UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10QSB

/X/      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended:             MARCH 31, 1999

/ /      TRANSACTION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from______________________ to ________________________

Commission File Number: 333-41007

                         EAST/WEST COMMUNICATIONS, INC.
             (exact name of registrant as specified in its charter)

DELAWARE                                                 13-3964837
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)
350 STUYVESANT AVENUE, NEW YORK, NEW YORK                  10580
(Address of principle executive offices)                 (Zip Code)

                                 (914) 921-6300
              (Registrant's telephone number, including area code)


Check  whether the issuer (1) has filed all reports to be filed by section 13 or
15(d) of the Exchange Act during the past 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./X/ Yes / / No

As of March 31, 1999, there were 1,772,198  shares of the  Registrant's  Class A
Common Stock outstanding and 1,779,301 shares of the Registrant's Class B Common
Stock outstanding.


<PAGE>
                                      INDEX

                         EAST/WEST COMMUNICATIONS, INC.


                                                                        PAGE NO.

PART I.     FINANCIAL INFORMATION


Item 1.     Financial Statements

            Consolidated Balance Sheets as of March 31, 1999 and
            December 31, 1998                                              3

            Consolidated  Statements  of  Operations
            for the  three  months  ended  March 31,
            1999 and 1998 and the  period  from July
            26, 1996 (inception) to March 31, 1999                         

            Consolidated  Statements  of Cash  Flows
            for the  three  months  ended  March 31,
            1999 and 1998 and the period  from July
            26, 1996 (inception) to March 31, 1999                         6

            Notes to Consolidated Financial Statements                   7-8

Item 2.     Management's Discussion and Analysis
            of Financial Condition                                      9-11


PART II.    OTHER INFORMATION

Item 2.     Changes in Securities                                         11

Item 6.     Exhibits and Reports on Form 8-K                              11



                                       -2-
<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                    MARCH 31,        DECEMBER 31,
                                                                      1999               1998
                                                                   ----------        ------------
ASSETS
<S>                                                                 <C>              <C>          
Current Assets
      Cash and cash equivalents                                     $      21,297    $      61,805
                                                                    -------------    -------------
Total current assets                                                       21,297           61,805

PCS Licenses                                                           18,957,721       18,957,721
Capitalized costs                                                       2,422,119        2,188,626
                                                                    =============    =============
Total assets                                                        $  21,401,137    $  21,208,152
                                                                    =============    =============

LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities:
      Accounts payable and accrued expenses                         $   1,508,543    $   1,250,939
      Loans from shareholders                                             300,000          300,000
      Current portion of Loan from FCC                                    743,580          743,580
                                                                    -------------      -----------
Total current liabilities                                               2,552,123        2,294,519

Loan from FCC                                                          14,422,597       14,422,597
Deferred income taxes                                                     430,000          444,000

Redeemable preferred stock,  $1,000 par value; 5% cumulative
      dividends, 16,000 shares authorized, 7,800 issued and
      outstanding (liquidation value - $7,800,000)                      4,192,211        4,024,176

Shareholders' equity (deficit)
Common stock, Class A, $.0001 par value, 3,600,000 shares
      authorized, 1,772,198 shares issued and outstanding                     177              177
Common stock, Class B, $.0001 par value, 16,000,000 shares
      authorized, 1,779,301 shares issued and outstanding                     178              178
Additional paid-in capital                                              4,949,645        4,949,645
Shareholders' deficit accumulated during development stage             (5,145,794)      (4,927,140)

                                                                    --------------     -----------
Total shareholders' equity (deficit)                                     (195,794)          22,860
                                                                    ==============     ===========
Total liabilities and shareholders' equity (deficit)                $  21,401,137    $  21,208,152
                                                                    ==============     ===========
</TABLE>


See accompanying notes.


