FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

              [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

                                       or

              [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 33-83740

                        Diamond Cable Communications Plc
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

      England and Wales                                           N/A
---------------------------------------------                -------------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

  Diamond Plaza, Daleside Road
  Nottingham NG2 3GG, England                                     N/A
---------------------------------------------                -------------------
(Address of principal executive offices)                     (Zip code)

                                 44-115-912-2242
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


                                Yes  X       No   
                                    ---         ---

         The number of shares outstanding of the Registrant's Ordinary Shares of
2.5 pence each outstanding as of March 31, 1999 was 59,138,791.





<PAGE>



                        DIAMOND CABLE COMMUNICATIONS PLC

                                      INDEX


                                                                            Page
                                                                            ----


INTRODUCTION .......................................................           3

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Unaudited condensed consolidated statements of
           operations--Three months ended
           March 31, 1999 and 1998.................................            5

         Condensed consolidated balance sheets--
           March 31, 1999 and December 31, 1998....................            6

         Unaudited condensed consolidated statement of
           shareholders' equity -- Three months
           ended March 31, 1999....................................            7

         Unaudited condensed consolidated statements of cash
           flows -- Three months ended March 31, 1999
           and 1998................................................            8

         Notes to the unaudited condensed consolidated
           financial statements....................................            9


Item 2.  Management's Discussion and Analysis of Results
           of Operations and Financial Condition...................           13

Item 3.  Quantitative and Qualitative disclosures
           about market risk.......................................           23


Part II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K..........................           24


SIGNATURES.........................................................           25




                                        2

<PAGE>



                                  INTRODUCTION

         Diamond Cable Communications Plc (the "Company") is a public limited
company (with registered number 2965241) incorporated under the laws of England
and Wales. The Company is a holding company which holds all of the shares of (i)
Diamond Cable Communications (UK) Limited (formerly Diamond Cable (Nottingham)
Limited) ("DCL") and its subsidiaries and (ii) a group of companies comprising
East Midlands Cable Group Limited ("EMCG"), East Midlands Cable Communications
Limited and East Midlands Cable Holdings Limited (collectively "LCL"), in both
cases through intermediate holding companies, Diamond Holdings plc and Jewel
Holdings Limited ("Jewel"). References herein to the "Group" refer to the
Company and its subsidiaries, including, since September 27, 1995, LCL.

         The Group operates a telecommunications and cable television business
focused on the East Midlands area of England. The Group is currently
constructing a broadband fiber-optic network to serve the approximately 1.2
million homes and an estimated 60,600 businesses within its contiguous franchise
areas. As of March 31, 1999, the Group's cable television and telecommunications
network had passed by civils construction approximately 722,400 homes and an
estimated 31,700 businesses, of which portions of the network passing
approximately 702,700 homes and an estimated 31,600 businesses had been
activated. As of that date, the Group also had approximately 248,100 residential
telephone lines, 131,100 cable television subscribers and 42,400 business
telephone lines. Through that date, (pound)595 million had been invested (at
original cost) in the construction of the network and related systems.

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


         THIS DOCUMENT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, IDENTIFIED
AS SUCH, WITH RESPECT TO WHICH THE COMPANY IS SEEKING TO UTILIZE THE SAFE HARBOR
PROVIDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
STATEMENTS ARE ACCOMPANIED BY, AND SHOULD BE READ IN CONJUNCTION WITH, AN
EXPLANATION OF IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS.




                                        3

<PAGE>



         The Company operates only in the United Kingdom and, accordingly,
publishes its financial statements in pounds sterling. In this Report,
references to "pounds sterling," "(pound)" "pence" or "p" are to the lawful
currency of the United Kingdom and references to "U.S. dollars," "$" or "(cent)"
are to the lawful currency of the United States. Merely for convenience, this
Report contains translations of certain pound sterling amounts into U.S. dollars
at specified rates. These translations should not be construed as
representations that the pound sterling amounts actually represent such U.S.
dollar amounts or could have been or could be converted into U.S. dollars at the
rate indicated or at any other rate. Unless otherwise indicated, the
translations of pounds sterling into U.S. dollars have been made at $1.6140 per
(pound)1.00, the noon buying rate in The City of New York for cable transfers in
pounds sterling as certified for customs purposes by the Federal Reserve Bank of
New York (the "Noon Buying Rate") on March 31, 1999. On May 7, 1999, the Noon
Buying Rate was $1.6350 per (pound)1.00.

         On June 16, 1998, the Company announced that all of the holders of its
outstanding ordinary shares of 2.5p each and deferred shares of 25p each had
agreed to exchange all outstanding shares in the Company for newly issued shares
of common stock of NTL Incorporated ("NTL"), an alternative telecommunications
company in the UK, the common stock of which is quoted on NASDAQ (NTLi). On
March 8, 1999, the share exchange (the "Share Exchange") contemplated by the
Share Exchange Agreement, dated as of June 16, 1998, as amended (the "Share
Exchange Agreement"), among NTL and the shareholders of the Company, was
consummated. As a result of this transaction, all of the issued and outstanding
ordinary shares, par value 2.5p per share (the "Ordinary Shares") of the Company
and all of the issued and outstanding deferred shares, par value 25p per share
(the "Deferred Shares," and together with the Ordinary Shares, the "Company
Shares") of the Company were exchanged for shares of NTL's common stock, par
value $.01 per share (the "NTL Common Stock"). As a result of the Share
Exchange, the Company became a wholly-owned subsidiary of NTL.

         In connection with provisions in each of the indentures pursuant to
which the Group's debt securities were issued, which require that offers to
repurchase such debt securities be made to holders of such securities at a price
of 101% of their accreted value or principal amount following a "change of
control", the Company commenced offers to repurchase its outstanding debt
securities on April 1, 1999. The offers expired on April 30, 1999. The Company
will pay approximately $105,000 to repurchase the tendered debt securities.




