<PAGE>


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

     /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.


                                       OR

        / / TRANSITION REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE
                          SECURITIES EXCHANGE ACT 1934
        FROM THE TRANSITION PERIOD FROM ______________ TO ______________


                        COMMISSION FILE NUMBER 333-20307

                           POLAND COMMUNICATIONS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

              NEW YORK                                   06-1070447
   (State or Other Jurisdiction of                      (IRS Employer
    Incorporation of Organization)                    Identification No.)

        ONE COMMERCIAL PLAZA
        HARTFORD, CONNECTICUT                               06103

(Address of Principal Executive Officers)                 (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:     (860) 549-1674

Indicate by check (X) whether the registrant (1) has filed all reports required
to be fled 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 __________

The number of shares outstanding of Poland Communications, Inc.'s common stock
as of June 30, 1998, was:

        Common Stock                                         18,948



                                       1

<PAGE>


                           POLAND COMMUNICATIONS, INC.

                                 FORM 10-Q INDEX

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

<TABLE>
<CAPTION>

                                                                                             PAGE NO.
<S>      <C>                                                                                 <C>
PART I   FINANCIAL INFORMATION

         Item 1.   Financial Statements
                   Poland Communications, Inc.
                                 Consolidated Balance Sheets.................................  3-4
                                 Consolidated Statements of Operations.......................  5
                                 Consolidated Statements of Cash Flows......................   6

                                 Notes to Consolidated Financial Statements..................  7-8

                    Poland Cablevision (Netherlands) B.V.
                                  Consolidated Balance Sheets................................  9-10
                                  Consolidated Statements of Operations......................  11
                                  Consolidated Statements of Cash Flows......................  12

                                  Notes to Consolidated Financial Statements.................  13-14

         Item 2.    Management's Discussion and Analysis of
                    Financial Condition and Results of Operations............................. 15-20

         Item 3.    Quantitative and Qualitative Disclosures
                    About Market Risk......................................................... 21

PART II  OTHER INFORMATION

         Item 1.    Legal Proceedings......................................................... 22

         Item 2.    Changes in Securities and Use of Proceeds................................. 22

         Item 3.    Defaults Upon Senior Securities........................................... 22

         Item 4.    Submission of Matters to a Vote of Security Holders....................... 22

         Item 5.    Other Information......................................................... 22

         Item 6.    Exhibits and reports on Form 8-K.......................................... 22

         Signature Page....................................................................... 23

</TABLE>


                                       2

<PAGE>

                                POLAND COMMUNICATIONS, INC.
                                CONSOLIDATED BALANCE SHEETS

                                        (UNAUDITED)

                                           ASSETS

<TABLE>
<CAPTION>

                                                            June 30,         December 31,
                                                              1998              1997
                                                            --------         ------------
                                                                  (in thousands)
<S>                                                         <C>              <C>

Current assets:
   Cash and cash equivalents                                $   3,552           $  25,750
   Accounts receivable, not of allowances for doubtful
     accounts $1,153,000 in 1998 and $766,000 in 1997           2,754               2,120
   Due from affiliate                                           3,351               2,353
   Other current assets                                         8,174               2,233
                                                            ---------           ---------
     Total current assets                                      17,831              32,456
                                                            ---------           ---------

Property, plant and equipment:
   Cable television system assets                             155,132             134,456
   Construction in progress                                     4,537               1,904
   Vehicles                                                     1,976               2,032
   Other                                                        5,479               3,784
                                                            ---------           ---------
                                                              167,124             142,189
     Less accumulated depreciation                            (40,690)            (33,099)
                                                            ---------           ---------
     Net property, plant and equipment                        126,434             109,090

Inventories for construction                                   10,704               8,153
Intangibles, net                                               32,983              33,440
Notes receivable from affiliates                                7,233               6,472
Investment in affiliated companies                                141                 172
                                                            ---------           ---------
     Total assets                                           $ 195,326           $ 189,783
                                                            ---------           ---------
                                                            ---------           ---------

</TABLE>


          See accompanying notes to unaudited consolidated financial statements.

                                       3

<PAGE>

                                POLAND COMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                        (UNAUDITED)

                       LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)/EQUITY



<TABLE>
<CAPTION>
                                                                      June 30,            December 31,
                                                                        1998                  1997            
                                                                      --------            ------------
<S>                                                               <C>                  <C>
                                                                             (in thousands)
Current liabilities:
     Accounts payable and accrued expenses                           $ 11,939               $  5,662
     Accrued interest                                                   2,175                  2,175
     Deferred revenue                                                     925                  1,257
     Income taxes payable                                               2,441                  1,765
     Other current liabilities                                            388                    733
                                                                     --------               --------
          Total current liabilities                                    17,868                 11,592

Notes payable (note 8)                                                138,728                130,110
                                                                     --------               --------
          Total liabilities                                           156,596                141,702
                                                                     --------               --------

Minority interest                                                       4,920                  4,713

Redeemable preferred stock (liquidation value $85,000,000;
  8,500 shares authorized, issued and outstanding)                     41,467                 39,149

Commitments and contingencies (note 9)

Stockholders' (deficiency)/equity
     Common stock, $.01 par value, 24,051 shares authorized; 18,948
        shares issued and outstanding                                       1                      1
     Paid-in capital                                                   60,267                 62,584
     Cumulative translation adjustment                                  1,351                      -
     Accumulated deficit                                              (69,276)               (58,366)
                                                                     ---------              --------
         Total stockholders'(deficiency)/equity                        (7,657)                 4,219
                                                                     ---------              --------

         Total liabilities and stockholders' (deficiency)/equity      $195,326              $189,783
                                                                     ---------              --------
                                                                     ---------              --------
</TABLE>


          See accompanying notes to unaudited consolidated financial statements.



