FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)
[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1999

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____________________ to __________________

Commission file number: 0-19889

                  SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
             (Exact name of registrant as specified in its charter)

      Colorado      South Hertfordshire United Kingdom Fund, Ltd.    #84-1145140
--------------------------------------------------------------------------------
(State of Organization)                      (IRS Employer Identification No.)

Caxton Way, Watford, WD1 8XH, England            011-44-1923-435000
-------------------------------------            ------------------
(Address of principal executive office           (Registrant's telephone no.
and Zip Code)                                    including area code)

        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:
                         Limited Partnership Interests

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
                      ---                            ---

Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (e229 405) is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x

DOCUMENTS INCORPORATED BY REFERENCE:
None

<PAGE>


TABLE OF CONTENTS
                                                                            Page
PART I
ITEM 1.    DESCRIPTION OF BUSINESS                                             3
ITEM 2.    DESCRIPTION OF PROPERTIES                                          22
ITEM 3.    LEGAL PROCEEDINGS                                                  22
ITEM 4.    CONTROL OF REGISTRANT                                              22
PART II
ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY
           AND RELATED STOCKHOLDER MATTERS                                    22
ITEM 6.    SELECTED FINANCIAL DATA                                            23
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                                24
ITEM 7a    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK         27
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                        28
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE                             39
ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                 39
ITEM 11.   EXECUTIVE COMPENSATION                                             40
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT                                                     40
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                     40
ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND                        40
           REPORTS ON FORM 8-K

Signatures                                                                    42

Exhibit Index                                                                 43

<PAGE>

                                     PART I

ITEM 1. BUSINESS

         South Hertfordshire United Kingdom Fund, Ltd., formerly known as Jones
United Kingdom Fund, Ltd., (the "Partnership"), is a Colorado limited
partnership that was formed in December 1991 pursuant to the public offering of
limited partnership interests (the "Interests") in the Partnership for the
purpose of acquiring one or more cable television/telephony systems in the
United Kingdom of Great Britain and Northern Ireland (the "United Kingdom" or
the "UK"). Upon acquisition of its system, the Partnership's primary investment
objective is to obtain capital appreciation in the value of its systems over the
term they are held by the Partnership. The capital appreciation in the
Partnership's assets may be converted to cash by the sale of a system, through
one or more refinancings or by the partners' sale of their Interests in the
Partnership.


History


         The Partnership was formed upon the receipt of subscriptions for
Interests totalling the minimum offering of $10,000,000. The general partner of
the Partnership was initially Jones Global Funds, Inc., a Colorado corporation
("Jones Global Funds"). As of August 15, 1992, when the initial offering by the
Partnership terminated, the Partnership had raised $16,548,000 in gross offering
proceeds from the sale of 16,548 Interests, or $14,272,650 net of sales
commissions and other organizational and offering costs. On September 14, 1992,
the Partnership commenced a second offering of Interests. As of April 1994, when
the second offering terminated, the Partnership had raised a total of
$56,935,000 in gross offering proceeds from the sale of 56,935 limited
partnership interests, or $48,817,997 net of sales commissions and other
organizational and offering costs, from both its initial and its second public
offerings.


         On February 20, 1992, upon receipt of approval from United Kingdom
regulatory authorities, the Partnership acquired, through nominees, the
beneficial ownership of all of the shares of Cable & Wireless Communications
(South Hertfordshire) Limited (formerly Jones Cable Group of South Hertfordshire
Limited) ("Cable & Wireless Communications South Herts") from Jones Global
Funds, Inc. and certain of its affiliates (the "Former Owners"). Cable &
Wireless Communications South Herts is a United Kingdom corporation which holds
the cable and telecommunications licenses necessary to build and operate a cable
television/telephony system in the South Hertfordshire franchise area, located
adjacent to the north-west perimeter of Greater London (the "South Herts
System"). The acquisition by the Partnership of all of the shares of Cable &
Wireless Communications South Herts resulted in the Partnership acquiring an
indirect beneficial ownership interest in the South Herts System. The
Partnership paid the Former Owners a total of $4,996,700, representing, at cost,
their expenses in connection with obtaining, holding and maintaining the
licenses for the South Herts System and their capital expenditures during and
before the Partnership acquired the beneficial ownership of Cable & Wireless
Communications South Herts, plus the amount of operating and interest expenses
in excess of operating receipts incurred during such period. Subsequent to the
Partnership investment in Cable & Wireless Communications South Herts, cost
reimbursements have been and will continue to be made to the general partner (or
its affiliates) for construction costs of the South Herts System. Partnership
funds are used to reimburse the general partner (or its affiliates) at cost on a
monthly basis for expenditures incurred by the general partner (or its
affiliates) for the South Herts System's construction and operation.


         The South Herts System's ownership by Cable & Wireless Communications
South Herts, a United Kingdom corporation, rather than directly by the
Partnership, results from an intention to insulate the limited partners of the
Partnership (the "Limited Partners") from potential United Kingdom taxation upon
the eventual sale of the South Herts System. Under current United Kingdom tax
laws, the sale of the United Kingdom cable television/telephony system by a U.S.
limited partnership may give rise to limited partner tax liability in the United
Kingdom whereas the sale of shares in a United Kingdom corporation by a U.S.
limited partnership does not give rise to limited partner tax liability in the
United Kingdom on the basis that the limited partnership is not itself trading
in the United Kingdom through a permanent establishment there. The shares of
Cable & Wireless Communications South Herts are held indirectly by the
Partnership through corporate nominees on the advice of the Partnership's
counsel in the United Kingdom. This indirect ownership structure is intended to
afford the Limited Partners more certain protection from United Kingdom tax
liability.


         In order to provide additional funding for the construction of the
South Herts System, two additional participants invested in Cable & Wireless
Communications South Herts in 1993 and 1994. Jones Intercable of South
Hertfordshire, Inc. invested (pound)3,400,000 in Cable & Wireless Communications
South Herts in exchange for 34,000 Class A shares in November 1993. Also in
November 1993, affiliates of Sandler Capital Management (the "Sandler Group")
committed to invest (pound)6,800,000 in Cable & Wireless Communications South
Herts, of which (pound)2,266,600 was funded in November 1993 for 22,666 Class B
shares. In June 1994, the Sandler Group invested (pound)3,273,232 for 32,732
Class B shares and Jones Intercable of South Hertfordshire, Inc. invested
(pound)503,283 for 5,033 Class A shares. In July 1994, the Sandler Group
invested (pound)1,800,000 for 18,000 Class B shares and Jones Intercable of
South Hertfordshire, Inc. invested (pound)466,800 for 4,668 Class B shares.


         On June 10, 1994, Jones Global Group, Inc., Jones Intercable, Inc. and
certain of their subsidiaries (collectively, "Jones") and the Sandler Group
entered into agreements to transfer all of their interests in their United
Kingdom cable television/telephony operations and franchises, including Jones
Intercable of South Hertfordshire, Inc.'s interest in Cable & Wireless
Communications South Herts, Jones Global Funds, Inc.'s general partner interest
in the Partnership and the Sandler Group's interest in Cable & Wireless
Communications South Herts, to Cable & Wireless Communications (B) plc ("BCM")
in exchange for ordinary shares (in the form of American Depository Shares
("ADSs")) to be issued by BCM in connection with a planned public equity
offering of ADSs by BCM. At that date, BCM was indirectly owned 80 percent by
BCI Telecom Holding Inc (formerly Bell Canada International Inc.) ("BCITH") and
20 percent by Cable and Wireless plc ("C&W").


         On July 22, 1994, in connection with the closing of the public equity
offering by BCM, Jones and the Sandler Group completed the exchange of their
interests in United Kingdom cable television/telephony operations and franchises
for ordinary shares (in the form of ADSs) issued by BCM. At closing, BCM
acquired Jones Intercable of South Hertfordshire, Inc.'s interest in Cable &
Wireless Communications South Herts, the Sandler Group's interest in Cable &
Wireless Communications South Herts and the general partner interest in the
Partnership. These acquisitions are collectively referred to herein as the "BCM
Acquisition." In October 1994, the Partnership invested (pound)5,108,900 in
Cable & Wireless Communications South Herts for 51,089 Class A shares and BCM
invested (pound)2,554,600 in Cable & Wireless Communications South Herts for
25,546 Class A shares. In November 1994, the Partnership invested
(pound)1,410,000 in Cable & Wireless Communications South Herts for 14,100 Class
A shares and BCM invested (pound)705,000 in Cable & Wireless Communications
South Herts for 7,050 Class A shares. As a result of these transactions, Cable &
Wireless Communications South Herts is now owned 66.7 percent by the Partnership
and 33.3 percent by BCM, and the general partner of the Partnership is now
Fawnspring Limited, a wholly owned subsidiary of BCM (the "General Partner").
The General Partner provides consulting services to the Partnership. The General
Partner may delegate some or all of the consulting services to BCM or to other
affiliates.


         On October 21, 1996, BCM entered into a number of agreements relating
to the acquisition of control of the outstanding shares of Cable & Wireless
Communications (V) Plc ("Videotron"). Prior to the acquisition, BCM owned 26.2%
of Videotron and did not control Videotron's operations. Pursuant to an
agreement entered into on October 21, 1996 and consummated on December 17, 1996,
BCM acquired control of an additional 55.6% of Videotron, increasing its direct
and indirect shareholding in Videotron to 81.8%. Subsequently, certain share
options of Videotron were exercised, and as of January 8, 1997, BCM owned 81.7%
of Videotron's ordinary shares. Also on December 17, 1996, a subsidiary of C&W
subscribed for additional shares in BCM, increasing its stake in the company to
32.5%, with BCI's indirect stake reducing to 32.5%.


         On January 8, 1997, BCM made an offer to acquire all the remaining
public and employee shares of Videotron. BCM now owns all of the current issued
ordinary share capital of Videotron.


         On October 22, 1996, C&W, BCITH and Bell Atlantic (at that time, NYNEX)
announced that they had entered into an agreement, pursuant to which, subject to
the satisfaction of certain conditions precedent, the parties agreed to combine:
(i) Cable & Wireless Communications (Mercury) Limited ("Mercury"), (ii) BCM (as
enlarged by the acquisition of Videotron), and (iii) Cable & Wireless
Communications CableComms Group PLC and NYNEX Cablecomms Group Inc.
(collectively "NYNEX CableComms") under one company to be called Cable and
Wireless Communications plc ("C&W Comms"). On completion of this combination,
C&W Comms became the largest provider of integrated telecommunications and
television entertainment services in the United Kingdom.


         C&W and Bell Atlantic presently own, directly or indirectly,
approximately 52.6 per cent and 18.5 per cent respectively of the issued share
capital of C&W Comms. Public shareholders hold the remaining 28.9 per cent.


