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 quarterly period ended SEPTEMBER 30, 1998

                                       OR

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

For the transition period from__________________ to ___________________


                         333-06609-01
Commission file number   333-06609-02

                              SPRINT SPECTRUM L.P.
                       SPRINT SPECTRUM FINANCE CORPORATION
             (Exact name of registrant as specified in its charter)

      DELAWARE                                    48-1165245
      DELAWARE                                    43-1746537
(State or other jurisdiction           (IRS Employer Identification No.)
of incorporation or organization)                                       

                 4900 Main Street, Kansas City, Missouri, 64112
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (816) 559-1000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

         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

As of November 1, 1998,  Sprint  Spectrum  Finance  Corporation had Common Stock
outstanding of 100 shares.


<PAGE>
                              SPRINT SPECTRUM L.P.
                       SPRINT SPECTRUM FINANCE CORPORATION
               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998

                                      INDEX

                                                                           Page
                                                                          Number
                                                                        --------

Part I - Financial Information.............................................1-21

     Item 1a.  Financial Statements - Sprint Spectrum L.P..................1-7

         Consolidated Condensed Balance Sheets............................. 1

         Consolidated Condensed Statements of Operations................... 2

         Consolidated Condensed Statements of Cash Flows................... 3

         Notes to Consolidated Condensed Financial Statements..............4-7

     Item 1b.  Financial Statements - Sprint Spectrum Finance Corporation..8-11

         Condensed Balance Sheets.......................................... 8

         Condensed Statements of Operations................................ 9 

         Condensed Statements of Cash Flows................................ 10 

         Notes to Condensed Financial Statements........................... 11

     Item 2a.  Management's Discussion and Analysis of Financial Condition  
         and Results of Operations - Sprint Spectrum L.P...................12-20

     Item 2b.  Management's Discussion and Analysis of Financial Condition 
          and Results of Operations - Sprint Spectrum Finance Corporation.. 21

Part II - Other Information

     Item 1.  Legal Proceedings............................................22-24

     Item 2.  Changes in Securities........................................ 24

     Item 3.  Defaults On Senior Securities................................ 24

     Item 4.  Submission of Matters to a Vote of Security Holders.......... 24

     Item 5.  Other Information............................................ 24

     Item 6.  Exhibits and Reports on Form 8-K.............................24-25

Signature..................................................................26-27

Exhibits






<PAGE>

<TABLE>


                                                                         PART I.
                                                                        Item 1a.
                              SPRINT SPECTRUM L.P.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (In Thousands)

                                                       September 30,   December 31,
                                                           1998            1997
                                                       -------------   -------------
------------------------------------------------------
                                                        (unaudited)
                               ASSETS

CURRENT ASSETS:
<S>                                                    <C>             <C>        
   Cash and cash equivalents.......................... $     96,040    $    36,821
   Accounts receivable, net...........................      131,972         96,318
   Receivable from affiliates.........................       91,970        105,156
   Inventory..........................................      162,682         96,907
   Prepaid expenses and other assets..................       37,896         25,353
                                                       -------------   -------------
     Total current assets.............................      520,560        360,555

INVESTMENT IN PCS LICENSES, net.......................    2,045,883      2,085,836

PROPERTY, PLANT AND EQUIPMENT, net....................    3,580,420      3,132,664

MICROWAVE RELOCATION COSTS, net.......................      272,963        250,397

OTHER ASSETS, net.....................................       88,090        101,465

                                                       =============   =============
TOTAL ASSETS.......................................... $  6,507,916    $ 5,930,917
                                                       =============   =============

                  LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable................................... $    269,500    $   305,524
   Payable to affiliates..............................        1,648          1,190
   Accrued interest...................................       63,251         45,851
   Accrued expenses...................................      321,480        227,890
   Current maturities of long-term debt ..............       11,858         11,380
                                                       -------------   -------------
     Total current liabilities........................      667,737        591,835

CONSTRUCTION OBLIGATIONS..............................      462,653        705,280

LONG TERM DEBT, net...................................    5,001,107      3,101,539

OTHER NONCURRENT LIABILITIES..........................       80,603         48,975

COMMITMENTS AND CONTINGENCIES

LIMITED PARTNER INTEREST IN CONSOLIDATED SUBSIDIARY...        5,000          5,000

PARTNERS' CAPITAL AND ACCUMULATED DEFICIT:
   Partners' capital..................................    3,690,314      3,437,565
   Accumulated deficit................................   (3,399,498)    (1,959,277)
                                                       -------------   -------------
     Total partners' capital..........................      290,816      1,478,288

                                                       =============   =============
TOTAL LIABILITIES AND PARTNERS' CAPITAL............... $  6,507,916    $ 5,930,917
                                                       =============   =============

See notes to consolidated condensed financial statements.
</TABLE>

<PAGE>

<TABLE>

                                                                         PART I.
                                                                        Item 1a.
                              SPRINT SPECTRUM L.P.
           CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
                                 (In Thousands)





                                              Three Months Ended               Nine Months Ended
                                                September 30,                    September 30,
                                          --------------------------   -------------------------------
                                               1998         1997               1998           1997
---------------------------------------   ------------  ------------   ----------------   ------------

<S>                                     <C>             <C>            <C>                <C>       
OPERATING REVENUES..................... $    246,448    $   72,534     $     582,552      $  107,387

OPERATING EXPENSES:
   Cost of revenues....................      233,379       166,010           607,575         302,131
   Selling, general and administrative.      251,919       205,172           699,515         471,748
   Depreciation and amortization.......      167,314        84,054           431,841         184,736
                                          ------------  ------------   ----------------   ------------
     Total operating expenses..........      652,612       455,236         1,738,931         958,615

LOSS FROM OPERATIONS...................     (406,164)     (382,702)       (1,156,379)       (851,228)

OTHER INCOME (EXPENSE):
   Interest, net ......................     (111,609)      (39,243)         (287,258)        (50,140)
   Other income (expense)..............         (425)        1,031             3,416           3,906
                                          ------------  ------------   ----------------   ------------

     Total other income (expense)......     (112,034)      (38,212)         (283,842)        (46,234)

                                          ============  ============   ================   ============
NET LOSS...............................   $ (518,198)   $ (420,914)    $  (1,440,221)     $ (897,462)
                                          ============  ============   ================   ============


See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>


                                                                         PART I.
                                                                        Item 1a.
                              SPRINT SPECTRUM L.P.
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (In Thousands)




                                                                            Nine Months Ended
                                                                              September 30,
                                                                    -------------------------------
                                                                         1998              1997
-----------------------------------------------------------------   ---------------  --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                 <C>                <C>         
   Net loss......................................................   $ (1,440,221)      $  (897,462)
   Adjustments to reconcile net loss to net cash provided by
        (used in) operating activities:
     Depreciation and amortization...............................        431,841           184,736
     Amortization of debt discount and issuance costs............         40,147            35,328
     Changes in assets and liabilities:
       Receivables...............................................        (19,204)          (81,876)
       Inventory.................................................        (65,775)           (7,826)
       Prepaid expenses and other assets.........................         (8,631)           (8,984)
       Accounts payable and accrued expenses.....................         79,324           167,972
       Other noncurrent liabilities..............................         31,628            13,488
       Other, net................................................          2,161              -
                                                                    ---------------  --------------
                                                                                     
         Net cash used in operating activities...................       (948,730)         (594,624)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures..........................................       (840,780)       (1,567,924)
   Microwave relocation costs....................................        (30,755)          (96,852)
                                                                    ---------------  --------------
         Net cash used in investing activities...................       (871,535)       (1,664,776)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Capital contributions.........................................        252,750           455,000
   Net borrowing under revolving credit agreement................        960,000           370,000
   Proceeds from issuance of long-term debt......................        914,242         1,327,553
   Change in construction obligations............................       (242,627)          149,906
   Payments on long-term debt....................................         (4,881)           (1,490)
   Debt issuance costs...........................................           -              (20,000)
                                                                    ---------------  --------------
         Net cash provided by financing activities...............      1,879,484         2,280,969

                                                                    ---------------  --------------
INCREASE  IN CASH AND CASH EQUIVALENTS...........................         59,219            21,569

CASH AND CASH EQUIVALENTS, Beginning of period...................         36,821            49,988

                                                                    ---------------  --------------
CASH AND CASH EQUIVALENTS, End of period.........................   $     96,040       $    71,577
                                                                    ===============  ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid, net of amount capitalized.....................   $    116,110       $    12,226

NON-CASH INVESTING AND FINANCING ACTIVITIES:
 - Accrued interest of $139.0 million and $24.8 million related
   to vendor financing was converted to long-term  debt during
   each of the nine months ended September 30, 1998 and 1997, 
   respectively.