                                        4

<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                     DIAMOND CABLE COMMUNICATIONS PLC

                        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                  THREE MONTHS ENDED MARCH 31,
                                                  ------------------------------------------------------

                                                        1998               1999               1999
                                                  ----------------   ----------------   ----------------
                                                                                             (note 1)
                                                                     (in thousands)
<S>                                              <C>                 <C>                   <C>
REVENUE
Business telecommunications....................   (pound) 4,332      (pound) 5,733          $ 9,253
Residential telephone..........................           9,840             14,406           23,251
Cable television...............................           5,459              7,164           11,563
                                                 --------------      -------------         --------
                                                         19,631             27,303           44,067
                                                 --------------      -------------         --------

OPERATING COSTS AND EXPENSES
Telephone......................................          (3,738)            (5,581)          (9,008)
Programming....................................          (3,025)            (3,932)          (6,346)
Selling, general, and
  administrative...............................          (8,729)           (11,023)         (17,791)
Depreciation and amortization..................          (9,320)           (12,568)         (20,285)
Other expenses (note 4) .......................            --               (8,533)         (13,772)
                                                 --------------      -------------         --------
                                                        (24,812)           (41,637)         (67,202)
                                                 --------------      -------------         --------
OPERATING LOSS.................................          (5,181)           (14,334)         (23,135)

Interest income................................           3,006              2,361            3,811
Interest expense and amortization of debt
  discount and expenses........................         (18,959)           (23,445)         (37,840)
Foreign exchange (losses)/gains, net...........          12,497            (19,996)         (32,274)
Unrealized loss on derivative financial
  instruments..................................          (1,914)              --               --
Realized gain on derivative financial
  instruments..................................              24               --               --
                                                 --------------      -------------         --------

Loss before income taxes.......................         (10,527)           (55,414)         (89,438)
Income taxes...................................            --                 --               --
                                                 --------------      -------------         --------


NET LOSS.......................................  (pound)(10,527)    (pound)(55,414)        $(89,438)
                                                 ==============      =============         ========

<FN>
         See the accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
</FN>
</TABLE>



                                                    5

<PAGE>

<TABLE>
<CAPTION>
                                    DIAMOND CABLE COMMUNICATIONS PLC

                                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                         AT DECEMBER 31,             AT MARCH 31,
                                                        ----------------  -----------------------------
                                                                                     (UNAUDITED)

                                                              1998             1999             1999
                                                        ----------------  --------------    -----------
                                                                                              (NOTE 1)
                                                                          (IN THOUSANDS)
<S>                                                     <C>               <C>                <C>

                       ASSETS
Cash and cash equivalents ..........................    (pound)164,738    (pound)263,381       $425,097
Trade receivables (net of allowance
  for doubtful accounts of (pound)4,775 at
  December 31, 1998 and (pound)4,760 at
  March 31, 1999)...................................             9,873            12,346         19,926
Other assets........................................             2,229             3,515          5,673
Deferred financing costs (less
  accumulated amortization of
  (pound)4,830 at December 31, 1998 and
  (pound)5,424 at March 31, 1999)...................            20,322            19,729         31,843
Property and equipment, net (note 5)................           465,866           482,658        779,010
Goodwill (less accumulated amortization of
(pound)15,764 at December 31, 1998 and
(pound)16,976 at March 31, 1999)....................            81,196            79,984        129,094
Franchise costs (less accumulated
  amortization of (pound)142 at December 31,
  1998 and (pound)150 at March 31, 1999)............               397               389            628
                                                        --------------    --------------    -----------
                    TOTAL ASSETS                        (pound)744,621    (pound)862,002     $1,391,271
                                                        ==============    ==============    ===========
        LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable....................................     (pound)28,514     (pound)27,479        $44,351
Accounts payable deposit (note 7)...................                --           116,596        188,186
Other liabilities...................................            20,411            38,604         62,307
Senior discount notes...............................           592,763           628,463      1,014,339
Senior notes........................................           201,154           203,154        327,891
Capital lease obligations...........................             7,089             6,482         10,462
Mortgage loan.......................................             2,386             2,366          3,819
Shareholders' equity
  Ordinary shares (70,000,000 authorized;
    59,138,791 issued at December 31, 1998 and
    at March 31, 1999)..............................             1,478             1,478          2,385
  Non-voting deferred shares (6 shares authorized
  and issued at December 31, 1998 and March 31,
  1999).............................................                --                --             --
  Additional paid-in-capital........................           134,466           134,466        217,028
  Accumulated other comprehensive (loss)/profit.....            (1,367)              601            970
  Accumulated deficit...............................          (242,273)         (297,687)      (480,467)
                                                        --------------    --------------    -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..........    (pound)744,621    (pound)862,002     $1,391,271
                                                        ==============    ==============    ===========

<FN>
        See the accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
</FN>
</TABLE>





                                        6

<PAGE>


<TABLE>
<CAPTION>
                                                  DIAMOND CABLE COMMUNICATIONS PLC

                                             UNAUDITED CONDENSED CONSOLIDATED STATEMENT
                                                       OF SHAREHOLDERS' EQUITY


                                                                                    ACCUMULATED
                                                         NON-VOTING     ADDITIONAL     OTHER                             TOTAL
                                                          DEFERRED         PAID-    COMPREHENSIVE    ACCUMULATED      SHAREHOLDERS'
                                     ORDINARY SHARES       SHARES       IN-CAPITAL   (LOSS)/GAIN       DEFICIT          DEFICIT
                                -----------------------  ----------   ------------- -------------  ---------------- ----------------
                                                                        (IN THOUSANDS EXCEPT SHARE DATA)

                                 Number                  Number

<S>                             <C>        <C>            <C>   <C>  <C>            <C>            <C>              <C>
BALANCE AT JANUARY 1, 1999..... 59,138,791 (pound)1,478    6    --   (pound)134,466 (pound)(1,367) (pound)(242,273) (pound)(107,696)
Unrealized gain on securities..     --              --    --    --             --           1,968             --              1,968
Net loss.......................     --              --    --    --             --             --           (55,414)         (55,414)
BALANCE AT MARCH 31, 1999...... 59,138,791 (pound)1,478    6    --   (pound)134,466 (pound)   601  (pound)(297,687) (pound)(161,142)

<FN>
---------------

See the accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
</FN>
</TABLE>





                                       7

<PAGE>


<TABLE>
<CAPTION>
                                          DIAMOND CABLE COMMUNICATIONS PLC

                             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                THREE MONTHS ENDED MARCH 31,
                                                                   -----------------------------------------------
                                                                         1998              1999             1999
                                                                   ---------------   ---------------     ---------
                                                                                                          (NOTE 1)
                                                                                       (IN THOUSANDS)
<S>                                                                <C>               <C>                 <C>
Cash flows from operating activities:                                                                                       
Net loss.......................................................    (pound)(10,527)   (pound)(55,414)     $(89,438)
Adjustments to reconcile net loss to net cash provided by                                                         
operating activities:                                                                                             
  Depreciation and amortization................................             9,320            12,568        20,285
  Unrealized foreign exchange losses/(gains)...................           (12,552)           19,946        32,192
  Accretion of Senior Note discount............................            15,247            17,755        28,657
  Provision for losses on accounts receivable..................               444               (14)          (22)
  Amortization of deferred financing costs.....................               484               593           957