         C&W Comms' digital telecommunication network supports a broad range of
voice and data telecommunication services that can be provided to almost any
business establishment in the United Kingdom. Upon completion of the
construction of its broadband cable and local telecommunication networks C&W
Comms will offer a broad range of voice and data telecommunication services plus
multichannel television and other broadband services to approximately six
million potential residential homes, representing approximately 25 per cent. of
all homes in the United Kingdom (including 59 per cent. of all homes in Greater
London), and substantially all small-to-medium sized business customers within
its 47 cable franchise areas.


         Cable & Wireless Communications South Herts is one of 47 franchise
areas which C&W Comms manages and controls from its headquarters in the South
Hertfordshire franchise. Management control is exercised by Fawnspring Limited,
a UK corporation, which is the general partner of the Partnership (the "General
Partner"), although it is delegated to other affiliated companies of C&W Comms
as the General Partner believes that returns are maximised by management as an
integral part of a larger group to reap the benefits of synergy. C&W Comms
Services performs all billing and collection functions and other C&W Comms group
companies procure all services on behalf of Cable & Wireless Communications
South Herts. C&W Comms arrange all necessary funding on behalf of Cable &
Wireless Communications South Herts. Cable & Wireless Communications South Herts
is an integral part of C&W Comms strategy for developing activities in the UK.


         On 26 July 1999, C&W, NTL Incorporated ("NTL") and C&W Comms announced:

(a) the proposed separation of C&W Comms into its corporate, business, Internet
protocol and wholesale operations ("CWC DataCo") and its residential cable,
business cable, indirect residential telephony, residential Internet and digital
television development and services businesses ("CWC ConsumerCo"), (which
includes Cable & Wireless Communications South Herts);


(b) the proposed indirect acquisition by C&W of the 47.3 per cent interest in
CWC DataCo which is not currently attributable to it (thereby achieving 100 per
cent ownership of CWC DataCo); and


(c) the proposed indirect acquisition by NTL of CWC ConsumerCo (together with
the proposed separation of C&W Comms and the C&W acquisition, the
"Transaction").


         Shareholder and other public documentation relevant to the Transaction,
in particular the documents required to solicit various shareholder and
bondholder consents, was posted on February 14, 2000 to holders of relevant
securities of C&W, NTL and C&W Comms. However, the transaction remains
conditional upon various matters and, in particular, the competition clearances
relating to the NTL acquisition of CWC ConsumerCo and France Telecom's
investment in NTL.


         The South Herts System

         Franchise Area

         The South Hertfordshire franchise area comprises the three
administrative areas of Three Rivers, Watford and Hertsmere, with a population
of approximately 240,000. The franchise area covers commuter suburbs of London,
and many people who reside in the franchise area use the available fast rail and
motorway services to travel to work in central London. South Hertfordshire has
benefited from the completion in 1986 of the M25 London Motorway, which makes
commuting from the franchise area to other areas in or near London more
convenient. An M1 motorway link exists to give London-bound commuters direct
access from Watford to the London highway system. The M1 link is half a mile
from the South Herts System headend and administrative offices. There are
approximately 94,000 homes in the franchise area, of which 91,438 have been
passed by the South Herts System cable television/telephony network.
Construction in the franchise area is substantially complete. The average
housing density in the South Herts franchise area is approximately 1,150 homes
per square mile.


         The South Hertfordshire franchise area contains approximately 7,000
businesses, 80 percent of which are small or medium-sized. In addition, there
are several business parks containing predominantly industrial and manufacturing
concerns.


         Operations

         Construction of a cable television-only network in the South
Hertfordshire franchise area commenced in early 1991 and an integrated cable
television/telephony network architecture was developed for this franchise in
late 1991. As of December 31, 1999, approximately 91,438 homes, or 97 percent of
total homes, in this area had been passed. Cable television services commenced
in April 1992 and telephony services commenced in February 1993, following
completion of the installation of a telephony switch. At December 31, 1999,
Cable & Wireless Communications South Herts serviced approximately 24,717 basic
cable television customers and 30,909 residential telephony lines.


         Products and Services


         Three main types of service are offered by Cable & Wireless
Communications South Herts: cable television (mainly to the home but also to
businesses), residential telephony services and telecommunications services for
business customers.


         Cable Television Services. Cable & Wireless Communications South Herts
offers a range of programming, marketed in a series of packages: basic packages,
which include cable exclusive programming and premium packages, which are based
on films, sporting events, Asian programming and adult programming. Pay-per-view
("PPV") facilities are also available, providing a way for customers to buy
television programming, including high profile movies, sports and music events.
Cable & Wireless Communications South Herts uses its return path network to
encourage viewers to order the PPV events directly using their set top box and
remote control, rather than having to place an order over the telephone, which
direct-to-home ("DTH") television subscribers must do.


         Residential Telephony Services. Cable & Wireless Communications South
Herts offers local and long distance and international telephony services to its
customers, including advanced services such as call monitoring, call barring,
three-way calling, alarm calls, itemized billing, call waiting, call divert,
call screening and speed dialling.


           Internet access is available free from C&W Comms ISP via Internet
Lite.


         Business Telecommunications Services. Cable & Wireless Communications
South Herts offers businesses a range of services alongside basic telephony,
including fax, private circuits and virtual private networks. A Centrex service,
which offers customers the facilities they would expect from a private
switchboard without the need to buy or maintain their own switching equipment,
has been introduced.


         Future Services


         Opportunities for interactive and integrated services, which may be
offered by Cable & Wireless Communications South Herts in the future, include
the following:


         Digital television. Digital television is a technology that allows
customers to have access to a much higher channel capacity. The increased
capacity can be used for more broadcast channels, as well as for PPV, near
video-on-demand, broadband Internet access, games, home shopping/banking and a
wide range of other interactive services. The primary aim of digital television
will be to give more choice to the customer. Cable & Wireless Communications
South Herts has introduced digital television services as part of the roll-out
of such services by C&W Comms in January 2000.


         Near video-on-demand ("NVOD"). NVOD technology allows individual
subscribers to select, on a PPV basis, from a range of channels showing film,
event and sports programming available at staggered start times. NVOD is
distinguished from PPV by the relatively large numbers of channels used to
transmit the movies and events shown. This means that a customer will never have
to wait long for the beginning of a chosen movie. Such a service provides the
subscriber with a wide choice of programming options and flexibility in term of
viewing times.


         Video-on-demand ("VOD"). VOD is an improvement of NVOD service which
allows the viewer a much greater choice of programming selected from the service
provider's inventory for viewing at a specific time of the viewer's choice (ie
not at a time predetermined by the broadcaster). As with NVOD, the programming
selected would be transmitted over the network and is likely to be delivered to
a converter box in the customer's home in viewable form only to the particular
customer requesting the program, on a PPV basis. The provision of true VOD in
the UK is still likely to be several years away, owing to the current cost of
the video servers and the switching equipment needed. However, the upgrade to
digital technology will provide a suitable platform for VOD.


         Internet and other on-line information services. With the growth in the
home PC market fuelling the rapid growth in demand for Internet access and other
on-line information services, Cable & Wireless Communications South Herts is
well placed to offer both narrowband and broadband services into the home,
making use of its sophisticated "return path" network to offer full
interactivity. Internet access will be available via customers' television sets
from Summer 2000. PC access via cable modem will be available later.


         Competitive Advantages

         The South Herts franchise is managed as an integral part of C&W Comms.
C&W Comms has certain competitive strengths that position it to compete
effectively against BT and other potential competitors serving the UK market.

         Regulatory Environment and Market Position

         C&W Comms believes that the UK regulatory climate is generally
favorable for its operations. UK telecommunication policy has historically
tended towards promoting facilities-based competition, although more recently
this has shifted to a position whereby facilities-based and services-based
competition, are promoted in a balanced manner. At this stage of the development
of the UK market, Oftel has rejected demands from service providers to allow
them cost-based network services without having to build competing network
elements although they have encouraged the development of retail-minus products
for this sector by infrastructure providers. In addition, the UK regulatory
regime places greater burdens on those operators with significant market power,
giving C&W Comms greater operational flexibility than BT. Finally, C&W Comms
believes that the availability of number portability and reciprocal charging
arrangements between operators will generally favor C&W Comms and other
facilities-based competitors over BT.

         National Network Presence

         C&W Comms' continually expanding high-capacity local, national and
international network creates a competitive advantage in the UK market. The
Company is able to provide access (either direct or indirect) to almost all
small-to-medium-sized enterprises and large corporate businesses in the United
Kingdom. When construction of the cable television networks is complete, direct
access will be available to approximately 25 per cent. of all homes in the
United Kingdom. In addition, C&W Comms can provide telecommunication services to
substantially all potential UK customers by indirect connection to its network.
As a national operator, C&W Comms benefits from cost advantages in network
operations and marketing.

         Integrated Products and New Services

         C&W Comms believes it is well positioned in its franchise areas to
integrate a complete range of communications products, including multichannel
television and interactive services, fixed and mobile telephony, and Internet
and data services, and to offer these products at competitive prices to the
residential and business market segments. Product bundling provides customers
with increased value and a broadened range of services, and can also help reduce
residential customer churn. As part of its marketing efforts, C&W Comms will
continue to determine how best to maximize customer take-up through the variety
and value of its product offerings.

         Additionally, C&W Comms offers its customers integrated packages of
products, such as "telebusiness", corporate Internet services, on-line Internet
access services and number portability. In the future, C&W Comms will offer the
same products along with digital television products such as near
video-on-demand.


         Advanced Technology

         C&W Comms' digital telecommunication network is capable of supporting a
wide range of services and all anticipated growth of traffic volumes. The
(pound)400 million Synchronous Digital Hierarchy (SDH) upgrade of the C&W Comms
network, known as Network 2000, is progressing well. Upon completion of Network
2000, the Company will own one of the most advanced national communications
networks in the world, incorporating Dense Wave Division Multiplexing (DWDM)
technology along with SDH, ATM and IP. This will significantly improve both
speed and reliability, increasing network capacity by more than 1,000 fold and
providing the infrastructure for the UK, via C&W Comms, to exploit the age of IP
based, integrated communications.



         The development of a Network Level Management system, which went live
in February 1999, enables Network Controllers to identify and diagnose
transmission faults for different types of equipment across the entire network
from a single terminal for the first time. This augments the Company's ability
to offer a broad range of sophisticated customer support services ranging from
total contract management of large corporate customers' telemarketing centres to
switch-based residential value-added services, such as call forwarding, call
waiting and number portability. C&W Comms' value-added services can enhance C&W
Comms' competitiveness while also providing a net contribution to C&W Comms'
results. In addition, C&W Comms believes these services enhance customer loyalty
thereby reducing the risk of churn.