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                                                 JULY 26, 1996
                                                                            THREE MONTHS ENDED                   (INCEPTION) TO
                                                                                 MARCH 31,                         MARCH 31,
                                                                       1999                 1998                     1999
                                                                   ------------------------------------------------------------

<S>                                                                <C>               <C>                      <C>          
Interest income                                                    $      468        $      2,766             $      10,286
Interest expense, including commitment  and late fees                 (22,133)                  0                (3,662,319)
Other expenses                                                        (42,954)             (8,464)                 (206,771)
                                                                   ----------        ------------             -------------
          Loss before income taxes                                    (64,619)             (5,698)               (3,858,804)

Income tax benefit (expense)                                           14,000                   0                  (430,000)
                                                                   ----------        ------------             -------------
          Net loss                                                    (50,619)             (5,698)               (4,288,804)

Dividend requirement on preferred stock                              (168,035)           (147,443)                 (856,990)
                                                                   ----------        ------------             -------------

Loss applicable to common shares                                   $ (218,654)       $   (153,141)            $  (5,145,794)
                                                                   ==========        ============             =============

Basic and diluted loss per common share                                 (0.06)              (0.04)
                                                                   ===========       ============

Number of shares used in computation                                3,551,499           3,551,499
                                                                   ===========       ============
</TABLE>


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                                             JULY 26, 1996
                                                                              THREE MONTHS ENDED            (INCEPTION) TO
                                                                                   MARCH 31,                    MARCH 31,
                                                                             1999              1998               1999
                                                                         ----------------------------       --------------

Cash Flows from Operating Activities:
<S>                                                                     <C>               <C>                <C>          
      Net Loss                                                          $  (50,619)       $   (5,698)        $ (4,288,804)
      Adjustments to reconcile net loss to net
           cash used by operating activities:
           Deferred income tax (benefit) expense                           (14,000)                0              430,000
           Changes in operating assets and liabilities:
                Increase in accounts payable and
                           accrued expenses                                257,836            (1,849)             376,091
           Interest accrued, including commitment fees                    (233,725)                0            2,911,280
                                                                        --------------------------------------------------

Net cash used in Operating Activities                                      (40,508)           (7,547)            (571,433)

Cash Flows from Investing Activities:
      Deposits with FCC                                                          0                 0           (1,895,772)
      Purchase of PCS licenses                                                   0                 0           (1,895,772)
                                                                        --------------------------------------------------

Net cash provided by (used in) Investing Activities                              0                 0           (3,791,544)

Cash Flows from Financing Activities:
      Proceeds from shareholders' loan                                           0                                300,000
      Proceeds from loans from the Limited
           Partner                                                               0                 0           13,738,502
      Repayment of loans from the Limited Partner                                0                 0          (10,104,228)
      Capital contributions                                                      0                 0              450,000
                                                                        --------------------------------------------------

Net Cash provided by (used in) Financing Activities                              0                 0            4,384,274

(Decrease) Increase in Cash and Cash Equivalents                           (40,508)           (7,547)              21,297

Cash and cash equivalents, beginning of period                              61,805           254,427                    0
                                                                        -------------------------------------------------

Cash and cash equivalents, end of period                                $   21,297        $  246,880         $     21,297
                                                                        ==================================================
</TABLE>

<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


NOTE 1     ACCOUNTING POLICIES:

           DESCRIPTION OF BUSINESS:
           East/West  Communications,  Inc. ("the Company") was  incorporated on
           August 13,  1997,  to succeed  to the rights and  obligations  of Aer
           Force Communications B, L.P. ("the Partnership"). The Partnership was
           formed in July  1996,  to bid for  personal  communications  services
           ("PCS") licenses in the Federal  Communications  Commission's ("FCC")
           F-Block auction.  PCS is a second generation digital wireless service
           utilizing  voice,   video  or  data  devices  that  allow  people  to
           communicate  at anytime and virtually  anywhere.  Over the past three
           years,  the FCC auctioned off PCS licenses with a total of 120 MHZ of
           spectrum,  falling  within six separate  frequency  blocks  labeled A
           through F.  Frequency  blocks C and F were  designated  by the FCC as
           "entrepreneurial   blocks."   Certain   qualifying  small  businesses
           including  the  Partnership  were  afforded  bidding  credits  in the
           auctions as well as  government  financing of the licenses  acquired.
           The  Partnership  won  five  licenses  in  1997 to  provide  personal
           communications  services  over 10Mhz of spectrum to a  population  of
           approximately 21 million, including Los Angeles and Washington,  D.C.
           Aer  Force  Communications,  Inc.  was  the  General  Partner  of the
           Partnership  with a 50.1% equity  interest.  Lynch PCS  Corporation F
           ("Lynch  PCS F"),  a  wholly-owned  subsidiary  of Lynch  Corporation
           ("Lynch"),  a publicly held company,  was the Limited  Partner of the
           Partnership with a 49.9% equity interest.