  Change in operating assets and liabilities:                                                                     
    Change in trade receivables................................              (691)           (2,459)       (3,969)
    Change in other assets.....................................               464            (1,287)       (2,077)
    Change in accounts payable.................................             1,469             2,151         3,472
    Change in accounts payable deposit.........................                 -           116,596       188,186
    Change in other liabilities................................             4,040            18,193        29,363
                                                                   ---------------   ---------------     ---------
Net cash provided by operating activities......................             7,698           128,628       207,606
                                                                   ---------------   ---------------     ---------
Cash flows from investing activities:                                                                             
  Cash invested in property and equipment......................           (30,091)          (31,160)      (50,292)
  Proceeds from disposition of assets..........................                14                --            --
                                                                   ---------------   ---------------     ---------
Net cash used in investing activities..........................           (30,077)          (31,160)      (50,292)
                                                                   ---------------   ---------------     ---------
Cash flows from financing activities:                                                                             
  Proceeds of issue of debt....................................           202,381                --            --
  Debt financing costs.........................................            (6,225)               --            --
  Repayment of mortgage loan...................................               (10)              (20)          (32)
  Capital element of capital lease repayments..................              (588)             (773)       (1,248)
                                                                   ---------------   ---------------     ---------
Net cash provided by/(used in)financing activities.............           195,558              (793)       (1,280)
                                                                   ---------------   ---------------     ---------
Net increase in cash and cash equivalents......................           173,179            96,675       156,034
Cash and cash equivalents at beginning of period...............            75,680           164,738       265,887
Effect of exchange rate changes on cash and cash equivalents...            (2,041)            1,968         3,176
                                                                   ---------------   ---------------     ---------
Cash and cash equivalents at end of period.....................    (pound)246,818    (pound)263,381      $425,097
                                                                   ===============   ===============     =========


<FN>
         See the accompanying notes to the Unaudited Condensed Consolidated Financial Statements.
</FN>
</TABLE>


                                        8

<PAGE>



       NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PREPARATION

         Diamond  Cable  Communications  Plc (the  "Company")  owns and operates
cable television and  telecommunications  systems through its subsidiaries.  The
unaudited  consolidated financial statements of the Company and its subsidiaries
(the  "Group") have been prepared in  accordance  with U.S.  generally  accepted
accounting  principles  and the  rules and  regulations  of the  Securities  and
Exchange Commission (the "SEC").  Accordingly,  certain information and footnote
disclosures  normally included in consolidated  financial statements prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted.  The  consolidated  financial  statements are stated in pounds sterling
((pound)).  Merely for convenience the consolidated financial statements contain
translations of certain pound sterling  amounts into U.S. dollars at $1.6140 per
(pound)1.00, the noon buying rate in the City of New York for cable transfers in
pounds sterling as certified for customs purposes by the Federal Reserve Bank of
New York on March 31, 1999.

2.   RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS

         The financial statements as of and for the periods ended March 31, 1999
and  1998  are  unaudited.  However,  in the  opinion  of the  management,  such
statements  include  all  adjustments   (consisting  only  of  normal  recurring
accruals)  necessary  for a fair  presentation  of the  results  for the periods
presented.  The results of operations for any interim period are not necessarily
indicative of the results for the full year.  The interim  financial  statements
should be read in  conjunction  with the financial  information  included in the
Company's 1998 Annual Report on Form 10-K filed with the SEC.

3.   COMPREHENSIVE LOSS

         Comprehensive  loss for the  three-month  periods to March 31, 1998 and
1999 is shown below:

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED MARCH 31,
                                                     ------------------------------------------------
                                                          1998               1999              1999
                                                     ---------------    ---------------     ---------
                                                                                             (NOTE 1)
                                                                        (IN THOUSANDS)

<S>                                                  <C>                <C>                 <C>
Net loss..........................................   (pound)(10,527)    (pound)(55,414)     $(89,438)
Other comprehensive (loss)/profit net of tax:-                                                        
  Unrealized (loss)/profit on securities..........           (2,041)             1,968         3,176
                                                     ---------------    ---------------     ---------
Comprehensive loss................................   (pound)(12,568)    (pound)(53,446)     $(86,262)
                                                     ===============    ===============     =========
</TABLE>


4.  OTHER EXPENSES



                                        9
<PAGE>




         Other  expenses  of  (pound)8.5  million  consist of costs  incurred in
connection  with the Share  Exchange  Agreement,  including  fees of  (pound)7.4
million paid to Goldman,  Sachs & Co. and Columbia  Management for their role as
joint  financial  advisors  to  the  Company  in  examining  potential  business
opportunities and other strategic alternatives leading up to the Share Exchange.


5.   PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                       LAND AND          CABLE         OFFICE          MOTOR
                                       BUILDINGS        NETWORK       EQUIPMENT       VEHICLES        TOTAL
                                     ------------   --------------   ------------   ----------   --------------
                                                                   (IN THOUSANDS)
<S>                                  <C>            <C>              <C>            <C>          <C>
ACQUISITION COSTS

Balance at January 1, 1999.......    (pound)7,483   (pound)538,472  (pound)11,637   (pound)961   (pound)558,553
Additions........................             141           26,761          1,075          164           28,141
Dispositions.....................             --               --             --           --               --
                                     ------------   --------------   ------------   ----------   --------------
Balance at March 31, 1999........           7,624          565,233         12,712        1,125          586,694
                                     ------------   --------------   ------------   ----------   --------------
ACCUMULATED DEPRECIATION
Balance at January 1, 1999.......             680           85,385          6,373          249           92,687
Charge for period................              58           10,642            584           65           11,349
Dispositions.....................             --               --             --           --               -- 
                                     ------------   --------------   ------------   ----------   --------------
Balance at March 31, 1999........             738           96,027          6,957          314          104,036
                                     ------------   --------------   ------------   ----------   --------------
MARCH 31, 1999 NET BOOK VALUE....           6,886          469,206          5,755          811          482,658
                                     ============   ==============   ============   ==========   ==============
DECEMBER 31, 1998 NET BOOK VALUE     (pound)6,803   (pound)453,087   (pound)5,264   (pound)712   (pound)465,866
                                     ============   ==============   ============   ==========   ==============
</TABLE>


6.   COMMITMENTS AND CONTINGENCIES

         The Company is obligated under the terms of its existing licenses,  and
under the milestone  requirements of its local delivery  licenses  ("LDLs"),  to
construct cable systems passing a predetermined  number of premises.  Should the
Company fail to achieve these  milestones,  without license  modifications,  the
Director General could commence  proceedings to require  compliance.  Similarly,
the  Independent  Television  Commission  ("ITC") may  commence  proceedings  to
require  compliance  with the build  milestones  in the LDLs.  If the Company is
unable to comply,  its licenses in respect of which milestones have not been met
could be revoked, which could have a material adverse effect on the Company.




                                       10

<PAGE>



7.   JOINT PURCHASING ALLIANCE AGREEMENT

         The Company and NTL entered into a Joint Purchasing  Alliance Agreement
(the "Alliance  Agreement") on March 5, 1999, pursuant to which the Company acts
as  purchasing  agent on behalf of a number of  subsidiaries  of NTL.  Under the
terms of the  Alliance  Agreement,  on March 8,  1999,  the  Company  received a
deposit of purchasing funds of (pound)137  million from various  subsidiaries of
NTL to act as agent for capital  purchases.  Funds held by the Company under the
Alliance  Agreement  are  recorded  on  the  balance  sheet  as  Cash  and  Cash
Equivalents and Accounts Payable-Deposits.