         Pricing Flexibility

         Modifications made in June 1996 and February 1997 to Mercury's PTO
license mean that C&W Comms is no longer required to publish prices for national
services or subject to the prohibition on undue preference or discrimination in
relation to these services. This provides C&W Comms with an advantage relative
to BT, giving it the same pricing flexibility as new entrants in the UK domestic
telecommunication market. Oftel has determined that C&W Comms has a
"well-established" operator status in international markets for retail and
wholesale service. Oftel regularly reviews status and in the last review in
February 1999 reduced the number of routes to just above 60, excluding the main
traffic heavy routes. On those international routes where Mercury has been
deemed to be `well established' the price publication and prohibitation on
discrimination rules apply, otherwise Mercury is unencumbered by prescriptive
regulation in this area.

         Strong Management Team and Strategic Relationships

         C&W Comms has recruited its senior executives both from within its
constituent companies and from other well-established corporations. C&W Comms'
senior executive team has the requisite experience to operate a business of the
scope and scale of C&W Comms.

         C&W Comms also benefits from close working relationships with C&W and
Bell Atlantic, and these relationships provide it with access to significant
bodies of accumulated experience and technological capability.




Pricing


         All prices set out in this section include Value Added Tax.



         Cable Television. Cable & Wireless Communications South Herts currently
charges customers on the basic Access cable television package (pound)9.98 per
month. Charges for dual packages including premium channels are up to
(pound)60.00. C&W Comm's cable television services include the supply and
installation of one addressable converter box which provides service to one
television set. There is a monthly charge of approximately (pound)10.00 per
additional channel selector box. Cable & Wireless Communications South Herts
also charges a one time connection fee, with discounts for those customers who
take telephony services as well as for those who choose to pay by direct debit.



         As a result of the regulation of BT's prices and increased competition,
telephony prices in the UK telecommunications market have declined significantly
over the past few years. Price remains an important factor in the residential,
small office and home business segments, although in its other business
segments, C&W Comms' pricing strategy is to sell predominantly on value rather
than on price alone. C&W Comms' tariffs for both domestic and international
telephone calls are set on the basis of per second rate, which varies according
to the destination and time of call. Except for a minimum fixed charge, C&W
Comms charges customers only for the actual time elapsed during a call. Leased
circuit services are charged at a fixed rate regardless of usage.


         Dual Product Packages. C&W Comms offers within its C&W Comms franchises
dual product cable television and telephony packages ("Dual Product Packages").
These Dual Product Packages known as Unity Packages provide customers within
these areas with a range of cable television packages integrated with its
telephony services. These services are priced to compete with the prices of
similar products offered separately by BSkyB and BT. They include both a range
of basic television packages together with the option to add certain "Premium"
channels (including sports and movie channels) and provide the customer with the
additional benefit of dealing with just one communications company.
Subscriptions are taken by both existing and new customers of C&W Comms with the
main interest being the entry level package, a mid-range package and a big basic
package. Based on past experience, C&W Comms believes that customers with both
cable television and telecommunications services are less likely to terminate
service than those with only cable television service. The Unity Packages are
designed to provide the consumer with greater choice and flexibility. They are
also intended to increase the rate of uptake of dual packaged services in
addition to stimulating higher penetration levels.


         Cable & Wireless Communications South Herts' Network


         Construction of Cable & Wireless Communications South Herts' cable
television/telephony network is substantially complete with approximately 97% of
homes in the South Hertfordshire franchise area passed at December 31, 1999.


         Network Architecture. Cable & Wireless Communications South Herts'
network is designed to take integrated two-way broadband cable television
systems. The network utilises fibre optic cables on major trunk routes from a
central location containing the cable television headend and telephony switch to
nodes that serve approximately 1,500 homes and 600 homes for cable television
and telephony, respectively.


         Cable & Wireless Communications South Herts' network makes extensive
use of fiber optic cable. The main benefits of deploying fiber in place of
traditional coaxial cable or copper wire result from its smaller size, greater
capacity, increased functionality and decreased requirements for periodic
amplification of the signal. These factors contribute to lower installation and
maintenance costs and increase the variety and quality of the services provided.


         The cable television system has the capacity to ultimately carry
between 200 and 300 channels of television plus radio, teletext,
telecommunications and other related services. The network is also capable of
conveying video and high speed data transmissions, thus providing the basis for
video conference facilities, television surveillance services and computer
communications.


         Because of the nature of moving picture video, substantial transmission
capacity, known as bandwidth, is required to provide a cable television program
to the customer. A network's transmission capacity requirement increases
proportionally as additional cable television programs are broadcast to
customers. The inherent bandwidth limitations of twisted pair copper wire
historically used in telephone networks have to date presented a substantial
obstacle to the use of existing telephone networks for the provision of cable
television services. Coaxial cable provides substantially greater bandwidth than
twisted pair copper wire and fiber optic cable can provide substantially greater
bandwidth than coaxial cable.


         Cable & Wireless Communications South Herts' telephony network employ
an open architecture, using a combination of SDH and PDH Technology for system
resilience. Voice and high speed data services may be provided across the
network. Multipair copper cable is used to connect fiber optic nodes serving
approximately 600 homes to distribution points housed in street cabinets serving
40 homes. From these cabinets, twisted pair copper cable is pulled to the
customer's home.


         Cable & Wireless Communications South Herts' telephony switch has
multiple interconnects to the C&W Comms and the BT networks.


         Network Construction Costs. Construction of integrated cable
television/telephony systems is capital intensive, requiring substantial
investment for "network costs" including "construction costs" such as trenching
and laying underground ducts, cable television and telephony plant, network
electronics and headend equipment, "customer costs" including converters,
customer electronics and installation of cable from the network to the
customer's home), and "other costs" such as switching offices, land and
buildings, computers, and capitalization of pre-operating costs and labour.
Total capital expenditure by Cable & Wireless Communications South Herts on its
cable television/telephony systems up to December 31, 1999 was approximately
(pound)66.5 million ($108.4 million based on a December 31, 1999 exchange rate
of (pound)1=$1.62).


         Construction costs for the South Herts System vary depending upon
housing density, geographical terrain and the types of underground conditions
encountered. Construction expenses in the UK have been higher than comparable
costs in the United States, primarily because of the logistics in laying the
fiber optic and coaxial cables for the networks necessitated by the UK's
prohibition on aerial construction. Therefore, nearly all cable installation in
the UK requires hand or machine excavation, backfill to specification and
permanent reinstatement of surfaces in compliance with the New Roads and Street
Works Act 1991 (the "Street Works Act"). The Street Works Act has, however,
standardized fees for inspection of construction works by local government
authorities and standardized specifications for reinstatement of property
following excavation. As a result, construction delays previously experienced by
cable operators because of separate and often lengthy negotiations with local
government authorities have been reduced.


         Domestic Interconnect. Tariffs for national calls are influenced by
interconnect charges payable to BT. As the dominant operator in the UK
telecommunications market, BT's interconnect rates are regulated by OFTEL. BT's
interconnect charges are, at present, controlled through a price control
mechanism linked to the UK Retail Price Index. The interconnect rate entitles an
operator to compensation for (i) terminating in its network a call that has
originated in another network, (ii) providing its customers with access to those
services of another network operator which are invoiced by such other network
operator, and (iii) transit of traffic between two networks. Interconnection
with other licensed operators is an important component of C&W Comms' network,
since the majority of the traffic handled by C&W Comms originates from or
terminates on BT's or on other licensed operators' networks. C&W Comms operates
under interconnection agreements with BT and a number of other licensed
operators, including cellular, PCN, ISR and cable operators.


         International Interconnect. Turnover from international telephone
services is derived from outgoing calls made by customers in the United Kingdom
and from receipts from overseas telecommunication operators for incoming calls
which are passed to C&W Comms' network for delivery to their final destinations
within the United Kingdom or overseas. In turn, C&W Comms makes payments to
overseas operators for the international use of their facilities to deliver the
outgoing calls from C&W Comms' customers.


         C&W Comms enters into operating agreements with overseas carriers to
provide for interconnection between its network and the domestic network of
overseas carriers. C&W Comms continues to seek additional operating agreements
with telecommunication administrations in other countries as C&W Comms believes
it is economically justified in order to increase the percentage of outgoing
international calls from the United Kingdom that can be carried on C&W Comms'
network. There can be no assurance as to whether or when C&W Comms will enter
into any additional operating agreements or that existing operating agreements
will be renewed in similar terms. Where C&W Comms does not have an operating
agreement for direct connection with, or the agreement has not yet been
implemented by, the overseas telecommunication administration to which a call is
directed, agreements are sought whereby calls can be routed through an
intermediate switching centre, paying the intermediary an agreed rate determined
in accordance with regulatory obligations.


         Relationships with overseas international carriers are becoming
increasingly commercial. The International and Partner Services division of C&W
Comms is active in managing this transition profitably. This includes developing
relationships with the new operators which are emerging in many countries to
challenge the former monopoly operators. It also involves, where appropriate and
where costs can be reduced, exploiting liberalization by routing certain
international traffic outside correspondent relationships.


Competition


         Cable Television


         Overview. It has been the UK Independent Television Commission's (the
"ITC's") policy not to grant more than one cable television license in any
franchise area. Accordingly, Cable & Wireless Communications South Herts is the
exclusive provider of cable television services in its licensed franchise area.
However on 23 April 1998 the Department of Trade and Industry announced its
intention to end this policy of exclusivity from 1 January 2001 for all cable
operator franchise licensees. In addition, Cable & Wireless Communications South
Herts' cable television system competes with direct reception of terrestrial
broadcast television signals and with other methods of delivering television
signals to the home for a fee, such as DTH satellite services.


         Important factors which affect the success of a cable television
business are: the general demographics of the area in which the services are
being provided (i.e., the desire and ability to pay for enhanced television
services) the quality and range of the programming available over the cable
television network and the competitive advantages of cable television (including
pricing) over other multichannel distribution methods.


         BSkyB. The most significant competitor in the multichannel television
market in the South Herts franchise area is BSkyB which offers DTH satellite
television services and therefore does not require a cable television network. A
DTH satellite customer must either purchase or rent a satellite dish and a
receiver/decoder (a set top box) and pay subscriber fees to BSkyB for a card
which, inserted in the decoder, decodes the satellite signal. Although BSkyB's
DTH satellite service presents substantial competition to Cable & Wireless
Communications South Herts' cable television service no assurance can be given
that it will not become an even stronger competitor. Following the launch of its
digital satellite offerings their number of subscribers had increased from 3.5m
in 1998 to 3.6m in 1999 but their market share had fallen from 56% to 50%, C&W
Comms market share remained constant at 13% with ONdigital gaining a 6% share. A
significant factor in BSkyB's favour is its role as sole supplier of many
popular cable television programs carried by the Cable Cos. Although BSkyB, has
given undertakings to the Office of Fair Trading (OFT) in respect of its terms
of supply of programming to cable companies, any future attempt to restrict the
programming it makes available to Cable & Wireless Communications South Herts or
offers such programming to Cable & Wireless Communications South Herts at prices
relatively higher than those it currently charges, could put Cable & Wireless
Communications South Herts' cable television business at a significant
competitive disadvantage. BSkyB's position may be further strengthened in view
of its potential ability to control the conditional access technology which is
required to gain access to digital television services. In addition DTH
satellite is currently more readily available than cable television as BSkyB is
competing with generally incomplete television networks and can also provide
services in, for example, rural areas more readily.