                                       4     

<PAGE>


                    POLAND COMMUNICATION, INC. 
                 CONSOLIDATED STATEMENTS OF OPERATION 

                           (UNAUDITED)

<TABLE>
<CAPTION>

                                                           Three months ended June 30,               Six months ended June 30,
                                                           ---------------------------               --------------------------
                                                              1998             1997                     1998            1997

                                                           ----------       ----------               ----------      ----------
<S>                                                        <C>                <C>                    <C>             <C>
                                                                            (in thousands, except per share data)
Cable television revenue                                   $   12,478         $   8,776              $   24,571      $   16,284

Operating expenses:

  Direct opening expenses                                       5,791             2,263                   9,533           4,363

  Selling general and administrative expenses                   4,206            11,252                   8,658          14,063

  Depreciation and amortization                                 5,085             3,069                   9,920           6,519
                                                           -----------        ----------             ------------    -----------
    Total operating expenses                                   15,082            16,584                  28,111          24,945
                                                           -----------        ----------             ------------    -----------
    Operating loss                                             (2,604)           (7,808)                 (3,540)         (8,661)

Interest and investment income                                    310               863                      703          2,030

Interest expense                                               (3,538)           (4,382)                  (7,070)        (7,587)

Foreign exchange loss                                            (301)             (117)                    (234)          (422)
                                                           -----------        ----------             ------------    -----------

  Loss before income taxes and 
  minority interest                                            (6,133)          (11,444)                 (10,141)       (14,640)

Income tax (expense)/benefit                                     (229)              159                     (562)          (112)
Minority interest                                                 (58)            2,123                     (207)         2,599
                                                           -----------        ----------             ------------    -----------


  Net loss                                                     (6,420)           (9,162)                 (10,910)       (12,153)


Accretion of redeemable preferred stock                        (1,159)           (1,048)                  (2,318)        (2,028)
                                                           -----------        ----------             ------------    -----------

Net loss aplicable to holders of common stock              $   (7,579)        $ (10,210)             $   (13,228)    $  (14,181)
                                                           -----------        ----------             ------------    -----------
                                                           -----------        ----------             ------------    -----------

Basic an diluted loss per common share                     $  (399.99)        $ (538.84)             $   (698.12)    $  (748.42)
                                                           -----------        ----------             ------------    -----------
                                                           -----------        ----------             ------------    -----------

</TABLE>



        See accompanying notes to unaudited consolidated financial statements.




                                       5 



<PAGE>



                                POLAND COMMUNICATIONS, INC.
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             Six months ended June 30,
                                                                             ------------------------
                                                                              1998               1997
                                                                              ----               ----
                                                                                  (in thousands)
<S>                                                                       <C>                <C>

Cash flows from operating activities:
     Net loss                                                              $ (10,910)         $ (12,153)
     Adjustment to reconcile net loss to
      net cash used in operating activities:
         Minority interest                                                       207             (2,599)
         Depreciation and amortization                                         9,920              6,519
         Non-cash stock option compensation expense                              -                7,444
         Changes in operating assets and liabilities:
            Accounts receivable                                                 (634)              (272)
            Other current assets                                              (5,852)             1,252
            Accounts payable                                                   5,685             (2,067)
            Accrued interest                                                     -                1,070
            Amounts due to affiliates                                           (998)              (191)
            Deferred revenue                                                    (346)              (223)
            Income taxes payable                                                 676               (971)
            Other current liabilities                                           (345)            (1,133)
                                                                             --------           --------
               Net cash used in operating activities                          (2,597)            (3,324)
                                                                             --------           --------
Cash flows from investing activities:
            Construction and purchase of property, plant and equipment       (24,497)           (14,463)
            Proceeds from sale of investment securities                          -               25,669
            Other investments                                                     21             (1,221)
            Notes receivable from affiliate                                     (761)            (9,060)
            Purchase of intangibles                                              (49)               -
            Purchase of subsidiaries, net of cash received                      (783)           (10,976)
                                                                             --------           --------
               Net cash used in investing activities                          (26,069)           (10,051)
                                                                             --------           --------
Cash flows from financing activities:                                         
            Proceeds from notes payable                                         6,500             2,200
            Costs to obtain loans                                                -               (1,275)
            Repayments to affiliates                                             -                3,224
            Repayment of notes payable                                           (32)              (562)
                                                                             --------           ---------
               Net cash provided by financing activities                       6,468              3,587
                                                                             --------           ---------
               Net decrease in cash and cash equivalents                     (22,198)            (9,788)
Cash and cash equivalents at beginning of period                              25,750             63,483
                                                                             --------           ---------
Cash and cash equivalents at end of period                                  $  3,552          $  53,695
                                                                             --------           ---------
                                                                             --------           ---------
Supplemental cash flow information:                                          
            Cash paid for interest                                            $6,476             $6,619
                                                                             --------           ---------
                                                                             --------           ---------
            Cash paid for income taxes                                          $395             $1,132
                                                                             --------           ---------
                                                                             --------           ---------

</TABLE>


         See accompanying notes to unaudited consolidated financial statements.

                                       6



<PAGE>



                           POLAND COMMUNICATIONS, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1998
                                   (UNAUDITED)

1.    BASIS OF PRESENTATION

The information furnished by Poland Communications, Inc. and subsidiaries ("PCI"
or the "Company") has been prepared in accordance with United States generally
accepted accounting principles and the rules and regulations of the Securities
and Exchange Commission (the "SEC"). Certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to these rules and regulations. The accompanying consolidated
balance sheets, statements of operations and statements of cash flows are
unaudited but in the opinion of management reflect all adjustments (consisting
only of items of a normal recurring nature) which are necessary for a fair
statement of the Company's consolidated results of operations and cash flows for
the interim periods and the Company's financial position as of June 30, 1998.
The accompanying unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the notes
thereto included in the Company's 1997 Annual Report on Form 10-K filed with the
SEC (the "1997 Annual Report"). The interim financial results are not
necessarily indicative of the results of the full year.


RECLASSIFICATIONS

Certain amounts have been reclassified in the prior period unaudited 
consolidated financial statement to conform to the 1998 unaudited consolidated
financial statement presentation.

3.    ADOPTION OF NEW ACCOUNTING STANDARD

The Company has adopted Statement of Financial Accounting Standards ("SFAS") 
No. 130, "Reporting Comprehensive Income", which establishes standards for 
the reporting and presentation of comprehensive income and its components in 
a full set of financial statements. Comprehensive income/(loss) generally 
encompasses all changes in stockholders' equity (except those arising from 
transactions with owners) and includes net income/(loss), net unrealized 
capital gains or losses on available for sale securities and foreign currency 
translation adjustments. The Company's comprehensive loss differs from net 
loss applicable to common stockholders only by the foreign currency 
translation adjustment charged to stockholders' equity for the period. 
Comprehensive loss for the six-month periods ended June 30, 1998 and 1997 was 
approximately $11,877,000 and $14,181,000, respectively.