8.   SHARE EXCHANGE AGREEMENT

         On June 16, 1998, the Company  announced that all of the holders of its
outstanding  ordinary  shares of 2.5p each and  deferred  shares of 25p each had
agreed to exchange all outstanding shares in the Company for newly issued shares
of common stock of NTL. On March 8, 1999, the Share Exchange contemplated by the
Share Exchange  Agreement,  among NTL and the  shareholders of the Company,  was
consummated.  As a result of this  transaction,  all of the Company  Shares were
exchanged for NTL Common Stock, and the Company became a wholly-owned subsidiary
of NTL.

         In connection  with  provisions in each of the  indentures  pursuant to
which the Group's  debt  securities  were issued,  which  require that offers to
repurchase such debt securities be made to holders of such securities at a price
of 101% of their  accreted  value or  principal  amount  following  a "change of
control",  the Company  commenced  offers to  repurchase  its  outstanding  debt
securities on April 1, 1999.  The offers  expired on April 30, 1999. The Company
will pay approximately $105,000 to repurchase the tendered debt securities.

9.   SUMMARIZED FINANCIAL INFORMATION

         On February 6, 1998,  Diamond  Holdings  plc  ("Diamond  Holdings"),  a
subsidiary of the Company, issued  (pound)135,000,000 in principal amount of its
10% Senior Notes due February 1, 2008 and  $110,000,000  in principal  amount of
its 91/8% Senior Notes due February 1, 2008  (together,  the "1998  Notes".) The
1998 Notes have been fully and  unconditionally  guaranteed by the Company as to
principal,  interest and other  amounts  due.  Net proceeds  received by Diamond
Holdings  amounted to approximately  (pound)195  million after issuance costs of
approximately (pound)7 million.




                                       11

<PAGE>



         The  following  table  presents   summarized   consolidated   financial
information for Diamond  Holdings as of and for the three months ended March 31,
1999.  This  summarized  financial  information  is being  provided  pursuant to
Section G of Topic 1 of Staff Accounting Bulletin No. 53-- "Financial  Statement
Requirements in Filings Involving the Guarantee of Securities by a Parent".  The
Company  will  continue to provide such  summarized  financial  information  for
Diamond Holdings for as long as the 1998 Notes remain outstanding and guaranteed
by the Company.


                                            Diamond Holdings plc (note a)
                                            --------------------
                                         Year ended          Three months ended
                                     December 31, 1998         March 31, 1999
                                     -------------------    -------------------
                                                   (in thousands)
SUMMARIZED CONSOLIDATED INCOME
STATEMENT INFORMATION
Revenue............................   (pound) 88,756           (pound)27,303
Operating costs and expenses.......          105,914                  33,646
Net loss for the period............   (pound)(87,556)         (pound)(47,078)
                                    ====================    ===================

                                      December 31, 1998       March 31, 1999
                                      -----------------       --------------
                                                   (in thousands)
SUMMARIZED CONSOLIDATED BALANCE
SHEET INFORMATION
Fixed and noncurrent assets........   (pound)553,740          (pound)569,140
Current assets.....................          148,415                  17,022
                                    --------------------    -------------------
Total assets.......................   (pound)702,155          (pound)586,162
                                    ====================    ===================

Current liabilities................    (pound)48,030           (pound)50,933
Noncurrent liabilities.............          849,750                 776,886
Shareholders deficit...............         (195,625)               (241,657)
                                    --------------------    -------------------
Total liabilities and                                                          
shareholders interest..............   (pound)702,155          (pound)586,162
                                    ====================    ===================

(a)  Diamond  Holdings  was  incorporated  on December 15, 1997 and is a wholly-
     owned,  direct subsidiary of Diamond Cable  Communications  Plc. On January
     16, 1998 Diamond  Holdings  became the  intermediate  holding company which
     holds all of the shares of all Group  companies.  The Summarized  Financial
     Information  shows  operating  results  as if Diamond  Holdings  became the
     intermediate holding company on January 1, 1998.



                                       12

<PAGE>



                        DIAMOND CABLE COMMUNICATIONS PLC

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF RESULTS OF  OPERATIONS  AND
         FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

         The  Group   expended  net  cash  to  fund   investing   activities  of
(pound)134.3 million and (pound)31.2 million in the year ended December 31, 1998
and the  first  three  months  of  1999,  respectively.  The  Group's  investing
activities  consisted  almost  exclusively  of the ongoing  construction  of the
network.  Net cash provided by financing  activities in the year ended  December
31, 1998 was (pound)193.1 million and in the first three months of 1999 net cash
used in  financing  activities  was  (pound)0.8  million.  The  Group's net cash
provided  by  operating  activities  was  (pound)31.4  million in the year ended
December  31,  1998 and  (pound)128.7  million in the three  months to March 31,
1999, of which (pound)116.6 million relates to funds received in connection with
the Alliance Agreement.  The Group's cash and funding requirements  historically
have been met principally  through the issuance of the Company's senior discount
notes in September  1994,  December  1995 and February 1997  (collectively,  the
"Discount  Notes"),   as  well  as  from  equity  capital,   advances  from  its
shareholders,  and from bank and lease financing. In February 1998, a subsidiary
of the Company, Diamond Holdings, issued the 1998 Notes, raising net proceeds of
approximately  (pound)195 million.  The 1998 Notes are guaranteed by the Company
as to payment of  principal,  interest and any other  amounts due. In connection
with the issuance of the 1998 Notes,  the Group  terminated  its  existing  bank
facility.

         The  further   development  and   construction  of  the  Group's  cable
television  and  telecommunications  network  will require  substantial  capital
investment.  The Group is obligated by the milestones in its  telecommunications
licenses and its LDLs to construct  and activate a network  passing an aggregate
of 1,021,894  premises within  prescribed time periods.  Failure by the Group to
meet its milestones could  potentially  subject the Group to enforcement  orders
from OFTEL or the ITC,  which could lead to revocation of the relevant  licenses
or a shortening of an LDL period or fines. The Group has met the final milestone
obligations  under all of its  telecommunications  licenses except in respect of
the Leicester and Loughborough  franchise.  The Group met the required quarterly
milestone obligation under its telecommunications  license for the Leicester and
Loughborough  franchise as at March 31, 1999.  Principally  because of delays by
the  Department  of  Trade  and  Industry  in  granting  the  Group  a  national
telecommunications  license,  and  consequent  delays  in  the  commencement  of
construction,  the Group did not meet its annual  milestones in six of its seven
LDL franchises at the end of 1997,  although  construction  has now commenced in
all LDL  franchises.  Following an application by the Group to the ITC, on March
26, 1998 the ITC formally modified the annual build milestone obligations in all
of the Group's LDL franchise areas except Vale of Belvoir. The Group has met


                                       13

<PAGE>



the  modified  milestones  in all of its LDL  franchises  at December  31, 1998,
except for its Ravenshead franchise.