         Digital Television. Digital television is expected to provide a wide
range of additional services to customers, in addition to improved picture and
sound quality. Furthermore , many more digital channels will be able to be
transmitted in a frequency range that previously could carry only one analog
channel. This combining of channels in the same frequency range is known as
multiplexing. Until affordable digital television sets are readily available,
digital television will continue to be received through a set top box containing
a processor that can decode and decompress scrambled signals and convert them to
analog form.


         ONdigital, a joint venture owned equal by Granada Group Plc and Carlton
Communications Plc , launched its DTT service on 15 November 1998, offering
customers with DTT receivers 30 new television channels. Twelve of the channels
are available to customers free of charge including 5 terrestrial channels once
they obtain a receiver. Additional channels are available on subscription.
ONdigital are providing free set top boxes. The DTT services provide significant
competition for cable as ONdigital is targeting the same potential customers as
C&W Comms. No assurance can be given that DTT will not become the preferred
multichannel television technology in the future rendering cable television
systems less profitable and less viable.


         Interactive services. In July 1998, C&W Comms acquired a major stake in
Two Way TV, the UK leader in analog interactive gaming and entertainment. Two
Way TV, is expected to provide a significant contribution to the launch of
enhanced television. C&W Comms have launched a digital interactive services
platform based on open standards which will give digital cable customers access
to a large range of interactive services.


          BSkyB has formed a consortium, British Interactive Broadcasting
(`BIB'), with BT, Midland Bank plc and Matsushita to operate an interactive
services platform branded OpenTV which gives digital satellite customers access
to a large range of interactive services.


         PTO's. HM Government has recently reviewed the broadcast restrictions
on BT and the other national PTOs. BT (and all other national PTOs) will now be
allowed entry to the nation-wide entertainment market from January 2001, while
currently unfranchized areas will be let on a non-exclusive basis with national
PTOs being able to provide services in these areas. Since March 1994, BT and
other national PTOs have ceased to be prohibited from bidding for these
franchise licences despite the restrictions on their ability to provide
nation-wide broadcast entertainment services. As a result, however, of the
transmission capacity limitations of twisted pair copper wires historically used
in BT's telecommunication network, particularly between its local distribution
points and its customers' homes, and the age and condition of older portions of
BT's network, C&W Comms believes that, unless substantial improvements are made
in digital compression or other technologies, BT may not be able to provide a
broadband cable television service comparable to that offered by Cable &
Wireless Communications South Herts without substantial investment. Furthermore,
BT has publicly indicated that it has no plans currently to provide broadcast
entertainment services on a nation-wide basis.


         On September 29, 1993, the ITC issued a statement in which it took the
position (shared by OFTEL and the Department of Trade and Industry (the "DTI"))
that BT and other national PTOs were permitted to provide VOD services under
their existing national PTO licenses. Cable & Wireless Communications South
Herts similarly is not prevented from providing VOD services. In order to offer
VOD services on a broad scale, the General Partner believes that BT would have
to upgrade its existing telecommunications switches and to install video
distribution facilities. In July 1999, BT announced the roll-out of Asynchronous
Digital Subscriber Line (ADSL) technology on a wholesale basis. BT conducted a
trial of a VOD system in the towns of Ipswich and Colchester (which are not
within Cable & Wireless Communications South Herts' franchise area) in
collaboration with BSkyB and has undertaken trials in Westminster but has not
yet offered the service in other areas. The General Partner is unable to assess
fully the technical feasibility or timing of BT or any other provider offering
VOD services. No assurance can be given that VOD will not provide substantial
competition to Cable & Wireless Communications South Herts in the future. OFTEL
announced in November 1999, that BT must make its local loop available by July
2001 to other operators to allow them to compete directly with BT in providing
higher bandwidth access.


         Cable Telephony


         Overview. Until 1981, the UK Post Office was, with certain minor
exceptions, the monopoly supplier of telecommunications services throughout the
UK. BT was formed in 1981, when it took over the telecommunications assets of
the Post Office and became the monopoly UK telecommunications supplier. BT was
privatized in three tranches between 1984 and July 1993.


         In 1984, Mercury was formally granted a license to compete with BT.
Prior to this, in November 1983, the Government had given a commitment not to
license, for a period of seven years, companies other than BT or Mercury to
carry telecommunications services nationally over fixed links ("the Duopoly
Policy"). In November 1990 the Secretary of State for Trade and Industry
published a consultative document entitled "Competition and Choice:
Telecommunications Policy for the 1990's", which commenced a review of the
Duopoly Policy and the UK telecommunications market generally (the "Duopoly
Review").


         The Duopoly Review was completed in March 1991, and represented, with
consequent changes in policy and to the licenses of telecommunications
operators, a fundamental turning point in the telecommunications industry in the
UK. The major policy change was that anyone could come forward and apply to the
UK Government to run new telecommunications networks over fixed links. The
general presumption, subject to financial and technical competence, would be
that such licenses should be granted unless there were specific reasons to the
contrary. Cable television/telephony operators were permitted to provide
telephony services in their own right, instead of as agents of BT or Mercury as
previously required, and had the right to switch their telephony customers'
calls. These changes significantly improved the terms on which cable operators
had been able to require PTOs to interconnect with them. As at 31 March 1999,
over 200 companies were licensed by the DTI to compete in the telecommunications
market, operating in various areas and providing a variety of services. Of
these, over 140 licences were granted to cable companies (including Cable &
Wireless Communications South Herts) which are licensed to install and operate
telecommunications systems in specified franchise areas and to provide a full
range of telecommunication and broadcasting services (other than mobile
services) within their licensed areas. The ITC's historic policy was to grant
only a single licence for the provision of cable television services to dwelling
houses in each geographical franchise with the result that cable companies
currently have exclusive rights to provide such services in their franchise
areas. HM Government confirmed in April 1998, however, that while this policy
will continue until January 2001 in existing franchise areas, after that date
national PTOs will be able to apply to serve those areas. No such exclusivity
exists in relation to telephone services or in relation to delivery of pay
television services by other means such as DTH satellite.


         Residential Telephony. Cable & Wireless Communications South Herts'
principal competitor in the UK residential market is BT, which is expected to
continue to hold over 80% of the estimated national market in 2000. Competition
is also provided by other PTOs, including cellular telephone operators described
below.


         BT has a fully built national telephone network and has extensive
experience in the marketing and operation of telecommunications services in the
UK. In BT's latest fiscal year ended March 31, 1999 revenues exceeded
(pound)16.9 billion. However, BT's ability to respond to price competition from
local cable/telephony operators is restricted by its license obligations to
average its pricing geographically. BT is not permitted to show undue preference
to or unduly discriminate against different classes of customers and is required
to offer uniform rates nationally, although BT does offer certain discount
schemes that reduce the price of calls. Cable television/telecommunications
providers are only required to offer uniform rates within a franchise.


         Cable & Wireless Communications South Herts also competes in the
residential telephony market with cellular telephone operators such as Vodafone
Airtouch plc ("Vodafone") and Telecom Securicor Cellular Radio Limited
("Cellnet") (100% owned by BT), One2One (owned by Deutsche Telecom) and Orange
plc ("Orange"). Due to the non-exclusive nature of telecommunications licenses
in the UK, Cable & Wireless Communications South Herts also competes with
additional entrants to the residential telephony markets, such as Energis
Communications Limited ("Energis"), a long-distance operator.


         Business Telephony. Competition in business telephony has been more
intense than that experienced in residential telephony and, because of the
number of competitors in the area, is expected to intensify further. BT is Cable
& Wireless Communications South Herts' principal competitor in providing
business telephony services. In addition to BT, Cable & Wireless Communications
South Herts currently competes with other telecommunications companies, such as
Energis and MCI WorldCom, Inc. ("WorldCom"). Cable & Wireless Communications
South Herts may compete in the future with additional entrants into the business
telephony market, some of which may have substantially larger resources than
those of the Partnership.


Regulation


         The operation of cable television/telephony services in the UK is
regulated under both the Broadcasting Act 1990 (the "Broadcasting Act") which
replaced the Cable and Broadcasting Act 1984 (the "Cable and Broadcasting Act"),
and the Telecommunications Act 1984 (the "Telecommunications Act"). Other
legislation , such as the New Broadcasting Act, also has an impact on the
activities through the licensing and regulation of digital television services.
The operation of cable television/telephony services in the UK requires two
principal licenses: (i) a license (a "cable television license") issued either
under the Cable and Broadcasting Act (prior to January 1991) or under the
Broadcasting Act (since 1991), which permits the holder to provide cable
television services within a specific franchise area and (ii) a
telecommunications license issued under the Telecommunications Act, which allows
the holder to construct and operate the physical network necessary to provide
cable television and telecommunications services. The ITC is responsible for
issuing and enforcing cable television licenses. The DTI is responsible for
issuing, and OFTEL is responsible for enforcing, telecommunications licenses. In
addition, if an operator utilizes microwave distribution systems as part of its
network, such operator is required to hold a license under the Wireless
Telegraphy Acts of 1949-1967. Any SMATV system covering 1,000 homes or less
requires a telecommunications license, but not a cable television license, and a
cable television system that covers only one building or generally two adjacent
buildings can operate pursuant to an existing telecommunications services class
license.


         By virtue of the Telecommunications Code, contained in the
Telecommunications Act and included in a modified form in the telecommunications
licenses of cable operators, cable operators also must comply with, and are
entitled to the benefits of, the Street Works Act, the principal benefit of
which is to allow cable operators the right to undertake civil construction on
public roads. In addition, because the Street Works Act standardized fees for
inspections of construction works by local government authorities and
standardized specifications for reinstatement of property following excavation,
construction delays previously experienced by cable operators because of
separate and often lengthy negotiations with local government authorities have
been reduced.


         The rights of cable operators under the Telecommunications Code are
subject to planning legislation. In April 1994, a Planning Order came into force
which requires planning consent for the installation, alteration or replacement
of any telecommunication apparatus on, or within the land surrounding, a
dwelling.


         The cable television license held by Cable & Wireless Communications
South Herts was issued for a 15 year period and is scheduled to expire in 2005.
The telecommunications license held by Cable & Wireless Communications South
Herts was issued for a 15 year period, which has been extended to a 23 year
period, and is scheduled to expire in 2013.


