UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                    For the quarter ended September 30, 1997

                                       or

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

               For the transition period from _______ to_________

                          Commission File No. 333-05017

                           UIH Australia/Pacific, Inc.
             (Exact name of Registrant as specified in its charter)

           State of Colorado                                      84-1341958
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

    4643 South Ulster Street, #1300
            Denver, Colorado                                        80237
(Address of principal executive offices)                          (Zip code)

       Registrant's telephone number, including area code: (303) 770-4001







     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 and (2) has been  subject to such  filing
requirements for the past 90 days. Yes  X   No 
                                       ---     ---

     The Company has no publicly-traded  shares of capital stock. As of November
14, 1997, the Company had 13,864,941 shares of common stock outstanding.


<PAGE>

                                               UIH AUSTRALIA/PACIFIC, INC.
                                                    TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                Number
                                                                                                                ------
                                              PART I - FINANCIAL INFORMATION
                                              ------------------------------
<S>                                                                                                                <C>
Item 1 - Financial Statements
------

     Condensed Consolidated Balance Sheets as of September 30, 1997 and December 31, 1996 (Unaudited)........      2

     Condensed Consolidated Statements of Operations For the Three and Nine Months Ended
         September 30, 1997 and 1996 (Unaudited).............................................................      3

     Condensed Consolidated Statement of Stockholder's (Deficit) Equity For the Nine Months Ended
         September 30, 1997 (Unaudited)......................................................................      4

     Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 1997
         and 1996 (Unaudited)................................................................................      5

     Notes to Condensed Consolidated Financial Statements (Unaudited)........................................      6


Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations...............     10
------                                                                                        


                                               PART II - OTHER INFORMATION
                                               ---------------------------

Item 1 - Legal Proceedings...................................................................................     16
------                    

Item 5 - Other Information...................................................................................     16
------                    

Item 6 - Exhibits and Reports on Form 8-K....................................................................     17
------                                   
</TABLE>




<PAGE>
<TABLE>
<CAPTION>
                                               UIH AUSTRALIA/PACIFIC, INC.
                                          CONDENSED CONSOLIDATED BALANCE SHEETS
                                (Stated in thousands, except share and per share amounts)
                                                       (Unaudited)


                                                                                         September 30,     December 31,
                                                                                             1997              1996
                                                                                         -------------     ------------
<S>                                                                                        <C>               <C>   
ASSETS
Current assets
   Cash and cash equivalents........................................................       $ 45,689          $ 19,220
   Short-term investments...........................................................             --            18,640
   Subscriber receivables...........................................................          2,519             1,625
   Related party receivables........................................................          2,194             1,958
   Other current assets.............................................................          2,645             2,393
                                                                                           --------          --------
       Total current assets.........................................................         53,047            43,836

Marketable equity securities, including other investments in affiliated companies...          2,031             1,372
Property, plant and equipment, net of accumulated depreciation of $67,449 and
   $27,038, respectively............................................................        191,496           193,170
License fees, net of accumulated amortization of $3,324 and $2,520, respectively....          8,644            10,387
Goodwill, net of accumulated amortization of $6,932 and $3,835, respectively........         53,839            58,134
Other non-current assets, net, including related party receivables of $1,600 and
   $1,600, respectively.............................................................         14,872            12,424
                                                                                           --------          --------
       Total assets.................................................................       $323,929          $319,323
                                                                                           ========          ========

LIABILITIES AND STOCKHOLDER'S (DEFICIT) EQUITY
Current liabilities
   Accrued liabilities and accounts payable, including related party payables of
     $18,653 and $1,905, respectively...............................................       $ 37,624          $ 20,336
   Construction payables............................................................          6,924            38,407
   Accrued funding obligation.......................................................            904             1,270
   Related party note payable.......................................................          4,999                --
   Current portion of long-term debt................................................          1,286             1,108
                                                                                           --------          --------
       Total current liabilities....................................................         51,737            61,121

Due to parent.......................................................................          4,112             2,758
Senior discount notes and other liabilities.........................................        370,183           251,397
                                                                                           --------          --------
       Total liabilities............................................................        426,032           315,276
                                                                                           --------          --------

Minority interest in subsidiary.....................................................         13,227                --
                                                                                           --------          --------
Stockholder's (deficit) equity:
   Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
     and outstanding................................................................             --                --
   Common stock, $0.01 par value, 30,000,000 shares authorized, 13,864,941 and
     13,864,941 shares issued and outstanding, respectively.........................            139               139
   Additional paid-in capital.......................................................        118,331           112,346
   Unrealized loss on investment....................................................         (2,753)           (3,412)
   Cumulative translation adjustments...............................................         (9,734)            1,867
   Accumulated deficit..............................................................       (221,313)         (106,893)
                                                                                           --------          --------
       Total stockholder's (deficit) equity.........................................       (115,330)            4,047
                                                                                           --------          --------
       Total liabilities and stockholder's (deficit) equity.........................       $323,929          $319,323
                                                                                           ========          ========

         The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                                            2


<PAGE>
<TABLE>
<CAPTION>
                                               UIH AUSTRALIA/PACIFIC, INC.
                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Stated in thousands, except share and per share amounts)
                                                       (Unaudited)


                                                                     For the Three Months Ended          For the Nine Months Ended
                                                                            September 30,                       September 30,
                                                                     --------------------------         ----------------------------
                                                                       1997               1996             1997               1996
                                                                     --------          --------         ---------          ---------
<S>                                                                  <C>               <C>              <C>                <C>   
Service and other revenue ..................................         $ 18,341          $  7,392         $  49,052          $ 13,262

System operating expense, including related party
   expense of $853, $0, $2,174 and $362, respectively ......          (13,988)           (6,262)          (35,857)          (13,276)
System selling, general and administrative expense .........          (14,220)           (9,383)          (37,025)          (19,625)
Corporate general and administrative expense,
   including management fees to a related party of
   $203, $188, $588 and $563, respectively .................             (309)             (214)             (885)             (746)
Depreciation and amortization ..............................          (22,061)           (7,686)          (57,797)          (15,935)
                                                                     --------          --------         ---------          -------- 
       Net operating loss ..................................          (32,237)          (16,153)          (82,512)          (36,320)

Equity in losses of affiliated companies ...................             (557)           (1,933)           (2,000)           (4,501)
Interest income ............................................              247             1,967               526             3,284
Interest expense, including related party interest
   expense of $555, $0, $633 and $0, respectively ..........          (11,214)           (8,647)          (29,676)          (12,855)
Other (expense) income, net ................................             (342)              383            (1,109)            1,001
                                                                     --------          --------         ---------          -------- 
       Net loss before minority interest ...................          (44,103)          (24,383)         (114,771)          (49,391)

Minority interest in subsidiaries ..........................              351               457               351             2,062
                                                                     --------          --------         ---------          -------- 
       Net loss ............................................         $(43,752)         $(23,926)        $(114,420)         $(47,329)
                                                                     ========          ========         =========          ========

Net loss per common share ..................................         $  (3.16)         $  (1.73)        $   (8.25)         $  (3.48)
                                                                     ========          ========         =========          ========

Weighted-average number of common shares outstanding .......       13,864,941        13,837,211        13,864,941        13,615,372
                                                                   ==========        ==========        ==========        ==========





            The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                                            3