           On  December  4,  1997,  the  Company  succeeded  to the  assets  and
           liabilities of the Partnership under a plan where the General Partner
           received  50.1% of the Common  Stock of the  Company  (in the form of
           100% of the Company's  Class B Common Stock) and Lynch PCS F received
           49.9% of the Common  Stock of the Company (in the form of 100% of the
           Company's Class A Common Stock).  Just prior to the  succession,  the
           Partners made cash contributions  totaling $250,000 (in proportion to
           their respective equity interests) to the Partnership and the Limited
           Partner  contributed  $4.5  million  of its  outstanding  loan to the
           Partnership's capital.


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


NOTE 1     ACCOUNTING POLICIES (CONTINUED):

           DESCRIPTION OF BUSINESS (CONTINUED):
           Immediately  thereafter,  Lynch PCS F dividended  39.9% of the Common
           Stock  of the  Company  to Lynch  which,  in  turn,  dividended  this
           interest to its  shareholders.  In addition,  Lynch PCS F transferred
           the  remaining  10% of  Common  Stock  of the  Company  held by it to
           Gabelli  Funds,  Inc., an affiliate of the Chairman and CEO of Lynch,
           in satisfaction  of a previously  incurred  obligation.  Also at that
           time,  Lynch PCS F converted  the remaining  principal  amount of its
           loan to the Partnership of $3,335,221 (after the capital contribution
           of $4,500,000) into a redeemable  preferred stock of the Company (see
           Note 6).  Under the terms of this  conversion  the Limited  Partner's
           prior  obligation  to  make  further  loans  to the  Partnership  was
           terminated.

           BASIS OF PRESENTATION:
           The financial  statements  are prepared in conformity  with generally
           accepted  accounting  principles  applicable to a  development  stage
           enterprise.

           The  Company's  financial  statements  have been  prepared on a going
           concern basis which  contemplates  the  realization of assets and the
           satisfaction  of  liabilities in the normal course of business and do
           not include any adjustments to reflect the possible future effects on
           the  recoverability  and  classification of assets and the amount and
           classification  of  liabilities  that may  result  from the  possible
           inability of the Company to continue as a going concern.

           The  Company   believes  that  its  PCS  licenses  have   substantial
           potential.  However,  the Company has not yet adopted a business plan
           or determined how to finance its operations  because of uncertainties
           relating  to PCS.  Therefore,  the  Company  has  not yet  determined
           whether to develop its PCS licenses on its own, to joint  venture its
           licenses with other PCS or wireless telephone licensees or operators,
           or to sell  some  or all of its  licenses.  The  Company  expects  to
           continually  evaluate these factors and to adopt a business plan once
           the  financing,  regulatory  and  market  aspects  of  PCS  are  less
           uncertain.

<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


NOTE 1     ACCOUNTING POLICIES (CONTINUED):

           BASIS OF PRESENTATION (CONTINUED):
           The Company has  incurred  losses  since  inception  and will need to
           obtain  capital in order to fund its interest and  principal  payment
           obligations and for working capital and general  corporate  purposes.
           There can be no  assurance  that the  Company  can  raise  sufficient
           capital to fund its obligations  and finance the  construction of its
           networks.  Accordingly, the lack of funding creates substantial doubt
           about the  Company's  ability to  continue  as a going  concern.  The
           October 31, 1998  interest  payment on loan payable to the FCC in the
           amount of $340,248.67  plus applicable  penalties of $51,037 was paid
           on April  26,  1999.  Management  has  elected  to defer  payment  of
           interest  on the FCC loan  which was due on  1/31/99 in the amount of
           $388,307 including  applicable late fees. The Company intends to make
           the  required  payment on or before July 29, 1999.  However,  if such
           payment  is not made,  the  Company  will  forfeit  its rights to the
           licenses.

           Certain prior year amounts have been  reclassified  to conform to the
           current year presentation.

           CASH AND CASH EQUIVALENTS:
           Cash and cash equivalents for which the carrying amount  approximates
           fair value include highly liquid investments with a maturity of three
           months or less at the time of purchase.