         Cable Television Licenses


         Under the Broadcasting Act, cable companies may carry certain
television and radio services on their networks. Cable television licenses
require cable companies to ensure that certain foreign satellite programs
carried by them conform to ITC requirements and that advertisements, which the
cable company itself inserts, conform to the Broadcasting Act's advertising
requirements. The ITC must discharge its functions in the way it considers best
calculated to ensure the availability of a wide range of services and fair and
effective competition in their provision. Each cable television license gives
the holder the right to provide television services within the cable television
franchise area using cable television distribution networks.


         Restrictions on Ownership. The ITC is under a duty to ensure that
certain entities, including local authorities, political bodies, advertising
agencies and religious bodies do not own, or otherwise participate in a manner
against the public interest in, entities holding cable television licenses
issued under the Cable and Broadcasting Act. Restrictions may also be imposed on
cross ownership of different licensed services (including local delivery
services, independent television and radio services) and different media
(including local and national newspapers) operating in substantially the same
franchise area. Cable television licenses issued under the Cable and
Broadcasting Act continue to be substantially regulated as if the Cable and
Broadcasting Act remained in force under the Broadcasting Act. The ownership
rules are substantially similar for cable television licenses issued under the
Broadcasting Act. The cross media ownership rules have changed following the
entry into force of the Broadcasting Act 1996 and do not now apply to local
delivery services. The BBC, Channel 4 and S4C (the Welsh Channel) are not
permitted to hold local delivery operations licenses. The Secretary of State for
Trade and Industry has wide discretion to amend the rules relating to cross
media ownership and accumulations of interests in licensed services.


         The ITC has the authority to revoke any cable television license in
order to enforce the restrictions on ownership contained in the Broadcasting
Act. The ITC may also revoke any cable television license issued under the Cable
and Broadcasting Act if any change in the nature or characteristics of the
licensee, or any change in the persons having control over or interests in it,
are such that, had they occurred before the granting of the license, such change
would have induced the ITC to refrain from granting the license. For cable
television licenses issued under the Broadcasting Act the test is one of fitness
and propriety of the holder of the license. The ITC also has authority to impose
fines, shorten the license period or revoke cable television licenses if a cable
operator fails to comply with the conditions of its cable television license or
with any direction of the ITC.


         License Term and Renewals. Cable television licenses extend for a
period of 15 years, and all cable television licenses, including those issued
under the Cable and Broadcasting Act, are renewable under the Broadcasting Act
for additional 15 year periods. An application for renewal must be made not
earlier than five years prior to the expiration of the cable television license
and not later than the date on which the ITC publishes a notice inviting
applications for a replacement license. The ITC may refuse such application but
only on limited grounds, including that the ITC proposes to grant a license in
an area different from that described under the existing license or that the
applicant is not providing services through the whole of its franchised area. If
an operator chooses to renew for an eight year period, it will not be required
to pay the annual fees referred to below, but at the end of the eight year
period the license cannot be renewed again and will be put out for tender and
awarded to the highest bidder, as described below with respect to the award of a
new license. If an operator chooses to renew its license for a 15 year period,
it will currently be required to pay annually during the renewal period a
percentage to be fixed by the ITC of the operator's cable television related
revenues, plus an additional amount that the ITC believes a successful applicant
would have bid for the franchise if it were being offered as a new franchise.
Licensees holding licenses issued under the Cable and Broadcasting Act are
currently only required to pay to the ITC annual fees, which in the aggregate
are intended to cover the ITC's administrative costs. Fees are payable annually
and upon the renewal of a license. Cable & Wireless Communications South Herts
has not yet renewed its cable television license.


         Revocation of cable television licenses. The ITC can revoke a cable
television license if an operator fails to comply with its conditions or with
any direction of the ITC and the ITC considers revocation to be in the public
interest. If there is any change in either the nature or characteristics of an
operator that is a corporate entity, or any change in the persons controlling or
having an interest in it, the ITC can decide to revoke the license if due to
such changes it would not have awarded the license under the new circumstances.
With respect to licenses issued under the Broadcasting Act, the ITC can also
impose fines and shorten the license period.


         Restrictions on Transfer. The Broadcasting Act permits the transfer of
a cable television license issued under such Act to a third party with the
written consent of the ITC. The ITC has absolute discretion to refuse any
proposed transfer of a license.


         Obligations of Licensees. Under the Broadcasting Act, cable television
operators may carry any programming licensed under the Broadcasting Act but are
responsible for ensuring that advertising included by them in their services
conforms to the restrictions set forth in the codes on advertising, sponsorship
and programming produced by the ITC. Both the cable television and
telecommunications licenses impose obligations on the licensees to provide any
information which either OFTEL or the ITC may require for purposes of exercising
their statutory functions.


Review of Regulation


         UK Government Policy


         References within this document to "HM Government" refer to the
Conservative government of the UK prior to May 1 1997, and to the Labour
government after that date.


         HM Government undertook a general review of the regulatory processes
governing the UK gas, electricity, water and telecommunications industries.
Issues for consideration included accountability to customers, transparency,
regulatory authorities headed by panels rather than individuals, price controls
(including profit sharing) and the duties of the regulator. A statement was
issued on April 9, 1999 outlining HM Government's intention to introduce
consumer councils for each of the utilities including telecoms which will assist
the sectoral regulators in dealing with the effective resolution of consumer
complaints. Legislation has been introduced. However the Government has
considered exempting telecoms operations from the utilities Bill.


         Bundling of Services


         The ITC has undertaken a wide ranging consultation into the way in
which pay television channels are marketed at the wholesale and retail levels.
Issues considered included the competition and consumer effects of minimum
carriage requirements, the practice of deep discounting premium channels, and
the bundling of telephony and cable television. The ITC published its
conclusions from the consultation on June 26 1998. They confirmed that minimum
carriage requirements (MCRs) would be prohibited in future on pay-TV channels
for all new agreements from July 1 1998. For existing agreements the prohibition
will apply from July 1 1998 for services broadcast for digital reception
contracts and from January 1 2000 for services broadcast for analogue reception.
There would be two important exceptions to this general prohibition. First, MCRs
will be allowed to continue for a yet to be determined period for existing
channels which are contractually exclusive to one platform (eg cable, satellite)
where those contracts were entered into before April 1 1998. Second, new
channels may for the first 12 months of their operation negotiate MCRs with
their distributors. Introductory offers of this kind will allow operators to
become acquainted with the new channels and indicate their interest in having
those channels included in the bundles of channels they purchase. The OFT has
announced that during Spring 2000 it will review its regulatory oversight of the
terms on which BskyB provides its key programming to cable companies.


         Conditional Access Regulation


         The Conditional Access Class License and Guidelines require conditional
access services to be provided on a non-discriminatory basis, address
anti-competitive agreements or abuse of a dominant position, and provide cable
operators such as C&W Comms with the right to control the presentation of
services to its customers through a process known as transcontrol. In April
1999, OFTEL published revised principles it would use when examining the prices
proposed by a conditional access provider.


         Digital Broadcasting


         The introduction of digital technology by Cable & Wireless
Communications South Herts will greatly increase the number of channels it is
able to provide, allow greater flexibility in packaging channels and enhance the
provision of services such as pay-per-view which require greater bandwidth than
existing services. BSkyB launched a digital satellite service on 1 October 1998
and Ondigital , a licensed DTT provider, launched their digital service on 15
November 1998.


         Digital Terrestrial Broadcasting. The New Broadcasting Act introduced a
legal framework for the regulation of digital terrestrial broadcasting. Most of
the New Broadcasting Act's provisions on digital terrestrial broadcasting came
into force on October 1, 1996.


         The New Broadcasting Acts permits the provision of digital program
services, digital additional services (e.g., text-based services) and qualifying
services. Broadly speaking, qualifying services are the digital equivalent of
services provided in analog form by existing terrestrial broadcasters such as
ITV, Channel 4 and Channel 5.


         The New Broadcasting Act distinguishes between multiplex service
providers, that is those providing the transmission infrastructure, and digital
program providers, that is, those providing the programs to be transmitted. Both
need to be licensed under the New Broadcasting Act (except the BBC which may act
as a digital program provider pursuant to its Royal Charter), although the
holders of existing licenses for ITV, Channel 4 and Channel 5 and the public
teletext service will not require new broadcast licenses in order to simulcast
their existing output in digital form.


         On January 31, 1997 applications for further digital terrestrial
multiplex licenses were received by the ITC from British Digital Broadcasting
(now called Ondigital), Digital Television Network (owned by NTL Incorporated)
and S4C Digital. ONdigital, a consortium incorporating Carlton Communications
and Granada Group and S4C Digital were successful in their applications and were
awarded multiplex licenses, ONdigital 's license for three multiplex frequencies
only being awarded after BSkyB had withdrawn from the consortium on the ITC's
request. Issues concerning Ondigital's proposal have been under consideration by
the European Commission's Competition Authority, DGIV. On December 19, 1997 the
ITC granted multiplex licenses to ONdigital and to Digital 3 and 4. A license
was granted to SDN Limited on May 26, 1998 a consortium made up of NTL, S4C and
United News and Media.


         C&W Comms is under "must carry" obligations for digital qualifying
services (i.e., digital simulcasts of current analog television broadcasts) if
C&W Comms is itself operating a digital system.


         Telecommunications Licenses


         General. The telecommunications license granted to a cable operator
permits the holder to install and operate a telecommunications system over which
television and other telecommunications services are provided. The
telecommunications license also permits the holder to connect its system to
other telecommunications systems, which may include systems operated by the
broadcasting authorities, satellite television delivery systems and other
telecommunications systems in the UK. Although a telecommunications license is
granted to a cable operator for a particular franchise area, it is not exclusive
and, as a result, a cable operator may compete in the provision of telephony and
other telecommunications services with national PTOs, such as BT and Energis,
and other telecommunications companies in its franchise areas.


         Pursuant to its telecommunications license, a cable operator is
entitled to the benefits of the Telecommunications Code, which is contained in
the Telecommunications Act. The Telecommunications Code grants rights and
imposes obligations in respect of the installation and maintenance of apparatus
such as ducts, cables and equipment on private or public land and incorporates
procedures to be used for the installation of equipment on public highways.
Cable operators are generally required to enter into bonding obligations with
local government authorities in order to ensure removal of certain apparatus and
reinstatement of roads and streets in the event of the telecommunications
license being terminated.


         Build Schedules. Each telecommunications license specifies the build
schedule of the system that the cable operator is required to implement (by
reference to the number of premises passed by specified dates) and the
particular technical characteristics to which the system must adhere. It is
OFTEL's responsibility to enforce compliance with the build schedules. Failure
to comply with the build schedules could result in revocation of the relevant
telecommunications license.