See notes to consolidated condensed financial statements

</TABLE>
<PAGE>                                                  
                                                                         PART I.
                                                                        Item 1a.
                              SPRINT SPECTRUM L.P.
        Notes to Consolidated Condensed Financial Statements (Unaudited)


The information contained in this Form 10-Q for the three and nine month interim
periods ended  September 30, 1998 and 1997 has been prepared in accordance  with
instructions  to Form 10-Q and Rule 10-01 of  Regulation  S-X. In the opinion of
management,  all  adjustments  considered  necessary,  consisting only of normal
recurring  accruals,  to present  fairly the  consolidated  financial  position,
results of  operations,  and cash flows for such interim  periods have been made
(See Note 1).

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 results of operations  for the
three and nine months ended September 30, 1998 are not necessarily indicative of
the operating results that may be expected for the year ended December 31, 1998.
These unaudited  consolidated  condensed financial  statements should be read in
conjunction  with the  consolidated  financial  statements and the notes thereto
included in the 1997 Annual  Report on Form 10-K filed by Sprint  Spectrum  L.P.
and Sprint Spectrum Finance Corporation.

1.    Organization

     Sprint  Spectrum L.P. (the  "Company") is a limited  partnership  formed in
Delaware  on  March  28,  1995,  by  Sprint  Spectrum  Holding   Company,   L.P.
("Holdings") and MinorCo,  L.P.  ("MinorCo") both of which were formed by Sprint
Enterprises,  L.P., TCI Spectrum Holdings,  Inc., Cox Telephony  Partnership and
Comcast  Telephony  Services   (together  the  "Partners").   The  Partners  are
subsidiaries  of  Sprint  Corporation  ("Sprint"),   Tele-Communications,   Inc.
("TCI"), Cox Communications,  Inc. ("Cox"),  and Comcast Corporation  ("Comcast"
and together with Sprint, TCI and Cox, the "Parents"), respectively. The Company
and certain other affiliated partnerships offer services as Sprint PCS.

The  partners  of the  Company  have the  following  ownership  interests  as of
September 30, 1998 and 1997:

     Sprint Spectrum Holding Company, L.P. (general partner)....greater than 99%
     MinorCo, L.P. (limited partner)................................less than 1%

The  Company  is   consolidated   with  its   subsidiaries,   WirelessCo,   L.P.
("WirelessCo"), Sprint Spectrum Equipment Company, L.P. ("EquipmentCo"),  Sprint
Spectrum  Realty  Company,   L.P.   ("RealtyCo")  and  Sprint  Spectrum  Finance
Corporation  ("FinCo").  WirelessCo  was formed on October  24, 1994 to develop,
operate and manage an integrated wireless business. On May 15, 1996, EquipmentCo
was  formed  to lease  or own  wireless  communication  network  equipment,  and
RealtyCo  was  formed  to  lease  or  own  real   property  on  which   wireless
communication facilities are to be located. On May 20, 1996, FinCo was formed to
be a co-obligor of the senior notes and senior discount notes.

Sprint Recapitalization - Sprint has entered into a restructuring agreement with
TCI, Comcast and Cox (the "Cable Parents") to restructure  Sprint's wireless PCS
operations  (the "PCS  Restructuring")  subject  to Sprint  stockholder  and FCC
approvals.  If the PCS Restructuring occurs as planned,  Sprint will acquire the
joint  venture  interests  of TCI,  Comcast  and Cox in Sprint PCS and the joint
venture  interest of TCI and Cox in  PhillieCo  Partners I, L.P.  and  PhillieCo
Partners II, L.P. In exchange  for these joint  venture  interests,  Sprint will
issue to TCI, Comcast, and Cox a newly created class of Sprint common stock (the
"PCS Stock"). The PCS Stock is 
<PAGE>
intended to reflect  separately the performance of these joint ventures and
Sprint's  other PCS  interests.  The  operations  will be referred to as the PCS
Group.

Deadlock Event - The proposed  budget for fiscal year 1998 has not been approved
by the  Holdings  partnership  board,  which  resulted  in the  occurrence  of a
"Deadlock Event" as of January 1, 1998 under the Amended and Restated  Agreement
of Limited  Partnership  of  MajorCo,  L.P.  (renamed  Sprint  Spectrum  Holding
Company,  L.P.) dated January 31, 1996 (the "Holdings  Partnership  Agreement").
Holdings is the sole general  partner of Sprint Spectrum L.P. Under the Holdings
Partnership  Agreement,  if one of the  Partners  refers the budget issue to the
chief  executive  officers of the Parents for  resolution  pursuant to specified
procedures  and the  issue  remains  unresolved,  buy/sell  provisions  would be
triggered which may result in the purchase by one or more of the Partners of the
interest of the other Partners, or, in certain circumstances, the liquidation of
Holdings  and  its   subsidiaries.   Discussions   among  the   Partners   about
restructuring  their interests in Holdings,  in lieu of triggering such buy/sell
procedures,  have  resulted  in  the  Partners  entering  into  a  restructuring
agreement  dated  May  26,  1998.  See  "Sprint  Recapitalization"  above  for a
discussion of the restructuring agreement between the Partners.

2.    Summary of Significant Accounting Policies

Basis of Presentation - The assets, liabilities,  results of operations and cash
flows of  entities in which the Company  has a  controlling  interest  have been
consolidated.  All significant  intercompany accounts and transactions have been
eliminated.

Accounts  Receivable - Accounts  receivable are net of an allowance for doubtful
accounts of  approximately  $17.2 million and $9.0 million at September 30, 1998
and December 31, 1997, respectively.

Investment  in PCS Licenses - During 1994 and 1995,  the Federal  Communications
Commission ("FCC") auctioned PCS licenses in specific  geographic service areas.
The FCC grants  licenses  for terms of up to ten  years,  and  generally  grants
renewals if the licensee has complied with its license obligations.  The Company
believes  it will be able to  secure  renewal  of the PCS  licenses  used by its
subsidiaries.  PCS licenses are amortized  over 40 years once placed in service.
Accumulated  amortization for PCS licenses totaled  approximately  $84.9 million
and $45.0 million as of September 30, 1998 and December 31, 1997, respectively.

Microwave Relocation Costs - The Company has also incurred costs associated with
microwave  relocation  in  the  construction  of  the  PCS  network.   Microwave
relocation  costs are  amortized  over the  remaining  life of the PCS licenses.
Accumulated  amortization for microwave  relocation costs totaled  approximately
$10.1  million and $5.2 million as of September  30, 1998 and December 31, 1997,
respectively.

Intangible  Assets - The ongoing value and  remaining  useful life of intangible
assets are subject to periodic  evaluation.  The Company  currently  expects the
carrying  amounts  to be  fully  recoverable.  Impairments  of  intangibles  and
long-lived assets are assessed based on an undiscounted cash flow methodology.

Capitalized  Interest -  Interest  costs  associated  with the  construction  of
capital  assets  (including  the PCS  licenses)  incurred  during  the period of
construction are capitalized. The total interest capitalized for the nine months
ended  September  30, 1998 and 1997 was  approximately  $26.8  million and $87.2
million, respectively.

Debt  Issuance  Costs -  Included  in other  assets  are costs  associated  with
obtaining  financing.  Such costs are  capitalized  and  amortized  to  interest
expense  over the term of the  related  debt  instruments  using  the  effective
interest method. Accumulated amortization at September 30, 1998 and December 31,
1997 totaled approximately $22.8 million and $13.3 million, respectively.

