%.  BVT had existing debt of $1.4 million at an interest rate of 8.5% 
which the Company acquired through the merger,  the balance of which is due 
the second quarter of 1998.

      During 1996, the Company held a 70% partnership interest in the BRACE
partnership which in turn owns a 39% limited partnership interest in the 
Reading SMSA Limited Partnership providing cellular telephone service in the 
Reading metropolitan area, and a 10% partnership interest in the LACE 
partnership, which in turn owns an 18.4% limited partnership interest in the 
Susquehanna Cellular Communications Limited Partnership providing cellular 
telephone service in the Harrisburg, Lancaster, York metropolitan area.  The 
Company, through CTT, holds an 11.5% interest in PenTeleData which provides
local access to the Internet.  The pre-tax income from the Company's
interests in these ventures increased 90.5% in 1996 when compared with 1995, 
to $1,256,357.  Profits from the cellular interests might be adversely 
impacted with the advent of PCS services.  
         
       On December 24, 1996 the Company transferred its 69% Limited 
Partnership interest in BRACE to CIC. 
 
Income Taxes:

     Income taxes increased 33.3% during 1996 when compared with 1995 due to 
the 31.2% increase in income before income taxes, and 32.3% during the two 
year period 1994-96.  The federal income tax rates over the period remained 
unchanged.  The state income tax rate  during 1996 and 1995 was 9.99% but 
during 1994 was 11.99%.

Minority Interest:

     The minority interest recorded during 1996 and 1995  reflects Infocore, 
Inc.'s 40% interest in net loss for Conestoga Wireless Company (CWC).

Net Income:  

     Net Income for 1996 increased 30.2% when compared with 1995, and for the
1994-96 period increased 35.1%. BVT after absorbing the merger costs added 
about $800,000 to net income for 1996, or 40% of the increase.  The balance of 
the increases can be attributed to excellent growth in access lines,  
increased  minutes of use on the network for access, and increased 
undistributed profits from the partnerships providing cellular services.

Accounting for the Effects of Certain Types of Regulation ("SFAS 71"): 
          
     The Company follows the accounting statement which recognizes the 
economic effect of rate regulation by recording costs and a return on 
investment as such amounts are recovered through regulatory authorized rates.  
As of December 31, 1996, the Company had no regulated assets but had regulated 
liabilities which total $858,680.  The Company currently expects to follow the 
accounting prescribed by SFAS 71 in the foreseeable future, but if the Company  
discontinued this practice,  the effects of writing off any regulatory assets 
and liabilities would not be material to operations of the Company.         

Liquidity and Capital Commitments: 
 
     Current Operations: The Company had commitments at December 31, 1996 of 
$1,400,000 for the purchase of equipment and materials to continue to upgrade 
its telecommunications plant base.  The projected capital budget requirements 
for 1997 of approximately $7.0 million will  be financed through internally 
generated funds. 

      A line of credit with a bank at $3 million remained during 1996, with 
the interest rate at one-half of one percent under the bank's prime rate.  
During 1996 a second line of credit was secured from another bank for $10 
million with interest at

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS(Continued)

one percent below the bank's prime rate or .35 percent above the bank's 
overnight base rate.   The prime rate applicable at December 31, 1996 and 1995 
was 8.25% and 8.75%, respectively.  The overnight base interest rate on 
December 31, 1996 was 7.35%.  The line of credit was utilized several times 
during the current year to cover current expenses.   There was no balance 
outstanding on December 31, 1996, but there was a $500,000 balance outstanding 
on December 31, 1995.

      The Company has continued to invest in the future of the 
telecommunications industry through the ownership of the publicly traded stock 
of other telecommunication companies.  During 1996 the Company's total 
investment in these publicly traded stock decreased  due to unrealized 
depreciation of such stock.  The current market value of such investment is 
$1,622,107.  This investment may be a source of future liquidity.

      The Board of Directors at its monthly meeting on September 24, 1996 
authorized the repurchase of up to one hundred thousand shares of CEI common 
stock on the open market or in negotiated transactions.  The maximum price 
which will be offered at any time will be $24.00 per common share depending 
on market conditions and other factors.  As of February 28, 1997 there were 
87,273 common shares purchased back at an average price of $23.34 per share.

       Management believes that the current working capital is adequate to 
meet the immediate operating requirements, and that the current available 
credit facilities are adequate to provide short  term financing for 
unforeseen requirements.

       The capital requirement over the next five years, for CWC to provide 
the high mobility services through PCS, could exceed $50 million.  The 
financing of the project could come from (1) internal sources, (2) long term 
debt, or possibly (3) stock issue, or a combination of the three.

 Pending Acquisition:
          
          On February 13, 1997 the Company signed a letter of intent 
(Agreement) to acquire all of the common stock of Infocore, Inc., a 
telecommunications company based in King of Prussia, Pennsylvania.   Under the 
terms of the Agreement, the Company will issue 200,000 shares of common stock 
to Infocore, Inc.'s stockholders in exchange for all outstanding shares of 
Infocore,  Inc.  The transaction will be accounted for by the purchase method, 
with the effective date of the merger expected to be third quarter of 1997.

        Management views the proposed acquisition of Infocore as an important 
step which will strengthen the Company's capabilities of being a full service
telecommunications provider.   It enhances the Company's  customer base and 
provides additional experienced telecom and data professionals to the 
organization. The acquisition solidifies a business relationship which was 
established in March 1995, when the Company and Infocore, Inc. ("Infocore") 
formed Conestoga Wireless Company (CWC).  The Company owns 60% and Infocore 
owns 40%, of CWC.   After the pending acquisition the Company and its 
subsidiaries will have 100% ownership of CWC.  The proposed acquisition will 
provide a well qualified and experienced PCS management team.
 
Personal Communication Services (PCS):

     CWC was a successful  bidder in the Federal Communications Commission 
(FCC) auctions for Personal Communication Services ("PCS") radio spectrum D, 
E, and F bandwidth.  PCS is a wireless communications service based on lower 
power and a higher frequency bandwidth than cellular service.  PCS is 
anticipated to be more reliable, of better quality and less expensive for the 
customer,  than cellular.  The Basic Trading Areas in which CWC was the 
successful  bidder are Reading,  Pottsville, Sunbury, and Williamsport, Pa.  
These territories cover nine counties in Pennsylvania with a population of 
840,000. 
          
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS(Continued)

     Management views participation in PCS as being an important part of its 
future business.  PCS is expected to be a reliable, convenient and inexpensive 
vehicle for providing mobile telephone service.  It will provide the Company 
with  a tremendous opportunity to expand the business into neighboring 
territories while maintaining the Company's current customer base.
                           
Effects of Substantial Indebtedness and Preferred Stock on Future Operations:
          
     At December 31, 1996, the Company had approximately $28.0 million of long 
term debt outstanding and approximately $12.8 million of redeemable preferred 
stock, compared to approximately $63.1 million of common equity.  This 
resulted in a  ratio of 40% debt and preferred stock  to 60% equity.  At 
December 31, 1995 the ratio was 12% debt to 88% equity.  The increases are a 
result of the acquisition of BVT.  It is anticipated that with the pending 
acquisition of Infocore, Inc. and the building of the PCS infrastructure the 
Company will incur additional amounts of debt and/or capital.

      Although a higher level of debt and preferred stock is not unusual in 
the telecommunications industry, the additional debt and preferred stock may 
have important consequences on the Company's future operations, including (i) 
the Company will incur additional  interest expense, which may  have 
significant  principal repayment obligations, (ii) the Company will be subject 
to significant unscheduled preferred stock redemption obligations because the 
preferred shares issued in the acquisition of BVT which  may be "put" by the 
holders thereof beginning in 1998; (iii)the Company's increased leverage may 
make it more vulnerable to economic downturns and reduce its flexibility in 
responding to changing business and economic conditions; and (iv) payment of 
dividends on the Company's common shares, may be restricted by the
level of financial resources needed to service the Company's additional debt 
and preferred stock.   
           