         License Term and Renewals. Telecommunications licenses that have been
issued to date have been for periods of either 15 or 23 years from the date of
issuance. Prior to 1992, telecommunications licenses with 23 year terms were
granted only to cable operators utilizing systems with a "switched star"
architecture, while all other operators received licenses with 15 year terms.
Since 1992, the DTI has amended this policy and upon request has extended the
terms of existing 15 year licenses to 23 years provided the cable operator's
system meets certain technical requirements. Telecommunications licenses do not
contain any provisions for renewal, however, it is expected that renewals of
telecommunications licenses will be on similar terms to the current ones. The
Director General may modify telecommunications licenses either with the
agreement of the licensee following a statutory period of public consultation or
following a report of the Competition Commission.


         Restrictions on Transfer. Telecommunications licenses may not be
transferred. However, a change of control of an entity holding a license is
allowed subject to compliance with a notification requirement. Licenses may be
revoked if the change in control is deemed to be contrary to the UK's national
security interests or its relations with any other country.


         Technical Requirements. The principal technical requirements for the
cable television/telephony systems are contained in the telecommunications
licenses, which address, among other things, technical requirements for
transmissions and performance.


         Telephony Operations


         Interconnect Principles. Each individual PTO licensee is obliged under
the terms of its Telecommunications Act license to permit, on agreed terms,
connection between its network and the networks of other licensed operators in
order to enable a customer of one licensee to make calls to the customers of
other licensees.


         Interconnection agreements generally provide for (among other things):


         (a)   the connection of the network of one licensee with the network of
               another in order to deliver traffic to and, in some cases,
               originate and carry traffic for, the other;


         (b)   where and how those connections are to be made; and


         (c)   payments with respect to connection and the conveyance of traffic
               and any other services provided by one licensee to another.


If two licensees cannot reach agreement, material terms of interconnection can
be determined by the Director General on the application of either licensee.


         Network Charge Cap. In June 1996, OFTEL released a statement entitled
"Pricing of Telecommunication Services from 1997 - OFTEL's Proposals for Price
Control and Fair Trading". In this statement, OFTEL indicated that it intended
to introduce network charge caps (see below) for interconnection charges, the
starting values of which will be based on long-run incremental costs. In
December 1996 and May 1997, OFTEL released further consultative documents in
which it sets out its refined proposals for network charges.


         In July 1997, OFTEL published its final statement on the network charge
cap, setting out a framework effectively comprising four different approaches
which OFTEL intends to adopt in relation to the pricing of BT's interconnection
services, depending on the degree of competition which exists in relation to the
provision of those services. The approaches, which remain effective for four
years commencing October 1, 1997, are as follows:


          (a)  for "competitive services", BT will be free to set the charges;


          (b)  for "prospectively competitive services", BT will be subject to a
               charge cap on each such service equal to the percentage change in
               the UK domestic retail price index (i.e., "RPI" plus zero);


          (c)  for "bottleneck and non-competitive services", two baskets of
               services will be introduced, each subject to a cap equal to RPI
               less 8 per cent; and


          (d)  for "interconnection-specific services", BT will be subject to
               individual charge caps equal to RPI less 8 per cent.


         The starting values for the price-capped services are set at long-run
incremental cost. BT agreed to modifications to its PTO license to implement
these proposals and the new charge controls took effect on October 1, 1997.


         The interconnection charges BT sets will, in any event, be subject to
the general application of the fair trading condition described below and the
other fair trading conditions in BT's PTO license. OFTEL has indicated that it
intends to use a system of cost floors based on incremental costs and ceilings
based on stand alone costs in considering whether or not a charge is
anti-competitive.


         European Interconnect Directive. In June 1997, the European Commission
adopted the Interconnect Directive. The Directive aims to guarantee the rights
of operators to obtain interconnection with the networks and services of others.
Operators with "significant market power" must provide interconnection on
cost-oriented terms. These principles also apply to European cross-border
interconnection traffic, currently subject to the accounting rate regime. The
Directive was implemented in December 1997 and resulted in the following
statements:


         o     identification of BT and Kingston Communications as having
               significant market power in the fixed telephony market and
               Cellnet and Vodafone in mobile (though not in the national market
               for interconnection);


         o     classification of those operators that would have access to
               cost-oriented interconnection rates, representing in OFTEL's view
               a slight widening from the current position; and


         o     requirements on those telecommunication operators with special or
               exclusive rights in another sector to produce separate accounts
               where the turnover in that sector exceeds ECU 50m. This may have
               applicability to certain of C&W Comms' franchises over time.


         These proposals were implemented via a Statutory Instrument laid before
Parliament on December 10, 1997, coming into force on December 31, 1997.
Consultation on certain aspects of the regime, in particular access to
cost-oriented rates is, however, continuing.


         Equal access Indirect access allows a customer to enter into a contract
to buy a telecommunication service from a operator to which the customer is not
directly connected. In these circumstances, the second operator pays the first
operator (the access operator) for use of the connection to the customer. Equal
access is an enhanced form of indirect access and can be achieved by dialling
parity (where a customer has to dial the same number of digits regardless of
which long distance or international network is to carry its calls) and by
carrier pre-selection. Carrier pre-selection is a facility offered to customers
which allows them to opt for certain defined classes of calls to be carried by
an operator selected in advance (and having a contract with the customer),
without having to dial an indirect access prefix or follow any other different
procedure to achieve that routing. The European Commission has adopted a
directive requiring the introduction of carrier pre-selection by those operators
with significant market power in the provision of fixed public telephone
networks or fixed public telephone services by January 1 2000. Equal access (in
the form of carrier pre-selection) is therefore required to be introduced in the
UK market.


         In July 1998, OFTEL issued a consultation document outlining the form
that the implementation of carrier pre-selection will take. Customers will be
able to opt to pre-select one alternative carrier for either of international or
national calls, or make a single pre-selection for all types of call (excluding
emergency and operator calls). It is not technically possible for BT to
implement carrier pre-selection by the January 1 2000 deadline and BT received a
derogation to 1 April 2000. A switch based solution can not be implemented by 1
April 2000 and therefore the industry is developing an interim solution based on
diallers in the customers home.


         Interconnection Agreements with Other Operators. BT now offers a
published standard interconnections agreement to other telecommunications
operators. On September 23, 1997, BT and C&W Comms signed a new interconnect
agreement based on BT's standard contract, replacing the previous agreement
between BT and Mercury dated November 1994.


         C&W Comms has interconnection agreements in place with many of the
other Telecommunications Act licensees in the UK market, such as those operating
cellular and personal communication networks, cable companies and others
including Worldcom and Energis. C&W Comms also has interconnection agreements or
less formal accounting arrangements with international operators worldwide.


         Retail Price Regulation. BT was previously subject to retail price cap
regulation on approximately 65 per cent of its revenues pursuant to the terms of
the August 1992 price cap review. The new price control of RPI less 4.5 per cent
took effect on August 1, 1997 and will remain until 2001, but only in relation
to the bottom 80 per cent of residential customers by bill spend. OFTEL has
indicated that this is likely to be the last retail price control imposed on BT.
The level of retail rates charged by Cable & Wireless Communications South Herts
and telecommunication providers other than BT is not limited by specific
regulation by any HM Government entity, but is subject to general competition
and fair trade rules.


         Universal Service Obligation. In July 1997, OFTEL published its final
proposals for Universal Service following extensive consultation. The key
elements are:


         (a) the level of Universal Service is established for the four year
         period from September 30, 1997 to September 27, 2001, and was subject
         to a review in 1999;


         (b)  "Universal Service" is defined as:


              o    connection to the fixed PSTN to support voice telephony and
                   low speed data/ fax;


              o    the option of a more restricted service package at a lower
                   cost; and


              o    reasonable geographic access to public call boxes across the
                   United Kingdom at affordable prices;


         (c)  OFTEL found that the costs of the provision of this level of
              Universal Service do not represent an undue financial burden on
              BT and reaffirmed this conclusion in the 1999 review;


         (d)  as there was no substantive net cost to finance, a fund would not
              be established;


         (e)  the Disability Discrimination Act will be used as the framework
              to develop proposals for delivering Universal Service to people
              with disabilities;


         (f)  all consumers should be given the option of an outgoing calls
              barred service as an alternative to disconnection.


         Modifications to BT's license implementing the new regime were made in
November 1997.


         Number Portability. BT's PTO license was modified in July 1996 to
incorporate a condition which supports the implementation of number portability
and on January 6, 1997, the Director General determined BT's costs in providing
number portability and the charges it can make to other operators to recover
those costs. BT has reached agreement with several cable companies on number
portability. Cable & Wireless Communications South Herts believes that the
absence of number portability was a significant impediment to competition in the
telecommunication market and that its implementation has provided BT's
competitors with access to greater numbers of customers. The C&W Comms license
was modified on January 17, 1996 to incorporate a condition supporting the
implementation of number portability between operators. A further condition was
incorporated into all PTO licences on July 21, 1998 requiring the provision of
one of two back-stop products on a customer's request, in circumstances where
number portability could not be supported. All operators, including C&W Comms,
have been required to provide number portability on the request of customers,
rather than operators, since January 1, 2000.


European Legislation


         In addition to direct UK legislation, the activities of C&W Comms are
subject to the impact of European Directives relating to telecommunications,
broadcasting and competition.


         The UK telecommunications regime was liberalized well in advance of
other European countries and hence in many cases the UK's domestic regulations
are already compliant with European rules to promote market liberalization.
European legislation in certain instances may, however, result in alterations to
the existing UK regulatory environment. In particular the following Directives
and proposed Directives may affect Cable & Wireless Communications South Herts'
activities when implemented in the United Kingdom.


         On November 20, 1996, the European Commission issued its Green paper on
a numbering policy for telecommunications services in Europe. It included
proposals aimed at harmonization of certain numbering ranges at a European
level, carrier selection (call by call) by 1998 and carrier preselection, also
known as equal access, by 2000. The first stage of the consultation process on
the Green Paper was completed on February 21, 1997. On June 27, 1997, the
European Telecoms Council adopted a resolution in response to the Commission's
Green Paper. This resolution largely endorsed the Commission's proposals. On
December 1, 1997, the Council of the European Union agreed the text of a
modification to the Interconnect Directive requiring the introduction of equal
access by those operators with significant market power by January 1, 2000. This
has not yet been implemented in the UK due to technical difficulties and an
interim solution will be implemented by 1 April 2000. The text allows for
deferment by a particular Member State where it can be demonstrated that equal
access will impose an excessive burden on an organization or category of
organization.


         The EC is currently undergoing a significant review of
telecommunications policy. New legislation is expected to be introduced for
implementation in 2003. It is as yet unclear the precise nature this legislation
will take.





Employees


         The Partnership has no employees. Cable & Wireless Communications South
Herts is managed as a part of C&W Comms, thus benefiting from the economies of
scale of sharing support functions.


