<PAGE>


                                                                    EXHIBIT 99.3


                       QUARTERLY REPORT FOR THE PERIOD ENDED
                                   JUNE 30, 1998



                     DIRECT BROADCASTING SATELLITE CORPORATION


               COLORADO                                84-1328967
     (State or other jurisdiction       (I.R.S. Employer Identification No.)
   of incorporation or organization)

          5701 S. SANTA FE DRIVE
            LITTLETON, COLORADO                          80120
(Address of principal executive offices)               (Zip code)

                                   (303) 723-1000
                      (Telephone number, including area code)


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                                 TABLE OF CONTENTS


                           PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
 
<S>                                                                                 <C>
Item 1.   Financial Statements

          Condensed Balance Sheets -
             December 31, 1997 and June 30, 1998 (Unaudited) . . . . . . . . . .        1

          Condensed Statements of Operations for the
             three and six months ended June 30, 1997 and 1998 (Unaudited) . . .        2

          Condensed Statements of Cash Flows for the
             six months ended June 30, 1997 and 1998 (Unaudited) . . . . . . . .        3

          Notes to Condensed Financial Statements (Unaudited). . . . . . . . . .        4

Item 2.   Management's Narrative Analysis of Results of Operations . . . . . . .        7

Item 3.   Quantitative and Qualitative Disclosures About Market Risk . . . . . .     None

                                                                       
                            PART II - OTHER INFORMATION
 
Item 1.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . .        *

Item 2.   Changes in Securities and Use of Proceeds. . . . . . . . . . . . . . .        *

Item 3.   Defaults Upon Senior Securities. . . . . . . . . . . . . . . . . . . .        *

Item 4.   Submission of Matters to a Vote of Security Holders. . . . . . . . . .        *

Item 5.   Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . .     None

Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . .      N/A
</TABLE>


      DISH NETWORK-SM- IS A SERVICE MARK OF ECHOSTAR COMMUNICATIONS CORPORATION.


-------------------------
*    This item has been omitted pursuant to the reduced disclosure format as set
     forth in General Instructions (H)(1)(a) and (b) of Form 10-Q.

<PAGE>

                     DIRECT BROADCASTING SATELLITE CORPORATION
                              CONDENSED BALANCE SHEETS
                               (Dollars in thousands)

 <TABLE>
<CAPTION>


                                                        DECEMBER 31,    JUNE 30,
                                                           1997         1998
                                                       ------------  -----------
                                                                     (Unaudited)
<S>                                                    <C>           <C>
ASSETS
Current Assets:
  Cash and cash equivalents. . . . . . . . . . . . . .    $      -     $     44
  Other current assets . . . . . . . . . . . . . . . .           7            7
                                                        -----------------------
Total current assets . . . . . . . . . . . . . . . . .           7           51
EchoStar III . . . . . . . . . . . . . . . . . . . . .      92,408       88,558
FCC authorizations . . . . . . . . . . . . . . . . . .      18,504       18,272
                                                        -----------------------
    Total assets . . . . . . . . . . . . . . . . . . .    $110,919     $106,881
                                                        -----------------------
                                                        -----------------------

LIABILITIES AND  STOCKHOLDER'S EQUITY
Current Liabilities:
  Trade accounts payable and accrued expenses. . . . .    $    545     $    375
  Advances from affiliates, net. . . . . . . . . . . .      30,601       32,708
  Current portion of notes payable . . . . . . . . . .       2,961        3,081
                                                        -----------------------
Total current liabilities. . . . . . . . . . . . . . .      34,107       36,164
Other notes payable, net of current portion. . . . . .      11,351       10,018
Notes payable to ECC and accumulated interest. . . . .      54,597       57,183
                                                        -----------------------
    Total liabilities. . . . . . . . . . . . . . . . .     100,055      103,365

Commitments and Contingencies

Stockholder's Equity:
    Common Stock, $0.01 par value, 1,000 shares
      authorized, issued and outstanding . . . . . . .           -            -
    Additional paid-in capital . . . . . . . . . . . .      16,324       16,324
    Accumulated deficit. . . . . . . . . . . . . . . .      (5,460)     (12,808)
                                                        -----------------------
Total stockholder's equity . . . . . . . . . . . . . .      10,864        3,516
                                                        -----------------------
    Total liabilities and stockholder's equity . . . .    $110,919     $106,881
                                                        -----------------------
                                                        -----------------------
 </TABLE>

              See accompanying Notes to Condensed Financial Statements.