<PAGE>

Income  Taxes - The Company has not  provided  for federal or state income taxes
since such taxes are the responsibility of the individual Partners.

Use of Estimates - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and reported  amounts of revenues and expenses  during the reporting
period. Actual results could differ from those estimates.

Reclassification  -  Certain  reclassifications  have  been  made  to  the  1997
consolidated  condensed  financial  statements to conform to the 1998  statement
presentation.

3.    Long-Term Debt and Borrowing Arrangements

Bank Credit  Facility - The Company  entered  into an  agreement  with The Chase
Manhattan  Bank  ("Chase") as agent for a group of lenders for a $2 billion bank
credit  facility  dated October 2, 1996. The proceeds of this facility are to be
used to finance working capital needs,  subscriber  acquisition  costs,  capital
expenditures and other general Company purposes.

The facility  consists of a revolving  credit  commitment  of $1.7 billion and a
$300 million term loan commitment.  In December 1997,  certain terms relating to
the financial and operating  conditions  were amended.  As of September 30, 1998
the term loans have a weighted  average  interest rate of 8.20%. As of September
30, 1998,  $1.6 billion had been drawn under the revolving  credit facility at a
weighted  average   interest  rate  of  8.19%  with  $100.0  million   remaining
immediately  available.  Commitment  fees  for  the  revolving  portion  of  the
agreement are payable quarterly based on average unused revolving commitments.

Vendor  Financing - As of October 2, 1996,  the Company  entered into  financing
agreements with Northern Telecom Inc.  ("Nortel") and Lucent  Technologies  Inc.
("Lucent",  and together with Nortel,  the "Vendors") for multiple drawdown term
loan  facilities  totaling  $1.3  billion and $1.8  billion,  respectively.  The
proceeds of such  facilities are to be used to finance the purchase of goods and
services  provided by the Vendors.  Additionally,  the commitments allow for the
conversion of accrued  interest into additional  principal.  Such conversions do
not reduce the availability under the commitments. Interest accruing on the debt
outstanding  at March 31,  1999,  can be  converted  into  additional  principal
through   February  8,  2000  and  March  30,  2000,   for  Lucent  and  Nortel,
respectively.

On April 30, 1997 and November 20,  1997,  the Company  amended the terms of its
financing agreement with Nortel. The amendments provide for a syndication of the
financing  commitment  between  Nortel,  several  banks and other  vendors  (the
"Nortel  Lenders")  and the  modification  of certain  operating  and  financial
covenants. As of September 30, 1998, $856.3 million, including converted accrued
interest of $67.2  million,  had been borrowed at an interest rate of 8.78% with
$510.9 million remaining available.

On May 29 and December 15, 1997, the Company  amended the terms of its financing
agreement with Lucent. The amendment provides for a syndication of the financing
commitment  between  Lucent,  Sprint and other  banks and vendors  (the  "Lucent
Lenders") and the modification of certain operating and financial covenants. The
Lucent  Lenders have  committed to financing up to an aggregate of $1.8 billion,
with Sprint financing up to $300 million.  As of September 30, 1998, the Company
had borrowed approximately $1.7 billion, including converted accrued interest of
$123.5 million, at a weighted average interest rate of 8.70% with $252.8 million
remaining available.

<PAGE>

Certain  amounts  included under  Construction  Obligations on the  consolidated
condensed   balance  sheets  may  be  financed  under  the  Vendors'   financing
agreements.


4.    Contingencies and Commitments

Procurement  Contract- On May 8, 1998, the Company  amended its  procurement and
services agreement with Lucent. The amendment provides for an additional pricing
structure for certain equipment,  software and engineering services purchased by
the Company from Lucent after  January 1, 1998.  Significant  original  contract
provisions,  including  but not limited to, the length of the  contract  and the
payment terms, have not been amended. The minimum commitment under the amendment
is approximately $353 million.

Litigation - The Company is involved in various legal proceedings  incidental to
the conduct of its business.  While it is not possible to determine the ultimate
disposition of each of these proceedings,  the Company believes that the outcome
of such proceedings, individually and in the aggregate, will not have a material
adverse effect on the Company's financial condition or results of operations.




<PAGE>



                                                             



                                                                         Part I.
<TABLE>
                                                                        Item 1b.

                       SPRINT SPECTRUM FINANCE CORPORATION
               (A wholly-owned subsidiary of Sprint Spectrum L.P.)
                            CONDENSED BALANCE SHEETS


                                                                    September 30,    December 31,
                                                                         1998             1997
        ---------------------------------------------------------    -----------     ------------
                                                                     (Unaudited)
                                     ASSETS

<S>                                                                    <C>            <C>   
        Receivable from parent...................................      $   -          $    -
                                                                      ----------      ----------

        TOTAL ASSETS.............................................      $   -          $    -
                                                                      ==========      ==========

                      LIABILITIES AND STOCKHOLDER'S EQUITY

        Payable to parent........................................      $ 1,497        $ 1,497

        STOCKHOLDER'S EQUITY:

        Common stock, $1.00 par value; 1,000 shares authorized;
           100 shares issued and outstanding.....................          100            100

        Accumulated deficit......................................       (1,597)        (1,597)
                                                                      ----------      ----------
              Total stockholders' equity.........................       (1,497)        (1,497)


        TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY...............
                                                                        $  -          $    -
                                                                      ==========      ==========


See notes to condensed financial statements.
</TABLE>
<PAGE>


                                                                         Part I.
                                                                        Item 1b.

                       SPRINT SPECTRUM FINANCE CORPORATION
               (A wholly-owned subsidiary of Sprint Spectrum L.P.)
                 CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)




                            Three Months Ended             Nine Months Ended
                              September 30,                   September 30,
                            -------------------         -----------------------
                              1998       1997             1998           1997
                            --------    -------         ---------       -------
                            
Operating Revenues.......    $  -      $   -           $   -           $   -   

Operating Expenses.......       -          -               -               -
                            --------   -------         ---------       --------

Net Loss.................    $  -      $   -           $   -           $   -  
                            ========   ========        =========       =========













See notes to condensed financial statements.


<PAGE>


                                                                         Part I.
                                                                        Item 1b.

                       SPRINT SPECTRUM FINANCE CORPORATION
               (A wholly-owned subsidiary of Sprint Spectrum L.P.)
                 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)


<TABLE>


                                                            Nine Months Ended       Nine Months Ended
                                                            September 30, 1998      September 30, 1997
                                                            ------------------     --------------------
<S>                                                          <C>                        <C>  
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Adjustments to reconcile net loss to net cash 
       used in operating activities:
          Net loss........................................   $        -                 $   -
          Changes in assets and liabilities:
             Receivable from parent.......................            -                     -
             Payable to parent............................            -                     -
                                                            ------------------      --------------------
               Net cash used in operating activities......            -                     -

     CASH FLOWS FROM FINANCING ACTIVITIES:
       Issuance of common stock...........................            -                     -
                                                            ------------------      -------------------- 
                                                                                    
               Net cash provided by financing activities..            -                     -

                                                            ------------------      --------------------
     INCREASE (DECREASE) IN CASH AND
       CASH EQUIVALENTS...................................            -                     -

     CASH AND CASH EQUIVALENTS, Beginning of Period.......
                                                                      -                     -

                                                            ==================      ====================
     CASH AND CASH EQUIVALENTS, End of Period.............   $        -                 $   -
                                                            ==================      ====================








See notes to condensed financial statements.
</TABLE>

<PAGE>





                                                                         Part I.
                                                                        Item 1b.