<PAGE>
<TABLE>
<CAPTION>
                                                UIH AUSTRALIA/PACIFIC, INC.
                              CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S (DEFICIT) EQUITY
                                         (Stated in thousands, except share amounts)
                                                       (Unaudited)



                                            Common Stock         Additional    Unrealized    Cumulative
                                         ------------------        Paid-In      Loss on      Translation    Accumulated
                                         Shares      Amount        Capital     Investment    Adjustments      Deficit       Total
                                         ------      ------      ----------    ----------    -----------    -----------     -----
<S>                                    <C>            <C>         <C>           <C>           <C>           <C>          <C>
Balances, December 31, 1996 .......... 13,864,941     $139        $112,346      $(3,412)      $ 1,867       $(106,893)   $   4,047

Gain on sale of stock by
  subsidiary .........................         --       --           5,985           --            --              --        5,985
Change in unrealized loss on
  investment .........................         --       --              --          659            --              --          659 
Change in cumulative translation
  adjustments ........................         --       --              --           --       (11,601)             --      (11,601)
Net loss .............................         --       --              --           --            --        (114,420)    (114,420)
                                       ----------     ----        --------      -------       -------       ---------    ---------

Balances, September 30, 1997.........  13,864,941     $139        $118,331      $(2,753)      $(9,734)      $(221,313)   $(115,330)
                                       ==========     ====        ========      =======       =======       =========    =========


















         The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                                              4

<PAGE>
<TABLE>
<CAPTION>
                                               UIH AUSTRALIA/PACIFIC, INC.
                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (Stated in thousands)
                                                       (Unaudited)
                                                                                                        For the Nine Months Ended
                                                                                                              September 30,
                                                                                                       ---------------------------
                                                                                                         1997               1996
                                                                                                       ---------          --------
<S>                                                                                                    <C>                <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .....................................................................................         $(114,420)         $(47,329)
Adjustments to reconcile net loss to net cash flows from operating activities:
   Depreciation and amortization .............................................................            57,797            15,935
   Equity in losses of affiliated companies ..................................................             2,000             4,501
   Minority interest share of losses .........................................................              (351)           (2,062)
   Increase in technical assistance agreement payables .......................................             2,248             1,772
   Accretion of interest on senior discount notes ............................................            26,969            12,028
   Increase in subscriber receivables ........................................................            (1,079)           (3,580)
   Decrease (increase) in other assets .......................................................               165            (6,855)
   Increase in accounts payable, accrued liabilities and other ...............................            19,992            17,473
                                                                                                       ---------          --------

Net cash flows used in operating activities ..................................................            (6,679)           (8,117)
                                                                                                       ---------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments ...........................................................            (3,663)         (132,887)
Proceeds from sale of short-term investments .................................................            22,303           105,257
Restricted cash deposited ....................................................................                --           (10,000)
Investments in and advances to affiliated companies and other investments ....................            (2,366)          (10,651)
Purchase of property, plant and equipment ....................................................           (67,948)         (105,899)
(Decrease) increase in construction payables .................................................           (29,385)            5,636
                                                                                                       ---------          --------

Net cash flows used in investing activities ..................................................           (81,059)         (148,544)
                                                                                                       ---------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions from parent ............................................................                --            10,664
Cash contribution from minority interest partner .............................................            20,336                --
Proceeds from offering of senior discount notes ..............................................            29,925           225,115
Deferred debt offering costs .................................................................            (4,632)           (9,624)
Borrowing on related party payables to parent ................................................             4,999            15,073
Payment on bridge loan payable to parent .....................................................                --           (25,000)
Borrowing on other debt ......................................................................            65,971                13
Payment on other debt ........................................................................              (959)               --
                                                                                                       ---------          --------

Net cash flows provided by financing activities ..............................................           115,640           216,241
                                                                                                       ---------          --------

EFFECT OF EXCHANGE RATES ON CASH .............................................................            (1,433)              918
                                                                                                       ---------          --------
INCREASE IN CASH AND CASH EQUIVALENTS ........................................................            26,469            60,498
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ...............................................            19,220             8,730
                                                                                                       ---------          --------
CASH AND CASH EQUIVALENTS, END OF PERIOD .....................................................         $  45,689          $ 69,228
                                                                                                       =========          ========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
    Non-cash stock issuance for purchase of 50% interest in Saturn ...........................         $      --          $  7,800
                                                                                                       =========          ========
    Gain on issuance of shares by a wholly-owned subsidiary ..................................         $   5,985          $     --
                                                                                                       =========          ========
    Decrease (increase) in unrealized loss on investment .....................................         $     659          $   (784)
                                                                                                       =========          ========
    Assets acquired with capital leases ......................................................         $      --          $  1,707
                                                                                                       =========          ========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
    Cash received for interest ...............................................................         $     377          $    131
                                                                                                       =========          ========

              The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                                              5
<PAGE>

                           UIH AUSTRALIA/PACIFIC, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 1997
                     (Monetary amounts stated in thousands)
                                   (Unaudited)
 

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

      The accompanying consolidated financial statements include the accounts of
UIH  Australia/Pacific,  Inc. (the  "Company"),  and all  subsidiaries  where it
exercises  majority  control  and  owns a  majority  economic  interest.  Austar
Entertainment Pty Limited  ("Austar"),  Telefenua S.A.  ("Telefenua") and United
Wireless  Pty Limited  ("United  Wireless")  were  consolidated  for all periods
presented.  The Company has consolidated the operations of Saturn Communications
Limited ("Saturn") since July 1, 1996. Prior to that time, the Company accounted
for  its  investment  in  Saturn  under  the  equity  method.   All  significant
intercompany accounts and transactions have been eliminated in consolidation.

      In  November  1997,  the Company  effected a stock  split  whereby the 500
shares of common stock  outstanding  were  exchanged  for  13,864,941  shares of
common stock. All share and per share amounts have been  retroactively  restated
to reflect this event.

      In management's  opinion,  all adjustments (of a normal recurring  nature)
have been made which are necessary to present  fairly the financial  position of
the Company as of September 30, 1997 and the results of its  operations  for the
three and nine months ended  September  30, 1997 and 1996.  For a more  complete
understanding of the Company's financial position and results of its operations,
see  the  consolidated  financial  statements  of the  Company  included  in the
Company's annual report on Form 10-K for the year ended December 31, 1996.

INVESTMENTS IN AND ADVANCES TO AN AFFILIATED  COMPANY,  ACCOUNTED FOR UNDER  THE
EQUITY METHOD

      The Company accounts for its investment in XYZ  Entertainment  Pty Limited
("XYZ Entertainment") under the equity method of accounting.  Under this method,
the  investment,  originally  recorded at cost,  is adjusted  to  recognize  the
Company's  proportionate  share of net  earnings  or  losses  of the  affiliate,
limited  to the  extent  of the  Company's  investment  in and  advances  to the
affiliate,   including  any  debt  guarantees  or  other   contractual   funding
commitments.  The Company's proportionate share of net earnings or losses of XYZ
Entertainment  includes the  amortization  of basis  differences  related to the
excess of cost over net tangible assets acquired. Investments in and advances to
XYZ Entertainment are as follows:
<TABLE>
<CAPTION>
                                                                            As of
                                                                     September 30, 1997
                                            ------------------------------------------------------------------------
                                              Investments in       Cumulative Equity       Cumulative
                                              and Advances to         in Losses of        Translation
                                            Affiliated Company     Affiliated Company     Adjustments         Total
                                            ------------------     ------------------     ------------        -----
       <S>                                      <C>                     <C>                  <C>              <C>  
       XYZ Entertainment..................      $18,202(1)              $(18,312)            $110             $  --
                                                =======                 ========             ====             =====
</TABLE>
<TABLE>
<CAPTION>
                                                                            As of
                                                                      December 31, 1996
                                            ------------------------------------------------------------------------
                                              Investments in       Cumulative Equity       Cumulative
                                              and Advances to         in Losses of        Translation
                                            Affiliated Company     Affiliated Company     Adjustments         Total
                                            ------------------     ------------------     ------------        -----
       <S>                                      <C>                     <C>                  <C>              <C>   
       XYZ Entertainment..................      $16,202(1)              $(16,312)            $110             $  --
                                                =======                 ========             ====             =====
</TABLE>