4.    FOREIGN CURRENCY TRANSLATION

Effective January 1, 1998, Poland was no longer deemed to have a highly
inflationary economy. In accordance with this change, the Company established a
new functional currency basis for its Polish subsidiaries for non-monetary items
in accordance with guidelines established within EITF Issue 92-4, "Accounting
for a Change in Functional Currency When an Economy Ceases to Be Considered
Highly Inflationary." That basis is computed by translating the historical
reporting currency amounts of non-monetary items into the local currency at
current exchange rates.


5.    LOSS PER SHARE

As noted in the 1997 Annual Report, the Company adopted SFAS No. 128, "Earnings
Per Share". The statement required that all prior period earnings per share
calculations including interim financial statements be restated to conform with
the provisions of this statement. Basic and diluted loss per ordinary share is
based on the weighted average number of ordinary shares outstanding of 18,948
for both the three-month and the six-month periods ended June 30, 1998 and 1997.

6.    ACQUISITION


                                       7

<PAGE>

On April 6, 1998, a subsidiary of the Company acquired certain cable television
assets of Tekaso Telewizja Kablowa for an aggregate consideration of
approximately $972,000. The acquisition was accounted for using the purchase
method with the purchase price allocated among the assets acquired based upon
their fair values at the date of acquisition and any excess to goodwill. The
purchase price did not materially exceed the fair value of the assets acquired.


7.    RELATED PARTY TRANSACTION

On June 3, 1998, the Company signed an agreement with Sereke Holding B.V. 
("Sereke"), a subsidiary of @Entertainment, Inc., the Company's parent, under 
which PCI will pay Sereke a fee of $3.50 per cable subscriber per month for 
the procurement and delivery of third party programming. PCI paid Sereke 
approximately $8,300,000 under this agreement relating to the period from 
June 1,1998 to September 30, 1998. As such, the portion of the payment 
relating to the third quarter of 1998 of $6,711,000 is reported as other 
current assets at June 30, 1998.

8.    CREDIT FACILITY

On June 9, 1998, the Company drew down on its credit facility with American 
Bank in Poland S.A. (the "AmerBank Credit Facility") for the full amount of 
$6,500,000. The AmerBank Credit Facility is secured by a pledge of the shares 
of certain subsidiaries of the Company and all advances must be repaid by 
August 30, 1999. Interest is based on LIBOR plus 3% and is due quarterly.

9.    COMMITMENTS AND CONTINGENCIES

Programming Commitments
-----------------------
The Company has entered into programming agreements with certain third party 
content providers. The programming agreements have terms which range from one 
to five years and require that payments for programs be paid either at a 
fixed amount or based upon the number of subscribers connected to the system 
each month. At June 30, 1998, the Company had a minimum commitment under such 
agreements of approximately $288,000 for the remainder of 1998, $576,000 in 
1999, $576,000 in 2000, and $96,000 in 2001 and thereafter. For the six 
months ended June 30, 1998 and 1997 the Company incurred programming fees of 
approximately $3,684,000 and $1,729,000 respectively, pursuant to these 
agreements.

Litigation and Claims
---------------------
From time to time, the Company is subject to various claims and suits arising
out of the ordinary course of business. While the ultimate result of all such
matters is not presently determinable, based upon current knowledge and facts,
management does not expect that their resolution will have a material adverse
effect on the Company's consolidated financial position or results of
operations.


10.   SUBSEQUENT EVENTS

Subsequent to June 30, 1998, the Company's parent, @ Entertainment, Inc.,
purchased the remaining minority interest in a subsidiary of the Company for
aggregate consideration of $10.6 million.


                                       8

<PAGE>


                             POLAND CABLEVISION (NETHERLANDS) B.V.
                                  CONSOLIDATED BALANCE SHEETS
          
                                           (UNAUDITED)
                                    
                                             ASSETS


<TABLE>
<CAPTION>
                                                                       June 30,         December 31,
                                                                         1998                1997
                                                                       --------        -------------
                                                                                (in thousands)
<S>                                                                     <C>                 <C>

Current assets:
     Cash                                                              $  1,808             $   4,951
     Accounts receivable, net of allowances of $751,000 in 1998      
       and $608,000 in 1997                                               1,710                 1,222
     Other current assets
       Total current assets                                                 913                 1,283
                                                                       ---------           ----------
                                                                          4,431                 7,456
                                                                       ---------           ----------
     Property, plant and equipment:
       Cable television system assets                                   123,048               108,475
       Construction in progress                                           1,800                   -
       Vehicles                                                           1,637                 1,619
       Other                                                              4,647                 3,246
                                                                       ---------           ----------
                                                                        131,132               113,340
           Less accumulated depreciation                                (33,180)              (27,378)
                                                                       ---------           ----------
           Net property, plant and equipment                             97,952                85,962

     Inventories for construction                                         7,864                 5,887
     Intangibles, net                                                     9,480                 9,887
                                                                       --------            ----------

                Total assets                                          $ 119,727             $ 109,192
                                                                       --------            ----------
                                                                       --------            ----------
</TABLE>


        See accompanying notes to unaudited consolidated financial statements.


                                      9

<PAGE>



                     POLAND CABLEVISION (NETHERLANDS) B.V.
                   CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (UNAUDITED)

                   LIABILITIES AND STOCKHOLDERS' DEFICIENCY

<TABLE>
<CAPTION>

                                                          June 30,     December 31,
                                                            1998           1997
                                                        ------------  --------------
                                                              (in thousands)
<S>                                                    <C>              <C>
Current liabilities:
    Accounts payable and accrued expenses               $   7,975        $   2,574
    Deferred revenue                                          402              609
    Other current liabilities                                 288               18
                                                        ----------       ----------
        Total current liabilities                           8,665            3,201

Due to affiliate                                           17,061           14,505
Notes payable to affiliates                               145,084          134,509
                                                        ----------       ----------
        Total liabilities                                 170,810          152,215
                                                        ----------       ----------

Minority interest                                           1,319            2,523

Stockholders' deficiency:
    Capital stock par value, $0.50 par; 200,000 shares
        authorized, issued and outstanding                    100              100
    Paid-in capital                                         4,662            4,713
    Cumulative translation adjustment                       1,057                -
    Accumulated deficit                                   (58,221)         (50,359)
                                                        ----------       ----------
        Total stockholders' deficiency                    (52,402)         (45,546)
                                                        ----------       ----------

        Total liabilities and stockholders' deficiency   $ 119,727        $ 109,192
                                                        ----------       ----------
                                                        ----------       ----------
</TABLE>


             See accompany notes to unaudited consolidated financial statements.