 Regulated Industry:                      

      Conestoga Telephone Company (CTT), and Buffalo Valley Telephone Company 
(BVT) are subject to a rate making process regulated by the Pennsylvania 
Public Utility Commission (PUC) called rate of return regulation.  An 
amendment to the Pennsylvania Public Utility Act passed in 1993, provides for 
streamlined rate regulation and a method for determining rates other than the 
rate of return regulation and procedures. This new regulation referred to as 
Chapter 30, provides a price stability mechanism in which a telephone 
company's annual revenues from non-competitive services may be permitted to 
change in line with the gross domestic product price index, minus a
productivity offset, with no limitation on  earnings by the regulated company.  
In order for the Company  to avail itself of the procedures permitted by 
chapter 30, CTT and BVT must commit  to providing universal broadband services 
by 2015.  As of yet, neither have  determined the full effects of such a 
pricing mechanism, therefore, they have not availed themselves of the 
alternate pricing procedures.

      The telecommunication industry continues to undergo fundamental changes,
which may have a significant impact on financial performance.  The  Federal
Telecommunications Act of 1996, while apparently lifting the ban on cross 
ownership between cable and telephone companies in communities served by the 
local telephone company, opens the local telephone company's market to new 
competitors providing local exchange service.

       Management recognizes that there will be substantial competitive 
pressure in the local exchange market from many players in the future. It also 
believes that competition will bring many  new opportunities for the local 
exchange companies. Management is endeavoring to position the Company to take 
advantage of these opportunities as they arise, and remains optimistic about 
the future.

Forward-Looking Statements:
        
       Management's Discussion and Analysis of Financial Conditions and 
Results of Operations relating toOperating Revenues, Other Income/Expense, 
Liquidity and Capital Commitments, Pending Acquisitions, PCS, Effects of 
Substantial Indebtedness and Preferred Stock on Future Operations and 
Regulated Industry and other statements relating to anticipated growth, 
anticipated sources of funding for continuing operating activities and 
construction expenditures (see. . . above) constitute  "forward-looking 
statements" as defined in the Securities Litigation Reform Act of 1995.
Such forward-looking statements involve risks and uncertainties which could
cause actual results or outcomes to differ materially from those expressed in 
forward-looking statements.  The projections made herein are expressed in good 
faith and believed by the Company to have a reasonable basis, but there can be 
no assurance that actual outcomes or results will not differ materially from 
the expected outcomes or results described herein.  Important factors that 
could cause actual results to differ materially from the forward-looking 
statements identified in this paragraph are discussed in the above-referenced 
sections and accompany such forward-looking statements. 
               
PART II
          
ITEM 8. Financial Statements and Supplementary Data     
               
               
               INDEPENDENT AUDITOR'S REPORT




To the Board of Directors
Conestoga Enterprises, Inc.
Birdsboro, Pennsylvania


     We have audited the accompanying consolidated balance sheets of Conestoga
Enterprises, Inc. and subsidiaries as of December 31, 1996 and 1995, and the 
related consolidated statements of income, common stockholders' equity and 
cash flows for each of the three years in the period ended December 31, 1996.  
These financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements 
based on our audits. 


     We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable 
basis for our opinion.


      In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Conestoga 
Enterprises, Inc. and subsidiaries as of December 31, 1996 and 1995, and the 
results of their operations and their cash flows for each of the three years 
in the period ended December 31, 1996 in conformity with generally accepted 
accounting principles. 

                                
                              
                                           BEARD & COMPANY, INC.





Reading, Pennsylvania
January 18, 1997, except for Note 13 as to which the date is
        February 13, 1997

CONESTOGA ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS


December 31,                                             1996         1995

ASSETS

CURRENT ASSETS
Cash and cash equivalents                           $1,956,554     $671,495
Accounts receivable, including unbilled revenue      6,888,667    3,751,182
Inventories, at average cost                           867,205      576,786
Prepaid expenses                                       206,351      404,271

Total current assets                                 9,918,777    5,403,734

INVESTMENTS AND OTHER ASSETS
Cost in excess of net assets of business acquired,
less amortization of $ 567,357                      38,337,140        -
Investments in partnerships                          3,377,027    2,552,270
Investments in equity securities                     1,622,107    2,361,102
Prepaid pension costs                                2,148,700    1,425,584
Other                                                1,513,920      711,773

                                                    46,998,894    7,050,729

PLANT                                                                        
In service                                         123,137,474   86,222,150
Under construction                                     557,293    1,064,075
                                                   123,694,767   87,286,225
Less accumulated depreciation                       60,760,620   41,145,963
                                                    62,934,147   46,140,262



                                                  $119,851,818  $58,594,725

See Notes to Consolidated Financial Statements.




December 31,                                             1996         1995

LIABILITIES AND COMMON STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Note payable                                        $     -        $500,000
Current maturities of long-term debt                   831,000      390,000
Accounts payable                                     2,769,189    1,982,689
Accrued payroll and vacation pay                       855,981      390,372
Advance billings and customer deposits                 307,806      484,617

Total current liabilities                            4,763,976    3,747,678

LONG-TERM LIABILITIES
Long-term debt, less current maturities             27,218,000    4,645,000
Accrued postretirement cost                            596,742      447,908
Other                                                  834,201      189,681

                                                    28,648,943    5,282,589

DEFERRED INCOME TAXES                               10,185,015    7,222,136

COMMITMENTS

MINORITY INTEREST IN SUBSIDIARY                        400,198      253,367

REDEEMABLE PREFERRED STOCK, par value $ 65 per share;
authorized 900,000 shares; issued and outstanding 1996
196,618 shares; $ 3.42 cumulative dividends         12,780,170           -

COMMON STOCKHOLDERS' EQUITY
Common stock, par value $ 5 per share; authorized
10,000,000 shares; issued 1996 4,568,500 shares;
1995 3,848,922 shares                               22,842,500   19,244,610
Additional paid-in capital                          20,420,005    4,769,183
Retained earnings                                   20,863,934   17,727,271
Net unrealized appreciation on marketable equity
securities                                             315,602      347,891
Less cost of treasury stock 1996 58,400 shares      (1,368,525)           -
                                                                             
                                                    63,073,516   42,088,955

                                                  $119,851,818  $58,594,725

CONESTOGA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME


Three Years Ended December 31,        1996           1995          1994

Operating revenues:
Local service                  $   7,416,992  $   5,774,650   $   5,699,215
Access service                    19,718,523     14,104,359      13,428,850
Long distance service              8,937,836      7,672,932       8,122,348
Nonregulated sales and lease       5,982,170      4,270,249       3,673,849
Miscellaneous                        843,422        730,513         778,523

                                  42,898,943     32,552,703      31,702,785
Operating expenses:                                                       
Plant operations                   5,751,212      4,440,292       4,271,326
Depreciation and amortization      7,449,751      5,138,828       4,822,211
Customer operations                7,445,712      6,470,809       6,314,176
Corporate operations               3,230,656      2,137,427       1,773,415
Nonregulated sales and lease       3,293,229      2,462,666       2,502,042
Taxes other than income            1,664,650      1,318,887       1,368,848

                                  28,835,210     21,968,909      21,052,018

Operating income                  14,063,733     10,583,794      10,650,767

Other income (expense), net:
Interest expense                  (1,297,226)      (427,812)       (422,106)
Income from unconsolidated 
partnership interests              1,256,357        659,526         385,077
Other, net                           283,202         91,251         105,048