           ADMINISTRATIVE SERVICES:
           The Company  and the  Partnership  has never had any paid  employees.
           Lynch PCS F provided the  Partnership,  at its request,  with certain
           services  in  connection  with  the  Partnership's  bidding  for  PCS
           licenses in the FCC auction in late 1996  through  early 1997.  Aside
           from  that  matter,  neither  the  General  Partner  nor  Lynch PCS F
           provided the Partnership or the Company with a substantial  amount of
           services.  Neither partner charged the Partnership or the Company for
           the services provided, as such amounts are not significant.

           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  carrying  amounts  of assets and
           liabilities and disclosures at the



<PAGE>

                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


           date of the financial statements and the reported amounts of expenses
           during the reporting  period.  Actual results could differ from those
           estimates.

NOTE 1     ACCOUNTING POLICIES (CONTINUED):

           CAPITALIZED COSTS:
           Interest  charges  including  commitment  fees incurred  prior to the
           granting  of the  licenses  have  been  expensed.  Subsequent  to the
           license  grant dates,  and until  operations  commence,  all interest
           charges  (excluding  penalty  interest and late fees) and  commitment
           fees on outstanding  loan balances will be  capitalized.  These costs
           amounted to  $2,422,120  and  $1,104,273  at March 31, 1999 and 1998,
           respectively.   Such  costs  include  $2,078,875  and  $1,104,274  of
           capitalized  interest at March 31, 1999 and 1998 respectively.  Total
           interest charges amounted to $233,725,  $207,009,  and $2,998,885 for
           the three months  period ended March 31, 1999 and 1998 and the period
           from July 26, 1996 (inception) to March 31, 1999, respectively.

           The cost of the PCS licenses  (including  capitalized  costs) will be
           amortized over a period, consistent with the industry practice, which
           will begin when operations commence.

           Pursuant to FCC regulations, license holders are required to commence
           providing  service to one-third or the population  within the license
           area within five years from the date of award and  two-thirds  of the
           population within ten years from the date of award. Such licenses may
           only be transferred to other entities that meet the FCC  requirements
           for  F-Block  license  holders  during  the first  five  years of the
           initial  license  term.  Transfers  of such  licenses to entities not
           meeting  such  requirements  in years six  through ten of the initial
           license  term  will  subject  the  Company  to   substantial   unjust
           enrichment penalties.

           LOSS PER SHARE:
           In 1997,  the Financial  Accounting  Standards  Board issued SFAS No.
           128,  "Earnings  per Share," which was adopted by the Company in 1997
           upon the issuance of its common stock. Basic loss per common share is
           calculated  by dividing  net loss by the weighted  average  number of
           Class A and Class B common shares  outstanding during the period. The
           basic and diluted loss per common  share for the year ended  December
           31, 1997 give effect to the


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


           issuance  of the  common  stock  of the  Company  as if the  issuance
           occurred on January 1, 1997.

NOTE 1     ACCOUNTING POLICIES (CONTINUED):

           INCOME TAXES:
           Prior to December 4, 1997,  no provision for income taxes was made in
           the  financial  statements  as the partners  were  required to report
           their respective  share of income or loss on their respective  income
           tax returns.  Beginning  December 4, 1997,  the Company  accounts for
           income taxes pursuant to the provisions of SFAS No. 109,  "Accounting
           for Income  Taxes."  Under SFAS No. 109,  deferred  taxes result from
           temporary differences in the recognition of revenues and expenses for
           income tax and financial  reporting  purposes.  At March 31, 1999 and
           1998,  net  deferred  tax  liabilities  represent  the tax  effect of
           taxable  temporary  differences  (pertaining to capitalized  costs of
           approximately $1.3 million) which existed at the date the Partnership
           converted to a  C-Corporation  offset,  in part, by  accumulated  net
           operating losses of approximately $64,619 for the first Quarter 1999.
           The Company's net operating losses expire in 2012.

NOTE 2     RELATED PARTIES:
           On October 22,  1998,  the Company  borrowed  $300,000  from  certain
           directors  of the Company.  The loans in the amount of $150,000  from
           Mario J. Gabelli and T. Gibbs Kane,  Jr.,  bear interest at a rate of
           7.00% per year,  and  become  due and  payable  on the  earlier of i)
           October 22, 1999 or ii) upon the receipt of proceeds from an offering
           of rights  (the  "Rights  Offering")  to  purchase  shares of Class A
           Common  Stock  sufficient  to pay the full  amount of  principal  and
           interest then owed on the notes. The Company plans to offer rights in
           connection with such Rights Offering to existing  shareholders of the
           Company's Class A Common Stock during 1999 (See Note 8).