       (1) Includes  an  accrued  funding  obligation  of  $904  and  $1,270  at
           September 30, 1997 and December 31, 1996,  respectively.  The Company
           does not have a contractual  funding obligation to XYZ Entertainment;
           however,  the Company would face significant and punitive dilution if
           it did not make the scheduled fundings.



                                       6
<PAGE>

                           UIH AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 
PROPERTY, PLANT AND EQUIPMENT

     Property,  plant and equipment are stated at cost. Additions,  replacements
and  major  improvements  are  capitalized,  and  costs for  normal  repair  and
maintenance of property, plant and equipment are charged to expense as incurred.
All  subscriber  premises  equipment  and  capitalized   installation  labor  is
depreciated over three years. Upon disconnection of a subscriber,  the remaining
book value of the subscriber equipment, excluding converters which are recovered
upon  disconnection,  and the  capitalized  labor are written off.  Depreciation
expense is computed  using the  straight-line  method over the estimated  useful
lives shown below. Detail of property, plant and equipment is as follows:
<TABLE>
<CAPTION>

                                                                  As of                 As of
                                                              September 30,         December 31,          Average
                                                                  1997                  1996               Life
                                                              -------------         ------------          -------
       <S>                                                      <C>                   <C>                   <C> 
       Subscriber premises equipment and converters.......      $155,860              $125,238                 3
       MMDS distribution facilities.......................        58,217                57,073              5-10
       Cable distribution networks........................        16,297                11,672              5-10
       Furniture and fixtures.............................         2,005                 2,031              5-10
       Leasehold improvements.............................         3,272                 3,465              6-10
       Other..............................................        23,294                20,729               3-5
                                                                --------              --------
                                                                 258,945               220,208
               Accumulated depreciation...................       (67,449)              (27,038)
                                                                --------              --------
               Net property, plant and equipment..........      $191,496              $193,170
                                                                ========              ========
</TABLE>

     Assets  acquired under capital  leases are included in property,  plant and
equipment.  The  initial  amount of the  leased  asset and  corresponding  lease
liability  are recorded at the present value of future  minimum lease  payments.
Leased assets are amortized over the life of the relevant lease.

SAB 51 ACCOUNTING POLICY

     Under  Staff  Accounting  Bulletin  No. 51 ("SAB  51"),  the gain of $5,985
recognized  by the Company upon the issuance by Saturn of newly issued shares in
exchange  for the sale of a 35%  interest  in Saturn was  credited  directly  to
equity (see Note 4). The Company has adopted a SAB 51 policy to record all gains
as a result of stock sales by its  subsidiaries  in the statement of operations,
except  for any  transactions  which  must be  credited  directly  to  equity in
accordance with the provisions of SAB 51.

FOREIGN OPERATIONS

     The  functional  currency  for  the  Company's  foreign  operations  is the
applicable local currency for each affiliate company.  Assets and liabilities of
foreign   subsidiaries  are  translated  at  the  exchange  rate  in  effect  at
period-end,  and the  statements  of  operations  are  translated at the average
exchange  rates during the period.  Exchange rate  fluctuations  on  translating
foreign  currency  financial   statements  into  U.S.  dollars  that  result  in
unrealized  gains  or  losses  are  referred  to  as  translation   adjustments.
Cumulative  translation  adjustments  are  recorded as a separate  component  of
stockholder's (deficit) equity.

     Transactions  denominated  in currencies  other than the local currency are
recorded based on exchange rates at the time such transactions arise. Subsequent
changes in  exchange  rates  result in  transaction  gains and losses  which are
reflected in income as unrealized (based on period-end translations) or realized
upon settlement of the transactions.

     In  accordance  with  Statement of Financial  Accounting  Standards No. 95,
"Statement of Cash Flows," cash flows from the  Company's  operations in foreign
countries are calculated at average rates based on their  reporting  currencies.
As a result, amounts related to assets and liabilities reported on the Condensed
Consolidated  Statements  of  Cash  Flows  will  not  agree  to  changes  in the
corresponding balances on the Condensed Consolidated Balance Sheets. The effects
of  exchange  rate  changes  on cash  balances  held in foreign  currencies  are
reported as a separate line below cash flows from financing activities.


                                       7
<PAGE>
                          UIH AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

RECLASSIFICATIONS

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

2.   SENIOR DISCOUNT NOTES AND OTHER LIABILITIES

     Senior discount notes and other liabilities consists of the following:
<TABLE>
<CAPTION>
                                                                                        As of                As of
                                                                                    September 30,        December 31,
                                                                                        1997                 1996
                                                                                    -------------        ------------
       <S>                                                                             <C>                 <C>  
       May 1996 Notes (as defined below), net of unamortized discount.............     $272,094            $245,182
       September 1997 Notes (as defined below), net of unamortized discount.......       29,982                  --
       Austar Bank Facility (as defined below)....................................       63,144                  --
       Capitalized lease obligations..............................................        3,990               4,522
       Mortgage note, interest at 7.885%, 7 year term.............................        1,158               1,464
       Other......................................................................        1,101               1,337
                                                                                       --------            --------
                                                                                        371,469             252,505
           Less current portion...................................................       (1,286)             (1,108)
                                                                                       --------            --------
                                                                                       $370,183            $251,397
                                                                                       ========            ========
</TABLE>

     On May 14, 1996, the Company  raised total gross proceeds of  approximately
$225,115 from the private  placement of $443,000  aggregate  principal amount of
14% senior  discount  notes (the "May 1996  Notes").  On and after May 15, 2001,
cash interest will accrue and will be payable  semi-annually  on each May 15 and
November 15,  commencing  November 15, 2001.  The May 1996 Notes are due May 15,
2006.  Effective May 16, 1997, the interest rate on these notes  increased by an
additional 0.75% per annum to 14.75%, until such time as the Company consummates
an issuance of its capital stock  resulting in gross  proceeds to the Company of
at least $70,000 (an "Equity Sale"). Due to this increase in the interest rates,
the May 1996 Notes will  accrete to a principal  amount of $455,574 if an Equity
Sale is not consummated prior to maturity.

     On September 23, 1997, the Company received total gross proceeds of $29,925
from the private placement of $45,000  aggregate  principal amount of 14% senior
discount notes (the  "September  1997 Notes").  On and after May 15, 2001,  cash
interest  will  accrue  and  will be  payable  semi-annually  on each May 15 and
November 15, commencing  November 15, 2001. The September 1997 Notes are due May
15,  2006.  Effective  September  23,  1997,  the  interest  rate on these notes
increased  by an  additional  0.75% per annum to 14.75%,  until such time as the
Company  consummates an Equity Sale. Due to this increase in interest rates, the
September 1997 Notes will accrete to a principal  amount of $46,277 if an Equity
Sale is not consummated prior to maturity.