                                          10

<PAGE>

                          POLAND CABLEVISION (NETHERLANDS) B.V.
                          CONSOLIDATED STATEMENTS OF OPERATIONS

                                      (UNAUDITED)
<TABLE>
<CAPTION>

                                                        Three months ended June 30,   Six months ended June 30, 
                                                        ---------------------------  ---------------------------
                                                             1998         1997            1998         1997
                                                        ------------- -------------  ------------- -------------
                                                                 (in thousands, except per share data)
<S>                                                     <C>           <C>            <C>           <C>
Cable television revenue                                 $    8,525    $    7,101     $   16,727    $   13,380

Operating expenses:
 Direct operating expenses                                    4,159         1,813          6,700         3,535
 Selling, general and administrative expenses                 3,715         6,097          6,494         8,249
 Depreciation and amortization                                3,218         2,205          6,314         4,921
                                                        ------------- -------------  ------------- -------------
  Total operating expenses                                   11,092        10,115         19,508        16,705
                                                        ------------- -------------  ------------- -------------

  Operating loss                                             (2,567)       (3,014)        (2,781)       (3,325)
 
Interest income                                                  46            33             74            90
Interest expense                                             (3,204)       (2,711)        (6,244)       (5,410)
Foreign exchange gain (loss)                                     42          (315)            92          (775)
                                                        ------------- -------------  ------------- -------------
  Loss before income taxes and minority interest             (5,683)       (6,007)        (8,859)       (9,420)

Income tax expense                                             (107)          (56)          (209)         (105)
Minority interest                                               928           539          1,206           761
                                                        ------------- -------------  ------------- -------------
  Net loss                                               $   (4,862)   $   (5,524)    $   (7,862)   $   (8,764)
                                                        ------------- -------------  ------------- -------------
                                                        ------------- -------------  ------------- -------------
  Basic and diluted net loss per common share            $   (24.31)   $   (27.62)    $   (39.31)   $   (43.82)
                                                        ------------- -------------  ------------- -------------
                                                        ------------- -------------  ------------- -------------


</TABLE>


    See accompanying notes to unaudited consolidated financial statements.

                                      11

<PAGE>


                    POLAND CABLEVISION (NETHERLANDS) B.V.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (UNAUDITED)


<TABLE>
<CAPTION>

                                                                     Six months ended June 30,  
                                                                  ------------------------------
                                                                       1998             1997
                                                                  -------------      -----------
                                                                          (in thousands)
<S>                                                                  <C>                   <C>  
Cash flows from operating activities:
   Net loss                                                       $   (7,862)        $   (8,764)
   Adjustments to reconcile net loss to
    net cash provided by operating activities:
   Minority interest                                                  (1,206)              (761)
    Depreciation and amortization                                       6,314             4,921 
    Interest expense added to notes payable
     to affiliates                                                      6,237             5,438 
    Changes in operating assets and liabilities:
     Accounts receivable                                                 (488)               83 
     Other current assets                                                 385              (149)
     Accounts payable                                                   5,401              (233)
     Deferred revenue                                                    (207)             (407)
     Amounts due to affiliates                                          2,488             7,389 
     Other current liabilities                                            270                80 
                                                                   ----------          ---------
      Net cash provided by operating activities                        11,332             7,597 
                                                                   ----------          ---------

Cash flows from investing activities:
   Construction and purchase of property, plant and equipment         (18,713)          (12,102)
   Purchase of intangible assets                                          (49)             (691)
   Other investments                                                     --                (115)
                                                                   ----------           --------
    Net cash used in investing activities                             (18,762)          (12,908)
                                                                   ----------          ---------

Cash flows from financing activities:
    Proceeds from borrowings from affiliates                             4,338             2,200
    Dividend to parent                                                     (51)             --  
                                                                   -----------           -------
   Net cash provided by financing activities                             4,287             2,200
                                                                   -----------           -------
   Net decrease in cash                                                 (3,143)           (3,111)
  Cash at beginning of the period                                        4,951             7,015 
                                                                   -----------           --------
  Cash at end of the period                                        $     1,808           $ 3,904 
                                                                   -----------           --------
                                                                   -----------           --------

Supplemental cash flow information:
   Cash paid for interest                                          $        57           $   140 
                                                                   -----------           --------
                                                                   -----------           --------
   Cash paid for income taxes                                      $       177           $   104 
                                                                   -----------           --------
                                                                   -----------           --------


</TABLE>


    See accompanying notes to unaudited consolidated financial statements.


                                      12


<PAGE>



                      POLAND CABLEVISION (NETHERLANDS) B.V.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1998
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

Financial information is included for Poland Cablevision (Netherlands) B.V. 
and subsidiaries ("PCBV") as PCBV is a guarantor of PCI's 9 7/8% Senior Notes 
due 2003 and 9 7/8% Series B Senior Notes due 2003 (collectively, the "PCI 
Notes"). The information furnished by PCBV has been prepared in accordance 
with United States generally accepted accounting principles and the rules and 
regulations of the Securities and Exchange Commission ("SEC"). Certain 
information and footnote disclosures normally included in annual financial 
statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted pursuant to these rules and 
regulations. The accompanying consolidated balance sheets, statements of 
operations and statements of cash flows are unaudited but in the opinion of 
management reflect all adjustments (consisting only of items of a normal 
recurring nature) which are necessary for a fair statement of PCBV's 
consolidated results of operations and cash flows for the interim periods and 
PCBV's financial position as of June 30, 1998. The accompanying unaudited 
consolidated financial statements should be read in conjunction with the 
audited consolidated financial statements and the notes thereto included in 
PCI's 1997 Annual Report on Form 10-K filed with the SEC (the "1997 PCI 
Annual Report"). The interim financial results are not necessarily indicative 
of the results of the full year.

  RECLASSIFICATIONS

Certain amounts have been reclassified in the prior period unaudited 
consolidated financial statement to conform to the 1998 unaudited 
consolidated financial statement presentation.