         The Company  expects that the Group's  residential  cable  network will
extend  approximately 14,300 kilometers (plus 920 kilometers to interconnect the
residential build) and pass approximately 1.2 million homes once completed.  The
Group expects the network to be substantially  completed by the end of 2004. The
Company currently estimates that the additional capital  expenditures from April
1, 1999 required for the Group to substantially complete construction sufficient
to satisfy its aggregate  milestone  obligations of  approximately  1.02 million
premises  (including   estimated   subscriber   connection   expenses)  will  be
approximately (pound)282 million, although further capital expenditures would be
required to substantially  complete the network.  These  expenditures could vary
significantly  depending  on the number of customers  actually  connected to the
network, the availability of construction  resources,  the impact of competition
from  other  cable  or  telecommunications   operators  or  television  delivery
platforms,  the pace of the  Group's  construction  program  and other  factors,
including those described below.

         At March 31, 1999,  the Group had  constructed  and activated a network
comprising  approximately 72% of its aggregate  milestones.  The Group estimates
that existing cash  resources  and estimated  future cash flows from  operations
will be sufficient to complete the construction and activation of its network to
almost 84% of its aggregate final milestones, which level the Group estimates it
will  achieve by the end of the second  quarter of 2000.  Thereafter,  the Group
will be required to obtain  further  debt and/or  equity  financing  to complete
construction sufficient to satisfy its aggregate milestones.  To the extent that
(i) the amounts required to construct the Group's network to meet its milestones
exceed its estimates,  (ii) the Group's cash flow does not meet  expectations or
(iii) the Group  continues its  construction of the network beyond its milestone
obligations,  the amount of further debt and/or equity  financing  required will
increase.  There can be no assurance that any such debt or equity financing will
be available to the Group on acceptable commercial terms or at all.

         The foregoing  information  with regard to expected  completion  times,
future capital expenditures and the sufficiency of funding is forward-looking in
nature. Due to a number of factors,  including those identified in the preceding
paragraph and below, actual results may differ materially from expected results.
In particular, the anticipated further funding requirements will depend upon the
Group's  cash flow  which,  in turn,  will  depend  upon a number of  variables,
including  revenue  generated  from  business  telecommunications,   residential
telephone and cable  television  services,  churn,  expenses such as programming
costs  and   interconnect   charges,   network   construction   and  development
expenditures and financing costs.  Adverse developments in any of these or other
areas could adversely  affect the Group's cash flow.  Moreover,  there can be no
assurance that (i) conditions  precedent to the  availability of funds under any
future debt instruments will be satisfied when funds are


                                       14

<PAGE>



required; (ii) the Group will be able to generate sufficient cash
from operations to meet any unfunded  portion of its capital  requirements  when
required;  (iii) the cost of  constructing  and  activating the network will not
increase  significantly;  (iv) the Group will not acquire  additional  franchise
areas,  which would require additional  capital  expenditures;  or (v) the Group
will not incur  losses from  foreign  currency  transactions  or its exposure to
foreign  currency  exchange  rate  fluctuations,  each of  which  factors  would
increase the Group's funding needs.

         In  connection  with  change  of  control  provisions  in  each  of the
indentures  pursuant to which the Group's debt  securities  were  issued,  which
require that offers to  repurchase  such debt  securities  be made to holders of
such securities at a price of 101% of their accreted value or principal  amount,
the Company  commenced  offers to repurchase its outstanding  debt securities on
April 1,  1999.  The offers  expired on April 30,  1999.  The  Company  will pay
approximately $105,000 to repurchase the tendered debt securities.

SELECTED OPERATING DATA

         The  following  table sets forth  certain data  concerning  the Group's
franchises at and for the years ended  December 31, 1997 and 1998 and at and for
the three-month period ended March 31, 1999.

<TABLE>
<CAPTION>
                                                             DECEMBER 31,           MARCH 31,
                                                    ---------------------------   ------------
                                                         1997          1998           1999
                                                    ------------   ------------   ------------

<S>                                                 <C>            <C>            <C>  
Homes passed by civils construction(1)............       536,110        699,682        722,417
Homes activated(2)................................       508,801        677,407        702,696
Homes marketed(3).................................       405,787        584,457        603,757
Student services rooms marketed(4)................         1,805          9,908          9,915
BUSINESS TELECOMMUNICATIONS
Business customers accounts.......................         5,723          7,649          8,511
Business lines connected..........................        27,124         37,473         42,364
Private circuits(5)...............................           258            331            511
Average lines per business(6).....................           4.7            4.9            5.0
Average monthly revenue per line(7)(8)............  (pound)46.26   (pound)43.07   (pound)42.04
Pro-forma average monthly revenue per line(8).....  (pound)46.26   (pound)43.26   (pound)42.04
</TABLE>




                                       15

<PAGE>


<TABLE>
<CAPTION>
                                                             DECEMBER 31,           MARCH 31,
                                                    ---------------------------   ------------
                                                         1997          1998           1999
                                                    ------------   ------------   ------------

<S>                                                 <C>            <C>            <C>  
RESIDENTIAL TELEPHONE(4)
Residential lines connected.......................       157,171        232,059        248,132
Penetration rate of homes marketed(9).............          38.6%          39.0%          40.4%
Average monthly revenue per line(8)(10)...........  (pound)18.75   (pound)18.82   (pound)19.54
Pro-forma average monthly revenue per line(8).....  (pound)18.75   (pound)18.89   (pound)19.54
Churn(11).........................................          16.3%          13.5%          11.8%
CABLE TELEVISION
Basic service subscribers.........................        83,793        117,290        131,056
Penetration rate of homes marketed(12)............          20.6%          20.1%          21.7%
Average monthly revenue per subscriber(13)........  (pound)19.84   (pound)19.46   (pound)18.38
Churn(11).........................................          32.7%          22.4%          15.2%
</TABLE>


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

(1)  Homes passed by civils is the number of homes  (excluding  student services
     rooms) that have had ducting buried outside.

(2)  Homes activated is the number of homes  (excluding  student services rooms)
     that are capable of receiving cable service  without  further  extension of
     transmission lines, apart from the final connection to the home.

(3)  Homes marketed is the number of homes activated (excluding student services
     rooms) for which the initial marketing phase (including door to door direct
     marketing) has been completed.