                                     242,333        322,965          68,019

Income before income taxes        14,306,066     10,906,759      10,718,786

Income taxes                       5,853,421      4,390,341       4,424,803

Income before minority interest    8,452,645      6,516,418       6,293,983

Minority interest in net loss of 
subsidiary                            53,169         14,440             -

Net income                     $   8,505,814  $   6,530,858   $   6,293,983

Earnings per common share            $1.91          $1.70            $1.64

Weighted average common shares 
outstanding                        4,260,420      3,848,922       3,843,174


See Notes to Consolidated Financial Statements.
CONESTOGA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY


Three Years Ended December 31, 1996, 1995 and 1994



                                                            Common
                                               Additional   Stock
                          Common Stock         Paid-In      Dividend
                         Shares   Amount       Capital      Distributable

Balance,
December 31, 1993      3,660,494  $18,302,470   $837,032   $     -
Adjustment to
beginning balance
for change in 
accounting method,
net of taxes              -            -              -          -
Net income                -            -              -          -
Common stock dividends
($ 1.11 per share)        -            -              -          -
Issuance of stock
under employee
stock purchase plan        5,473       27,365    113,017         -
5% stock dividend 
distributable             -             -              -    4,733,909
Net change in
unrealized appreciation
on marketable equity
securities, net
of taxes                   -            -             -          -

Balance,
December 31, 1994      3,665,967   18,329,835    950,049    4,733,909
Net income                  -           -            -          -
Common stock dividends
($ 1.20 per share)          -           -            -          -
Distribution of
5% stock dividend        182,955      914,775  3,819,134   (4,733,909)
Netchange in 
unrealized appreciation
on marketable equity 
securities, net
of taxes                    -           -            -          -

Balance,
December 31, 1995      3,848,922   19,244,610   4,769,183        -
Net income                  -           -            -          -
Common stock dividends
($ 1.20 per share)          -           -            -          -
Preferred stock dividends   -           -            -          -
Common stock issued
for business acquired    719,578    3,597,890  15,650,822        -
Purchase of common 
stock for the treasury      -           -           -           -
Net change in 
unrealized appreciation
on marketable equity
securities, net
of taxes                    -           -           -          -
Balance,
December 31, 1996      4,568,500   $22,842,500  $20,420,005  $ -


See Notes to Consolidated Financial Statements.





                 Net
                 Unrealized
                 Appreciation
                 On Marketable
Retained         Equity                Treasury Stock
Earnings         Securities         Shares      Amount           Total

$18,509,616      $    -                -       $      -      $   37,649,118


      -            153,260             -              -             153,260
 6,293,983             -               -              -           6,293,983
(4,246,172)            -               -              -          (4,246,172)


      -                -               -             -              140,382
(4,742,834)            -               -             -               (8,925)


      -             (73,290)           -             -              (73,290)

15,814,593           79,970            -             -           39,908,356
 6,530,858              -              -             -            6,530,858

(4,618,708)             -              -             -           (4,618,708)
       528              -              -             -                  528


       -            267,921            -             -              267,921

17,727,271          347,891            -             -           42,088,955
 8,505,814               -             -             -            8,505,814

(5,032,934)              -             -             -           (5,032,934)
  (336,217)              -             -             -             (336,217)

       -                 -             -             -           19,248,712

       -                 -           (58,400)   (1,368,525)      (1,368,525)


       -            (32,289)            -            -              (32,289)

$20,863,934       $ 315,602          (58,400)   $(1,368,525)   $ 63,073,516



CONESTOGA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS


Three Years Ended December 31,              1996         1995        1994

CASH FLOWS FROM OPERATING ACTIVITIES
Net income                             $ 8,505,814  $ 6,530,858  $ 6,293,983
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization            7,937,706    5,494,723    5,188,997
    Income from unconsolidated partnership
interests                               (1,256,357)    (659,526)    (385,077)
Minority interest in loss of subsidiary    (53,169)     (14,440)          -
Change in assets and liabilities, net of
effects from acquisition of business:
(Increase) decrease in:
Accounts receivable                       (405,542)    (149,080)     (82,574)
Materials and supplies                     377,315       19,930     (200,277)
Prepaid expenses                           497,281      (42,736)    (278,803)
Prepaid pension costs                     (165,405)    (328,853)    (124,640)
Other assets                              (560,591)    (653,961)      (5,169)
Increase (decrease) in:                                            
Accounts payable                        (1,528,996)     114,322      295,600
        Accrued expenses and other current
liabilities                                (36,445)    (430,889)     123,195
Other liabilities                          405,191      170,082      180,238
Deferred income taxes                     (337,750)     218,640       32,443

Net cash provided by operating 
              activities                13,379,052   10,269,070   11,037,916

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant, net of removal costs
and salvage from retirements            (7,353,793)  (6,035,724)  (5,798,667)
Purchase of investments                        -            -       (776,000)
Capital investments in unconsolidated
partnership interests                          -       (320,000)      (7,000)
 Capital distributions from unconsolidated
partnership interests                      431,600       92,000       17,900
Acquisition of business, net of cash and
cash equivalents acquired              (19,744,124)          -            -

Net cash used in investing activities  (26,666,317)  (6,263,724)  (6,563,767)

CONESTOGA ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


Three Years Ended December 31,              1996         1995        1994     

CASH FLOWS FROM FINANCING ACTIVITIES                                          
Proceeds from long-term borrowings     $ 22,000,000 $      -     $     -
Principal payments on long-term debt       (390,000)   (390,000)    (390,000)
Borrowings on line of credit                900,000   2,000,000    2,300,000
Principal payments on line of credit     (1,400,000) (1,500,000)  (2,300,000)
 Proceeds from issuance of stock under the
employee stock purchase plan                   -            -        140,382
Common and preferred dividends paid      (5,369,151) (4,618,708)  (4,246,172)
Purchase of common stock for the 
treasury                                 (1,368,525)        -             -
Minority interest investment in subsidiary  200,000     267,807           -

Net cash provided by (used in)
financing activities                     14,572,324  (4,240,901)  (4,495,790)

Increase (decrease) in cash and
cash equivalents                          1,285,059    (235,555)     (21,641)

Cash and cash equivalents:
Beginning                                   671,495     907,050      928,691

Ending                                  $ 1,956,554  $  671,495   $  907,050

SUPPLEMENTAL DISCLOSURES OF CASH FLOW 
INFORMATION
Cash payments for:
Interest                                $ 1,297,226  $  427,812   $  422,106

Income taxes                            $ 6,065,817  $4,283,881   $ 4,859,254

SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Acquisition of business:
Working capital acquired, net of cash and
cash equivalents of $ 5,458,768         $   977,299  $      -     $     -
Plant and other assets acquired          16,924,033         -           -
Cost in excess of net assets acquired    38,904,497         -           -
Long-term liabilities assumed            (5,032,823)        -           -
Redeemable preferred stock issued       (12,780,170)        -           -
Common stock issued                     (19,248,712)        -           -
                                                                         
                                       $ 19,744,124   $     -      $    -


See Notes to Consolidated Financial Statements.
CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




1
SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation and nature of operations:
   The consolidated financial statements include the accounts of Conestoga 
Enterprises, Inc. (CEI) and its subsidiaries:

      The Conestoga Telephone and Telegraph Company (CTT) and Buffalo Valley 
      Telephone Company (BVT),  wholly-owned subsidiaries, which are 
      independent local exchange carriers providing both  regulated and 
      nonregulated communication services.
      