                       SPRINT SPECTRUM FINANCE CORPORATION
               (A wholly-owned subsidiary of Sprint Spectrum L.P.)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


The information contained in this Form 10-Q for the three and nine month interim
periods ended  September 30, 1998 and 1997 has been prepared in accordance  with
instructions  to Form 10-Q and Rule 10-01 of  Regulation  S-X. In the opinion of
management,  all  adjustments  considered  necessary,  consisting only of normal
recurring  accruals,  to present  fairly the  consolidated  financial  position,
results of operations, and cash flows for such interim periods have been made.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted. The results of operations for the three and nine
months ended September 30, 1998 are not necessarily  indicative of the operating
results  that may be  expected  for the year  ended  December  31,  1998.  These
unaudited condensed financial  statements should be read in conjunction with the
financial statements and the notes thereto included in the 1997 Annual Report on
Form 10-K filed by Sprint Spectrum L.P.
and Sprint Spectrum Finance Corporation.


1.    Organization

Sprint Spectrum  Finance  Corporation  ("FinCo"),  a Delaware  corporation,  was
formed on May 21, 1996 and is a wholly-owned  subsidiary of Sprint Spectrum L.P.
(the  "Partnership").  FinCo was formed to be a  co-obligor  of $250  million in
senior notes and $500 million in senior discount notes.  FinCo pays a management
fee to the  Partnership  based on actual  expenses  paid by the  Partnership  of
behalf of FinCo.  The losses  generated by the  management fee incurred by FinCo
will be funded by the Partnership.

The  Partnership  contributed  $100 to FinCo on May 21, 1996 in exchange for 100
shares of common stock.

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                                                                         PART I.
                                                                        Item 2a.
                              SPRINT SPECTRUM L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following  discussion and analysis should be read in conjunction with Sprint
Spectrum L.P.'s consolidated  condensed financial  statements and notes thereto.
The  term  "Company"  refers  to  Sprint  Spectrum  L.P.  and its  subsidiaries,
including FinCo, WirelessCo, RealtyCo, and EquipmentCo.

The Company includes certain  estimates,  projections and other  forward-looking
statements in its reports as well as in presentations to analysts and others and
in other  material  disseminated  to the public.  There can be no  assurances of
future  performance  and actual results may differ  materially from those in the
forward-looking  statements.  Factors which could cause actual results to differ
materially from estimates or projections contained in forward-looking statements
include:

 -  the establishment of a market for new digital personal  communications
    services  ("PCS");
 -  the introduction of competitive  service plans and pricing and other effects
    of vigorous competition in the markets in which the Company currently 
    operates or intends to market its services;
 -  the impact of  technological  change  which may  diminish the value of
    existing  equipment  which  may,  in turn,  result in the need to incur
    additional costs to upgrade previously sold communications equipment;
 -  the cost of entering new markets necessary to provide services;
 -  the impact of any unusual items resulting from ongoing  evaluations of the 
    Company's business strategies; 
 -  the impact of changes brought about by possible restructuring of  partners'
    ownership  interests; 
 -  the effects of  unanticipated  delays or problems with the  development of
    technologies and systems used by the Company;
 -  requirements imposed on the Company and its competitors by the Federal
    Communications Commission ("FCC") and state regulatory commissions under
    the Telecommunications Act of 1996;
 -  the impact of the Year 2000 issue and any related noncompliance;
 -  the possibility of one or more of the  markets in which the  Company will 
    compete being impacted by variations in political, economic or other factors
    over which the Company has no control;
 -  the effects of unanticipated delays resulting from zoning or other disputes
    with municipalities; 
 -  and unexpected results in litigation.

General

License and Network  Coverage - The Company owns 30 PCS licenses  granted in the
FCC's A Block and B Block PCS  auction,  which  concluded  in March 1995.  These
licenses allow the Company to provide service to 30 major trading areas ("MTAs")
covering  approximately  155.9 million Pops. The Company has also affiliated and
expects  to  continue  to  affiliate  with  other  PCS  providers.  Pursuant  to
management and affiliation agreements, each affiliated PCS service provider will
use  the  Sprint(R)  and  Sprint  PCS(R)  brand  names,   trademarks  of  Sprint
Communications Company L.P. ("Sprint Communications").

In 1997  the  Company  commenced  service  in all of the MTAs in which it owns a
license and expects to continue  to incur  additional  construction  costs as it
expands  coverage in existing  license  areas.  Additionally,  the Company  will
require  substantial  working  capital  to fund  initial  operating  activities,
including  the  up-front  customer  acquisition  costs.  The extent to which the
Company is able to generate  operating  revenues  and 

<PAGE>

earnings  is  dependent  on  a  number  of  business   factors,   including
maintaining  existing financing,  generating  operating revenues,  and attaining
profitable levels of market demand for the Company's products and services.

Affiliations  - The Company  currently  affiliates  with or provides  management
services to entities  in which the  Partners  have an  ownership  interest.  The
Company  has an  affiliation  agreement  with  American  PCS,  L.P.  ("APC"),  a
subsidiary of Holdings, which, through subsidiaries,  owns a PCS license for and
operates both a broadband CDMA (code division  multiple  access) network and GSM
(global   system  for   mobile   communications)   network  in  the   Washington
D.C./Baltimore  area MTA,  which  covers  approximately  8.3 million  Pops.  APC
launched CDMA service at the end of the first quarter of 1998.  The Company also
affiliates with Cox Communications PCS, L.P. ("Cox PCS"), a limited partnership,
in which Holdings is managing  partner and has a 59.2% ownership  interest.  Cox
PCS owns a PCS license for the Los Angeles-San Diego MTA covering  approximately
21.0 million Pops.

The Company provides  management services to SprintCom,  Inc.  ("SprintCom") and
PhillieCo,  L.P. ("PhillieCo").  SprintCom, a wholly-owned subsidiary of Sprint,
participated  in the FCC's D and E Block  auction  which ended January 14, 1997,
and was  awarded  licenses  for 139 of 493  BTAs,  covering  approximately  74.9
million  Pops,  all of which are  geographic  areas not covered by the Company's
owned PCS licenses or licenses owned by APC, Cox PCS or PhillieCo.  PhillieCo is
a limited partnership organized by and among subsidiaries of Sprint, TCI and Cox
that owns a PCS license for the  Philadelphia  MTA  covering  approximately  9.2
million Pops.

In June  1998,  the  Company  and  its  affiliates  also  entered  into  various
management  agreements  with  other  companies  pursuant  to  which  such  other
companies  (each a "Manager")  will build  networks in portions of the Company's
licensed  coverage  area and  then  affiliate  the  Manager's  network  with the
Company's  network.  These  Manager  networks  will  be  built  using  the  same
technological  standards as those of the Company,  and the Managers will use the
Sprint PCS brand name to market their  services and will be required to maintain
certain  quality  standards to be  established  by the Company.  The Company and
affiliates entered into additional agreements in the third quarter and intend to
continue to enter into additional  management agreements as a means of expanding
its existing network.

Sprint Recapitalization - Sprint has entered into a restructuring agreement with
TCI, Comcast and Cox (the "Cable Parents") to restructure  Sprint's wireless PCS
operations  (the "PCS  Restructuring")  subject  to Sprint  stockholder  and FCC
approvals.  If the PCS Restructuring occurs as planned,  Sprint will acquire the
joint  venture  interest  of TCI,  Comcast  and Cox in Sprint  PCS and the joint
venture  interest of TCI and Cox in  PhillieCo  Partners I, L.P.  and  PhillieCo
Partners II, L.P. In exchange  for these joint  venture  interests,  Sprint will
issue to TCI,  Comcast and Cox a newly created class of Sprint common stock (the
"PCS Stock"). The PCS Stock is intended to reflect separately the performance of
these joint ventures and Sprint's other PCS  interests.  The operations  will be
referred to as the PCS Group.

Roaming - The Company has entered into roaming  agreements  with various  analog
cellular providers  throughout the United States and Canada.  Additionally,  the
Company has  negotiated  roaming  arrangements  with other CDMA PCS carriers who
provide service in geographic areas not currently covered by the CDMA network of
Sprint Spectrum and its affiliates.  As a result, Sprint Spectrum customers with
dual-mode   handsets  capable  of  transmitting   over  cellular  and  CDMA  PCS
frequencies  have the ability to roam in areas where Sprint Spectrum  service is
not available and where there are roaming agreements.