     If the Company  does not  consummate  an Equity Sale prior to November  16,
1997,  the then  holders  of the May 1996  Notes and the  September  1997  Notes
(collectively,  the  "Notes")  will be entitled to receive  warrants to purchase
3.4% of the common  stock of the  Company  for an  aggregate  exercise  price of
approximately  $5,100.  The Company plans to issue such warrants on November 17,
1997, as it will not conclude an Equity Sale prior to November 16, 1997.

     In July 1997, Austar secured a financing  facility from a bank for a Senior
Syndicated  Term  Debt  Facility  in the  amount  of  Australian  $("A$")200,000
(US$155,000)  (the  "Austar  Bank  Facility").  The  proceeds of the Austar Bank
Facility  will be  used to fund  Austar's  subscriber  acquisition  and  working
capital needs. The Austar Bank Facility  consists of three  sub-facilities:  (i)
A$50,000 revolving working capital facility; (ii) A$60,000 cash advance facility
available upon the  contribution  of additional  equity on a 2:1  debt-to-equity
basis;  and (iii)  A$90,000 term loan  facility,  which will be available on the
basis of Austar having  achieved  minimum  subscriber  and  operating  cash flow
levels.  The maximum amount of equity  required in (ii) above would be A$30,000,
approximately  A$18,500 of which has already been contributed  through September
30,  1997,  and the  remainder  of which is  expected to be  contributed  by the
Company from the  proceeds of the  September  1997 Notes or by UIH  Asia/Pacific
Communications, Inc. ("UAP") or United International Holdings, Inc. ("UIH"). The
cash  advance  and term loan  facilities  are  fully  repayable  pursuant  to an
amortization  schedule  beginning December 31, 2001 and ending June 30, 2004. As
of September 30, 1997, Austar had drawn A$87,000 (US$63,144  converted using the
September 30, 1997 exchange rate) on the Austar Bank Facility.

                                       8
<PAGE>
                          UIH AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.   RELATED PARTY

     The  Company  and UIH  Management,  Inc.  ("UIH  Management"),  an indirect
wholly-owned subsidiary of UIH, executed a 10-year management services agreement
(the  "Management  Agreement"),  pursuant to which UIH  Management  will perform
certain administrative,  accounting,  financial reporting and other services for
the Company,  which has no separate  employees of its own.  Effective  March 31,
1997, UIH Management  assigned its rights and  obligations  under the Management
Agreement to UAP. Pursuant to the Management  Agreement,  the management fee was
$750 for the  first  year of such  agreement  (beginning  May 1,  1996),  and it
increases on each anniversary  date of the Management  Agreement by 8% per year.
In addition,  the Company  shall  reimburse UAP for any  out-of-pocket  expenses
incurred by UAP in  performance  of its duties under the  Management  Agreement,
including travel, lodging and entertainment expenses.

     Austar, Saturn, Telefenua and United Wireless are also parties to technical
service  agreements with UAP for which such operating  companies pay to UAP fees
based, in part, on their respective gross revenues.

     As of September 30, 1997, United International  Properties,  Inc. ("UIPI"),
the immediate parent of UAP, had loaned $4,999 to UIH Australia/Pacific Finance,
Inc., a wholly-owned  subsidiary of the Company.  This loan accrues  interest at
15% and is due on demand.

     Included in the amount due to parent is the following:
<TABLE>
<CAPTION>
                                                                                     As of                As of
                                                                                 September 30,         December 31,
                                                                                     1997                 1996
                                                                                 -------------         -----------
     <S>                                                                           <C>                  <C> 
     Payable to UIH and UAP for management fees, invoices and capital
       contributions paid by UIH on the Company's behalf.....................      $17,024               $  317
     Austar technical assistance agreement obligations.......................        2,614                1,135
     Telefenua technical assistance agreement obligations....................        2,497                1,879
     Saturn technical assistance agreement obligations.......................          205                1,002
     Other...................................................................          425                  330
                                                                                   -------               ------
                                                                                    22,765                4,663
         Less current portion................................................      (18,653)              (1,905)
                                                                                   -------               ------  
                                                                                   $ 4,112               $2,758
                                                                                   =======               ======
</TABLE>

4.   SATURN TRANSACTION

     In July 1997, SaskTel Holdings (New Zealand),  Inc. ("SaskTel") purchased a
35%  equity   interest  in  Saturn  by  investing   approximately   New  Zealand
$("NZ$")30,000  (US$19,600)  for its  shares  (the  "Saturn  Transaction").  The
Company  believes that SaskTel,  a division of  Saskatchewan  Telecommunications
Holdings   Corporation  of  Saskatchewan,   Canada,  will  contribute  telephony
expertise to Saturn in providing cable/telephony service in the Wellington,  New
Zealand area.

5.   SUBSEQUENT EVENT

     Australis  Media  Limited  ("Australis"),  a  supplier  of movie and sports
programming as well as satellite  distribution  services to Austar, has publicly
announced that it may need to appoint a receiver owing to liquidity issues.  The
Company is  currently  in  negotiations  with  Australis  and other  programming
suppliers for these types of programming and,  therefore,  currently believes it
will be able to make  satisfactory  programming  arrangements  in the event of a
disruption in service from Australis.  There can be no assurance,  however, that
such arrangements will be concluded,  or will be concluded on terms favorable to
Austar.


                                       9
<PAGE>
           ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

                     (Monetary amounts stated in thousands)

     THE FOLLOWING DISCUSSION CONTAINS,  IN ADDITION TO HISTORICAL  INFORMATION,
FORWARD-LOOKING  STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.  THE COMPANY'S
ACTUAL  RESULTS  MAY DIFFER  SIGNIFICANTLY  FROM THE  RESULTS  DISCUSSED  IN THE
FORWARD-LOOKING  STATEMENTS.  FACTORS  THAT COULD  CAUSE OR  CONTRIBUTE  TO SUCH
DIFFERENCES  INCLUDE,  BUT ARE NOT LIMITED TO, THOSE  DISCUSSED BELOW AND IN THE
COMPANY'S REPORT ON FORM 8-K DATED MAY 15, 1997.

     The following  discussion and analysis of the Company's financial condition
and  results of  operations  should be read in  conjunction  with the  Company's
condensed  consolidated  financial statements and related notes thereto included
elsewhere  herein.  Such condensed  consolidated  financial  statements  provide
additional   information   regarding  the  Company's  financial  activities  and
condition.

     The  Company  conducts  no  operations  other than  through  its  operating
companies in which it holds varying interests.  Because the operating  companies
have, since inception,  been engaged primarily in  organizational,  start-up and
construction  activities  and  have not yet  achieved  the  expected  subscriber
penetration  levels  anticipated  with  mature  operating  systems,  the Company
believes  that its  historical  results of operations  discussed  herein are not
indicative  of the results of  operations  which will follow the  completion  of
construction,  initial  marketing of service and the  achievement of anticipated
subscriber penetration levels by the operating companies.

     The  Company  has no  employees  of its own.  UAP,  the  Company's  parent,
provides various management,  financial reporting, accounting and other services
for the Company  pursuant to the terms of the Management  Agreement  between UAP
and the Company.  Austar, Saturn, Telefenua and United Wireless are also parties
to technical service agreements with UAP for which such operating  companies pay
to UAP fees based, in part, on their respective gross revenues (see Note 3).