NOTE 3     PARTNERSHIP AGREEMENT:
           The  Partnership  was formed in July 1996 to bid for PCS  licenses in
           the "F-Block"  auction.  The General Partner  originally  contributed
           $100,200  to the  Partnership  for a 50.1%  equity  interest  and the
           Limited  Partner  contributed  $99,800 to the Partnership for a 49.9%
           equity  interest.  Under the terms of the  Partnership  Agreement all
           deductions with respect to interest  expense and commitment fees were
           allocated  99%  to  the  Limited  Partner  and  1% to  the



<PAGE>

                                    EAST/WEST
                              COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


           General Partner. All profits of the Partnership were allocated 99% to
           the  Limited  Partner  and 1% to the  General  Partner  until all the
           aggregate amount of all profits  allocated to the Limited Partner and
           General Partner equal the deductions with respect to interest expense
           and commitment fees.

 NOTE 3    PARTNERSHIP AGREEMENT (CONTINUED):
           Subsequently,  all  profits and losses  were to be  allocated  to the
           Limited Partner and General Partner in proportion to their respective
           interests,  49.9% and 50.1%,  respectively.  On December 4, 1997, the
           Partnership was terminated.

NOTE 4     LONG TERM DEBT:
           Long term debt at March 31, 1999 and 1998  consists of FCC  financing
           of PCS  licenses  awarded in the  following  markets and  maturing in
           2007:

               Los Angeles, CA                           $  3,579,000
               Washington, D.C.                             7,068,000
               Sarasota, FL                                 1,322,400
               Reno, NV                                     1,429,800
               Santa Barbara, CA                            1,766,977
                                                         ------------
                                                          $15,166,177
               Less amounts due within one year              (743,580)
                                                         ------------
                                                          $14,422,597
                                                         ============

           In  connection  with the PCS  "F-Block"  auction,  $12.0  million was
           deposited with the FCC of which $11.8 million was borrowed from Lynch
           PCS F under a line of credit which was due and payable in five years.
           The interest rate on the  outstanding  borrowings  under the line was
           fixed at 15%;  additionally,  a  commitment  fee of 20% per annum was
           charged on the total line of credit. On December 4, 1997, the balance
           of  such  loan  was  $7,835,221,   including   accrued  interest  and
           commitment  fees. On such date,  $4.5 million was  contributed to the
           equity of the Partnership and the remaining balance of $3,335,221 was
           converted into 7,800 shares of redeemable  preferred  stock (see note
           6). At that time, the line of credit was terminated.

           All of the FCC financing bears interest at 6.25% per annum. Quarterly
           interest  payments of $236,972  were required for the first two years
           of the license  (1997 and 1998) and  quarterly  payments of principle
           and interest of $605,879 are required over the remaining  eight years
           of the license term. These loans


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


           are secured by the licenses granted. In April 1997, the FCC suspended
           the interest  payments on the debt through  March 31, 1998.  On March
           24, 1998,  the FCC  indicated  that such  interest  payments  will be
           resumed not earlier that 90 days  subsequent  to  publication  in the
           Federal  Register  of its  "Order on  Reconsideration  of the  Second
           Report  and  Order."  Such  order  was  published  on April 8,  1998,
           requiring the suspended payments (aggregating $805,488) to

NOTE 4     LONG TERM DEBT (CONTINUED):
           be made in eight quarterly installments of $100,686 beginning in July
           1998, plus regular interest payments for the period of March 31, 1998
           to July 31, 1998, of $311,324, subject to deferral of up to a maximum
           180 days.  Payment  was made on October 28,  1998,  within the 90-day
           non-delinquency  period, in the amount of $432,610 comprising accrued
           interest of $412,010 and a 5% penalty fee of $20,600.

           The  interest on the loan payable to the FCC, due on October 31, 1998
           amounted to  $337,658.  Payments  made within 90 days of the due date
           are subject to a 5% penalty which  increases to a 15% penalty if paid
           within  90 to 180  days of the  due  date.  The  Company  issued  the
           required  payment of $391,286  (including  applicable  penalties)  on
           April 26,1999. Management has elected to defer payment of interest on
           the FCC loan  which was due on  1/31/99  in the  amount  of  $388,307
           including  applicable  late  fees.  The  Company  intends to make the
           required payment on or before July 29, 1999. However, if such payment
           is not made, the Company will forfeit its rights to the licenses.