                                          1

<PAGE>

                     DIRECT BROADCASTING SATELLITE CORPORATION
                         CONDENSED STATEMENTS OF OPERATIONS
                                   (In thousands)
                                    (Unaudited)

 
<TABLE>
<CAPTION>


                                                         THREE MONTHS ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                                         ---------------------------        -------------------------
                                                             1997         1998                1997            1998
                                                         ---------------------------        -------------------------

<S>                                                      <C>            <C>                 <C>             <C>
Revenue  . . . . . . . . . . . . . . . . . . . . . . .     $     -      $     -             $     -         $     -

Expenses:
  Depreciation and amortization. . . . . . . . . . . .           -        2,040                   -           4,082
  Interest expense . . . . . . . . . . . . . . . . . .       1,592        1,581               2,945           3,266
                                                         ---------------------------        -------------------------
Total expenses . . . . . . . . . . . . . . . . . . . .       1,592        3,621               2,945           7,348
                                                         ---------------------------        -------------------------
Loss before income taxes . . . . . . . . . . . . . . .      (1,592)      (3,621)             (2,945)         (7,348)
Income tax provision . . . . . . . . . . . . . . . . .           -            -                   -               -
                                                         ---------------------------        -------------------------
Net loss . . . . . . . . . . . . . . . . . . . . . . .     $(1,592)     $(3,621)            $(2,945)        $(7,348)
                                                         ---------------------------        -------------------------
                                                         ---------------------------        -------------------------
</TABLE>
 
              See accompanying Notes to Condensed Financial Statements.

                                          2

<PAGE>

                     DIRECT BROADCASTING SATELLITE CORPORATION
                         CONDENSED STATEMENTS OF CASH FLOWS
                                   (In thousands)
                                    (Unaudited)

 
<TABLE>
<CAPTION>


                                                                   SIX MONTHS ENDED JUNE 30,
                                                                   -------------------------
                                                                     1997            1998
                                                                   -------------------------

<S>                                                                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . .         $(2,945)        $(7,348)
Adjustments to reconcile net loss to net cash flows
  from operating activities:
  Depreciation and amortization. . . . . . . . . . . . . .               -           4,082
  Interest on notes payable to ECC added to principal. . .           2,907           2,586
  Changes in current assets and current liabilities:
    Other current assets . . . . . . . . . . . . . . . . .              (7)              -
    Accounts payable and accrued expenses. . . . . . . . .          (1,310)           (170)
                                                                   -------------------------
Net cash flows from operating activities . . . . . . . . .          (1,355)           (850)

CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for satellite systems under construction
  and other. . . . . . . . . . . . . . . . . . . . . . . .          (9,998)              -
                                                                   -------------------------
Net cash flows from investing activities . . . . . . . . .          (9,998)              -

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from affiliates, net. . . . . . . . . . . . . . .          11,352           2,107
Repayment of other notes payable . . . . . . . . . . . . .               -          (1,213)
                                                                   -------------------------
Net cash flows from financing activities . . . . . . . . .          11,352             894