<PAGE>


Continuing Risk Factors

Year 2000 Issue - The "Year  2000"  affects  the  Company's  installed  computer
systems,  network elements,  software  applications,  and other business systems
that have time sensitive programs that may not properly reflect or recognize the
year 2000. Because many computers and computer  applications define dates by the
last two digits of the year,  "00" may not be  properly  identified  as the year
2000. This error could result in miscalculations or system errors. The Year 2000
issue may also affect the systems and  applications of the Company's  customers,
vendors or resellers.

The  Company is  undertaking  an  inventory  of its  computer  systems,  network
elements,  software  applications and other business systems.  These inventories
are  targeted  to be  completed  by year end  1998.  Once an item is  identified
through the  inventory  process,  its Year 2000 impact is assessed and a plan is
developed to address any required renovation. The Company is using both internal
and external resources to identify,  correct or reprogram,  and test its systems
for Year 2000 compliance.  The Company is planning that Year 2000 compliance for
these critical  systems will be achieved in 1999. The Company is also contacting
others with whom it conducts business to receive the appropriate  warranties and
assurances  that those  third  parties are or will be Year 2000  compliant.  The
total cost of modifications and conversions is not known at this time;  however,
it is not  expected to be material to the  Company's  financial  position and is
being expensed as incurred.  The Company relies on the third-party vendors for a
significant number of its important  operating and computer system functions and
therefore is highly dependent on such third-party vendors for the remediation of
network  elements,  computer systems,  software  applications and other business
systems.  In addition  the Company uses  publicly  available  services  that are
acquired without contract (e.g.,  global  positioning system timing signal) that
may be subject to the Year 2000 issue.  While the Company believes these systems
will be Year 2000  compliant,  the Company has no  contractual or other right to
compel compliance.

If compliance is not achieved in a timely manner, the Year 2000 issue could have
a material adverse effect on the Company's  operations.  However, the Company is
focusing on identifying and addressing all aspects of its operations that may be
affected by the Year 2000 issue and is addressing the most critical applications
first. The Company intends to develop and implement,  if necessary,  appropriate
contingency   plans  to   mitigate  to  the  extent   possible   any  Year  2000
noncompliance.

Deadlock Event - A proposed budget for fiscal year 1998 has not been approved by
the Holdings  partnership board, which resulted in the occurrence of a "Deadlock
Event" as of January 1, 1998 under the Holdings Partnership Agreement.  Holdings
is the  sole  general  partner  of  Sprint  Spectrum  L.P.  Under  the  Holdings
Partnership  Agreement,  if one of the  Partners  refers the budget issue to the
chief  executive  officers of the Parents for  resolution  pursuant to specified
procedures  and the  issue  remains  unresolved,  buy/sell  provisions  would be
triggered which may result in the purchase by one or more of the Partners of the
interest of the other Partners, or, in certain circumstances, the liquidation of
Holdings and it subsidiaries. Discussions among the Partners about restructuring
their  interests in Holdings,  in lieu of triggering  such buy/sell  procedures,
have resulted in the Partners entering into a restructuring  agreement dated May
26,  1998.  See  "Sprint   Recapitalization"  above  for  a  discussion  of  the
restructuring agreement between the Partners.

Business  Plan - To the extent the Sprint  recapitalization  is not  approved by
Sprint shareholders, the Company's business plan will require additional capital
financing prior to the end of 1998. Sources of funding for the Company's further
financing requirements may include additional vendor financing, public offerings
or private  placements of equity and/or debt  securities,  commercial bank loans
and/or debt and capital  contributions from Holdings or the Partners.  There can
be no assurance that any additional  financing can be obtained on a timely basis
and on terms  acceptable to the Company and its Partners and within  limitations
contained  in the 11%  Senior  Notes  and 12 1/2%  Senior  Discount  Notes,  the
agreements  governing the Secured Financing and any new 

<PAGE>

financing  arrangements.  Failure to obtain any such financing could result
in the delay or abandonment of the Company's development and expansion plans and
expenditures,  the failure to meet  regulatory  requirements  or other potential
adverse consequences.

Liquidity and Capital Resources

The  continued  expansion of the  Company's  PCS network and the  marketing  and
distribution of the Company's PCS products and services will continue to require
substantial  capital.  Actual amounts of the funds required may vary  materially
from these  estimates  and  additional  funds  would be required in the event of
significant  departures from the current business plan,  unforeseen delays, cost
overruns, unanticipated expenses, regulatory changes, engineering design changes
and other technological risks.

The  Company's  primary uses of cash  historically  has been to fund the initial
operating  losses,  capital  expenditures  and the  acquisition of PCS licenses.
Operating losses before  depreciation  and amortization  were $724.5 million and
$666.5  million  for  the  nine  months  ended  September  30,  1998  and  1997,
respectively.  Capital  expenditures totaled $840.8 million and $1,567.9 million
for the nine months ended  September  30, 1998 and 1997,  respectively.  Capital
expenditures  were  incurred  primarily  to fund the  buildout of the  Company's
network. The Company spent $2.1 billion to acquire the PCS licenses.

Historically,  the primary  sources of funds for the Company have been long-term
public  debt,  bank  facilities,   vendor  financing  arrangements  and  capital
contributions.  Long-term  debt,  including  vendor  financing and  construction
obligations,  totaled $5.5  billion and $3.8  billion at September  30, 1998 and
December  31,  1997,  respectively.   The  Company  has  used  vendor  financing
arrangements to fund the purchase of the equipment and software  manufactured by
certain  vendors as well as a  substantial  part of the  construction  labor and
ancillary equipment (e.g., towers, antennae) required to construct the Company's
PCS  network.  These  facilities  serve as a primary  financing  source  for the
buildout of the network.

To the extent the Sprint recapitalization is not approved, the Company currently
has  limited  sources of funds to meet its capital  requirements  and has relied
upon capital contributions,  advances from Holdings, third party debt and public
debt.  The Amended and Restated  Capital  Contribution  Agreement  (the "Amended
Agreement")  dated October 2, 1996 between the Company and the Partners provided
for $3.2 billion in capital contributions. As of March 31, 1998 the Partners had
fulfilled  their  obligation  under  the  Amended  Agreement.   Further  capital
contributions  may be made by the  Partners  to  Holdings  which  may,  in turn,
contribute  capital to the Company.  However,  the Partners are not obligated to
make additional capital  contributions,  and there can be no assurance that such
contributions will be made.

In October  1996 and as amended in December  1997,  the Company  entered  into a
credit  agreement with The Chase Manhattan Bank, as  administrative  agent for a
group of lenders,  for a $2.0 billion senior secured credit  facility (the "Bank
Facility").  The proceeds of the Bank Facility are to be used to finance working
capital needs,  subscriber  acquisition  costs,  capital  expenditures and other
general  purposes of the Company.  The Bank Facility  consists of a $300 million
term loan commitment and a revolving  credit  commitment of $1.7 billion.  As of
September 30, 1998,  $300 million under the term loan and $1.6 billion under the
revolving  credit  facility  had  been  borrowed  with  $100  million  remaining
available.

Also in October 1996,  the Company  entered into credit  agreements for up to an
aggregate  of $3.1  billion  of  senior  secured  multiple  drawdown  term  loan
facilities from two of its network infrastructure  equipment vendors. As amended
in April and November 1997, the Nortel facility  provides $1.3 billion in senior
secured  loans.  The  Lucent  facility,  as amended  in May and  December  1997,
provides $1.8 billion in senior secured loans  (together

<PAGE>

the "Vendor  Financing" and together with the Bank  Facility,  the "Secured
Financing"). The Company is using the proceeds from the Vendor Financing to fund
the purchase of the equipment and software  manufactured  by the vendors as well
as a substantial part of the construction and ancillary equipment (e.g., towers,
antennae,  cable)  required  to  construct  the  Company's  PCS  network.  These
facilities  serve  as the  primary  financing  mechanism  for the  buildout  and
continued  expansion of the  network.  The Company has  borrowed  $2.5  billion,
including $165.0 million in accrued converted interest, under such facilities at
September 30, 1998, of which $300 million was syndicated to Sprint.