ITEM 2. PROPERTIES


         Cable & Wireless Communications South Herts owns a freehold property at
9 Greycaine Road, Watford consisting of approximately 18,500 square feet of
office space.


ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


                                     Part II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

           While the Partnership's interests are publicly held, there is no
established public market for the limited partnership interests, and it is not
expected that such a market will develop in the future. As of March 31, 1999,
the approximate number of investors in the Partnership was 5,200.


ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<S>                              <C>               <C>           <C>              <C>             <C>

                                            South Hertfordshire United Kingdom Fund, Ltd.
                                            --------------------------------------------

                                                         For the years ended December 31
Income Statement Data:               1999             1998             1997            1996             1995
                                     ----             ----             ----            ----             ----
Revenues                         $28,345,316       $28,396,020   $23,603,312      $20,851,777     $16,554,283
Operating, General and
Administrative Expenses          (11,061,408)      (12,014,013)   (13,648,846)     (15,691,431)    (16,079,815)
Management Fees and
Allocations from General         (10,447,802)       (8,173,374)    (6,058,801)       (3,943,096)    (2,754,941)
Partner
Depreciation
and Amortization                  (6,279,976)       (4,119,297)    (6,177,968)      (5,129,620)     (4,214,341)
Write down of fixed assets                 -                 -     (6,562,400)               -                -
                               -------------------------------------------------------------------------------------
Operating Profit/(Loss)              556,130         4,089,336     (8,844,703)       (3,912,370)     (6,494,814)
Interest Income                            -            39,777         78,749            30,667          17,251
Interest Expense                  (3,322,569)       (3,743,532)    (3,599,912)       (2,836,056)     (2,442,312)
                               -------------------------------------------------------------------------------------
(Loss)/ Profit from
continuing operations              (2,766,439)         385,581    (12,365,866)      (6,717,759)     (8,919,875)
Before minority interests
Minority Interests                    797,107         (249,713)     3,975,339        2,100,658       2,767,869
                               -------------------------------------------------------------------------------------
Net (Loss) / Profit                (1,969,332)          135,868    (8,390,527)      (4,617,101)     (6,152,006)
                               ---------------          -------    -----------      -----------     -----------
Basic and diluted
(Loss)/Profit per Limited              (34.24)             2.36       (145.90)          (80.28)        (106.97)
Partnership Unit
Weighted Average Number of
Limited Partnership Units              56,935            56,935        56,935           56,935          56,935
Outstanding
Balance Sheet Data:
Total Assets                       73,021,980        77,814,972    76,963,343       91,119,344      80,239,942
Accounts Payable to
Affiliates/Related Parties         21,114,583        19,157,847    18,335,570       10,202,585       2,232,050
Debt                               29,014,559        32,028,350    31,756,220       30,290,110      24,220,560
General Partner's Capital
(Deficit)                            (354,851)         (335,158)     (336,517)        (252,612)       (206,441)
Limited Partners' Capital          13,869,947        15,819,586    15,685,077       23,991,699      28,562,629
Minority Interests                  7,883,670         8,912,532     8,588,899       13,079,544      13,948,743
</TABLE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


Results of Operations


         1999 Compared to 1998


         Revenues of the Partnership decreased $50,704 for the year ended
December 31, 1999, from $28,396,020 in 1998 to $28,345,316 in 1999. In the year
sterling revenue increased by (pound)420,000 but due to a fall in the exchange
rate when converted this resulted in a decrease in the partnerships overall
revenue of $50,704. The South Herts System served approximately 24,717 basic
cable television customers and 30,909 residential telephony lines at December
31, 1999, compared to 23,067 basic cable television customers and 30,019
residential telephony lines at December 31, 1998.


         Operating expenses decreased $948,486 or 8.0% for the year ended
December 31, 1999 from $11,785,683 in 1998 to $10,837,197 in 1999. This compares
to a rise of $311,327 or 2.7% for the year ended 31 December, 1998.


         Selling, general and administrative expenses decreased $4,119 for the
year ended December 31, 1999 from $228,330 in 1998 to $224,211in 1999.


         Management fees and allocated overhead from the General Partner
increased $2,274,428 for the year ended December 31, 1999 from $8,173,374 in
1998 to $10,447,802 in 1999. This increase is due to Y2K costs and the
outsourcing of computing costs.


          Depreciation and amortization expense increased $2,160,679 for the
year ended December 31, 1999 from $4,119,297 in 1998 to $6,279,976 in 1999. This
was due to an increase in capital expenditure in the year and a deflated charge
in 1998 following the fair value adjustment in 1997.


         Interest income decreased $39,777 for the year ended December 31, 1999
from $39,777 in 1998 to $nil in 1999, due to no cash being held on interest
bearing accounts.


         Interest expense decreased $420,963 for the year ended December 31,
1999 from $3,743,532 in 1998 to $3,322,569 in 1999. The decrease was due to
repayments of the principal on the loan and a reduction in U.K. interest rates.


          Net cash inflow in the year was $196,852. Cash inflow of $6,016,647
was from operating activities. The inflow was applied to investment in the cable
network and repayments of the principal of the loan. Payments under finance
leases fell from $894,989 in 1998 to $289,699 in 1999, reflecting the fact that
no new finance leases have been entered into.


         1998 Compared to 1997


         Revenues of the Partnership increased $4,792,708 for the year ended
December 31, 1998, from $23,603,312 in 1997 to $28,396,020 in 1998. This
increase is primarily the result of an increase in the South Herts System's
customer base. The South Herts System served approximately 23,067 basic cable
television customers and 30,019 residential telephony lines at December 31,
1998, compared to 22,400 basic cable television customers and 27,400 residential
telephony lines at December 31, 1997.


         Operating expenses increased $311,327 or 2.7% for the year ended
December 31, 1998 from $11,474,356 in 1997 to $11,785,683 in 1998. This compares
to a rise of $2,138,446 or 22.9% for the year ended 31 December, 1997. Operating
expenses have risen due to increased activity levels (see discussion of revenue
above), however the reduction in rate of increase and the reduction in operating
costs as a proportion of revenue (from 49% to 42%) reflects ongoing efforts by
C&W Comms to control costs.


         Selling, general and administrative expenses reduced $1,946,160 for the
year ended December 31, 1998 from $2,174,490 in 1997 to $228,330 in 1998. This
was primarily due to reductions in overhead costs, resulting from the provision
of additional services by affiliates of the General Partner in 1998.


         Management fees and allocated overhead from the General Partner
increased $2,114,573 for the year ended December 31, 1998 from $6,058,801 in
1997 to $8,173,374 in 1998. These costs relate to additional services provided
by affiliates of the General Partner in order to reduce overall costs by taking
advantage of economies of scale within the C&W Comms Group.


         Depreciation and amortisation expense decreased $2,058,671 for the year
ended December 31, 1998, from $6,177,968 in 1997 to $4,119,297 in 1998. This
decrease was largely due to the write down of fixed assets by $6,562,400 during
the year ended December 31, 1997 following a review of the net book values of
Cable & Wireless Communications South Herts' assets.


         Interest income decreased $38,972 for the year ended December 31, 1998
from $78,749 in 1997 to $39,777 in 1998. The decrease reverses the increase of
$48,082 between 1996 and 1997 which was the result of interest received on
temporary cash balances held during 1997.


         Interest expense increased $69,038 for the year ended December 31, 1998
from $3,599,912 in 1997 to $3,668,950 in 1998. This was due primarily to the
strengthening of sterling against the US dollar.


         Net cash outflow in the year was $358,049. Cash inflow of $5,331,792
was from operating activities. Working capital levels were consistent with 1997
levels. The majority of the inflow ($4,798,137) was applied to investment in the
cable network. This compares to $11,259,882 in 1997, the 57% reduction
reflecting the fact that construction work was nearing completion in 1998 with
93% of homes in the area passed by the network. Principal payments under finance
leases fell from $1,012,870 in 1997 to $894,989 in 1998, reflecting the fact
that no new finance leases have been entered into as existing leases have
expired.


Liquidity and capital resources


         The Partnership


         The Partnership's source of cash has been the net proceeds of its
offerings of limited partnership interests. Historically, the Partnership's
principal uses of cash have been capital contributions to Cable & Wireless
Communications South Herts in order to fund the Partnership's proportionate
share of the construction costs of the South Herts System. As discussed below,
the General Partner believes that no additional capital contributions will be
required to fund the completion of construction and operations of the South
Herts System. Accordingly, in the future, the Partnership's uses of cash will be
restricted to covering its administration costs (principally insurance premiums,
legal and accounting costs associated with the Partnership's annual audit and
periodic regulatory filings and general administration). As of December 31, 1999
the Partnership had current liabilities of approximately $1,469,517 owing to C&W
Comms group companies. Accordingly, until such time as Cable & Wireless
Communications South Herts begins to pay dividends on its ordinary shares (which
is not expected in the foreseeable future) the Partnership will be required to
fund its administrative expenses by additional issuances of limited partnership
interests or from borrowings. The General Partner will arrange for resources to
be made available for the Partnership to meet its obligations as they fall due.


         Cable & Wireless Communications South Herts


         On April 18, 1995, Cable & Wireless Communications South Herts entered
into an agreement with two major banks to provide a (pound)25,000,000 revolving
and term loan credit facility agreement maturing on December 31, 2003 (the
"South Herts Credit Agreement"). On October 18, 1996, (pound)5,000,000 was
cancelled and the facility reduced to (pound)20,000,000.


         The obligations of Cable & Wireless Communications South Herts under
the South Herts Credit Agreement are secured by first fixed and floating charges
over all of the assets of Cable & Wireless Communications South Herts. In
addition, there is a pledge of all of the share capital of Cable & Wireless
Communications South Herts given by C&W Comms and the Partnership as additional
security for the facility.


         Drawdowns of (pound)19.3 million have occurred under the South Herts
Credit Agreement since April 1995, partly to repay the temporary loans made to
Cable & Wireless Communications South Herts by BCM since November 1994. The
General Partner believes that the South Herts Credit Agreement will be
sufficient to fund the completion of construction and operation of the South
Herts system. The amount outstanding under the facility at December 31, 1999 was
(pound)17.9 million.


         Capital expenditure is funded from operating cash flow and by funds
made available by the General Partner.

Year 2000


         The year 2000 problem resulted from the use of two digits rather than
four to define the year in computer hardware and software and in electronic
equipment. When electronic systems processed dates before and after January 1,
2000, they may have recognised a date represented by "00" as indicating the year
1900, instead of 2000. Unless steps were taken to re-programme affected
equipment and re-write software, this may have created processing ambiguities
that could have caused errors and system failures, the effects of which may have
been limited or pervasive depending on the computer chip, system or software,
and its location and function. By definition, the precise effects of the problem
could have only been estimated in advance and would not have been known with
certainty until into and even after the year 2000 itself.