Net decrease in cash and cash equivalents. . . . . . . . .              (1)             44
Cash and cash equivalents, beginning of period . . . . . .               1               -
                                                                   -------------------------
Cash and cash equivalents, end of period . . . . . . . . .         $     -         $    44
                                                                   -------------------------
                                                                   -------------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Capitalized interest, including amounts due to affiliates.         $ 5,014               -
The purchase price of DBSC was "pushed-down" by
  EchoStar Communications Corporation to DBSC
  as follows in the related purchase accounting:
    Satellite construction costs . . . . . . . . . . . . .          51,244               -
    FCC authorization. . . . . . . . . . . . . . . . . . .          16,648               -
    Notes payable to EchoStar, including accrued
      interest of $3,382 . . . . . . . . . . . . . . . . .         (49,382)              -
    Trade accounts payable and accrued expenses. . . . . .          (1,687)              -
    Other notes payable. . . . . . . . . . . . . . . . . .            (500)              -
    Additional paid-in capital . . . . . . . . . . . . . .         (16,323)              -
</TABLE>
 
              See accompanying Notes to Condensed Financial Statements.

                                          3

<PAGE>

                      DIRECT BROADCASTING SATELLITE CORPORATION
                       NOTES TO CONDENSED FINANCIAL STATEMENTS
                                     (UNAUDITED)

1.   ORGANIZATION AND BUSINESS ACTIVITIES

PRINCIPAL BUSINESS

     During 1994, EchoStar Communications Corporation ("ECC," and together with
its subsidiaries, "EchoStar") acquired approximately 40% of the outstanding
common stock of Direct Broadcasting Satellite Corporation ("Old DBSC"), a
Delaware corporation.  Old DBSC's principal assets included a Federal
Communications Commission ("FCC") conditional satellite permit and specific
orbital slot assignments for a total of 22 DBS frequencies.  Through December
1996, EchoStar advanced Old DBSC a total of $46 million in the form of notes
receivable to enable Old DBSC to make required payments under the EchoStar III
construction contract.  During January 1997, EchoStar consummated the merger of
Old DBSC with a wholly-owned subsidiary of ECC ("DBSC" or the "Company").  This
transaction was accounted for as a purchase and the excess of the purchase price
over the fair value of Old DBSC's tangible assets was allocated to Old DBSC's
FCC authorizations.  Upon consummation of the Merger, Old DBSC ceased to exist.

     EchoStar is a publicly-traded company on the Nasdaq National Market and its
operations include three interrelated business units:

     -    THE DISH NETWORK - a direct broadcast satellite ("DBS") subscription
          television service in the United States.  As of June 30, 1998,
          EchoStar had approximately 1.4 million DISH Network subscribers.

     -    ECHOSTAR TECHNOLOGIES CORPORATION ("TECHNOLOGY") - the design,
          manufacture, distribution and sale of DBS set-top boxes, antennae and
          other digital equipment for the DISH Network ("EchoStar Receiver
          Systems"), and the design, manufacture and distribution of similar
          equipment for direct-to-home ("DTH") projects of others
          internationally, together with the provision of uplink center design,
          construction oversight and other project integration services for
          international DTH ventures.

     -    SATELLITE SERVICES - the turn-key delivery of video, audio and data
          services to business television customers and other satellite users.
          These services include satellite uplink services, satellite
          transponder space usage, and other services.

     Since 1994, EchoStar has deployed substantial resources to develop the
"EchoStar DBS System."  The EchoStar DBS System consists of EchoStar's
FCC-allocated DBS spectrum, DBS satellites ("EchoStar I," "EchoStar II,"
"EchoStar III," and "EchoStar IV"), digital satellite receivers, digital
broadcast operations center, customer service facilities, and other assets
utilized in its operations.  EchoStar's principal business strategy is to
continue developing its subscription television service in the U.S. to provide
consumers with a fully competitive alternative to cable television service.

2.   SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles and with
the instructions to Form 10-Q and Article 10 of Regulation S-X for interim
financial information.  Accordingly, these statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included.  Operating results for the three and
six months ended June 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998.  For further
information, refer to the financial statements and footnotes thereto included in
the Company's Annual Report filed as Exhibit 99.3 to EchoStar Satellite
Broadcasting Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997.  Certain prior year amounts have been reclassified to conform
with the current year presentation.