The Bank Credit Facility  agreement and the Vendor Financing  agreements contain
certain restrictive  financial and operating covenants,  including,  among other
requirements,  maximum  debt ratios  (including  debt to total  capitalization),
limitations on capital expenditures,  limitations on additional indebtedness and
limitations  on  dividends  and other  payment  restrictions  affecting  certain
restricted subsidiaries.  The loss of the right to use the Sprint trademark, the
termination or non-renewal of any FCC license that reduces  population  coverage
below specified  limits, or changes in controlling  interest in the Company,  as
defined, among other provisions, constitute events of default.

Borrowings under the Secured Financing are secured by the Company's  interest in
WirelessCo,  RealtyCo  and  EquipmentCo  and  certain  other  personal  and real
property (the "Shared  Lien").  The Shared Lien equally and ratably  secures the
Bank  Facility and the Vendor  Financing.  The Secured  Financing is jointly and
severally guaranteed by WirelessCo, RealtyCo and EquipmentCo and is non-recourse
to the Partners and the Parents.

In August 1996,  Sprint  Spectrum  L.P. and FinCo issued $250 million  aggregate
principal  amount of the 11% Senior  Notes due 2006 and $500  million  aggregate
principal  amount  at  maturity  of 12  1/2%  Senior  Discount  Notes  due  2006
(together,  the  "Notes").  FinCo was formed  solely to be a  co-obligor  of the
Notes.  FinCo has only nominal assets and no operations or revenues,  and Sprint
Spectrum L.P. will be responsible for payment of the Notes.

The Senior Discount Notes were issued at a discount to their aggregate principal
amount at maturity and generated  proceeds of  approximately  $273 million.  The
proceeds of  approximately  $509  million from the issuance of the Notes (net of
approximately $14 million of underwriting discounts,  commissions,  and offering
expenses) were used to fund capital expenditures,  including the buildout of the
nationwide PCS network, to fund working capital requirements,  to fund operating
losses and for other partnership  purposes.  Sprint purchased,  and continues to
hold,  approximately  $183  million  principal  amount at maturity of the Senior
Discount Notes.  The Notes contain  certain  restrictive  covenants,  including,
among other requirements limitations on additional indebtedness,  limitations on
restricted  payments,  limitations  on liens,  and  limitations on dividends and
other payment restrictions affecting restricted subsidiaries.

For the  nine  months  ended  September  30,  1998,  the  Company  used  cash of
approximately  $948.7 million in operating  activities,  which  consisted of the
operating  loss of $1.4 billion less  depreciation  and  amortization  of $471.9
million and net changes in working capital and other  noncurrent  liabilities of
$19.5  million.  Cash  used in  investing  activities  totaled  $871.5  million,
consisting of capital expenditures and microwave relocation costs. Cash provided
by financing  activities  totaled $1.9 billion,  consisting of the proceeds from
vendor financing, the revolving credit agreement, capital contributions, and the
change in construction obligations.

In connection with the restructuring and recapitalization,  Sprint and the Cable
Parents have agreed to loan up to $400 million,  based on  respective  ownership
interests,  to fund the capital  requirements  of Holdings  and its  affiliates,
including  the  Company,  from the date of the signing of the PCS  Restructuring
Agreement  through the closing date. These loans may be repaid from the proceeds
of an anticipated  initial public  offering  ("IPO") by Sprint,  but only to the
extent the net proceeds of the IPO exceed $500  million.  In the event the loans
remain  
<PAGE>

outstanding  after the IPO, the remaining balance will be converted into
10-year preferred stock convertible into PCS stock.

Subsequent  to the  restructuring,  Sprint  intends  to  borrow  funds  and then
allocate the borrowings to the PCS Group  depending  upon its capital  structure
and funding  needs.  Sprint will lend to the PCS Group at interest  rates and on
other terms and conditions substantially equivalent to those which the PCS Group
could raise funds on their own without the support of Sprint.

Seasonality

The  wireless  industry,  including  the  Company,  has  experienced  a trend of
generating a  significantly  higher number of  subscriber  additions and handset
sales in the fourth  quarter of each year as compared to the other three  fiscal
quarters. A number of factors contribute to the trend,  including the increasing
use of retail distribution,  which is dependent on the year-end holiday shopping
season,  the timing of new product and service  announcements and introductions,
competitive  pricing  pressures and aggressive  marketing and sales  promotions.
There can be no assurances  that strong fourth  quarter  results for  subscriber
additions  and handset  sales will  continue  for the  wireless  industry or the
Company.  The Company's  fourth quarter  subscriber  additions and handset sales
could be adversely  impacted by a variety of reasons,  including  the  Company's
inability to match or beat pricing plans offered by competitors,  the failure to
adequately  promote the  Company's  products,  services and pricing plans or the
failure to have an adequate  supply or selection of handsets.  If fourth quarter
results of the Company fail to significantly  improve upon subscriber  additions
and handset sales from the year's previous  quarters,  the Company's results for
the year could be materially adversely affected.


Results of Operations

For the Three and Nine Months Ended September 30, 1998

Operating Revenues

Revenues  and cost of revenues  have  increased  for the third  quarter and nine
months  ended  September  30, 1998  compared to the same  periods in 1997 due to
increases in the number of markets  launched  and in the number of  subscribers.
Revenues  include  service and the sales of  handsets  and  accessory  equipment
through  multiple  distribution  channels  (including  Sprint PCS retail stores,
telemarketing,  and  business  channels)  and to third  party  vendors.  Cost of
revenues  consists  principally of handset and accessory costs,  interconnection
costs and switch and cell site expenses, including site rental and utilities.


Selling, General and Administrative Expenses

The Company's selling, general and administrative expenses for the third quarter
of 1998 were $251.9 million  compared to $205.2 million for the third quarter of
1997.  For the nine  months  ended  September  30,  1998,  selling,  general and
administrative expenses increased to $699.5 million from $471.7 million. For the
nine months ended  September 30, 1998,  selling  expenses  were $218.9  million,
compared to $106.7 million for the same period in 1997. For the third quarter of
1998,  selling  expenses  increased to $86.8  million from $64.2  million in the
third quarter of 1997.  Such costs include  participation  with Sprint in an NFL
sponsorship,  development and production expenses associated with advertisements
in various media (i.e.,  television,  radio,  print), the development of printed
brochures to promote the Company's  products and services,  and sales

<PAGE>
incentive  programs.  The Company expects selling expenses will continue to
increase as the Company expands its sales and marketing activities.

General  and  administrative  expenses  for the third  quarter  increased  $24.1
million over the same period in 1997.  For the nine months ended  September  30,
1998,  general and  administrative  expenses  were $480.6  million,  compared to
$365.0  million  for the  comparable  period in 1997.  These  increases  are due
principally to increases in salary and related benefits,  computer equipment and
related expenses and  professional  and consulting fees.  Salaries and benefits,
computer equipment and related expenses increased due to an increase in employee
headcount.  These  additional  employees  have been  added over the last year to
support the continued  growth of the Company.  Professional  and consulting fees
increased  due to the use of  consultants  and other  experts to assist with the
continuing  development  and enhancement of the Company's  information  systems,
continued  rollout  and  tailoring  of  employee  training,  and  various  other
projects.

Depreciation and Amortization

Depreciation and  amortization  expense for the third quarter of 1998 was $167.3
million compared to $84.1 million for the same period in the prior year. For the
nine months ended  September 30, 1998,  depreciation  and  amortization  expense
increased  $247.1  million over the same period in 1997 as network  equipment in
launched markets has been placed in service and amortization of PCS licenses and
microwave relocation costs in those same markets commenced.

Other Income/Expense:

Interest Expense

Interest  expense  increased  to  $112.7  million  for the  three  months  ended
September 30, 1998,  versus $41.2  million for the same period in 1997.  For the
nine months ended  September  30,  1998,  interest  expense was $290.0  million,
compared  to $53.4  million  for the same  period in 1997.  The  balance  of the
Company's  construction accounts eligible for interest  capitalization  declined
during the period as markets  launched  commercial  service  and  equipment  was
placed in service.
Additionally, interest expense continued to increase as borrowings increased.