3.   ADOPTION OF NEW ACCOUNTING STANDARD

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
130, "Reporting Comprehensive Income", which establishes standards for the
reporting and presentation of comprehensive income and its components in a full
set of financial statements. Comprehensive income/(loss) generally encompasses
all changes in stockholders' equity (except those arising from transactions with
owners) and includes net income/(loss), net unrealized capital gains or losses
on available for sale securities and foreign currency translation adjustments.
PCBV's comprehensive loss differs from net loss only by the foreign currency
translation adjustment charged to stockholders' equity for the period.
Comprehensive loss for the six-month periods ended June 30, 1998 and 1997 was
$6,805,000 and $8,764,000, respectively.

4.    FOREIGN CURRENCY TRANSLATION

Effective January 1, 1998, Poland was no longer deemed to have a highly
inflationary economy. In accordance with this change, the Company established a
new functional currency basis for its Polish subsidiaries for non-monetary items
in accordance with guidelines established within EITF Issue 92-4, "Accounting
for a Change in Functional Currency When an Economy Ceases to Be Considered
Highly Inflationary." That basis is computed by translating the historical
reporting currency amounts of non-monetary items into the local currency at
current exchange rates.

5.    LOSS PER SHARE

As noted in the 1997 PCI Annual Report, the Company adopted SFAS No. 128,
"Earnings Per Share". The statement required that all prior period earnings per
share calculations including interim financial statements be restated to conform
with the provisions of this statement. Basic and diluted loss per ordinary share
is based on the weighted average number of ordinary shares outstanding of
200,000 for both the three-month and the six-month periods ended June 30, 1998
and 1997.


                                       13

<PAGE>

6.    ACQUISITIONS

On April 6, 1998, PCBV acquired certain cable television assets of Tekaso
Telewizja Kablowa for an aggregate consideration of approximately $972,000. The
acquisition was accounted for using the purchase method with the purchase price
allocated among the assets acquired based upon their fair values at the date of
acquisition and any excess to goodwill. The purchase price did not materially
exceed the fair value of the assets acquired.

7.    NET ASSET TRANSFER

On April 1, 1998, PCBV purchased substantially all of the assets and 
liabilities of one of PCI's subsidiaries for consideration of 10,000 PLN 
(approximately $2,900). The transfer was accounted for at historical cost in
a manner similar to a pooling of interests. The approximately $51,000 
difference between (i) the amount of cash disbursed and the fair value of the
liabilities assumed and (ii) the historical cost of the net liabilities 
acquired, was accounted for as a capital transaction.


                                       14

<PAGE>


   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

The following discussion and analysis provides information concerning the
results of operations and financial condition of the Company. Such discussion
and analysis should be read in conjunction with the accompanying unaudited
consolidated financial statements of the Company. Additionally, the following
discussion and analysis should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
audited consolidated financial statements included in Part II of the Company's
1997 Annual Report. The following discussion focuses on material trends, risks
and uncertainties affecting the results of operations and financial condition of
the Company.

Certain statements in this Quarterly Report on Form 10-Q constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, that are not historical facts but rather reflect
the Company's current expectations concerning future results and events. The
words "believes," "expects," "intends," "plans," "anticipates," "likely," "will"
and similar expressions identify such forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause the actual results, performance or
achievements of the Company (or entities in which the Company has interests), or
industry results, to differ materially from future results, performance or
achievements expressed or implied by such forward-looking statements.

Such risks, uncertainties and other factors include, among others: general
economic and business conditions and industry trends; the regulatory and
competitive environment of the industries in which the Company, and the entities
in which the Company has interests, operate; uncertainties inherent in new
business strategies, new product launches and development plans; rapid
technological changes; the acquisition, development and/or financing of
telecommunications networks and services; the development and provision of
programming for new television and telecommunications technologies; the
continued strength of the multi-channel video programming distribution industry;
future financial performance, including availability, terms and deployment of
capital; the ability of vendors to deliver required equipment, software and
services; availability of qualified personnel; changes in, or failure or
inability to comply with, government regulations; changes in the nature of key
strategic relationships with joint ventures; competitor responses to the
Company's products and services; the overall market acceptance of such products
and services, including acceptance of the pricing of such products and services;
acquisition opportunities: and other factors.

Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this Quarterly
Report on Form 10-Q. The Company undertakes no obligation to publicly release
the result of any revisions to these forward-looking statements which may be
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events, conditions or circumstances.

OVERVIEW

The Company continues to operate the largest cable television system in 
Poland with approximately 1,547,000 homes passed and approximately 871,000 
total subscribers as at June 30, 1998. The Company continues to realize 
subscriber growth through a combination of increased penetration, new network 
build-out and acquisitions. In addition, management believes that the 
offering of the Wizja TV programming platform on its cable television 
networks, which commenced on June 5, 1998, will increase the number of 
subscribers and support the increase in revenue per subscriber.

Having established itself as the leading cable television service provider in
Poland, the Company continues to focus its efforts toward the strategic
objective of increasing cash flow and enhancing the value of its cable networks.
To accomplish this objective, the Company's business and operating strategy in
the cable television business is to (i) provide compelling programming, (ii)
increase pricing and maximize revenue per cable subscriber, (iii) expand its
regional clusters, (iv) increase subscriber penetration, and (v) realize
additional operating efficiencies.

During the first half of 1998, management has completed or is in the process of
completing several strategic actions in support of this business and operating
strategy. On June 5, 1998, the Company began providing the Wizja TV programming
platform, with its initial eleven channel primarily Polish-language programming,
to its cable subscribers. Management believes that this selection of
high-quality Polish-language programming will provide it with a significant
competitive advantage in increasing its cable subscriber penetration rates. The
Company has implemented a pricing strategy designed to increase revenue per
subscriber and to achieve real profit margin increases in U.S. dollar terms. The
Company intends to increase the monthly price for the Basic Tier service twice
in the next six months and premium channels such as Wizja 1, the HBO Poland 
service (a Polish-language version of HBO's premium movie channel) and Canal+ 
will each be offered to cable customers for an additional monthly charge. The 


                                       15

<PAGE>


Company expects that it may continue to experience increases in its churn rate
above historical levels during the implementation of its current pricing
strategy, however, management believes the Company will be able to successfully
command higher prices while maintaining relatively low annual cable television
churn rates as a result of its customer service standards, the technical quality
of its networks and the broad selection of quality programming.

The Company continues to expand the coverage areas of its regional clusters,
both through selected build-out and acquisitions. During the first half of 1998,
the Company focused its build-out primarily in areas where it could fill-in and
expand existing clusters. Additionally, the Company acquired several smaller 
cable television operators.