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents increased $26,469 from $19,220 as of December 31,
1996 to $45,689 as of September 30, 1997.  Principal  sources of cash during the
nine months ended  September  30, 1997  included  $65,971 of  borrowings  on the
Austar Bank Facility,  $29,925 gross proceeds from the issuance of the September
1997 Notes,  $20,336 from the Saturn Transaction,  the net sale of the remaining
balance in  short-term  investments  of $18,640  and a loan from UIPI of $4,999.
These funds were used principally for purchases of property, plant and equipment
totaling $67,948 to continue the build-out of the Company's  existing  projects,
primarily Austar, and to pay down related construction  payables that existed as
of December 31, 1996 totaling $29,385,  as well as funding operating  activities
of $6,679  during the period.  During the nine months ended  September 30, 1997,
the Company  incurred a net loss of $114,420 of which  $57,797 was from non-cash
depreciation and amortization expense and $26,969 was from non-cash accretion of
interest on the Notes. In addition,  accounts payable,  accrued  liabilities and
other  increased  $19,992,  the  majority of which was due to an increase in the
amounts  owed  to UIH  and  UAP  for  capital  contributions  paid by UIH on the
Company's behalf.

     During the nine months ended September 30, 1996, cash and cash  equivalents
increased $60,498 from $8,730 as of December 31, 1995 to $69,228 as of September
30, 1996.  Principal  sources of cash during this period included $225,115 gross
proceeds  from the  issuance  of the May 1996  Notes,  loans  from UIH  totaling
$15,073 and capital  contributions  from UIH totaling $10,664.  These funds were
used principally to purchase property,  plant and equipment totaling $105,899 to
construct  Austar's  and  Telefenua's   systems,   to  purchase  net  short-term
investments of $27,630,  to pay down the $25,000 owed to UIH under a bridge loan
and to contribute  $10,651 to Saturn and XYZ Entertainment to meet the Company's
funding  obligations,  as well as funding operating  activities of $8,117 during
the  period.  During the nine  months  ended  September  30,  1996,  the Company
incurred a net loss of $47,329 of which $15,935 was from  non-cash  depreciation
and amortization  expense and $12,028 was from non-cash accretion of interest on
the May 1996 Notes. In addition, accounts payable, accrued liabilities and other
increased  $17,473,  the  majority of which was related to the  build-out of the
operating systems.

      If the Company  does not  consummate an Equity Sale prior to November  16,
1997,  the then  holders of the Notes would be  entitled to receive  warrants to
purchase 3.4% of the common stock of the Company for an aggregate exercise price
of  approximately  $5,100.  The Company plans to issue such warrants on November
17, 1997, as it will not conclude an Equity Sale prior to November 16, 1997.

                                       10
<PAGE>

     The  Company is  responsible  for its  proportionate  share of the  capital
requirements   of  the   operating   companies.   The  Company  has  funded  its
proportionate  share to date with capital contributed by UIH and proceeds of the
Notes and has  reduced  its  proportionate  share to date with the  Austar  Bank
Facility (see Note 2) and the Saturn Transaction (see Note 4).

     The following  table sets forth,  as of September  30, 1997,  (i) the total
estimated  funding required for the  construction  and initial  marketing of the
operating  companies'  systems in their existing  license  areas,  including any
capital  invested to date and the application of any operating cash flow sources
for such operating companies,  (ii) the total amount of capital invested in each
of the  operating  companies  and the portion  funded by the Company and by bank
facilities and (iii) the total estimated  additional  funding  required based on
the assumptions stated in (i) above and the Company's  estimated portion of such
funding.  Such  amounts are expected to be funded over the next 24 to 36 months.
The estimated required additional funding numbers below have not been reduced to
give effect to any surplus cash flow of any one operating company which might be
available to fund the requirements of another operating  company.  To the extent
the operating  companies fund their construction and other costs through project
financing,  the  Company's  portion of  estimated  additional  funding  would be
reduced  proportionately.  The Company's portion of estimated additional funding
would be increased  proportionately  to the extent cash flow from the  operating
companies  and other  sources of financing  are not  sufficient  to meet project
funding  requirements.  To the extent that the other  shareholders of Saturn and
XYZ  Entertainment  fail  to  fund  their  pro  rata  share  of  the  additional
shareholder  capital,  the  Company  may elect to fund all or a portion  of such
shortfall.
<TABLE>
<CAPTION>
                            Estimated Total Project                 Capital Invested                 Estimated Required
                              Funding Requirements             As of September 30, 1997(1)           Additional Funding
  Operating               ---------------------------         ----------------------------      ----------------------------    
   Company                The Company         Total           The Company(2)      Total(2)      The Company         Total
  ---------               -----------        --------         --------------    ----------      -----------      -----------
<S>                         <C>              <C>                <C>             <C>             <C>
Austar                      $391,000         $391,000           $290,202(3)     $290,202(3)     $100,798(4)      $100,798(4)
Saturn                        83,015          130,464             31,296(5)       50,896(6)       51,719           79,568
Telefenua                     17,400           17,400             16,737          16,737             663              663
XYZ Entertainment             13,974           55,896             13,185          52,740             789            3,156
United Wireless                8,226            8,226              7,087           7,087           1,139            1,139
                            --------         --------           --------        --------        --------         --------
     Total                  $513,615         $602,986           $358,507        $417,662        $155,108         $185,324
                            ========         ========           ========        ========        ========         ========
</TABLE>

(1)  Certain amounts  contributed by the Company's  partners were contributed in
     currencies  other than U.S.  dollars.  Such amounts have been translated to
     U.S. dollars using a convenience translation.
(2)  Includes amounts contributed to Austar  (approximately  $11,000) and Saturn
     (approximately  $2,920) by  shareholders  other than the Company which were
     contributed  by  such  shareholders  prior  to  the  acquisition  of  their
     respective interests by the Company.
(3)  Includes  A$87,000  (US$67,545  converted  using the exchange  rate on each
     funding date) of amounts borrowed under the Austar Bank Facility.  Does not
     include the $58,600 paid by the Company to increase  its economic  interest
     in Austar to approximately 100%.
(4)  The Austar Bank  Facility of A$200,000  (US$155,000)  reduces the Company's
     portion of the remaining  funding  requirements.  As of September 30, 1997,
     Austar had drawn  A$87,000 on this facility  leaving  A$113,000  (US$82,015
     converted  using the September  30, 1997  exchange  rate) that can be drawn
     down, assuming compliance with certain financial covenants (see Note 2).
(5)  Does not include the value of shares of common stock  exchanged  for shares
     of the  Company  to  increase  the  Company's  interest  in  Saturn to 100%
     effective July 1996.
(6)  Includes the $19,600  invested by SaskTel for its 35% interest in Saturn in
     July 1997.  Does not include the value of shares of common stock  exchanged
     for shares of the Company to increase the  Company's  interest in Saturn to
     100% effective July 1996.

     The Company  received  total gross proceeds of $29,925 from the issuance of
the September 1997 Notes. The Company plans to use the proceeds from the sale to
fund capital  expenditure and working capital  requirements of its  subsidiaries
and  affiliates as permitted by the terms of the Company's indentures.