(4)  During  1997 the Group began to provide  telephone  services  and  internet
     access to students at a number of large  educational  establishments in its
     franchise area.  Academic terms make this business  seasonal in nature.  In
     order to fairly present the results,  the Company has adopted the following
     policy:  (i) rental  revenue is recognized  evenly over a full twelve month
     period (or the balance of the period to the start of the next academic year
     if shorter),  (ii) call revenue is  recognized  in the month in which it is
     earned and is incorporated in residential telephone average monthly revenue
     per line,  (iii) a student services line is recognized as the equivalent of
     3/4 of a  residential  line,  (iv) each  student  room at which  service is
     available is treated as a home marketed and incorporated in the calculation
     of  residential  telephone  penetration  and,  (v) any net  decrease in the
     number of students taking the service between one academic year and another
     is ignored for the purposes of calculating residential telephone churn.

(5)  Private circuits are point-to-point customer specific connections for which
     a fixed annual rental charge is made.

(6)  Average lines per business  account is calculated by dividing the number of
     business  lines  connected  on the given  date by the  number  of  business
     customer accounts on such date.

(7)  The  average  monthly  business  telecommunications  revenue  per  line  is
     calculated by dividing (i) business  telecommunications  line and equipment
     rental,  outgoing call charges and incoming call charges (including revenue
     from  private  circuits)  for the  period  by (ii) the  average  number  of
     business  telecommunications  lines and private  circuits  (calculated as a
     simple  average of the number of subscribed  lines and private  circuits at
     the end of each month  during the  period) and  dividing  that amount by 12
     (for the years  ended  December  31,  1997 and 1998),  or by three (for the
     three months ended March 31, 1999).

(8)  The  calculation  of  the  average  monthly  revenue  per  line  (for  both
     residential telephone and business telecommunication revenues) for the year
     to December 31, 1998  reflects  the  reduction  in revenues  stemming  from
     rebates to BT on incoming termination revenues relating in part to 1995 and
     1996 but recorded  against revenues in 1998. The rebates were calculated in
     accordance  with  revised  interconnect  agreements  with BT that were made
     effective  retroactively  from April 1995.  The pro-forma  average  monthly
     revenue   per  line   (for  both   residential   telephone   and   business
     telecommunications  revenues)  gives  effect  to the  revised  interconnect
     agreements  as if they had been in effect from April 1995 and  allocates to
     each period the portion of the rebates that relates to such period.

(9)  Penetration  rate of homes marketed is calculated by dividing the number of
     residential  lines,  including  student  services  lines  recognized at the
     equivalent of 3/4 of a residential  line connected on the given date by the
     total number of homes  marketed and student  services  rooms marketed as of
     such date, expressed as a percentage.

(10) The average monthly revenue per residential telephone line is calculated by
     dividing (i) line and equipment rental,  outgoing call charges and incoming
     call  charges  for the  period by (ii) the  average  number of  residential
     telephone lines (calculated as a simple average of the number of subscribed
     lines at the end of each month during the period) and dividing  that amount
     by 12 (for the years ended  December  31, 1997 and 1998),  or by three (for
     the three months ended March




                                       16

<PAGE>


     31, 1999).  Call revenue from student  services  lines is recognized in the
     month in which it is earned and is  incorporated  in residential  telephone
     average  monthly  revenue  per  line,  with  each  student   services  line
     recognized as the equivalent of 3/4 of a residential line.

(11) Churn is calculated by dividing net  disconnections  (total  disconnections
     less the  number  of  disconnected  accounts  for  which  service  is later
     restored) in a period by the average  number of  subscribers  in the period
     (calculated  as a simple average of the number of subscribers at the end of
     each month during the  period).  Churn for the three months ended March 31,
     1999 is annualized by multiplying the amount as calculated above by four.

(12) Penetration  rate of homes marketed is calculated by dividing the number of
     homes  receiving  basic  cable  television  on the given  date by the total
     number of homes marketed as of such date, expressed as a percentage.

(13) The average monthly revenue per cable  television  subscriber is calculated
     by  dividing  total  cable  television   subscriber   revenues   (excluding
     installation  revenues)  for the  period  by the  average  number  of cable
     television  subscribers  (calculated  as a simple  average of the number of
     basic service  subscribers  at the end of each month during the period) and
     dividing  that  amount by 12 (for the years  ended  December  31,  1997 and
     1998), or by three (for the three months ended March 31, 1999).


RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1999

         The  Group  continued  to  experience  increases  in  its  subscribers,
revenues and expenses  during the  three-month  period ended March 31, 1999.  In
general,  these  increases were  attributable to the Group's  continued  network
construction, activation and marketing of new homes and businesses. Homes passed
by civils construction  increased by 22,735 (3.2%) and homes activated increased
by 25,289 (3.7%) from December 31, 1998 to March 31, 1999. The Group has met the
final milestone obligations under all of its telecommunications  licences except
in  respect  of the  Leicester  and  Loughborough  franchise.  The Group met the
required quarterly milestone obligation under its telecommunications license for
the Leicester and Loughborough franchise as at March 31, 1999.

         Sales performance has continued to be affected by increased competitive
activity, in particular from BT, CWC, BSkyB and, in the relevant period, Ionica.
At March 31, 1999,  residential  telephone line penetration  increased to 40.4%,
compared to 39.0% as at December 31, 1998. Cable television penetration at March
31, 1999 also  increased to 21.7% from 20.1% at December  31, 1998.  Penetration
rates for  residential  telephone  and cable  television  were  38.5% and 19.8%,
respectively, at March 31, 1998.

     REVENUE

         For the  three  months  ended  March  31,  1999,  total  revenues  were
(pound)27.3  million, a 39% increase over total revenues of (pound)19.6  million
for the comparable  period in 1998.  This growth is attributable to increases in
revenues in all three of the Group's primary lines of business.

         Business Telecommunications.  Business telecommunications revenues were
(pound)5.7  million  for the three  months  ended  March 31,  1999  compared  to
(pound)4.3 million for the comparable period in 1998 representing


                                       17

<PAGE>



an  increases  of 32%.  The growth in reported  revenues is due  primarily to an
increase in the number of business lines installed from 29,571 at March 31, 1998
to 42,364 at March 31, 1999, an increase of 43%. The average monthly revenue per
line  decreased  from  (pound)45.88  in the three  months  to March 31,  1998 to
(pound)42.04  in the  comparable  period  in  1999.  The  decrease  was due to a
combination  of, (i)  continued  increases  in centrex  lines which have a lower
average  revenue per line than other business  customer lines (centrex  services
represented  46.2% and 49.2% of the total number of business  lines at March 31,
1998 and March 31, 1999, respectively) and (ii) reductions in certain tariffs in
response to price  reductions by  competitors,  offset in part by increased call
usage per line.  The Company  may lower  prices in the future if  necessary  for
competitive reasons.