                                          4

<PAGE>

                      DIRECT BROADCASTING SATELLITE CORPORATION
                       NOTES TO CONDENSED FINANCIAL STATEMENTS
                                     (UNAUDITED)

PURPOSE OF FINANCIAL STATEMENTS

     DBSC is not currently subject to the reporting requirements of Section 13
or 15(d) of the Securities and Exchange Act of 1934 (the "Exchange Act").
However, pursuant to the terms of an indenture between ESBC and First Trust
National Association dated March 25, 1996 (the "Indenture"), DBSC is required to
provide quarterly and annual reports comparable to that which would have been
required if DBSC were subject to the requirements of Section 13 or 15(d) of the
Exchange Act.  Since DBSC does not have a separate Commission File Number with
the Securities and Exchange Commission, DBSC has made these financial
statements, complete with Management's Narrative Analysis of Results of
Operations, publicly available.  These financial statements were prepared solely
to comply with the reporting requirements under the Indenture.  For further
information, refer to the consolidated financial statements and footnotes
thereto included in EchoStar's Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 1997.

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 for each reporting
period.  Actual results could differ from those estimates.

COMPREHENSIVE INCOME

     The Company adopted Statement of Financial Accounting Standards ("FAS") No.
130, "Reporting Comprehensive Income" ("FAS No. 130") effective as of the first
quarter of 1998.  FAS No. 130 establishes new rules for the reporting and
display of comprehensive income and its components, however it has no impact on
the Company's net income or stockholder's equity.  For the periods reported, the
Company's comprehensive income is equal to its net income.

3.   SUBSEQUENT EVENTS

     EchoStar IV was launched on May 8, 1998 from the Baikonur Cosmodrome, 
Kazakhstan and was originally expected to provide video, audio and data 
services to the continental United States, Alaska and Hawaii from the 
119DEG. West Longitude ("WL") orbital location.  Following launch and 
deployment of EchoStar IV, EchoStar I was expected to be relocated from its 
current position at 119DEG. WL to the 148DEG. WL orbital location.  As a result 
of anomalies described below, EchoStar IV has instead been moved to the 
148DEG. WL orbital location where it is expected to provide local, 
educational, foreign language and other niche service to customers in the 
Western United States.  EchoStar I and EchoStar II will remain at 119DEG. WL 
and will continue to provide DISH Network service without interruption or 
change.

     As previously announced, the south solar array on EchoStar IV did not
properly deploy, resulting in a reduction of power available to operate the
satellite.  While final evaluations have not been completed, it now appears
likely that this anomaly will limit EchoStar to operation of a maximum of 22
transponders on the satellite.  The number of available transponders will
decrease over time, but based on existing data, approximately 16 transponders
should be available for the full planned 12 year life of the satellite absent
additional failures.

     An unrelated anomaly discovered subsequent to June 30, 1998 has resulted in
the failure of four primary transponders (transponders 5, 6, 9 and 10), and two
spare transponders on the satellite. The cause of this anomaly has not yet been
established.  EchoStar recently received notification from the manufacturer of
the satellite, Lockheed Martin, that several transponders, in addition to those
which have failed, are not recommended for use until the root cause of the
anomaly has been determined and corrective procedures, if possible, are
implemented to avoid further failures.

                                          5

<PAGE>

                      DIRECT BROADCASTING SATELLITE CORPORATION
                       NOTES TO CONDENSED FINANCIAL STATEMENTS
                                     (UNAUDITED)

     While EchoStar IV is equipped with 32 transponders, EchoStar is only
licensed by the Federal Communications Commission ("FCC") to use 24 of the total
of 32 frequencies at the 148DEG. WL orbital location, including frequencies 5,
6, 9 and 10, which correspond to the failed transponders.  Consequently, while
power continues to be available to operate 22 transponders on the satellite, to
fully utilize the remaining available capacity of the satellite, EchoStar will
need to file an application with the FCC to obtain authorization to operate
transponders which correspond to frequencies which are not currently assigned to
EchoStar by the FCC.