The Company has been able to realize additional operating efficiencies during 
the first half of 1998 through the centralization of subscriber management 
and customer support services in the Call Center. The Call Center became 
operational during the first six months of 1998 for cable customers in the 
Katowice regional cluster and is expected to be operational for all cable 
customers by the end of 1998. The Company is also in the process of 
installing an integrated management information system for both its billing 
and accounting systems, which is designed to further improve employee 
productivity and customer service for its cable business.

Historically, the cable networks the Company has acquired have had lower
operating margins than the Company's existing operations. Upon consummation of
an acquisition, the Company seeks to achieve operating efficiencies and reduce
operating costs by rationalizing the number of headends and reducing headcount,
among other things. The Company generally has been able to manage its acquired
cable television networks with experienced personnel from one of its existing
regional clusters and reduce the technical personnel necessary to operate
acquired networks after connecting the networks to the Company's existing
headends, or, if required, rebuilding the acquired networks to the required
technical standards. In part due to these efforts, the Company has generally
been able to increase the operating margins in its acquired systems, although
there can be no assurance that it will be able to continue to do so.

The Company's revenues have been and will continue to be derived primarily 
from monthly subscription fees for cable television services and one-time 
installation fees for connection to its cable television networks. The 
Company charges cable subscribers fixed monthly fees for their choice of 
service tiers and for other services, such as premium channels, tuner rentals 
and additional outlets, all of which are included in monthly subscription 
fees. The Company currently offers broadcast, intermediate (in limited areas) 
and basic tiers of cable service. At June 30, 1998 approximately 76% of the 
Company's subscribers received the Company's basic tier. During the six 
months ended June 30, 1998, approximately 93% of the Company's revenue was 
derived from monthly subscription fees compared to approximately 87% during 
the six months ended June 30, 1997. The Company's revenue performance in the 
first half of 1998 was generally strong with 51% growth in revenues for the 
six months ended June 30, 1998 as compared to the six months ended June 30, 
1997. This increase was caused mainly by organic growth in subscribers via 
increased penetration and build-out of existing networks, increases in 
subscription rates and the introduction of an additional premium channel into 
the programming offer.

The Company divides operating expenses into (i) direct operating expenses, (ii)
selling, general and administrative expenses and (iii) depreciation and
amortization expenses. Direct operating expenses consist of programming
expenses, maintenance and related expenses necessary to service, maintain and
operate the Company's cable systems, billing and collection expenses and
customer service expenses. Selling, general and administrative expenses consist
principally of administrative costs, including office related expenses,
professional fees and salaries, wages and benefits of non-technical employees,
advertising and marketing expenses, bank fees and bad debt expense. Depreciation
and amortization expenses consist of depreciation of property, plant and
equipment and amortization of intangible assets.

Although its revenue performance was strong during the first half of 1998, 
the Company generated an operating loss of $3.5 million for the six months 
ended June 30, 1998, primarily due to increased direct operating expenses 
related to the growth in subscribers' and high depreciation and amortization 
charges related to the expansion of the cable networks. This represents a 59% 
improvement, however, for the six months ended June 30, 1998 as compared to 
the $8.7 million loss for the six months ended June 30, 1997.

THREE AND SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE AND SIX MONTHS ENDED


                                       16

<PAGE>


JUNE 30, 1997

CABLE TELEVISION REVENUE. Revenue increased $3.7 million or 42.0% from $8.8
million in the three months ended June 30, 1997 to $12.5 million in the three
months ended June 30, 1998 and $8.3 million or 50.9% from $16.3 million in the
first six months of 1997 to $24.6 million in the first six months of 1998. This
increase was primarily attributable to a 21.2% increase in the number of basic
subscribers from approximately 580,200 at June 30, 1997 to approximately 703,300
at June 30, 1998, as well as an increase in monthly subscription rates.
Approximately 51% of the increase in basic subscribers was the result of
acquisitions and the remainder was due to build-out of the Company's existing
cable networks.

Revenue from monthly subscription fees represented 88.4% and 94.6% of cable
television revenue for the three months ended June 30, 1997 and 1998,
respectively. Monthly subscription revenue constituted 87.3% and 93.3% of cable
television revenue for the six months ended June 30, 1997 and 1998,
respectively. Installation fee revenue for the three months ended June 30, 1998
decreased by 80.5%, from $747,000 to $146,000 and decreased by 60.5% for six
months ended June 30, 1998, from $1.5 million to $593,000, compared to the
corresponding period in 1997. During the three months ended June 30, 1998, the
Company generated approximately $0.8 million of additional premium subscription
revenue and approximately $5,000 of additional premium channel installation
revenue as a result of providing the HBO Poland service pay movie channel to 
cable subscribers. For the six months ended June 30, 1997 and 1998 premium 
subscription revenue was $66,000 and $1.6 million respectively, where premium 
channel installation revenue was $150,000 and $22,000 for the six months periods
ending June 30, 1997 and 1998 respectively.

DIRECT OPERATING EXPENSES. Direct operating expenses increased $3.5 million, or
152.2%, from $2.3 million for the three months ended June 30, 1997 to $5.8
million for the three months ended June 30, 1998 and $5.1 million, or 115.9%,
from $4.4 million for the six months ended June 30, 1997 to $9.5 million for the
six months ended June 30, 1998, principally as a result of higher levels of
technical personnel and increased maintenance expenses associated with recently
acquired networks which have not yet been integrated within the Company's
networks and standards as well as the increased size of the Company's cable
television system. Direct operating expenses increased from 26.1% of revenues
for the three months ended June 30, 1997 to 46.4% of revenues for the three
months ended June 30, 1998 and increased from 27.0% of revenues for the six
months ended June 30, 1997 to 38.6% of revenues for the six months ended June
30, 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and 
administrative expenses decreased $7.1 million or 62.8% from $11.3 million 
for the three months ended June 30, 1997 to $4.2 million for the three months 
ended June 30, 1998 and decreased $5.4 million or 38.3% from $14.1 million 
for the six months ended June 30, 1997 to $8.7 million for the six months 
ended June 30, 1998. A portion of this decrease was attributable to 
non-recurring, non-cash compensation expense of approximately $7.3 million 
recorded in the three and six months ended June 30, 1997 in connection with 
stock options granted to certain employees. 