       Northern Communications, Inc. (NCI), a wholly-owned subsidiary, which 
       resells long distance  services.
  
       Conestoga Mobile Systems, Inc. (CMS), a wholly-owned subsidiary, which 
       provides paging communication services.
  
       Conestoga Wireless Company (CWC), a majority-owned subsidiary, formed 
       in March 1995 as a  Pennsylvania Limited Liability Corporation.  In 
       January 1997, CWC acquired licenses for  approximately $ 600,000 which 
       will allow the Company to provide personal communication services (PCS) 
       in selected markets throughout eastern and central Pennsylvania.
  
       Conestoga Investment Company (CIC), a wholly-owned subsidiary, formed in 
       December 1996 as an investment holding company.
  
The above companies are collectively referred to herein as the Company.  All 
significant intercompany transactions have been eliminated in consolidation.

The Company operates predominately in the communications and related services 
industry providing services to customers in eastern and central Pennsylvania.

The Company's local exchange carriers are subject to rate regulations by the 
Federal Communications Commission (FCC) and the Pennsylvania Public Utility 
Commission (PUC) and, accordingly, follow the accounting prescribed by 
Statement of Financial Accounting Standards No. 71, "Accounting for Certain 
Types of Regulation".

Telecommunications Act of 1996:
The Telecommunications Act of 1996 is the most comprehensive revision of the 
federal communications laws in over 60 years.  In general, the Act includes 
provisions that open the telephone subsidiaries' local exchange markets to 
competition upon certain conditions and permit local exchange carriers, such 
as the Company, to provide long distance service outside their regions.

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of estimates:
     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

Revenue recognition:
     The Company's revenues are recognized when earned.  Access service and 
long distance service revenues are derived from access charges, toll rates and 
settlement arrangements. The Company records retroactive settlements as 
revenues in the year the settlements become known in accordance with industry 
practice.

Cash and cash equivalents:
      For purposes of reporting the statements of cash flows, the Company 
considers all highly liquid debt instruments purchased with a maturity of 
three months or less to be cash equivalents.  At times, cash balances exceed 
F.D.I.C. limits.  

Cost in excess of net assets of business acquired:
     The excess of the acquisition cost over the net assets of the business 
acquired is being amortized by the straight-line method over 40 years. 
Management continually reviews the appropriateness of the carrying value of 
the excess acquisition cost and the related amortization period.

Investments:
     All marketable equity securities are classified as available for sale. 
These securities are recorded at fair value based on quoted market prices, and 
unrealized appreciation, net of taxes, is reported as a separate component of 
common stockholders' equity until realized. Gains and losses are determined 
using the specific-identification method. 

  The Company is accounting for its investments in partnerships by the equity 
method.  

Plant and depreciation:
     Plant is recorded at cost.  Normal renewals and betterments of units of 
property are charged to plant accounts, while ordinary repairs and replacements 
of items considered to be less than units of property are charged to plant 
specific expenses.  The cost of plant retired, plus removal costs, less salvage 
is charged to accumulated depreciation.  Accordingly, no gain or loss
is recognized in connection with ordinary retirements.


CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Plant and depreciation (continued):
      Depreciation is computed by the straight-line method.  Rates used for 
calculating depreciation are based on the economic useful lives of the assets.  
The effective composite depreciation rates for the years 1996, 1995 and 1994 
were 6.93%, 6.56% and 6.58% respectively.

Income taxes:
      Deferred taxes are provided on the liability method whereby deferred tax 
assets are recognized for deductible temporary differences and deferred tax 
liabilities are recognized for taxable temporary differences.  Temporary 
differences are the differences between the reported amounts of assets and 
liabilities and their tax basis.  Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely 
than not that some portion or all of the deferred tax assets will not be 
realized.  Deferred tax assets and liabilities are adjusted for the effects of 
changes in tax laws and rates on the date of enactment.

Employee benefits:
     Pension plans:
       Substantially all employees are covered under noncontributory defined 
benefit pension plans.  The plans provide benefits based on years of service 
and employee compensation. The Company's funding policy is to make 
contributions in compliance with applicable regulations.

Postretirement benefit plan:
      A subsidiary of the Company sponsors a postretirement health care plan 
for substantially all of its salaried employees and their spouses.  The plan 
is contributory, with retirees contributing 50% of the premiums. The plan is 
unfunded.  The Company's share of the estimated costs that will be paid after 
retirement is generally being accrued by charges to expense over the employees' 
active service periods to the dates they are fully eligible for benefits,
except that the Company's unfunded cost that existed at January 1, 1993 is 
being accrued primarily under the straight-line method that will result in 
full accrual by December 31, 2012.  The Company has received approval from 
the PUC to include the expense of this Plan for ratemaking purposes.

Savings plans:
      The Company has contributory savings plans for substantially all 
employees.  The Company contributes matching amounts for participating 
employees in accordance with the provisions of the plans.  The Company 
contributed $ 230,752, $ 200,068 and $ 187,305 to the plans for 1996, 1995 
and 1994 respectively.

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Employee benefits (continued):
   Deferred compensation agreements:
       The Company has deferred compensation agreements with certain officers 
and employees which provide benefits payable to them upon retirement. The 
estimated liabilities under the agreements are being accrued over the expected 
remaining years of employment.

Earnings per common share:
       Earnings per common share is computed by dividing net income less 
preferred stock dividends by the weighted average of common shares outstanding 
during the year.  Preferred stock dividends for 1996 include dividends paid of 
$ 336,217 and cumulative dividends of $ 56,036.  The computation of fully 
diluted earnings per share was antidilutive.
  
Reclassifications:
     Certain items in the 1995 and 1994 consolidated financial statements have 
been reclassified to conform to the 1996 consolidated financial statement 
presentation format.  The reclassifications had no impact on net income.


2
PURCHASE ACQUISITION

     On May 31, 1996, the Company acquired all of the outstanding shares of 
Buffalo Valley Telephone Company (BVT), an independent local exchange carrier 
providing regulated and nonregulated communication services in central 
Pennsylvania.  The consideration for the stock of BVT totaled approximately 
$ 57 million which included 196,618 shares of $ 3.42 Series A Preferred Stock,
719,578 shares of common stock and approximately $ 25 million in cash.  The
acquisition was accounted for as a purchase, and results of operations of BVT 
since the date of acquisition are included in the consolidated financial 
statements.

  
  
CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2
PURCHASE ACQUISITION (CONTINUED)

     Unaudited pro forma consolidated results of operations for the years 
ended December 31, 1996 and 1995 as though BVT has been acquired at the 
beginning of the respective periods follows (in thousands, except per share 
amounts):


                                          1996            1995
                                              (Unaudited)

Operating revenues                      $47,885         $43,873
Operating income                         15,373          13,936
Net income available for common stock     7,801           6,552
Earnings per common share                 $1.71           $1.43

     The above amounts reflect adjustments for amortization of goodwill, 
interest on debt issued to fund the cash portion of the acquisition and 
related tax benefits, removal of expenses related to the acquisition, net of 
taxes and preferred stock dividend requirements. 


     The pro forma consolidated results of operations are provided for 
comparative purposes only. They are based upon historical information which 
has been restated to reflect the purchase acquisition and do not necessarily 
reflect the actual results that would have occurred nor are they necessarily 
indicative of future results of operations of the combined companies.


3
INVESTMENTS IN EQUITY SECURITIES

 The following is a summary of the Company's investments in equity securities:

                                                 December 31,
                                               1996        1995
Marketable equity securities:
Aggregate cost                            $1,142,148  $    999,490
Gross unrealized appreciation                479,959       585,612

Fair value                                 1,622,107     1,585,102
Nonmarketable equity security, investment in
Buffalo Valley Telephone Company common 
stock, at cost                                     -       776,000

                                          $1,622,107   $  2,361,102

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




3
INVESTMENTS IN EQUITY SECURITIES (CONTINUED)

     The Company's investments in equity securities are concentrated in the 
telecommunications industry.