Other Income

The Company participates in affiliation  agreements with PhillieCo,  APC and Cox
PCS. For the three and nine months ended  September 30, 1998,  aggregate fees of
$0.7 million and $4.6 million,  respectively,  earned under these agreements are
shown in other income.


For the Three and Nine Months Ended September 30, 1997

Operating Revenues/Margin

The Company  emerged from the  development  stage in the third  quarter of 1997,
and, as a result, the majority of the year-to-date service revenue was generated
in the third  quarter.  Equipment  revenues  reflected the sales of handsets and
accessory  equipment  through Sprint PCS channels  (including  Sprint PCS retail
stores,  telemarketing,  and business channels) and to third party vendors.  The
negative  margin from equipment  sales resulted  principally  from the Company's
subsidy of handsets.  Cost of service  consisted  principally of switch and 

<PAGE>

cell site expenses,  including site rental,  utilities and access  charges.
Prior to service launch,  such costs were incurred  during the network  buildout
and testing phases.

Selling, General and Administrative Expenses

The Company's selling, general and administrative expenses for the third quarter
of 1997 were $205.2  million  compared to $82.0 million for the third quarter of
1996.  For the nine  months  ended  September  30,  1997,  selling,  general and
administrative  expenses increased to $471.7 million from $156.2 million for the
same nine months of 1996. The Company's  selling  expenses for the third quarter
of 1997 were $64.2  million  compared to $7.7  million for the third  quarter of
1996. For the nine months ended September 30, 1997,  selling expenses  increased
to $106.7  million  for $8.7  million  for the same nine  months of 1996.  These
increases  were due to costs  incurred  during the  initial  commercial  service
launch in various  markets and to costs incurred in  conjunction  with local and
national advertising for existing markets. Such costs include participation with
Sprint in an NFL  sponsorship,  development and production  expenses  associated
with advertisements in various media (i.e.,  television,  radio, print), and the
development of printed brochures to promote the Company's products and services.
The Company  expects  selling  expenses will continue to increase as the Company
expands its sales and marketing activities.

General and  administrative  expenses for the third quarter increased from $74.3
million in 1996 to $141.0 million in 1997. General and  administrative  expenses
for the nine months ended  September  30, 1996 and 1997 were $147.5  million and
$365.0  million,  respectively.  Increases  for both the  three  and nine  month
periods  were due  principally  to  increases  in salary and  related  benefits,
computer  equipment and related  expenses and  professional and consulting fees.
Salaries and benefits,  computer equipment and related expenses increased due to
an increase in employee  headcount.  Professional  and consulting fees increased
due to the use of  consultants  and other experts to assist with the  continuing
development and enhancement of the Company's sophisticated  information systems,
continued  rollout  and  tailoring  of  employee  training,  and  various  other
projects.

Depreciation and Amortization

Depreciation  and  amortization  expense for the third quarter of 1997 was $84.1
million  compared  to $1.2  million  for the  same  period  in the  prior  year.
Depreciation  and  amortization  expense of $184.7  million  for the nine months
ended  September 30, 1997, was an increase from $1.8 million for the same period
in 1996 as network  equipment in launched markets has been placed in service and
amortization  of PCS  licenses  and  microwave  relocation  costs in those  same
markets commenced.


Other Income/Expense:

Interest Income/Expense

Interest income decreased from $3.5 million for the three months ended September
30, 1996 to $1.9 million for the three months  ended  September  30, 1997 as the
average daily invested cash balance decreased during the comparative periods due
to the receipt in the prior year of partner equity  contributions  in advance of
capital  and  operational  requirements.  Interest  income  decreased  from $4.5
million for the nine months  ended  September  30, 1996 to $3.2  million for the
nine months ended September 30, 1997.

Interest expense increased to $41.2 million for the three months ended September
30, 1997,  versus $0.1 million for the same period in 1996.  For the nine months
ended September 30, 1997,  interest expense increased to $53.4 million from $0.4
million for the same period in 1996.  The balance of the Company's  construction
accounts  

<PAGE>

eligible for  interest  capitalization  declined  during the period as
markets  launched  commercial  service  and  equipment  was  placed  in  service
Additionally, interest expense continued to increase as borrowings increased.

Other Income

Equity in loss of unconsolidated partnership for the three and nine months ended
September 30, 1996  represents  the Company's  share of the losses in APC before
the  ownership  interest was  transferred  to Holdings on August 31,  1996.  The
Company retained the rights and obligations under the affiliation agreement with
APC. In addition,  the Company participates in an affiliation agreement with Cox
PCS.  Fees  earned  under these  agreements  of $1.0  million and $3.9  million,
respectively for the three and nine months ended September 30, 1997 are shown in
Other income.




<PAGE>



                                                                         PART I.
                                                                        Item 2b.
                       SPRINT SPECTRUM FINANCE CORPORATION
               (A Wholly-Owned Subsidiary of Sprint Spectrum L.P.)
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Sprint Spectrum  Finance  Corporation  ("FinCo"),  a Delaware  corporation,  was
formed on May 21, 1996 and is a wholly-owned  subsidiary of Sprint Spectrum L.P.
FinCo has nominal assets, does not conduct any operations and was formed to be a
co-obligor  of the  securities  issued  by the  Company.  Certain  institutional
investors  who  might  otherwise  be  limited  in their  ability  to  invest  in
securities  issued by  partnerships  by reasons of the legal  investment laws in
their states of organization or their charter  documents,  may be able to invest
in the  Company's  securities  because  FinCo is a  co-obligor.  Accordingly,  a
discussion  of the results of  operations,  liquidity  and capital  resources of
FinCo are not presented.

<PAGE>


                                                                        PART II.
                                                               Other Information
Item 1.  Legal Proceedings

                  Sewell, et al. v. Sprint PCS Limited Partnership, a/k/a Sprint
Spectrum L.P., et al.,  Circuit Court in Baltimore City,  Maryland (Civil Action
No. S-97-3044).  In July 1997, a class action complaint was filed against Sprint
Spectrum L.P. and American PCS, L.P.,  asserting common law and statutory claims
of misrepresentation and breaches of contract and warranty. The plaintiffs claim
the  defendants  misled  customers into buying Sprint  Spectrum(R)  handsets and
services on the basis that they were  compatible  with or operable on the Sprint
PCS(R)  network,  and failed to disclose that the  technology  behind the Sprint
Spectrum(R)  network was  inferior to the  technology  behind the Sprint  PCS(R)
network.  The  plaintiffs are seeking  compensatory  and punitive  damages,  and
attorneys'  fees. The  plaintiffs'  class was certified by the court on June 29,
1998. Sprint Spectrum L.P. filed a motion to stay further  proceedings pending a
decision by the Maryland Court of Appeals on another class  certifications case,
but this motion was denied on October 8, 1998.  Merits  discovery in the case is
proceeding.

         Copacino,  et al.  v.  Sprint  Spectrum  L.P.,  et al.,  United  States
District Court for the District of Columbia,  Case No. 98-1180.  In July 1998, a
class action  complaint was filed against Sprint Spectrum L.P.  asserting common
law and  statutory  claims of  misrepresentation  and  breaches of contract  and
warranty.  On October  2, 1998,  Sprint  Spectrum  L.P.  filed a motion for more
definite  statement  asking  plaintiffs  to further  define  their  claims.  The
plaintiffs claim the defendants misled customers into buying Sprint  Spectrum(R)
handsets and services on the basis that the Sprint Spectrum(R)  service would be
expanded to include  national  coverage or would be linked to the Sprint  PCS(R)
system.  The plaintiffs are seeking  injunctive  relief,  punitive damages,  and
attorneys' fees.

         Andrew Blum, et al.  [Goetz] vs. Sprint  Spectrum  L.P.,  United States
District  Court  for  the  Southern  District  of  Florida  (removed)  Case  No.
97-7157-CIV.  Suit was filed  August  28,  1997 in Florida  state  court and was
removed to federal court.  Plaintiff moved to certify the class on September 27,
1997.  Following limited discovery,  Sprint Spectrum L.P. opposed the motion and
plaintiffs  moved to  withdraw  their  motion to certify  the class on March 11,
1998.  Plaintiff  moved  to  amend  the  complaint  on  May 8,  1998  (including
withdrawal  of  the  original  class  representative  and  the  substitution  of
additional representatives), which motion was granted on June 15, 1998.