As a percentage of revenue, selling, general and administrative expenses 
decreased from 128.4% for the three months ended June 30, 1997 to approximately
33.6% for the three months ended June 30, 1998 and from 86.5% for the six months
ended June 30, 1997 to 35.4% for the six months ended June 30, 1998. However, 
without considering the non-cash compensation expense recorded in 1997 the 
comparison would have been 45.5% and 33.6% for the three months ended June 30, 
1997 and 1998, respectively and 41.7% and 35.4% for the six months ended 
June 30, 1997 and 1998, respectively.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense rose $2.0
million, or 64.5%, from $3.1 million for the three months ended June 30, 1997 to
$5.1 million for the three months ended June 30, 1998 and $3.4 million, or
52.3%, from $6.5 million for the six months ended June 30, 1997 to $9.9 million
for the six months ended June 30, 1998 principally as a result of depreciation
and amortization of additional cable television systems and related goodwill
acquired and the continued build-out of the Company's cable networks.
Depreciation and amortization expense as a percentage of revenues increased from
35.2% for the three months ended June 30, 1997 to 40.8% for the three months
ended June 30, 1998 and from 39.9% for the six months ended June 30, 1997 to
40.2% for the six months period ended June 30, 1998.

INTEREST EXPENSE. Interest expense decreased $0.9 million, or 20.5%, from $4.4
million for the three months ended June 30, 1997 to $3.5 million for the three
months ended June 30, 1998 and $0.5 million, from $7.6 million for the six
months ended June 30, 1997 to $7.1 million for the six months ended June 30,
1998.

INTEREST AND INVESTMENT INCOME. Interest and investment income decreased $0.6
million, or 66.7%, from $0.9 million for the three months ended June 30, 1997 to
$0.3 million for the three months ended June 30, 1998 and $1.3 million, or
65.0%, from $2.0 million for the six months ended June 30, 1997 to $0.7 million
for the six months ended June 30, 1998 primarily due to the reduction in the
level of cash available for investment.


                                       17


<PAGE>

FOREIGN EXCHANGE GAIN/(LOSS). For the three months ended June 30, 1998, 
foreign exchange loss amounted to $0.3 million as compared to a foreign 
exchange loss of $0.1 million for the three months ended June 30, 1997. For 
the six months ended June 30, 1998, foreign exchange loss was $0.2 million 
compared to a foreign exchange loss of $0.4 million for the six months ended 
June 30, 1997.

MINORITY INTEREST. Minority interest expense was $58,000 for the three months 
ended June 30, 1998, compared to minority interest income of $2.1 million for 
the corresponding period in 1997. Minority interest expense was $0.2 million 
for the six months ended June 30, 1998 compared to minority interest income 
of $2.6 million for the corresponding period 1997.

NET LOSS. For the three months ended June 30, 1997 and the three months ended 
June 30, 1998, the Company had net losses of $9.2 million and $6.4 million, 
respectively and for the six months ended June 30, 1997 and the six months ended
June 30, 1998, the Company had net losses of $12.2 million and $10.9 million, 
respectively. These losses were the result of the factors discussed above.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS. Net loss applicable to common
stockholders decreased from $10.2 million for the three months ended June 30,
1997 to $7.6 million for the three months ended June 30, 1998 and from $14.2
million for the six months ended June 30, 1997 to $13.2 million for the six
months ended June 30, 1998 due to the accretion of redeemable preferred stock
and the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

The Company has met its cash requirements in recent years primarily with (i) 
capital contributions and loans from certain of the Company's former 
principal stockholders, including Polish Investments Holding L.P. ("PIHLP"), 
the Cheryl Anne Chase Marital Trust ("CAC Trust"), certain members of David 
T. Chase's family and family trusts (the "Chase Family") (collectively the 
"Chase Entities") and ECO Holdings III Limited Partnership ("ECO"), who 
became principal stockholders of @Entertainment, Inc. ("@Entertainment"), the 
Company's parent, pursuant to a corporate reorganization (the "Former 
Principal Stockholders"), (ii) borrowings under available credit facilities, 
(iii) cash flows from operations, and (iv) the sale of $130 million aggregate 
principal amount of senior debt notes by the Company (the "Notes"). The 
Company had positive cash flows from operating activities in 1995 and 1996 of 
$3.8 million and $6.1 million, respectively, primarily due to the increase of 
cash received from subscribers and the deferral of the payment of interest 
expense. 

The Company had negative cash flows from operating activities for the six 
months ended June 30, 1997 and 1998 of $3.3 million and $2.6 million 
respectively, due to the Company's net loss, and had negative cash flows from 
operating activities for the year ended December 31, 1997 of $13.3 million. 
The improvement in the first six months of 1998 compared to 1997 is primarily 
due to management's increased focus on operating efficiencies.

Cash used for the purchase and build-out of the Company's cable television 
networks was $16.7 million, $26.6 million, $34.4 million, $14.1 million and 
$24.4 million in 1995, 1996, 1997 and the six months ended June 30, 1997 and 
1998, respectively. The increase in the first half of 1998 compared to the 
same period in 1997 is due to the build-out and upgrade of recently acquired 
networks and subsidiaries.

Cash used for the acquisition of subsidiaries, net of cash received, was $4.1 
million, $13.3 million, $18.0 million, $11.0 million and $0.9 million in 
1995, 1996, 1997 and the six months ended June 30, 1997 and 1998, 
respectively. The Company spent approximately $1.2 million, $3.9 million, 
$5.9 million, $2.5 million and $2.0 million in 1995, 1996, 1997 and the six 
months ended June 30, 1997 and 1998 respectively, to upgrade major acquired 
networks to meet PCI's technical standards.

Since the commencement of its operations in 1990, the Company has required
external funds to finance the build-out of its existing networks and to finance
acquisitions of new cable television networks. The Company had relied on the
equity investments and loans from stockholders and their affiliates and
borrowings under available credit facilities to provide the funding for these
activities. The Company does not expect that its former stockholders and their
affiliates will continue to make capital contributions and loans to the Company.
There can be no assurance that @Entertainment will make capital contributions
and loans to the Company.