4
INVESTMENTS IN PARTNERSHIPS

     The following is a summary of the Company's investments in partnerships:

                                                      December 31,
                                                 1996             1995

Berks and Reading Area Cellular Enterprises
(BRACE), 70% interest                        $ 2,555,292      $ 1,675,746
Lancaster Area Cellular Enterprises (LACE),
10% interest                                     731,279          675,175
PenTeleData, 11.85% interest                      90,456          201,349

                                             $ 3,377,027      $ 2,552,270

     BRACE's sole activity is a 39% limited partnership interest in the 
Reading SMSA Limited Partnership, which provides cellular telephone service to 
the Reading metropolitan area.  BRACE is reported on the equity method since 
the Company effectively has a 27.3% interest in the operating partnership.  
LACE is an 18.4% limited partner in the Susquehanna Cellular Communications 
Limited Partnership, which provides cellular telephone service in the
Harrisburg, Lancaster and York metropolitan areas.  LACE is reported on the 
equity method since the Company, as one of the three general partners in that 
entity, has significant influence over its operating and financial policies.  
PenTeleData is a limited partnership which provides Internet access services 
in central and eastern Pennsylvania.  PenTeleData is reported on the
equity method in accordance with Statement of Position 78-9.  The Company's 
equity in undistributed net income of the partnerships was $ 1,256,357, 
$ 659,526 and $ 385,077 for 1996, 1995 and 1994 respectively.


CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5
PLANT

     Plant is carried at cost less accumulated depreciation and consists of 
     the following:
         
                                              December 31,
                                         1996             1995

Telephone plant:
In service:
Land and buildings                   $5,342,010         $4,080,085
Digital switching equipment          41,777,768         28,019,258
Other equipment                       6,852,686          4,867,984
Outside plant facilities             65,321,649         46,922,475
                                    119,294,113         83,889,802
Under construction                      557,293          1,064,075
                                    119,851,406         84,953,877
Less accumulated depreciation        58,698,418         39,716,521

                                     61,152,988         45,237,356

Nonregulated property and equipment:
Land and buildings                      653,641            112,527
Equipment                             3,189,720          2,219,821
                                      3,843,361          2,332,348
Less accumulated depreciation         2,062,202          1,429,442

                                      1,781,159            902,906

                                    $62,934,147        $46,140,262



CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6
LONG-TERM DEBT AND CREDIT ARRANGEMENTS

          Long-term debt is summarized as follows:
                                                        December 31,
                                                   1996            1995

Promissory notes (see below).                  $ 4,645,000    $ 5,035,000
8.5% notes, interest payable semi-annually,
principal due in annual installments of 
$ 81,000, with the balance due in 1998.          1,404,000             -
6.91% Series A Senior Notes, interest payable
quarterly, principal due in annual installments
of $ 2,000,000 from 1998 through 2000.           6,000,000             -
7.59% Series B Senior Notes, interest payable
quarterly, principal due in annual installments
of $ 1,454,545 from 2001 through 2011.          16,000,000             -
                                                28,049,000      5,035,000
Less current maturities                            831,000        390,000

                                               $27,218,000     $4,645,000

     On December 30, 1996, the Company signed a commitment letter to 
refinance its promissory notes with its current lender.  Under the terms of 
the new agreement, the notes will be converted to a $ 5,000,000 unsecured 
term loan. The term loan will require quarterly principal payments beginning 
May 1997 through 2002 with interest at 6.89% per annum.  The notes to be
refinanced are classified in the accompanying balance sheet in accordance 
with the terms of the new agreement.

     On July 1, 1996, the Company entered into an unsecured credit agreement 
through June 30, 1997 with a bank under which it may borrow up to $ 10,000,000 
for working capital or general business purposes in the form of line of credit 
loans or letters of credit.  Interest is payable monthly on advances at the 
Company's option of either one percent below the bank's prime rate or .35 
percent above the bank's overnight base rate.  The prime and overnight base
interest rates were 8.25% and 7.35% respectively at December 31, 1996. 
Issuance fees on  letters of credit shall be mutually agreed between the bank 
and the Company on a case-by-case basis.

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6
LONG-TERM DEBT AND CREDIT ARRANGEMENTS (CONTINUED)

     The Company also has an unsecured $ 3,000,000 line of credit from a bank 
available until May 31, 1997 with interest at one-half of one percent under 
the bank's prime rate.  There were no borrowings outstanding on the line of 
credit at December 31,1996 and $ 500,000 was outstanding at December 31, 1995.  
The prime interest rate applicable to the line of credit was 8.25% and 8.75% 
at December 31, 1996 and 1995 respectively.

     The credit agreements contain provisions which, among other things, 
require maintenance of certain financial ratios and limit the amount of 
additional indebtedness.  The Senior Notes also contain provisions which, 
among other things, restrict mergers and consolidations, encumbrances and 
sales of certain assets, redemptions of preferred stock and purchases of
restricted investments. Under the most restrictive covenants of the debt 
agreements, approximately $ 11,800,000 of the consolidated retained earnings 
is available for payment of cash dividends in 1997.

     The aggregate amounts of maturities for each of the five years subsequent 
to December 31, 1996 are as follows:

          1997             $831,000
          1998            4,323,000
          1999            3,000,000
          2000            3,000,000
          2001            2,349,545


7
INCOME TAX MATTERS

     Net deferred tax liabilities consist of the following components as of 
December 31, 1996 and 1995:

                                                     1996           1995
Deferred tax liabilities:
Plant, in service                                  $9,914,064     $6,718,147
Prepaid pension costs                                 850,351        549,229
Investments                                           329,458        369,066
                                                   11,093,873      7,636,442
Deferred tax assets                                   908,858        414,306

                                                 $ 10,185,015     $ 7,222,136

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       
7
INCOME TAX MATTERS (CONTINUED)

     The provision for income taxes for the years ended December 31, 1996, 1995
and 1994 was as follows:

                                        1996         1995        1994

Current:
Federal                             $4,631,691   $3,136,592  $3,129,698
State                                1,507,025    1,035,109   1,262,662

                                     6,138,716    4,171,701   4,392,360
Deferred:
Federal                               (244,174)     167,915      23,312
State                                  (41,121)      50,725       9,131

                                      (285,295)     218,640      32,443

                                    $5,853,421   $4,390,341  $4,424,803

     The income tax provision differs from the amount of income tax determined 
by applying the federal income tax rate to pretax income for the years ended 
December 31, 1996, 1995 and 1994 due to the following:

                                                1996       1995        1994

Normal statutory federal income tax rate        34.0%      34.0%       34.0%
Increase resulting from:
State income tax, net of federal tax benefit     6.8        6.8         8.0
Other                                            0.1         -         (0.7)

                                                40.9%      40.8%       41.3%

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8
DEFINED BENEFIT PENSION PLANS 

     The components of the pension cost charged to expense for 1996, 1995 and 
1994 consisted of the following:

                                             1996      1995      1994

Service cost (benefits earned)            $420,292   $ 270,153   $317,134
Interest cost on projected benefit
obligation                                 789,634     603,315     568,597
Actual return on plan assets            (1,542,076) (2,001,488)     78,407
Net amortization and deferral              444,546   1,299,338    (777,411)

Total expense                             $112,396   $ 171,318    $186,727

     Assumptions used in the determination of pension plan information for 
1996, 1995 and 1994 consisted of the following:  