           Aggregate principle maturities of long-term debt for each of the next
           five years are as follows: 1999--$.744 million, 2000--$1.558 million,
           2001--$1.658 million, 2002--$1.764 million and 2003--$1.877 million.

 NOTE 5    COMMON STOCK :
           The  Company  has two  classes of Common  Stock  authorized:  Class A
           Common Stock and Class B Common Stock.  The authorized  capital stock
           of the Company  consists of 3,600,000  shares of Class A Common Stock
           and 16,000,000 shares of Class B Common Stock.


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


           The  holders of Common  Stock are  entitled to receive  ratably  such
           dividends,  if any, as may be declared from time to time by the Board
           of Directors out of funds legally available therefor. In the event of
           the  liquidation,  dissolution  or  winding  up of the  Company,  the
           holders of Common Stock are  entitled to share  ratably in all assets
           remaining  after payment of  liabilities,  if any, then  outstanding.
           Collectively,  the shares of Class A Common Stock  represent not more
           than 49.9% of the Company's voting interest, with each share of Class
           A Common  Stock issued and  outstanding  having one vote per share on
           all  matters,  except  the  election  of  directors  or as  otherwise
           provided by law.  The holders of the Class A Common  Stock as a class
           will be entitled to elect members to the Company's Board of Directors
           who  collectively  will  represent  two  of  the  five  votes  of the
           Company's Board of Directors.

NOTE 5     COMMON STOCK (CONTINUED):
           Collectively,  the shares of Class B Common Stock  represent at least
           50.1% of the Company's voting  interest,  with each shares of Class B
           Common Stock issued and  outstanding  having 5 votes per share on all
           matters, except the election of directors or as otherwise provided by
           law.  With respect to the election of  directors,  the Class B Common
           Stock,  voting together as a class,  may elect up to three members of
           the Company's Board of Directors.

 NOTE 6    REDEEMABLE PREFERRED STOCK :
           The Company is authorized  to issue 16,000 shares of Preferred  Stock
           and at  March  31,  1999 and 1998 had  outstanding  7,800  shares  of
           Preferred  Stock, par value $1,000 per share. The Preferred Stock (i)
           is  entitled  to  preferred  dividends  at an annual rate of five (5)
           shares of additional  Preferred  Stock for each one hundred shares of
           Preferred  Stock  outstanding,  (ii) has no voting  rights  except as
           provided  by law,  and (iii) is entitled to be redeemed at $1,000 per
           share  (plus  accrued  and unpaid  dividends)  on the  earlier of (i)
           December  1,  2009,  (ii) upon a change of  control of the Class A or
           Class B  Common  Stock  or  (iii)  upon  the  sale of one or more PCS
           licenses for cash or a non-cash sale under certain circumstances. The
           difference   between  the  carrying   value  of  such  shares  (which
           approximates  fair value) and the redemption price is being amortized
           using the  effective  interest  method to November  1, 2009.  Accrued
           dividends and  accretion on the  preferred  stock are included in the
           preferred  stock  account  in the  balance  sheets  and the  dividend
           requirement on preferred stock in the statements of operations.


<PAGE>
                         EAST/WEST COMMUNICATIONS, INC.

                    (A DEVELOPMENT STAGE ENTERPRISE, FORMERLY
                        AER FORCE COMMUNICATIONS B, L.P.)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999


NOTE 7     LEGAL MATTERS:
           The United States  Department of Justice  initiated an  investigation
           during  1997 to  determine  whether  there had been bid  rigging  and
           market  allocation  for  licenses  auctioned  by the FCC for PCS. The
           Company, together with various other bidders in the PCS auctions, had
           received a civil  investigative  demand ("CID") requesting  documents
           and  information  relating to bidding,  and in May 1997,  the Company
           complied  with the CID.  The  Company  is not  aware of what  further
           action, if any, the Justice Department or the FCC may take and cannot
           estimate its exposure, if any, at this time.

NOTE 8     RIGHTS OFFERING:

           The Company will  shortly be  comencing  an offer,  at no cost to the
           holders   of  its  Class  A  Common   Stock  on  May  10,   1999,   a
           non-transferable  right to purchase  up to 443,050  shares of Class A
           Common  Stock.  The  rights  entitle  shareholders  to  purchase  one
           additional  share of Class A Common  Stock for every  four  shares of
           Class A Common  Stock  held at $1.50  per  share.  In  addition,  the
           Company  intends to sell 444,825  shares of Class B Common Stock at a
           price of $1.50 per share to the current owners of the Company's Class
           B Common Stock.