     The  Company  believes  that  it  will  be  required  to  fund a  total  of
approximately $155,108 in order to build-out its existing projects over the next
three years. To the extent the operating  companies fund their  construction and
other costs  through  project  financing,  the  Company's  portion of  estimated
additional funding would be reduced  proportionately.  In addition to the Austar
Bank  Facility  (see  Note 2) and cash on hand,  the  Company  intends  to raise
additional capital through capital  contributions  from its parent  corporation,

                                       11
<PAGE>

further issuances of debt either by the Company or the operating  companies,  or
by the  sale  of  all  or a part  of its  equity  in  certain  of its  operating
subsidiaries.  The Company's  indentures and UIH's indentures place restrictions
on the  Company and certain of its  subsidiaries  with  respect to the amount of
additional debt each may incur.  The Company and all of the operating  companies
are  currently  restricted  under the UIH  indentures.  The Company,  Austar and
Telefenua  are  restricted  under the  Company's  indentures.  The  restrictions
imposed by the indentures  will be eliminated upon the retirement of UIH's notes
at their  maturity in November  1999 and upon the  retirement  of the  Company's
Notes at their maturity in May 2006.

     The  Company is  negotiating  to sell all or a portion of its  interest  in
Telefenua,  the  proceeds of which  would be used to fund its other  businesses.
There can be no assurance that the Company will be successful in completing this
sale.

     Australis,  a supplier of movie and sports programming as well as satellite
distribution  services to Austar,  has  publicly  announced  that it may need to
appoint a receiver  owing to  liquidity  issues.  The  Company is  currently  in
negotiations with Australis and other  programming  suppliers for these types of
programming  and,  therefore,  currently  believes  it  will  be  able  to  make
satisfactory  programming  arrangements  in the event of a disruption in service
from Australis. There can be no assurance,  however, that such arrangements will
be concluded, or will be concluded on terms favorable to Austar.

RESULTS OF OPERATIONS

SERVICE AND OTHER  REVENUE.  The Company's  service and other revenue  increased
$10,949  and $35,790 for the three and nine months  ended  September  30,  1997,
respectively, compared to the amounts for the corresponding periods in the prior
year as follows:
<TABLE>
<CAPTION>
                                                       For the Three Months Ended           For the Nine Months Ended
                                                              September 30,                       September 30,
                                                      ----------------------------         ---------------------------
                                                        1997                 1996            1997                1996
                                                      -------               ------         -------             -------
<S>                                                   <C>                   <C>            <C>                 <C>  
AUSTRALIA:
   Austar........................................     $16,986               $6,418         $45,510             $10,544
   United Wireless...............................         134                   37             265                  42
NEW ZEALAND:
   Saturn........................................         133                   44             314                  44
TAHITI:
   Telefenua  ...................................       1,088                  893           2,963               2,632
                                                      -------               ------         -------             -------
       Total service and other revenue...........     $18,341               $7,392         $49,052             $13,262
                                                      =======               ======         =======             =======
</TABLE>
          AUSTAR

               Service  and other  revenue  for  Austar  increased  $10,568,  or
          164.7%,  from $6,418 for the three months ended  September 30, 1996 to
          $16,986 for the three months ended  September 30, 1997.  This increase
          was primarily due to subscriber  growth (178,832 at September 30, 1997
          compared  to 60,276 at  September  30,  1996) as Austar  continues  to
          roll-out its services.

               Service  and other  revenue  for  Austar  increased  $34,966,  or
          331.6%,  from $10,544 for the nine months ended  September 30, 1996 to
          $45,510 for the nine months ended September 30, 1997. This increase is
          due to the aforementioned subscriber growth.

          SATURN

               The Company began  consolidating  the results of Saturn effective
          July 1, 1996. Accordingly, the Company reported no service revenue for
          Saturn for the six months ended June 30, 1996.  For the three and nine
          months ended September 30, 1997,  Saturn  reported  service revenue of
          $133 and $314, respectively,  compared with service revenue of $44 and
          $148 for the  corresponding  periods in 1996. The increase each period
          was  primarily due to an increase in  subscribers  (2,829 at September
          30, 1997 compared to 1,235 at September 30, 1996).

          TELEFENUA

               Telefenua's  service revenue  increased to $1,088 and $2,963 from
          $893 and $2,632 for the three and nine months ended September 30, 1997
          and 1996,  respectively.  The increase was primarily  attributable  to
          subscriber  growth  (6,257 at September  30, 1997 compared to 4,678 at
          September 30, 1996).

                                       12
<PAGE>

SYSTEM OPERATING EXPENSE.  System operating expense increased $7,726 and $22,581
for the three and nine months ended September 30, 1997,  respectively,  compared
to the amounts for the corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>

                                                          For the Three Months Ended         For the Nine Months Ended
                                                                  September 30,                     September 30,
                                                          ---------------------------       ----------------------------
                                                            1997                1996          1997                1996
                                                          -------             -------       -------              -------
<S>                                                       <C>                 <C>           <C>                  <C>
Austar.................................................   $11,375             $4,830        $29,841              $10,111
Saturn.................................................       802                599          2,461                  599
Telefenua..............................................       566                569          1,451                1,642
United Wireless........................................       414                264          1,273                  924
Other..................................................       831                 --            831                   --
                                                          -------             ------        -------              -------
       Total system operating expense..................   $13,988             $6,262        $35,857              $13,276
                                                          =======             ======        =======              =======
</TABLE>

          AUSTAR

               Operating expense for Austar increased  $6,545,  or 135.5%,  from
          $4,830 for the three  months ended  September  30, 1996 to $11,375 for
          the three months ended September 30, 1997. This increase was due to an
          increase in satellite  programming  fees and copyright  costs totaling
          $4,088 which corresponds to the increase in subscribers and additional
          basic  programming  services,  an increase in salaries and benefits of
          $206 as a result of additional personnel to support Austar's launch of
          local and state  offices  in its  markets,  an  increase  in  customer
          subscriber  management expenses of $914 related to volume increases in
          billing and collections, with the remainder due to increases in system
          travel, maintenance, vehicle costs and management fees.

               Operating expense for Austar increased $19,730,  or 195.1%,  from
          $10,111 for the nine months  ended  September  30, 1996 to $29,841 for
          the nine months ended  September 30, 1997. This increase was due to an
          increase in satellite  programming  fees and copyright  costs totaling
          $12,108  which   corresponds  to  the  increase  in  subscribers   and
          additional  basic  programming  services,  an increase in salaries and
          benefits  of $1,677 as a result of  additional  personnel  to  support
          Austar's launch of local and state offices in its markets, an increase
          in customer subscriber management expenses of $2,259 related to volume
          increases  in  billing  and  collections,  with the  remainder  due to
          increases in system travel, maintenance,  vehicle costs and management
          fees.

               Austar is experiencing high operating expense relative to service
          revenue due to certain fixed  operating  expenses  (such as management
          overhead,  license  fees and  certain  office-related  costs).  Austar
          expects  operating  expense  as a  percentage  of  service  revenue to
          decline as start-up  costs  decrease  and as certain  fixed  operating
          expenses are spread over expected increases in service revenues.