         The suit alleges that Sprint  Spectrum L.P. knew, or should have known,
at the time it promoted  high-minute  usage plans in July and August,  that such
promotions  would  generate  usage  demand  that would  exceed  capacity  of its
network,  resulting in blocked or dropped calls.  Plaintiff seeks to represent a
class of  subscribers  in four South Florida  counties who subscribed to service
between  July 1,  1997 to  December  31,  1997.  The suit  seeks a refund of the
purchase  price  of  telephone  handsets  and  all  amounts  paid  for  service,
unspecified  compensatory  and  punitive  damages,  attorneys'  fees  and  other
unspecified relief.

     Rick  Cortez,  et al. vs.  Sprint  Spectrum  L.P.,  et al.,  United  States
District Court for the Southern District of Texas,  Case No. M-97-259.  Suit was
filed in state court on September  24, 1997 and removed to federal  court.  Suit
was remanded to state court on September 28, 1998.

<PAGE>

         The suit is  against  Sprint  Spectrum  L.P.  and the  salesperson  who
allegedly sold plaintiff the telephone.  Plaintiff  alleges that Sprint Spectrum
L.P. began promoting its phones service through various advertisements,  touting
clarity,  fewer  dropped  calls and  coverage  in the Rio Grande  Valley,  which
plaintiff  alleges  were false,  complaining  of  excessive  dropped and blocked
calls. Claims are based on common law fraud, negligent misrepresentation, breach
of warranty  and breach of contract.  Plaintiff  seeks to represent a nationwide
class of subscribers.  Suit seeks unspecified  damages,  pre-judgment  interest,
punitive damages and attorneys' fees.

     Camille U. and Joseph  Chiarella v. Sprint  Spectrum  L.P.,  et al.,  Civil
District Court for the Parish of Orleans,  No. 97-19338.  Suit filed October 31,
1997. Exceptions to plaintiff's claims filed and several sustained. Plaintiff in
the process of filing an amended petition.

         Plaintiff   alleges  that  Sprint   Spectrum   L.P.,   its  owners  and
distributors  began  promoting its service through  various  advertisements  and
direct solicitations,  touting clarity,  fewer dropped calls and coverage in the
New  Orleans,  which  plaintiff  alleges  were false,  complaining  of excessive
dropped and blocked  calls.  Plaintiff  seeks to represent a statewide  class of
subscribers.


         Sam Nacify v Sprint Spectrum L.P., United States District Court for the
Southern District of California at Los Angeles, Case No. 98-4093 CBM. Suit filed
in state  court  April 1,  1998 and  removed  to  federal  court.  Case has been
remanded to state court by agreement of the parties.


         The suit is by a Cox Communications PCS, L.P. customer alleging that he
was induced to buy a handset  and sign up for  service  based on offers of large
numbers of  included  minutes  for a low  monthly  recurring  charge and that he
experienced numerous dropped calls and blocked calls and that coverage is not as
represented  due to  popularity  of  promotions,  resulting in lack of capacity.
Claims made are for violation of California  Consumer Legal Remedies Act, common
law  fraud  and  breach  of  contract.  Plaintiff  seeks to  represent  class of
customers in California.  Suit seeks restitution,  attorneys' fees,  prejudgment
interest, injunctive relief and other unspecified relief.


         Edward Ho, et al. v. Sprint Spectrum L.P., United States District Court
for the Southern District of California City of Los Angeles, Case No. BC 192668.
Suit was served June 22, 1998. The class is alleged to be those who bought 1,000
minute plans and 500 minute plans in  California  in the fall of 1997.  The suit
claims  that the system did not work as  represented  (frequent  dropped  calls,
non-functioning  voice  mail).  Breach  of  implied  warranty,  common  law  and
California  Consumer  Legal  Remedies Act fraud and negligent  misrepresentation
claims are made.  Relief  sought is  injunctive,  unspecified  compensatory  and
punitive damages and attorneys' fees.

     Joseph  Chazanow,  et al. v.  Sprint  Spectrum  L.P.,  et al.,  Los Angeles
Superior  Court  removed to the United  States  District  Court for the  Central
District of California, Case No. CV-98-7102 R(MCX). Original suit filed June 14,
1998.  Plaintiffs  desire to certify a class action  complaint  asserting  false
advertising,  misrepresentation,  fraud and defective equipment, focusing on the
pre-November  27, 1997  promotions  when Sprint PCS  services  were  launched in
plaintiffs'   area.   Plaintiffs  claim  they  were  misled  primarily   through
advertising  that  seamless  coverage  would be  available  by a specific  date.
Plaintiffs  allege they were required to make substantial  expenditures in order
to make their initial handset investment operational.

<PAGE>
The suit seeks permanent injunctive relief, actual and punitive damages and
attorneys' fees.



Item 2.  Changes in Securities

         There were no reportable  events during the quarter ended September 30,
         1998.

Item 3.  Defaults On Senior Securities

         There were no reportable  events during the quarter ended September 30,
         1998.

Item 4.  Submission of Matters to Votes of Security Holders

         There were no reportable  events during the quarter ended September 30,
         1998.

Item 5.  Other Information

         There were no reportable  events during the quarter ended September 30,
         1998.

Item 6.  Exhibits and Reports on Form 8-K

      (a) The following exhibits are filed as part of this report:

      3.1    Certificate of Limited Partnership of Sprint Spectrum L.P. 
             (incorporated by reference to Form S-1 Registration Statement, 
             Registration No. 333-06609, filed on June 21, 1996).

      3.2    Amended and Restated  Agreement of Limited  Partnership of MajorCo,
             L.P. (renamed Sprint Spectrum Holding Company,  L.P.) dated January
             31, 1996, among Sprint Spectrum L.P.  (renamed Sprint  Enterprises,
             L.P.), TCI Network Services,  Comcast Telephony  Services,  and Cox
             Telephony  Partnership  (incorporated  by  reference  to  Form  S-1
             Registration Statement,  Registration No. 333-06609,  filed on June
             21, 1996).

      3.3    Agreement  of Limited  Partnership  of MajorCo Sub,  L.P.  (renamed
             Sprint Spectrum L.P.),  dated as of March 28, 1995,  among MajorCo,
             L.P.  and  MinorCo,  L.P.  (incorporated  by  reference to Form S-1
             Registration Statement,  Registration No. 333-06609,  filed on June
             21, 1996).

      4.1    Senior  Note  Indenture,  dated  August 23,  1996,  between  Sprint
             Spectrum L.P., Sprint Spectrum Finance Corporation, and The Bank of
             New York, as Trustee (incorporated by reference to Form 10-Q, filed
             on November 12, 1996).

      4.2    Form of Senior Note (included in Exhibit 4.1).

<PAGE>

      4.3    Senior  Discount  Note  Indenture,  dated August 23, 1996,  between
             Sprint Spectrum L.P., Sprint Spectrum Finance Corporation,  and The
             Bank of New York,  as Trustee  (incorporated  by  reference to Form
             10-Q, filed on November 12, 1996).

      4.4    Form of Senior Discount Note (included in Exhibit 4.3).



     27   Financial data schedule

     (b)  Reports on Form 8-K

        No reports on Form 8-K were filed during the quarter ended September 30,
          1998.


<PAGE>


                                    SIGNATURE





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.







                                    SPRINT SPECTRUM L.P.
                                    (Registrant)





                                    By /s/ William J. Gunter
                                           William J. Gunter
                                           Chief Financial Officer



Dated:  November 2, 1998


<PAGE>


                                    SIGNATURE





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.





                                    SPRINT SPECTRUM FINANCE CORPORATION
                                    (Registrant)




                                    By /s/ William J. Gunter
                                           William J. Gunter
                                           Vice President and Treasurer




Dated:  November 2, 1998