         Residential Telephone.  Residential telephone revenues were (pound)14.4
million for the three months to March 31, 1999  compared to  (pound)9.8  million
for the comparable  period in 1998,  representing an increase of 46%. The growth
in  residential  telephone  revenue is due  primarily  to a 40%  increase in the
number of residential  telephone lines from 177,612 at March 31, 1998 to 248,132
at March 31, 1999.  Average  monthly  revenue per line was  (pound)18.77  in the
three-month  period to March 31, 1998 and (pound)19.54 in the comparable  period
in 1999.  The  increase  in the level of average  revenues  was  largely  due to
increased  call usage which offset  reductions in call and incoming  termination
tariffs  during  1998 and the  first  three  months  of  1999.  The  churn  rate
(annualized)  reduced to 11.8% for the three months to March 31, 1999 from 12.6%
in the comparable period in 1998.

         Cable  Television.   Cable  television   revenues  increased  31%  from
(pound)5.5  million for the three months to March 31, 1998 to (pound)7.2 million
in the comparable  period in 1999. This growth in cable  television  revenue was
primarily  due to an increase in the number of the  Company's  cable  television
subscribers  which rose 45% from 90,498 at March 31 1998 to 131,056 at March 31,
1999. The Company's average monthly revenue per subscriber,  however,  decreased
from (pound)19.95 for the three months to March 31, 1998 to (pound)18.38 for the
comparable  period in 1999.  The decrease in average  revenue per  subscriber is
primarily due to the introduction of new,  lower-priced  program packages during
1997 and 1998.

         The  Group's  churn  rates  fell  substantially  to 15.2% for the three
months to March 31, 1999 as compared to 29.2% in the comparable  period in 1998.
The Group  believes  that the reduction in churn this year is largely the result
of new policies  introduced by the Group to reduce churn,  including that it now
requires  subscribers  to  pay  an  installation  fee  in  connection  with  new
residential  services.  In addition,  the Group  introduced other policies which
contributed to the reducing trend in churn between  comparable periods including
improvements in the management and quality of the sales force,  the introduction
of more  program  packaging  choice for  customers  and  increased  focus on the
retention of customers.



                                       18

<PAGE>




     OPERATING COSTS AND EXPENSES

         Telephone  expenses,  consisting  principally of  interconnect  charges
payable to BT, Mercury,  Energis and Global One were  (pound)5.6  million in the
three-month  period to March 31, 1999, and (pound)3.7 million in the three-month
period   to  March   31,   1998.   As  a   percentage   of   combined   business
telecommunications  and  residential  telephone  revenues,  these  direct  costs
remained  relatively stable at 28% in the three-month  period to March 31, 1999,
compared to 27% in the comparable period in 1998.

         Direct costs for cable television  programming,  which generally depend
on the number of  subscribers  and  per-subscriber  rates charged by programming
suppliers,  increased from (pound)3.0 million in the three-month period to March
31,  1998,  to  (pound)3.9  million  in the  comparable  period  in  1999.  As a
percentage of cable television revenues, these direct costs were 55% both in the
three-month period ended March 31, 1998 and in the comparable period in 1999.

         Selling,  general and administrative  expenses as a percentage of total
revenues in the three-month period to March 31, 1998 were 44% compared to 40% in
the  comparable  period  in  1999.  These  costs  increased  by  26%,  from  the
three-month  period  to March 31,  1998 to the  comparable  period in 1999.  The
increase was due to higher  administration and sales force costs associated with
the expansion of the Company's  business,  together with additional LDL cash bid
payments which commenced in 1999.

         Depreciation  and  amortization  expenses  increased  by 35%  from  the
three-month  period to March 31,  1998 to the  comparable  period in 1999.  This
increase was attributable to the increasing size of the Company's network.

         Other expenses of (pound)8.5 million in the three month period to March
31,  1999  relate  to costs  incurred  in  connection  with the  Share  Exchange
Agreement, including fees of (pound)7.4 million paid to Goldman, Sachs & Co. and
Columbia Management for their role as joint financial advisors to the Company in
examining  potential  business  opportunities  and other strategic  alternatives
leading up to the Share Exchange.

     INTEREST INCOME/EXPENSE

         Interest  expense was  (pound)23.4  million in the  three-month  period
ended March 31, 1999,  compared to (pound)19.0  million in the comparable period
in 1998. The increase is due primarily to the accretion on the Discount Notes of
(pound)17.8  million in the  three-month  period to March 31,  1999  compared to
(pound)15.4  million in the  comparable  period in 1998 and interest on the 1998
Notes of  (pound)4.9  million  in the  three-month  period  to March  31,  1999,
compared to (pound)3.0  million in the  comparable  period in 1998. In addition,
amortization of debt financing  costs was (pound)0.6  million and other interest
expense was (pound)0.2  million in the three months to March 31, 1999,  compared
to (pound)0.4 million and (pound)0.2 million,  respectively, in the three months
to March 31, 1998.  Interest received was (pound)2.4 million in the 


                                       19

<PAGE>



three  months to March 31,  1999  compared  to  (pound)3.0  million in the three
months to March 31, 1998.

     FOREIGN EXCHANGE

         A  substantial  portion of the Group's  existing debt  obligations  are
denominated  in U.S.  dollars,  while the  Group's  revenues  and  accounts  are
generated and stated in pounds sterling.  Foreign currency translation gains and
losses, except for unrealized gains and losses on available-for-sale securities,
are  reported  as part of the profit or loss of the Group.  In the three  months
ended  March 31,  1998,  the Group  recognized  net  foreign  exchange  gains of
(pound)12.5 million,  primarily due to the unrealized gain on translation of its
liability on the Discount Notes.  Because of changes in prevailing rates, during
the three months ended March 31, 1999, the Group recorded a net foreign exchange
loss  of  (pound)20.0   million  primarily  due  to  the  unrealized  losses  on
translation of its liability on the Discount Notes and 1998 Notes.

     DERIVATIVE FINANCIAL INSTRUMENTS

         Realized gains on derivative financial  instruments of (pound)24,000 in
the three  months to March  31,  1998  consists  of the  mark-to-market  closing
valuation of an interest rate swap commitment which was closed in March 1998.

         The Company entered into a foreign  exchange  forward  contract on June
23, 1997 for settlement on June 25, 1998 to sell (pound)50  million at a rate of
$1.6505 to (pound)1.  The Company also entered into a foreign  exchange  forward
contract  on June 27,  1997 for  settlement  on July 1,  1998 to sell  (pound)50
million  at a rate of  $1.6515  to  (pound)1.  On June 16,  1998 two  offsetting
agreements  were entered  into at rates of $1.6326 and $1.6322 to (pound)1.  The
offsetting  contracts were settled on June 17, 1998 with a payment of (pound)1.1
million to the Company. An unrealized loss of (pound)1.9 million was recorded in
the three months to March 31, 1998 on these two contracts. The Company continues
to monitor  conditions in the foreign  exchange market and may from time to time
enter  into  foreign  currency  contracts  based on its  assessment  of  foreign
currency  market  conditions  and their effect on the Company's  operations  and
financial condition.  Therefore, changes in currency exchange rates may continue
to have a  material  effect on the  results of  operations  of the Group and may
materially  affect the Company's  ability to satisfy its obligations,  including
obligations under outstanding debt instruments, as they become due.