           The  Company's  Registration  Statement  has  been  filed  with,  and
           declared effective by Securities and Exchange  Commission ("SEC") and
           materials will be mailed to stockholders on or about May 18, 1999.

NOTE 9     SUBSEQUENT EVENTS:
           In order to meet our April 29, 1999 interest  payment  obligation the
           Corporation  borrowed additional funds in the amount of $400,000 from
           certain of our  directors  under the same term and provision of prior
           loans.


<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

         We are a  development  stage  company  with no  significant  results of
operations to date. We hold five 10 megahertz personal  communications  services
("PCS") licenses to serve a population of  approximately  21 million,  including
two of the top ten markets,  Los Angeles and  Washington  D.C.,  plus  Sarasota,
Florida,  Reno,  Nevada and Santa Barbara,  California.  The total cost of these
licenses was approximately  $19 million,  after a 25% bidding credit provided by
the Federal Communications Commission. 80% of the cost of the licenses (or $15.2
million) was financed  over ten years by the FCC, with only payments of interest
during the first two years after award of the licenses.

         We believe that our PCS licenses have substantial  potential.  However,
we have not yet  adopted  a  business  plan or  determined  how to  finance  our
operations  because of  uncertainties  relating to PCS,  which makes  evaluation
difficult,   including  without  limitation  the  newness  of  PCS,   financing,
affiliation and technology issues and the financial  problems of certain C-Block
licensees.  Therefore,  we have not yet  determined  whether to develop  our PCS
licenses  on its own,  joint  venture  our  licenses  with  other  PCS  wireless
telephone  licenses  holders or operators or others,  or sell some or all of our
licenses. We expect to continually evaluate these factors and to adopt a plan or
plans  once  the  financing,  regulatory  and  market  aspects  of PCS are  less
uncertain. Our principal expense to date has been interest, including commitment
fees, plus minor administrative expenses.

         Unless we sell our PCS business or joint  venture our PCS licenses with
an entity that has the capacity to provide  substantial  funds,  we will need to
raise  substantial  capital to fund our installment  payments to the FCC and the
build out of our PCS licenses.  Under the government financing,  we have to make
payments of  approximately  $2.3 million in 1999  including an interest  payment
that was due on October  31,  1998 (and was  postponed  until April 29, 1999 and
paid on that date including a penalty of $53,628), $2.6 million in the year 2000
and $2.4 million for the next 8 years.

         The  following  are the  remaining  scheduled  interest  and  principal
payments over the next two years:

                 Due Date                             Amount

              July 30, 1999                           388,307(1)
              July 29, 1999                           354,541(2)
              July 31, 1999                           534,641

------------------------

         (1) Scheduled payment was $337,658,  which was due on January 31, 1999.
Above amount  includes a 15%  penalty,  as provided in the loan  documents,  for
payments  made within 180 days after due date.  This  payment was delayed for an
additional 90 days and is now due on July 30, 1999.

         (2) Scheduled  payment was  337,658,  which are due on April 30, 1999.
Above  amount  includes a 5%  penalty,  as provided  in the loan  document,  for
payments made within 90 days of the due date.  This payment has been delayed for
90 days and is now due on July 29, 1999.

                                       -3-

<PAGE>
              October 31, 1999                        706,566
                                                   $1,933,406

              January 31, 2000                       $706,566
              April 30, 2000                          706,566
              July 31, 2000                           605,879
              October 31, 2000                        605,879
                                                   $2,624,890

         Under FCC rules,  scheduled  payments  may be delayed for up to 90 days
upon  payment of a 5% penalty and for 90-180 days upon payment of a 15% penalty.
The January  31,  1999  payment was delayed for 180 days and is now due July 30,
1999.  We do not have a  reliable  estimate  of the  cost to  build  out our PCS
licenses, should we determine to do so, but it is likely to be substantial.