     EchoStar will also need to obtain FCC approval to operate EchoStar IV at 
148DEG. WL on a permanent basis.  FCC rules require that DBS satellites 
positioned at 148DEG. WL also provide service to Alaska and Hawaii.  In April 
1998, EchoStar received a waiver from the FCC with respect to this obligation 
because EchoStar planned to provide DBS service to those states via EchoStar 
IV from the 119DEG. WL orbital location. As a result of moving EchoStar IV to 
the 148DEG. WL orbital location, EchoStar will not be able to provide DBS 
service to Alaska and Hawaii from 119DEG. WL and probably will not be able to 
fulfill its original obligation to provide DBS service to Alaska and Hawaii 
from 148DEG. WL either.  Consequently, EchoStar will probably need to obtain a 
waiver of its obligation to provide service to Alaska and Hawaii in 
connection with its application to operate EchoStar IV at 148DEG. WL on a 
permanent basis.

     While the FCC has typically shown flexibility when satellite failures 
occur, there can be no assurance that EchoStar's request will be granted. 
Further, it is likely that EchoStar will encounter opposition from certain 
parties, including those attempting to enforce the obligation to serve Alaska 
and Hawaii.  To minimize potential opposition, EchoStar intends to enter into 
an agreement with a third-party to provide DTH programming services to Alaska 
and Hawaii on an interim basis on an fixed satellite service ("FSS") 
satellite. EchoStar also intends to construct and launch a replacement 
satellite at 119DEG. WL which would provide service to Alaska and Hawaii.  If 
the FCC were to deny EchoStar's request, EchoStar's ability to provide DBS 
service from EchoStar IV would be significantly reduced.

     EchoStar will file an insurance claim with respect to EchoStar IV in the 
near future.  The Company expects to use insurance proceeds, together with 
other funds, to launch a new DBS satellite to its 119DEG. WL orbital location 
in approximately three years or less.  EchoStar also expects to file an 
insurance claim with respect to EchoStar III, which was launched October 5, 
1997.  Certain of EchoStar III's electric power converters ("EPC") are 
operating at temperatures slightly outside of engineering specifications.  
The high EPC temperatures may require certain transponders on EchoStar III to 
be turned off for several weeks during summer and winter solstice seasons to 
avoid overheating.

     Based on information currently available, management has evaluated the
potential financial statement impact of these satellite anomalies in accordance
with its stated accounting policies.  The Company has not completed its
assessment of the impairment of these satellites, but currently believes
insurance proceeds will be sufficient to offset any write-downs of its satellite
assets that are required because of lost transmission capacity caused by these
anomalies.  However, no assurance can be provided as to the ultimate amount that
may be received from these insurance claims.  EchoStar will continue to evaluate
the operating performance of EchoStar III and EchoStar IV and may modify its
loss assessment as new events or circumstances develop.  EchoStar does not
maintain insurance for lost profit opportunity.

                                          6

<PAGE>

ITEM 2.   MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1997.

     Direct Broadcasting Satellite Corporation ("DBSC") is the Federal
Communications Commission ("FCC") licensee and owner of EchoStar III but has no
operations as a stand-alone entity.  EchoStar III is an integral part of the
DISH Network and DBSC is dependent on EchoStar Communications Corporation
("ECC") and ECC's other subsidiaries for all necessary funding and all
management and administrative functions.  Depreciation on EchoStar III totaled
$2 million for the three months ended June 30, 1998.  EchoStar III was placed
into service in January 1998.  Interest expense totaled $2 million and
$1 million for the three months ended June 30, 1998 and 1997, respectively.
Interest expense represents interest incurred on the notes payable to ECC.

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1997.

     Depreciation on EchoStar III totaled $4 million for the six months ended
June 30, 1998.  Interest expense totaled $3 million for the six months ended
June 30, 1998 and 1997.

                                          7