          SATURN

               The Company began  consolidating  the results of Saturn effective
          July 1, 1996.  Accordingly,  the Company reported no operating expense
          for Saturn for the six months ended June 30,  1996.  For the three and
          nine months ended September 30, 1997, Saturn reported system operating
          expense  of  $802  and  $2,461,  respectively,  compared  with  system
          operating expense of $599 and $1,319 for the corresponding  periods in
          1996. System operating  personnel expenses decreased $85 and increased
          $296  for  the  three  and  nine  months  ended  September  30,  1997,
          respectively,  in order to support  Saturn's  build-out  of its hybrid
          fiber coaxial network in the Wellington area.

          TELEFENUA

               Operating  expense at Telefenua  decreased to $566 and $1,451 for
          the  three  and  nine  month   period   ended   September   30,  1997,
          respectively,  from $569 and $1,642 for the  corresponding  periods in
          1996.   These   decreases   were   primarily   due  to   decreases  in
          technical-related repairs and maintenance costs as well as a weakening
          in the local currency, partially offset by increased programming costs
          associated with the increase in subscribers.


                                       13
<PAGE>

          OTHER

               In September  1997, the Company began paying a satellite  service
          fee of  approximately  $480  per  month  as  part of  their  five-year
          agreement with Optus Vision Pty Limited  ("Optus").  In addition,  the
          Company  expensed  a  related  deposit  charged  by Optus  during  the
          quarter.  In future  periods,  these  costs  will be  incurred  at the
          operating system level based on usage of the satellite.

SYSTEM SELLING,  GENERAL AND ADMINISTRATIVE EXPENSE. System selling, general and
administrative  expense  increased  $4,837  and  $17,400  for the three and nine
months ended September 30, 1997,  respectively,  compared to the amounts for the
corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                          For the Three Months Ended         For the Nine Months Ended
                                                                 September 30,                      September 30,
                                                         ----------------------------        -------------------------
                                                           1997                 1996           1997              1996
                                                         -------              -------        -------           -------
<S>                                                      <C>                  <C>            <C>               <C>  
Austar...............................................    $12,301              $7,482         $31,910           $16,305
Saturn...............................................        934                 889           2,330               889
Telefenua............................................        492                 691           1,503             1,959
United Wireless......................................        493                 321           1,282               472
                                                         -------              ------         -------           -------
       Total system selling, general and
         administrative expense......................    $14,220              $9,383         $37,025           $19,625
                                                         =======              ======         =======           =======
</TABLE>

          AUSTAR

               System  selling,  general and  administrative  expense for Austar
          increased  $4,819,  or 64.4%,  from $7,482 for the three  months ended
          September 30, 1996 to $12,301 for the three months ended September 30,
          1997.  This  increase  was  primarily  due to an  increase in salaries
          associated with the National  Customer  Operations Center and Austar's
          corporate  headquarters of $1,519 as a result of additional  personnel
          necessary  to support  the  increase  in  subscribers,  an increase in
          marketing costs related to print, radio and television  advertisements
          of $1,484  associated with  subscriber  acquisition and an increase in
          direct  sales  commissions  of  $393  due  to  subscriber  growth.  In
          addition,  $855 of the  increase  related to one-time  charges for the
          restructuring and consolidation of various regional offices.

               System  selling,  general and  administrative  expense for Austar
          increased  $15,605,  or 95.7%,  from $16,305 for the nine months ended
          September 30, 1996 to $31,910 for the nine months ended  September 30,
          1997.  This  increase  was  primarily  due to an  increase in salaries
          associated with the National  Customer  Operations Center and Austar's
          corporate  headquarters of $5,526 as a result of additional  personnel
          necessary  to support  the  increase  in  subscribers,  an increase in
          marketing costs related to print, radio and television  advertisements
          of $4,413  associated with  subscriber  acquisition and an increase in
          direct  sales  commission  of  $2,261  due to  subscriber  growth.  In
          addition,  $855 of the  increase  related to one-time  charges for the
          restructuring and consolidation of various regional offices.

               Austar expects that system  selling,  general and  administrative
          expense as a percent of service  revenue will continue to decline over
          the  remainder  of 1997 as certain  fixed  expenses  are  spread  over
          expected increases in service revenues.

          SATURN

               The Company began  consolidating  the results of Saturn effective
          July 1, 1996.  Accordingly,  the Company  reported no system  selling,
          general and administrative expense for Saturn for the six months ended
          June 30, 1996.  Saturn's  system selling,  general and  administrative
          expense  was $934 and  $2,330  for the  three  and nine  months  ended
          September 30, 1997, respectively,  compared to $889 and $1,690 for the
          comparable  periods in 1996. System selling and marketing salaries and
          expenses  increased  $111 and $524 for the three and nine months ended
          September 30, 1997, respectively, related to increases in direct sales
          commissions due to subscriber growth and marketing/promotion costs for
          subscriber acquisition.

                                       14
<PAGE>

          TELEFENUA

               System selling,  general and administrative  expense consolidated
          by the Company  from  Telefenua  decreased  to $492 and $1,503 for the
          three and nine months ended  September  30, 1997,  respectively,  from
          $691  and  $1,959  for the  same  periods  in the  prior  year.  These
          decreases were primarily due to a reduction in marketing  costs during
          1997 as well as a weakening of the local currency.

CORPORATE   GENERAL   AND   ADMINISTRATIVE   EXPENSE.   Corporate   general  and
administrative  expense  increased  $95 and $139 for the three  and nine  months
ended  September  30,  1997,  respectively,  compared  to the  amounts  for  the
corresponding periods in the prior year.

DEPRECIATION AND  AMORTIZATION  EXPENSE.  Depreciation and amortization  expense
increased $14,375,  or 187.0%,  from $7,686 for the three months ended September
30, 1996 to $22,061 for the three months ended September 30, 1997. This increase
was  primarily  attributable  to a  larger  asset  base  due to the  significant
deployment of operating assets to meet subscriber  growth during the latter part
of 1996 and, to a lesser extent,  in 1997. For the three months ended  September
30,  1997,  depreciation  and  amortization  expense at Austar was  $19,982,  an
increase of $13,696 compared to the same quarter in the prior year.

     Depreciation and amortization  expense increased $41,862,  or 262.7%,  from
$15,935 for the nine  months  ended  September  30, 1996 to $57,797 for the nine
months ended September 30, 1997, for the reasons  discussed  above. For the nine
months ended September 30, 1997, depreciation and amortization expense at Austar
was  $51,914,  an increase of $39,645  compared to the  corresponding  period in
1996.

EQUITY IN LOSSES OF AFFILIATED  COMPANIES.  The Company experienced decreases in
equity in losses of affiliated  companies of $1,376 and $2,501 for the three and
nine months ended September 30, 1997, respectively,  compared to the amounts for
the corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                            For the Three Months Ended         For the Nine Months Ended
                                                                    September 30,                    September 30,
                                                            --------------------------         -------------------------
                                                              1997               1996            1997              1996
                                                            -------            -------         -------           -------
<S>                                                          <C>              <C>              <C>               <C> 
XYZ Entertainment....................................        $557               $1,933         $2,000            $3,571
Saturn (1)...........................................          --                   --             --               930
                                                             ----               ------         ------            ------
       Total equity in losses of affiliated
         companies...................................        $557               $1,933         $2,000            $4,501
                                                             ====               ======         ======            ======
</TABLE>

(1)  The Company  acquired a 50%  interest  in Saturn in July 1994.  The Company
     increased  its  ownership  in Saturn to 100% and  began  consolidating  its
     results  effective  July 1, 1996.  In July 1997,  the  Company  reduced its
     interest in Saturn to 65% from 100% (see Note 4).