         We will have to raise funds shortly in order to make interest  payments
on the  government  financing  and for working  capital  and  general  corporate
purposes. We borrowed additional funds in the amount of $400,000 from certain of
our directors in order to meet our April 29, 1999 payment  obligation  under the
same terms and provisions of prior loans received from our directors. The report
of our  independent  auditors  with respect to our  financial  statements  as of
December 31, 1998 and 1997,  for the years ended  December 31, 1998 and 1997 and
the period  from July 26, 1996  (inception)  to  December  31,  1998  contains a
paragraph indicating that substantial doubt exists as to our ability to continue
as a  going  concern.  Among  the  factors  cited  by the  auditors  as  raising
substantial doubt as to our ability to continue as a going concern is that, with
respect to the periods covered, we have incurred losses since inception and have
not yet adopted a business plan or determined  how to finance our operations and
will need to obtain capital in order to fund our interest and principal  payment
obligations and for working capital and general corporate purposes.

LIQUIDITY AND CAPITAL RESOURCES

         The principal amount of debt (excluding  accrued interest) on March 31,
1999 was $15,466,177,  compared to shareholders deficit of $195,794.  During the
period from July 26, 1996  (inception)  to December 31, 1998, we had no revenues
or operating  profits and cannot predict when East/West may have any revenues or
operating profits.

         In April 1997,  the FCC suspended  interest  payments on its financings
through March 31, 1998. On March 24, 1998,  the FCC indicated that such interest
would be resumed not earlier than 90 days  subsequent to the  publication in the
Federal  Register of an order on  reconsideration.  Such publication was made on
April 8, 1998,  requiring  cumulative  suspended interest payments to be made in
eight  quarterly  installments of $100,686 each beginning on July 31, 1998. Also
on that date,  the accrued  interest  of  $311,324,  from the date the  interest
suspension  ended,  March 31,  1998,  until July 31,  1998.  Payment was made on
October 28, 1998,  within the 90-day  non-delinquency  period,  in the amount of
$432,611  comprising  accrued  interest of $412,010 and a 5% penalty of $20,600.
Accordingly,  during  the  remainder  of  1998,  we  were  required  to  make an
additional  interest  payment of $236,972 plus  suspended  interest of $100,686.
Total interest  payments  required for year 1998 amounted to $749,688.  Interest
payments of $391,286  have been made in 1999.  Remaining  interest  payments for
1999 are projected to be $654,210, plus quarterly suspended interest of $302,058
for the year.

                                      -4-

<PAGE>

         On October 22, 1998 and April 29, 1999, East/West borrowed $300,000 and
$400,000,  respectively,  from certain of our directors.  The loans to be repaid
are evidenced by two series of promissory notes payable to the order of Mario J.
Gabelli and T. Gibbs Kane, Jr.,  directors of East/West.  Each of the promissory
notes bears  interest at a rate of 5.00% per year and becomes due and payable on
the earlier of (1) either  October 22, 1999 with  respect to $300,000  principal
amount of such notes or April 29, 2000 with respect to $400,000 principal amount
of such notes or (2) upon the receipt of proceeds from this offering  sufficient
to pay the  full  amount  of  principal  and  interest  then  owed on the  notes
(provided  that  repayments  of  $300,000  principal  amount  of  notes  is  not
contingent on the ability to repay the remaining  $400,000  principal  amount of
notes).  The  proceeds  of such  loans have been used to fund  interest  payment
obligations to the FCC.

YEAR 2000 COMPLIANCE

         We have considered the potential  impact of the year 2000 on our future
business and  operations.  Any programs that  recognize a date using "00" as the
year 1900 rather than the year 2000 could  result in errors or system  failures.
If we decide to develop  our PCS  licenses,  we may utilize a number of computer
programs.  Because we currently have no operations,  we are unable to assess the
potential  impact  of the year 2000 on any  systems  we may use nor have we been
able to  complete  our  assessment  of any year 2000  issues  which  may  affect
third-parties.  We believe that the costs of addressing this issue in the future
will not have a material adverse impact on our financial  position.  However, if
East/West  and third parties upon which we rely are unable to address this issue
in a timely manner, it could result in a material financial risk,  including the
possibility  that we may be liable to such third parties for a material  failure
of our systems due to year 2000 issues

                                       -5-

<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.

                                         EAST/WEST COMMUNICATIONS, INC.

                                         By:/s/ Victoria Kane
                                            ------------------------------------
                                            Victoria Kane
                                            Chairman of the Board
                                            (Chief Executive Officer)

Dated: May 17, 1999



                                       -6-