                                                 1996     1995     1994

Discount rate                                     7.5%      7.0%    8.0%
Rate of increase in compensation levels           5.0       5.0     5.0 
Expected long-term rate of return on plan assets  8.5       8.5     8.5 

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8
DEFINED BENEFIT PENSION PLANS (CONTINUED)

     The following table sets forth the plans' funded status as of December 31, 
1996 and 1995 and the amount recognized in the accompanying consolidated 
balance sheets:

                                                     1996       1995
 
 Actuarial present value of benefit obligations:
Vested benefits                                  $8,876,091  $6,680,657

Accumulated benefits                             $8,890,240  $6,696,921

Projected benefits                             $(12,905,922)$(9,827,790)

Plan assets at fair value                        16,083,105  10,217,166

Plan assets in excess of projected benefit
obligation                                        3,177,183     389,376
Unrecognized net (gain) loss                       (573,531)  1,308,705
Unrecognized net (asset)                         (1,124,152)   (506,933)
Unrecognized prior service cost                     669,200     234,436

Prepaid pension cost                             $2,148,700  $1,425,584

    Plan assets consist primarily of U.S. Government securities, corporate 
bonds and common stocks, including CEI's common stock of $ 200,720 and 
$ 151,393 at December 31, 1996 and 1995 respectively.


9
POSTRETIREMENT BENEFIT PLAN

    The components of the net periodic postretirement benefit cost charged to 
expense for 1996, 1995 and 1994 consisted of the following:

                                                  1996      1995     1994

Service cost                                    $37,372   $34,356  $41,903
Interest cost on projected benefit
obligation                                       92,104    94,181   92,350
Amortization of transition obligation            56,267    56,267   56,267

Total expense                                  $185,743  $184,804 $190,520

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9
POSTRETIREMENT BENEFIT PLAN (CONTINUED)

    The following sets forth the plans' funded status reconciled with the 
amount recognized in the Company's consolidated balance sheets as of December 
31, 1996 and 1995:

                                                           1996       1995

Actuarial present value of accumulated 
postretirement benefit obligations:
Retirees                                               $(398,192)  $(481,252)
Fully eligible active employees                         (496,864)   (366,498)
Other active members                                    (441,713)   (496,656)
                                                      (1,336,769) (1,344,406)
Unrecognized transition obligation                       900,262     956,529
Unrecognized net (gain)                                 (160,235)    (60,031)

Accrued postretirement cost                            $(596,742)  $(447,908)

    Assumptions used by the Company in the determination of postretirement 
benefit plan  information consisted of the following:  

                                                    1996     1995      1994

Projected health care cost trend rate               8.5%     9.5%      10.5%
Ultimate trend rate                                 6.0      6.0        6.0
Year ultimate trend rate is achieved               2000     2000       2000
Discount rate                                       7.5%     7.0%       8.0%

    Increasing the assumed health care cost trend rates by one percentage 
point in each year will increase the accumulated postretirement benefit 
obligation as of December 31, 1996 by $ 188,757 and the aggregate service and 
interest cost components of net periodic postretirement benefit cost for 1996 
by $ 24,282.



CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10
REDEEMABLE PREFERRED STOCK

    The Company has outstanding 196,618 shares of Series A Convertible 
Preferred Stock. Cumulative dividends of $ 3.42 per share per annum are paid 
semi-annually.  Each share of preferred stock may be converted, at the option 
of the holder, into shares of Common Stock at a conversion price of $ 34.425, 
subject to adjustment under certain circumstances.  Each holder may require 
the Company to redeem all or a portion of such holder's preferred stock,
after May 31, 1998, for $ 65 per share plus accrued dividends.

    The Company may redeem the stock, in whole or in part for $ 66.95, $ 66.30, 
$ 65.65 and $ 65.00 per share beginning on May 31, 2000, 2001, 2002 and 2003 
and thereafter respectively, plus all accumulated and unpaid dividends.  In 
the event of liquidation of the Company, the holders of preferred stock shall 
be entitled to receive a distribution of $ 65 per share plus accrued dividends.


11
COMMON STOCK AND DIVIDEND REINVESTMENT PLAN

    CTT has a Stock Purchase Plan for all employees who meet minimum 
eligibility requirements which provides for the issuance and sale of CEI 
common stock.  The Plan is being implemented by a series of offerings. Under 
the fourth offering of the Plan, participating employees of CTT authorized 
deductions for a period of two years ended December 31, 1994.  As of December 
31, 1994, the Company issued 5,473 shares under the fourth offering of the
Plan at a price of $ 25.65 per share.  Under the fifth offering of the Plan, 
participating employees of CTT authorized deductions for a period of two years 
ending August 31, 1997. The price the employee pays for a share of stock is 
95% of the average of the closing sales price of the shares as quoted on 
NASDAQ for the days on which sales are reported during the ten (10) business 
dates prior to August 31, 1997 but will not be less than $ 24.85 nor more 
than $ 28.38 per share.  A maximum of 146,237 shares are authorized for 
subscription under the fifth or subsequent offerings.  As of December 31, 1996, 
employees have reserved 4,660 shares for purchase under the fifth offering of 
the Plan.

    On October 26, 1994, the Company declared a 5% common stock dividend, 
payable February 28, 1995, to stockholders of record on January 31, 1995.

    The Company sponsors a Stock Reinvestment Plan for all shareholders who 
wish to participate. Participants' dividends will be used to purchase shares 
on the open market.  A participant's purchase price per share will be the 
average market price per share for all shares purchased under the Plan for 
each dividend period.

CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


12
COMMITMENTS 

    At December 31, 1996, the Company had commitments for the purchase of 
equipment and  materials approximating $ 1,400,000.


13
PENDING ACQUISITION

    On February 13, 1997, the Company signed a letter of intent (Agreement) to 
acquire all of the common stock of Infocore, Inc., a telecommunications 
company based in King of Prussia, Pennsylvania.  Under the terms of the 
Agreement, the Company will issue 200,000 shares of common stock to Infocore, 
Inc.'s stockholders in exchange for all outstanding shares of Infocore, Inc. 
The acquisition is subject to certain conditions, including approval of the 
merger by Infocore, Inc.'s stockholders.  The transaction will be accounted 
for by the purchase method, and the effective date of the merger is expected 
to be in the third quarter of 1997.


14
FAIR VALUE OF FINANCIAL INSTRUMENTS

    The following methods and assumptions were used to estimate the fair value 
of each class of financial instruments for which it is practicable to 
estimate that value.

    Cash and cash equivalents:
       The carrying amount approximates fair value because of the short 
maturity of those instruments.

    Investments in equity securities:
        The fair values of investments in equity securities are based on 
quoted market prices.

    Letters of credit:
         It was not practicable to estimate the fair value of the letters of 
credit due to the absence of definite issuance fee terms.
   
CONESTOGA ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

    Note payable and long-term debt:
       The fair values of the note payable and long-term debt are estimated 
based on interest rates for the same or similar debt offered to the Company 
having the same or similar remaining maturities.  The carrying amounts 
approximate fair value.

    Redeemable preferred stock:
       The carrying amount approximates fair value based on the fixed 
redemption price available to holders of preferred stock.


15
QUARTERLY DATA (UNAUDITED)

                          First      Second     Third       Fourth

1996

Operating revenues     $8,694,024  $9,535,043 $12,283,707 $12,386,169
Operating income        3,031,728   2,936,741   4,390,700   3,704,564
Net income              1,920,974   1,792,121   2,405,475   2,387,244
Earnings per common
share                      0.50        0.42         0.49        0.52

1995

Operating revenues     $7,737,068  $8,604,873  $7,991,579 $ 8,219,183
Operating income        2,514,855   2,983,315   2,577,922   2,507,702
Net income              1,439,572   1,914,303   1,653,292   1,523,691
Earnings per common
share                      0.37         0.50        0.43         0.40


   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

    None




                              PART III
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The information as to the Directors and Executive Officers of the Company
set forth under the Subcaption "Election of Directors " of the Proxy Statement
relating to the Annual Meeting of Shareholders to be held on May 3, 1997 is
incorporated by reference into this Report.