INTEREST  INCOME.  Interest income decreased $1,720 and $2,758 for the three and
nine months ended September 30, 1997, respectively,  compared to the amounts for
the  corresponding  periods in the prior year. The decreases were due to reduced
cash and short-term  investment balances related to the funding of the Company's
investments in affiliated companies.

INTEREST  EXPENSE.  Interest expense  increased $2,567 and $16,821 for the three
and nine months ended September 30, 1997, respectively,  compared to the amounts
for the  corresponding  periods in the prior  year.  The  increase  for the nine
months  ended  September  30,  1997  resulted  from  having  the May 1996  Notes
outstanding  for the  entire  nine month  period.  The Notes  currently  accrete
interest at a rate of 14.75%  compounded  semi-annually.  In addition,  interest
expense  related to the Austar Bank  Facility  was $951 and $1,692 for the three
and nine months ended September 30, 1997, respectively.


                                       15
<PAGE>

                           PART II - OTHER INFORMATION
                           ---------------------------

                           ITEM 1 - LEGAL PROCEEDINGS

     Carl M.  Johnson,  an  individual  who  claimed to have  worked with UIH in
connection  with the  acquisition by Austar of certain of its licenses,  filed a
complaint in 1996 claiming that UIH owed him an equity  interest in  unspecified
subsidiaries of UIH. This matter was settled in September 1997.


                           ITEM 5 - OTHER INFORMATION

SUMMARY OPERATING DATA

     The following tables set forth certain unaudited operating data:
<TABLE>
<CAPTION>
                                                                                    As of
                                                                              September 30, 1997
                                                -------------------------------------------------------------------------   
                                                 Television
                                                  Homes in                                                      Economic
                                                  Service          Homes           Basic            Basic       Ownership
     Operating System                               Area        Serviceable     Subscribers      Penetration    Interest
     ----------------                           ------------    -----------     -----------      -----------    ---------
<S>                                              <C>            <C>               <C>               <C>           <C> 
     Austar.............................         1,622,000      1,589,000         178,832           11.3%         100%
     Saturn.............................           141,000         20,124           2,829           14.1%          65%
     Telefenua..........................            31,000         20,128           6,257           31.1%          90%
     XYZ Entertainment..................               N/A(1)         N/A         524,000(2)         N/A           25%
                                                 ---------      ---------         -------       
           Total........................         1,794,000      1,629,252         711,918
                                                 =========      =========         =======
</TABLE>
<TABLE>
<CAPTION>
                                                                                    As of
                                                                              September 30, 1996
                                                -------------------------------------------------------------------------
                                                Television
                                                 Homes in                                                       Economic
                                                 Service           Homes           Basic            Basic       Ownership
     Operating System                              Area         Serviceable     Subscribers      Penetration    Interest
     ----------------                           ------------    -----------     -----------      -----------    ---------
     <S>                                        <C>             <C>                <C>               <C>           <C>
     Austar.............................        1,537,000       1,371,115          60,276             4.4%         100%
     Saturn.............................          141,000          10,468           1,235            11.8%         100%
     Telefenua..........................           31,000          18,633           4,678            25.1%          90%
     XYZ Entertainment..................              N/A(1)          N/A         258,210(2)          N/A           25%
                                                ---------       ---------         -------
            Total........................       1,709,000       1,400,216         324,399
                                                =========       =========         =======
</TABLE>
(1)   The Company expects that XYZ  Entertainment's  programming package will be
      marketed to virtually all of Australia's 6.5 million television households
      by  Australian  multi-channel  television  providers,   including  Austar,
      Australis,  Foxtel  Management  Pty  Limited and East Coast Television Pty
      Limited.
(2)   This  figure  represents  the  total  estimated  subscribers  to the eight
      channel Galaxy package to which XYZ Entertainment  supplies four channels.
      In addition,  XYZ  Entertainment  launched a fifth channel,  the Lifestyle
      Channel, on September 1, 1997.



                                       16
<PAGE>

                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     3.1A      Articles  of  Amendment  to  Articles  of  Incorporation  of  the
               Company,  incorporated by reference to the Registration Statement
               on Form S-3,  Amendment  No.  1, of the  Company  filed  with the
               Commission on November 14, 1997 (File No. 333-37651)
     4.1       The Indenture dated as of September 23, 1997, between the Company
               and  Firststar Bank  of  Minnesota,   N.A.   (the   "Indenture"),
               incorporated by reference to the  Registration  Statement on Form
               S-4 of the Company filed with the  Commission on November 6, 1997
               (File No. 333-39707)
     10.2      Purchase  Agreement dated September 16, 1997, between the Company
               and Donaldson,  Lufkin & Jenrette Securities Corporation ("DLJ"),
               incorporated by reference to the  Registration  Statement on Form
               S-4 of the Company filed with the  Commission on November 6, 1997
               (File No. 333-39707)
     10.3      Registration  Rights Agreement dated September 23, 1997,  between
               the  Company  and  DLJ,   incorporated   by   reference   to  the
               Registration  Statement on Form S-4 of the Company filed with the
               Commission on November 6, 1997 (File No. 333-39707)
     10.15     Subscription and Investment  Agreement dated July 21, 1997, among
               SaskTel, Saskatchewan Telecommunications Holding Corporation, UIH
               New Zealand Holdings, Inc. ("UIHNZ"), UAP and Saturn, as amended,
               incorporated by reference to the  Registration  Statement on Form
               S-4 of the Company filed with the  Commission on November 6, 1997
               (File No. 333-39707)
     10.16     Shareholders  Agreement dated July 23, 1997, among SaskTel, UIHNZ
               and  Saturn,   incorporated  by  reference  to  the  Registration
               Statement on Form S-4 of the Company filed with the Commission on
               November 6, 1997 (File No. 333-39707)
     10.26     A$200,000,000  Syndicated Senior Secured Debt Facility Agreement,
               dated July 31, 1997,  among Austar,  Chase  Securities  Australia
               Limited,   the   Guarantors   named  therein  and  the  financial
               institutions named therein*
     10.31     Amendment No. 1 to Technical  Assistance Agreement dated July 23,
               1997,  between Saturn and UAP,  incorporated  by reference to the
               Registration  Statement on Form S-4 of the Company filed with the
               Commission on November 6, 1997 (File No. 333-39707)
     10.32     Technical  Assistance  Agreement  dated  July 23,  1997,  between
               SaskTel and Saturn, incorporated by reference to the Registration
               Statement on Form S-4 of the Company filed with the Commission on
               November 6, 1997 (File No. 333-39707)
     10.37     Warrant  Agreement  dated as of November  15,  1997,  between the
               Company and Firststar Bank of Minnesota,  N.A.,  incorporated  by
               reference  to  the  Registration  Statement  on  Form  S-4 of the
               Company  filed with the  Commission on November 6, 1997 (File No.
               333-39707)
     27.1      Financial Data Schedule

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

*  To be filed by Amendment.


(b)  Reports on Form 8-K filed during the quarter.

     None.


                                       17
<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.



UIH AUSTRALIA/PACIFIC, INC.



Date:      November 14, 1997
           -------------------------------------

By:        /S/ J. Timothy Bryan
           -------------------------------------
           J. Timothy Bryan
           Chief Financial Officer and Treasurer
           (A Duly Authorized Officer and Principal Financial Officer)














                                       18