     NET LOSS

         As a result of the  foregoing  factors,  the  Group  had net  losses of
(pound)55.4  million in the three-month period ended March 31, 1999, compared to
net losses of (pound)10.5 million in the comparable period of 1998.


                                       20

<PAGE>



     INFORMATION SYSTEMS - YEAR 2000

         The future operations of the Group depend on its network infrastructure
and certain other systems performing correctly over the change of millennium and
on  subsequent  dates.  The correct  handling of date  information  is therefore
essential   and   detailed   test   programs   are   underway  for  all  crucial
telecommunications and cable television network and systems infrastructure.

         The Group has had an overall program in place since 1997. The Group has
split its business  into the  following  areas,  which  encompass IT systems and
non-IT systems containing embedded technology:

              o   Network and switches
              o   MIS
              o   Network construction
              o   Facilities
              o   Suppliers
              o   CATV network
              o   Customer equipment
              o   Internet

         A project  leader has been nominated in each business area with overall
responsibility  for the Year 2000 computer  problem for that area. Each Business
unit's  plan  addresses  the  specific   phases  to  be  undertaken,   including
identification and awareness,  evaluation/impact analysis, strategy development,
implementation,  and testing.  Every project leader is a member of the Year 2000
Compliance  Committee,  sponsored by the Managing Director and chaired by the IT
Director.  Additionally,  to ensure a rigorous and cohesive approach,  a Program
Manager is  responsible  for  coordinating  and  monitoring  the entire  program
against defined plans to completion.

         The  Group  has  installed  year  2000   compliant   software  for  the
telecommunications  switches and network control  systems.  The cable television
infrastructure  that is not currently  year 2000  compliant is on schedule to be
upgraded by the end of June 1999.

         Other systems critical to business  operations,  such as the subscriber
management  system and the financial and accounting  systems,  are maintained by
the vendors. With the exception of the subscriber management system, the vendors
have supplied  versions of these critical  systems which are designed to be Year
2000 compliant and were subject to a thorough testing program that was completed
in 1998.  The vendors  have  expressed  confidence  that any  problems  that may
currently  exist can be  rectified  in a timely  manner.  New  applications  and
upgrades of the  subscriber  management  system have recently been installed and
they are 


                                       21

<PAGE>



currently undergoing testing for Year 2000 compliance.  This testing is targeted
for completion in the second quarter of 1999.  Other than these recent  upgrades
and applications,  management believes the subscriber  management system is Year
2000 compliant. The personal computer and local area network infrastructures are
being surveyed and tested, and non-compliant  elements should be replaced by the
end of June 1999.

         The Group  depends,  to some extent,  on third party  suppliers for the
supply of telecommunications, cable television, systems for customer service and
billing,  as well as building  facilities  and supplies.  Maintenance  contracts
exist for critical  elements and assurance has been sought from all suppliers of
critical  services  that  they will  continue  to supply  the  services  without
interruption.  Where no satisfactory response has been forthcoming,  alternative
suppliers  have  been  sought  that can give the  assurances  the  Group and its
customers require.

         Costs incurred in connection with year 2000 compliance are not expected
to be material.  Software upgrades to the network,  cable television and systems
infrastructure are supplied as part of the normal maintenance contracts. Minimal
cost  has  been  incurred  to  date,   and  it  is  estimated   that  a  further
(pound)160,000 will be required for replacement of local area network,  personal
computer elements and program  management and associated costs. Other components
being replaced are otherwise due for replacement through obsolescence.

         Should the  telecommunications  network fail to operate  correctly over
the date  change,  the  business  of the  Group  would be  materially  adversely
affected.  Similarly,  should the cable  television  network  or the  subscriber
management system and personal computer network fail to operate correctly,  this
could also have  materially  adverse  consequences  to the Group.  The impact of
failure of the critical network, cable television and system components could be
significant.  Therefore, significant effort is being devoted to rigorous testing
programs to ensure that any potential problems are identified and rectified in a
timely manner.  Despite the efforts being expended by the Group, there can be no
assurance  that Year 2000  compliance  issues  will not have a material  adverse
effect on the Group's operations.

         Preparatory contingency planning has been performed to address critical
issues of customer support, technical support, and management representation.  A
Group-wide  review  has been  completed  to assess  the  suitability  of current
arrangements.  Detailed  contingency  plans are targeted for  completion in each
business area by the end of the second quarter of 1999. Risks and  uncertainties
and their associated contingency plans relate to systems,  software,  equipment,
and all


                                       22

<PAGE>



services which the group has assessed as being critical to business  operations,
financial impact, customer service, and safety. Significant effort has also been
devoted to verify and assist in the Year 2000 remediation efforts of the Group's
trading  partners and  suppliers  where they could have an effect on the Group's
operations.  Additionally, normal business continuity, contingency, and disaster
recovery plans will be verified, and where necessary,  augmented to specifically
address Year 2000  contingencies.  Appropriate  training will be given to people
where new or modified processes are in place to deal with millennium issues, and
rapid response teams and increased  levels of support will also be considered as
required.

     RECENT DEVELOPMENTS

         Provisions in each of the indentures pursuant to which the Group's debt
securities were issued require that offers to repurchase such debt securities be
made to holders of such securities at a price of 101% of their accreted value or
principal  amount following a "change of control".  Following  completion of the
Share  Exchange  Agreement,  the  Company  commenced  offers to  repurchase  its
outstanding  debt securities on April 1, 1999. These offers expired on April 30,
1999.  The Company will pay  approximately  $105,000 to repurchase  the tendered
debt securities.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         There have been no material  changes in the reported market risks since
the end of the most recent fiscal year.





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<PAGE>



                        DIAMOND CABLE COMMUNICATIONS PLC

PART II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits -

               None.

     (b)  Reports on Form 8-K -

               None.





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<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.

                                               DIAMOND CABLE COMMUNICATIONS PLC



Date: May 7, 1999                              By:  /s/ Leigh C. Wood
                                                  -----------------------------
                                                  Leigh C. Wood
                                                  (Chief Operating Officer)



Date: May 7, 1999                              By:  /s/ Ronald McKellar
                                                  -----------------------------
                                                  Ronald McKellar
                                                  (Principal Financial Officer)



Date: May 7,  1999                             By:  /s/ Duncan Craig
                                                  -----------------------------
                                                  Duncan Craig
                                                  (Principal Accounting Officer)






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