ITEM 11.  EXECUTIVE COMPENSATION

  The information as to the Executive Officers' Compensation set forth under 
the caption "Executive Compensation"  of the Proxy Statement relating to the 
Annual Meeting of Shareholders to be held on May 3, 1997 is incorporated by 
reference into this Report.
                                  

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  The information set forth under the captions "Election of Directors" and
"Security Ownership of Management"  of the Proxy Statement relating to the 
Annual Meeting of Shareholders to be held on May 3, 1997 is incorporated by 
reference into this Report.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  There are no relationships or related transactions as described in Item 404 
of Regulation S-K.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K       
(a)(1)    Financial Statements:
                      
       The following consolidated financial statements of Conestoga          
       Enterprises, Inc. and subsidiaries are included in Part II, Item 8:

         Opinion of Independent Certified Public Accountants

         Consolidated balance sheets - December 31, 1996 and 1995

         Consolidated statements of income - years ended December 31, 1996,    
          1995 and 1994

          Consolidated statements of stockholders' equity - years ended         
         December 31,1996, 1995, and 1994

          Consolidated statements of cash flows - years ended December 31,      
           1996, 1995 and 1994

          Notes to consolidated financial statements

      (a)(2)    Financial Statement Schedules

         All schedules are omitted because they are not applicable, not        
         required, or because the required information is included in the       
         financial statements or notes thereto.
                 
      (a)(3)     Exhibits - 
            
          (10) Material contracts                        Attachment 10 D        
          (11) Statement re: Computation of 
                                Per Share Earnings       Attachment 11 
            
          (12) Statement re: Computation of Ratios       Attachment 12
       
          (21) Subsidiaries of the registrant            Attachment 21 D
            

       (b)  Reports on Form 8-K
          
          A report on Form 8-K has been filed by the Registrant on October
          2, 1996 to report that on September 24, 1996 the Board of Directors  
          authorized the repurchase of up to one hundred thousand shares 
          of the common stock of CEI on the open market or in negotiated 
          tranactions, depending on market conditions and other factors.

       
                           INDEX TO EXHIBITS
                                   
                                   
                                                          Page

       (a)   Articles of Incorporation, as amended       53 - 56*

       (b)   By-laws                                     57 - 66*

       Instruments defining the rights of security holders

       (b)   Relevant portions of the by-laws                 67*

       Material contracts

       (a)   Agreement dated January 28, 1987 with
          John R. Bentz, Executive Vice President        68 - 74*

       (b)  Agreement dated March 22, 1989 with
          Donald R. Breitenstein, Controller             75 - 81*
       
       (c)  Agreement dated September 1, 1995 with       47 - 51**
              Albert H. Kramer, Vice-President, Finance and Administration
       
      (d)   Agreement dated May 29, 1996 with            44- 50
              Joseph J. Laffey, Vice-President, Regulatory and External Affairs
          
           Statement re: Computation of Per Share Earnings    51
           
           Statement re: Computation of Ratios                52
           
           Subsidiaries of the registrant                     53                
            
       *These exhibits appear in the 1992 10K.
       ** This exhibit appears in the 1995 10K.
            
                          EMPLOYMENT AGREEMENT



    AGREEMENT made this 29th day of May, 1996, between THE CONESTOGA
TELEPHONE & TELEGRAPH COMPANY, a Pennsylvania business corporation, having its
principal office in the Borough of Birdsboro, County of Berks and State of
Pennsylvania (hereinafter called "Employer") and JOSEPH J. LAFFEY, of 912 
Ralph Lane, Moosic, Pennsylvania 18507 (hereinafter called the "Employee").
                            A G R E E M E N T
    1.     Employment.  The Employer employs the Employee and the Employee
accepts employment upon the terms and conditions of this Agreement.
    2.     Term.  The term of this Agreement shall begin on
May 29, 1996 and shall terminate on May 28, 1999.  It is the intention of the
Employer and the Employee that this relationship shall continue beyond the 
three (3) years period, but either party may terminate the same under the 
terms hereinafter set forth in this Agreement.
    3.     Compensation.  
           (a)  The Employer shall pay the Employee for all services
rendered a salary of One Hundred Ten Thousand Dollars ($110,000.00) per year, 
payable in equal weekly installments at the end of each week.  Salary payments 
shall be subject to withholding and other applicable taxes. 
           (b)  Employer will review Employee's compensation on an annual
basis along with the review of all their management employees.
    4.     Duties.  The Employee shall serve as the Employer's Vice President
Regulatory and External Relations and shall be responsible for the Employer's 
overall regulatory matters.  The exact responsibilities for the position are 
set forth in the job description for Vice President Regulatory and External 
Relations of the Employer. A copy of said job description is attached hereto 
and referred to as Schedule A.
    5.     Extent of Services.  The Employee shall devote his entire time and
attention to the Employer's business.  During the term of this Agreement, the
Employee shall not engage in any other business activity, regardless of 
whether it is pursued for gain or profit.  Employee, however, may invest his 
assets in other companies so long as they do not require the Employee's 
services in the operation of their affairs.  
    6.     Working Facilities.  The Employee shall have a private office,
stenographic help, a personal computer and other facilities and services that 
are suitable to his position and appropriate for the performance of his duties.
    7.     Disclosure of Information.  The Employee acknowledges that the
list of the Employer's customers, as the Employer may determine from time to 
time, is a valuable, special and unique asset of the Employer's business.  The 
Employee shall not, during and after the term of his employment, disclose all 
or any part of the Employer's customer list to any person, firm, corporation, 
association, or other entity for any reason or purpose.  In the event of the 
Employee's breach or threatened breach of this paragraph, the Employer shall 
be entitled to a preliminary restraining order and an injunction restraining 
and enjoining the Employee from disclosing all or any part of the Employer's 
customer list to any person, firm, corporation, association, or other entity 
for any reason or purpose and from rendering any services to any person, firm, 
corporation, association, or other entity to whom all or any part of such list 
has been, or is threatened to be, disclosed.  In addition to, or in lieu of, 
the above, the Employer may pursue all other remedies available to the 
Employer for such breach, or threatened breach, including the recovery of 
damages from the Employee.
    8.     Expenses.  The Employer shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties under 
this Agreement.  Employee shall present to the Employer, from time to time, 
an itemized account of such expenses in any form required by the Employer.
    9.     Vacations.  The Employee shall be entitled each year to a vacation
of four (4) weeks commencing January 1, 1997, during which time his 
compensation shall be paid in full.
    10.    Termination Without Cause.  Commencing May 28, 1999, the Employer
may without cause, terminate this Agreement at any time by giving thirty (30) 
days written notice to the Employee.  In that event, the Employee, if requested 
by the Employer, shall continue to render his services and shall be paid his 
regular compensation up to the date of termination.  Employee may, without 
cause, terminate this Agreement by giving sixty (60) days written notice to 
the Employer.  In such event, the Employee shall continue to render his 
services and shall be paid his regular compensation up until the date of 
termination.  
    11.    Termination for Proper Cause.  Employer may terminate Employee's
employment at any time for "proper cause".  Proper cause for the termination 
of Employee's employment shall be as follows:
        (a)  Violation by Employee of the restrictive covenants set forth
in Paragraph 7 hereof; 
           (b)  Employee's disloyal, dishonest or illegal conduct; or
           (c)  Employee's willful dereliction of his duties to the Company.
    12.    Death During Employment.  If the Employee dies during the term of
employment, the Employer shall pay to the Employee's estate the compensation 
that would otherwise be payable to the Employee up to the end of the month in 
which his death occurs.  In addition, if Employee qualifies under the terms of 
the Employer's existing life insurance coverage, Employer will provide life 
insurance on the life of Employee amounting to two and one-half (2-1/2) times 
his annual salary up to a maximum of Three Hundred Thousand Dollars 
($300,000.00).
    13.    Restricted Covenant.  For a period of two (2) years after the
termination or expiration of this Agreement, the Employee shall not within a 
radius of twenty-five (25) miles from the present place of the Employer's 
business, directly or indirectly, own, manage, operate, control, be employed 
by, participate in, or be connected in any manner with the ownership, 
management, operation or control of any business similar and competitive to 
the type of business conducted by the Employer at the time this Agreement 
terminates.  In the event of the Employee's actual or threatened breach of 
this paragraph, the Employer shall be entitled to a preliminary
restraining order and injunction restraining the Employee from violating its
provisions.  Nothing in this Agreement shall be construed to prohibit the 
Employer from pursuing any other available remedies for such breach or 
threatened breach, including the recovery of damages from the Employee.
    14.    Arbitration.  Any controversy or claim arising out of, or relating
to this Agreement, or its breach, shall be settled by arbitration in the City 
of Reading in accordance with the then governing rules of the American 
Arbitration Association, provided that Employer may seek the injunctive and 
other relief provided for in Paragraphs 7 and 13 hereof in any court having 
jurisdiction.  Judgment upon the award rendered may be entered and enforced 
in any court of competent jurisdiction.
    15.    Notices.  Any notice required or desired to be given under this
Agreement shall be deemed given if in writing and sent by certified mail, 
return receipt requested, to the Employee's residence or to the Employer's 
principal office, as the case may be.
    16.    Waiver of Breach.  The Employer's waiver of a breach of any
provision in this Agreement by the Employee shall not operate or be construed 
as a waiver of any subsequent breach by the Employee.  No waiver shall be 
valid unless in writing and signed by an authorized officer of the Employer.
    17.    Assignment.  The Employee acknowledges that his services are
unique and personal.  Accordingly, the Employee may not assign his rights or 
delegate his duties or obligations under this Agreement.  The Employer's 
rights and obligations under this Agreement shall inure to the benefit of, and 
shall be binding upon, the Employer's successors and assigns.
    18.    Entire Agreement.  This Agreement contains the entire
understanding of the parties.  It may not be changed orally but only by an 
agreement in writing signed by the party against whom enforcement of any 
waiver, change, modification, extension, or discharge is sought.
    19.    Headings.  Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
    20.    Counterparts.  This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which 
together shall constitute one and the same instrument.
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.