Pursuant to the indentures governing their outstanding senior indebtedness, 
@Entertainment and the Company are subject to certain restrictions and 
covenants, including, without limitation, covenants with respect to the 
following matters: (i) limitation on additional indebtedness; (ii) limitation 
on restricted payments; (iii) limitation on issuances and sales of capital 
stock of subsidiaries; (iv) limitation on transactions with affiliates; (v) 
limitation on liens; (vi) limitation on guarantees of indebtedness by 
subsidiaries; (vii) purchase of notes upon a change of control; (viii) 
limitation on sale of assets; (ix) limitation on dividends and other payment

                                       18

<PAGE>

restrictions affecting subsidiaries; (x) limitation on investments in
unrestricted subsidiaries; (xi) limitation on lines of business; and (xii)
consolidations, mergers, and sale of assets.

The Company's current strategic objective is to increase cash flow and enhance
the value of its cable networks. To accomplish this objective, the Company's
business and operating strategy in the cable television business is to (i)
provide compelling programming, (ii) increase pricing and maximize revenue per
cable subscriber, (iii) expand its regional clusters, (iv) increase subscriber
penetration, and (v) realize additional operating efficiencies.

The Company is dependent on obtaining new financing to achieve this business 
strategy. Future sources of financing for the Company could include public or 
private debt offerings or bank financings or a combination thereof, subject 
to the restrictions contained in the indentures governing the Company's and 
@Entertainment's outstanding senior indebtedness. Moreover, if the Company's 
plans or assumptions change, if its assumptions prove inaccurate, if it 
consummates unanticipated investments in or acquisitions of other companies, 
if it experiences unexpected costs or competitive pressures, or if the net 
proceeds from the sale of the Notes, existing cash, and projected cash flow 
from operations prove to be insufficient, the Company may need to obtain 
greater amounts of additional financing. While it is the Company's intention 
to enter only into new financing or refinancings that it considers 
advantageous, there can be no assurance that such sources of financing would 
be available to the Company in the future, or, if available, that they could 
be obtained on terms acceptable to the Company.

INFLATION AND CURRENCY EXCHANGE FLUCTUATIONS

Since the fall of Communist rule in 1989, Poland has experienced high levels of
inflation and significant fluctuation in the exchange rate for the zloty. The
Polish government has adopted policies that slowed the annual rate of inflation
from approximately 250% in 1990 to approximately 27% in 1995, approximately 20%
in 1996 and to approximately 14.9% in 1997. The exchange rate for the zloty has
stabilized and the rate of devaluation of the zloty has generally decreased
since 1991, although the zloty/dollar exchange rate has increased in the six
months ended June 30, 1998. Inflation and currency exchange fluctuations have
had, and may continue to have, a material adverse effect on the business,
financial condition and results of operations of the Company.

Substantially all of the Company's debt obligations and certain of the Company's
operating expenses and capital expenditure are denominated in or indexed to U.S.
Dollars. By contrast, substantially all of the Company's revenues are
denominated in zloty. Any devaluation of the zloty against the U.S. Dollar that
the Company is unable to offset through price adjustments will require the
Company to use a larger portion of its revenues to service its U.S.
Dollar-denominated obligations. While the Company may consider entering into
transactions to hedge the risk of exchange rate fluctuations, it is unlikely
that the Company will be able to obtain hedging arrangements on commercially
satisfactory terms. Accordingly, shifts in currency exchange rates may have an
adverse effect on the ability of the Company to service its U.S.
Dollar-denominated obligations and, thus, on the Company's financial condition
and results of operations.

YEAR 2000 COMPLIANCE

In January 1997, the Company developed a plan to deal with the Year 2000 
problem and to make its computer systems Year 2000 compliant. The Company's 
plan provides for the Year 2000 related efforts to be completed by the end of 
1998. Largely as a result of its high rate of growth over the past few years, 
the Company has entered into an agreement to purchase a new system to replace 
its current accounting computer system and an agreement to purchase 
specialized billing software for the Company's new customer service and 
billing center. The Company has no other significant computer systems. The 
total cost of the purchases for @Entertainment, the Company and their 
subsidiaries is estimated to be approximately $2,400,000. The Company has 
obtained confirmations from the vendors of the systems indicating that such 
systems are Year 2000 compliant. The Company has completed testing phase of 
the new accounting computer software and the implementation phase is planned 
to be completed by the end of 1998. The Company capitalized approximately 
$356,000 relating to the new accounting software. The billing software will 
be implemented for all cable subscribers by the end of 1998. The Company 
expensed approximately $250,000, capitalized approximately $128,000 and 
prepaid approximately $630,000 in relation to the new billing software.

IMPACT OF NEW ACCOUNTING STANDARDS NOT YET ADOPTED

SFAS No. 131, "Disclosures about Segment of an Enterprise and Related
Information," was issued in June 1997 and establishes standards for the
reporting of information relating to operating segments in annual financial
statements, as well as disclosure of selected information in interim financial
reports. This statement supersedes SFAS No. 14, "Financial Reporting for
Segments of a Business Enterprise," which required reporting segment information
by industry and geographic area (industry approach). Under 


                                       19


<PAGE>


SFAS No. 131, operating segments are defined as components of a company for
which separate financial information is available and used by management to
allocate resources and assess performance (management approach). This statement
is effective for year-end 1998 financial statements. Interim financial
information will be required beginning in 1999 (with comparative 1998
information). The Company does not anticipate that this standard will
significantly impact the composition of its current operating segments, which
are consistent with the management approach.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which establishes standards of accounting
for these transactions. SFAS No. 133 is effective for the Company beginning on
July 1, 1999. The Company currently has no derivative instruments or hedging
activities.




                                       20

<PAGE>



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.



                                       21


<PAGE>




                            PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company is subject to various claims and suits arising
out of the ordinary course of business. While the ultimate result of all such
matters is not presently determinable, based upon current knowledge and facts,
management does not expect that their resolution will have a material adverse
effect on the Company's consolidated financial position or result of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
        Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
        None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        None.

ITEM 5. OTHER INFORMATION:
        Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits
        Exhibit 27 - Financial Data Schedule

(b)     Reports on Form 8-K

        The Company did not file any reports on Form 8-K during the second
quarter of 1998.



                                       22



<PAGE>


                                  SIGNATURES

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

                                 POLAND COMMUNICATIONS, INC.
                                 By: /s/ David Keefe
                                 David Keefe
                                 Chief Executive Officer and Director

                                 By: /s/ Piotr M. Majchrzak
                                 Piotr M. Majchrzak
                                 Chief Financial Officer

Date:  August 14, 1998




                                       23