                          CONESTOGA TELEPHONE AND TELEGRAPH
                          COMPANY


                          By   \s\ John R Bentz            
                                       President

                          Attest \s\ Kenneth A Benner      
                                       Secretary


                           \s\ Joseph J. Laffey            (SEAL)
                                Joseph J. Laffey
  
Exhibit 11
CONESTOGA ENTERPRISES, INC.

STATEMENT RE:  COMPUTATION OF PER SHARE EARNINGS


Years Ended December 31,               1996          1995         1994          
Net income                           $ 8,506     $   6,531     $  6,294
                              
Less preferred dividends:                    
Declared and paid                       (336)          -             -
  Cumulative                             (56)          -             -
                                     
Income applicable to common stock    $  8,114     $  6,531     $  6,294
                                     
Average shares outstanding              4,260        3,849        3,843
                                     
Earnings per common share            $  1.91      $   1.70     $   1.64

EXHIBIT 12
CONESTOGA ENTERPRISES, INC.

STATEMENT RE:  COMPUTATION OF RATIO OF EARNINGS TO 
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

Years Ended December 31,           1996     1995     1994     1993     1992   
                                         (In thousands, Except Ratios)          

Consolidated pre-tax income     $14,306  $10,907  $10,719  $10,340  $ 11,120
                                                         
Undistributed earnings from 
  unconsolidated partnerships
  interests                      (1,257)    (660)    (385)    (424)      (46)
                                                         
Interest                          1,297      428      422      368       459
                                                         
Earnings                        $14,346  $10,675  $10,756  $10,284  $ 11,533
                                                         
Interest                         $1,297  $   428  $   422    $ 368  $    459
                                                         
Preferred stock dividends (1)       566      -         -        -        116
                                                         
Fixed charges and preferred
  stock dividends                $1,863  $   428   $  422    $ 368  $    575
                                                         
Ratio                             7.70      24.95    25.48    27.92     20.06
                                               
                                               
                                               
(1)    Preferred stock dividends/(100% - income tax rate)




                                                    Attachment 21D
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
            SUBSIDIARIES OF CONESTOGA ENTERPRISES, INC.
                                 
          1.        The Conestoga Telephone and Telegraph Company
            Incorporated August 20, 1902
            Pennsylvania
            
            Operates - The Conestoga Telephone and Telegraph Company


          2.        Buffalo Valley Telephone Company
            Incorporated September 13, 1904
            Pennsylvania

            Operates - Buffalo Valley Telephone Company


          3.        Northern Communications, Inc.
            Incorporated March 5, 1981
            Pennsylvania

            Operates - Northern Communications, Inc.


          4.        Conestoga Mobile Systems, Inc.
            Incorporated April 1, 1991
            Pennsylvania

            Operates - Conestoga Mobile Systems, Inc.


          5.        Conestoga Wireless Company
            Limited Liability Company
            Formed March 1995
            Pennsylvania
            
            Operates - Conestoga Wireless Company


          6.        Conestoga Investment Corporation
            Incorporated November 27, 1996
            Delaware
            
            Operates - Conestoga Investment Corporation
                    


                                                          





     Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on 
its behalf by the undersigned, thereunto duly authorized.

                                        CONESTOGA ENTERPRISES, INC.

Date  ____________                   By  __\s\ John R Bentz________
                                           John R Bentz
                                           President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report signed below by the following persons on behalf of the Company and in 
the capacities and on the dates indicated.

Date  ____________                   ____\s\ F. M. Brown__________
                                       F. M. Brown
                                       Chairman of the Board

Date  ____________                   __\s\ James H Murray_________
                                                James H.Murray
                                      Vice President

Date  ____________                   __\s\ Kenneth A Benner______      
                                      Kenneth A. Benner
                                      Secretary/Treasurer

Date  ____________                   _\s\ Donald R Breitenstein___
                                      Donald R. Breitenstein
                                     Controller, Chief Accounting Officer

Date  ____________                   _\s\ John M Sausen_______
                                     John M. Sausen
                                     Director

Date  ____________                   _\s\Richard G Weidner________
                                     Richard G. Weidner
                                     Director

Date  ____________                   _\s\ Robert M Myers __________
                                     Robert M. Myers
                                     Director

Date  ____________                   __\s\ Jean  M Ruhl ____________
                                     Jean M. Ruhl
                                     Director
   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report signed below by the following persons on behalf of the Company and in 
the capacities and on the dates indicated (continued).


 Date  ____________                  __\s\ Thomas  C Keim _________
                                     Thomas C. Keim
                                     Vice President - Operations
     
Date  ____________                   _\s\ Albert H Kramer _________
                                     Albert H. Kramer
                                     Vice President - Finance and         
                                      Administration, Chief Financial   
                                        Officer