         Cable & Wireless Communications South Herts' operations are highly
dependent upon equipment with embedded computer technology (network, switches
etc), the widespread failure of which would have a material adverse impact on
the results of its operations. C&W Comms established a year 2000 compliance plan
and timetable which included a comprehensive review to identify systems and
equipment (both in Cable & Wireless Communications South Herts and in third
party vendors) that could be affected by the year 2000 issue. The Cable &
Wireless Millennium Programme operated to policies which conformed to the
requirements as set out in 'DISC PD2000-1:1998 - a definition of Year 2000
conformity requirements', issued by the British Standards Institution. These
policies encompassed the verification of our key systems with regard to their
normal operation over key dates such as the rollover from 1998 to 1999, 9/9/99,
the millennium transition, the leap year date of 29/2/00, and the transition
between 2000 and 2001.


Cable & Wireless Communications (South Herts) can report that over the
millennium transition and the subsequent period (including 29/2/00), all their
critical business systems and processes have continued to operate normally and
as such, the programme has been completely successful. Having achieved their
primary objective - continuity of business and service to customers, C&W Comms
will continue to monitor their network, critical business systems and key
systems. The success of the programme over the transition has provided added
confidence that there will not be any disruption over any other future dates.


         Accounting rules require that year 2000 compliance costs were expensed
as incurred. Cable & Wireless Communications South Herts' costs of Year 2000
compliance are included within those for C&W Comms as a whole, and an analysis
of these costs has not been performed. Cable & Wireless Communications South
Herts will continue to contribute its share of such costs.

Inflation

         On average, inflation rates in the UK economy have been relatively low
over the past few years. Although long term inflation rates are difficult to
predict, the General Partner believes it has the flexibility in operations and
capital structure to maintain a competitive position.


ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The functional currency of Cable & Wireless Communications South Herts
is UK pounds sterling and all revenue and significantly all costs are incurred
in UK pounds sterling. In order to partially fund capital expenditure on the
South Herts System, the company arranged a credit facility denominated in UK
pounds sterling. The balance outstanding on the facility at December 31, 1999
was (pound)17,949,000 ($29,014,560 at the closing rate of (pound)1 = $1.62. The
loan bears interest at sterling LIBOR plus a margin ranging from 0.75% to 2.0%
depending on the bank debt ratio (the ratio of bank debt to annualized operating
cash flow) of Cable & Wireless Communications South Herts. At December 31, 1999,
sterling LIBOR was 6.08%. The average interest rate borne by the loan during the
year was 5.58%.


         Repayment of the credit facility falls due as follows:


                                          (pound)                    $*
         2000                           3,474,000             5,615,721
         2001                           4,825,000             7,799,612
         2002                           4,825,000             7,799,613
         2003                           4,825,000             7,799,613
                                 -----------------     -----------------
                                       17,949,000            29,014,559
                                 -----------------     -----------------

         * At closing rate(pound)1 = $1.62


         This loan represents the Fund's principal exposure to market risk,
specifically to variations in the sterling LIBOR interest rate and in the UK
pound sterling - US dollar exchange rate. Exposure to foreign exchange risk is,
however, partially mitigated by the fact that the loan is denominated in the
functional currency of Cable & Wireless Communications South Herts.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

                        CONSOLIDATED FINANCIAL STATEMENTS

                        AS OF DECEMBER 31, 1999, AND 1998

            AND FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997


                                      INDEX
                                      -----

                                                                Page
                                                                ----

Independent Auditors' Reports                                    29

Consolidated Balance Sheets                                      30

Consolidated Statements of Operations and Consolidated
  Statement of Comprehensive Income                              31

Consolidated Statements of Partners' Capital (Deficit)           32

Consolidated Statements of Cash Flows                            33

Notes to Consolidated Financial Statements                       34


INDEPENDENT AUDITORS' REPORT


South Hertfordshire United Kingdom Fund, Ltd.

         We have audited the accompanying consolidated balance sheets of South
Hertfordshire United Kingdom Fund, Ltd. (a Colorado limited partnership) and its
subsidiary as of December 31, 1999 and December 31, 1998, and the related
consolidated statements of operations, comprehensive income, partners' capital
(deficit) and cash flows for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the
General Partner's management. Our responsibility is to express an opinion on
these financial statements based on our audit.


         We conducted our audit in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.


         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of South
Hertfordshire United Kingdom Fund, Ltd. and its subsidiary as of December 31,
1999 and December 31, 1998 , and the consolidated results of their operations
and cash flows for each of the three years in the period ended December 31,1999,
in conformity with generally accepted accounting principles in the United
States.


ARTHUR ANDERSEN
London, England


SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
                             (A Limited Partnership)

<TABLE>
<S>                                                                    <C>             <C>

                      CONSOLIDATED BALANCE SHEETS

                                                                         December 31
  ASSETS                                                                   1999           1998
                                                                           ----           ----
    Cash and cash equivalents                                          $304,438        $76,337
                                                                -------------------------------
      Current assets                                                    304,438         76,337
    Investment in cable television and telecommunications
    properties
    (net of accumulated depreciation and amortization of
    $36,038,632 and $32,586,193 at December 31, 1999 and 1998
    respectively)                                                    72,337,664     77,249,082
       Other assets - deferred financing costs                          379,878        489,553
                                                                -------------------------------
       Total assets                                                 $73,021,980    $77,814,972
                                                                ===============================

  LIABILITIES
    Accounts payable to affiliates and related parties              $21,114,583    $19,151,681
    Accrued liabilities                                                 185,125        175,779
  Current instalments on loan facility                                5,615,721      2,241,985
    Short term obligations under capital leases                          35,563        288,753
                                                                ---------------- --------------
      Current liabilities                                            26,950,992     21,858,198
    Long-term debt                                                   23,398,838     29,786,365
    Long-term obligations under capital leases                                -         36,509
                                                                ---------------- --------------
      Total liabilities                                              50,349,830     51,681,072
                                                                ---------------- --------------

  MINORITY INTERESTS                                                  7,883,670      8,912,532

  PARTNERS' CAPITAL (DEFICIT)
    General Partner-
    Contributed capital                                                   1,000          1,000
    Accumulated deficit                                                 (355,851)      (336,158)
                                                                ---------------- --------------
                                                                        (354,851)      (335,158)
                                                                ---------------- --------------
  Limited Partners-
    Net contributed capital (56,935 units outstanding at
    December 31, 1999 and 1998 respectively)                         48,817,997     48,817,997
    Accumulated deficit                                              (34,948,050)   (32,998,411)
                                                                ---------------- --------------
                                                                     13,869,947     15,819,586
                                                                ---------------- --------------

   Cumulative translation adjustment                                  1,273,384      1,736,940
                                                                ---------------- --------------
   Total partners' capital                                           14,788,480     17,221,368
                                                                ---------------- --------------

  TOTAL LIABILITIES AND PARTNER'S CAPITAL                           $73,021,980    $77,814,972
                                                                ================ ==============


                     The accompanying notes are an
          integral part of these consolidated balance sheets.
</TABLE>


<TABLE>
<S>                                                         <C>              <C>            <C>
                  SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
                             (A Limited Partnership)

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                 For the years ended December 31
                                                              1999             1998            1997
                                                              ----             ----            ----
REVENUES                                                    $28,345,316      $28,396,020    $23,603,312

COSTS AND EXPENSES
Operating                                                  (10,837,197)     (11,785,683)   (11,474,356)
Selling, general and administrative                           (224,211)        (228,330)    (2,174,490)
Management fees and allocated overhead from the General
Partner                                                    (10,447,802)      (8,173,374)    (6,058,801)
Depreciation and amortization                               (6,279,976)      (4,119,297)    (6,177,968)
Write down of fixed assets                                            -                -    (6,562,400)
                                                         ------------------------------------------------
OPERATING PROFIT/(LOSS)                                         556,130        4,089,336    (8,844,703)

OTHER INCOME (EXPENSE)
Interest income                                                       -           39,777         78,749
Interest expense                                            (3,322,569)      (3,743,532)    (3,599,912)
                                                         ------------------------------------------------
(LOSS)/PROFIT BEFORE MINORITY INTERESTS                     (2,766,439)          385,581   (12,365,866)
Minority interests                                              797,107        (249,713)      3,975,339
                                                         ------------------------------------------------
NET (LOSS)/PROFIT                                           (1,969,332)          135,868   $(8,390,527)
                                                         ================================================

ALLOCATION OF NET (LOSS) / PROFIT (Note 1)
General Partner                                               $(19,693)           $1,359      $(83,905)
Limited Partners                                           $(1,949,639)         $134,509   $(8,306,622)
BASIC AND DILUTED PROFIT/(LOSS) PER LIMITED PARTNERSHIP
UNIT                                                           $(34.24)            $2.36      $(145.90)
                                                         ================================================

WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS
OUTSTANDING                                                      56,935           56,935         56,935
                                                         ================================================


             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                                For the years ended December 31
                                                              1999             1998            1997
                                                              ----             ----            ----
NET (LOSS) / PROFIT:                                       $(1,969,332)         $135,868   $(8,390,527)
Foreign currency translation adjustments                      (463,556)          147,878   (1,030,616)
                                                         ================================================
COMPREHENSIVE INCOME                                       $(2,432,888)         $283,746   $(9,421,143)
                                                         ================================================

                             The accompanying notes
        are an integral part of these consolidated financial statements.

</TABLE>


                  SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
                             (A Limited Partnership)

             CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)

                                     For the years ended December 31,
                                         1999             1998            1997
                                         ----             ---- -          ----
GENERAL PARTNER:
Balance, beginning of year        $(335,158)       $(336,517)       $(252,612)
Net profit/(loss) for year          (19,693)            1,359         (83,905)
                                -----------------------------------------------
Balance, end of year               $(354,851)       $(335,158)      $(336,517)
                                ===============================================

LIMITED PARTNERS:
Balance, beginning of year        $15,819,586      $15,685,077     $23,991,699
Net profit/(loss) for year        (1,949,639)          134,509     (8,306,622)

                                -----------------------------------------------
Balance, end of year              $13,869,947      $15,819,586     $15,685,077
                                ===============================================

Translation adjustment              1,273,384        1,736,940       1,589,062

Total partners' capital           $14,788,480      $17,221,368     $16,937,622
                                ===============================================



                             The accompanying notes
        are an integral part of these consolidated financial statements.


                  SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
                             (A Limited Partnership)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<S>                                                           <C>             <C>             <C>

                                                                For the years ended December 31,
                                                              1999            1998            1997
                                                              ----            ----            ----
       CASH FLOWS FROM OPERATING ACTIVITIES:
       Net profit/(loss)                                  $(1,969,332)          $123,570     $(8,390,527)

       Adjustments to reconcile net profit/loss to net
       cash generated by operating activities
       Minority interests                                    (797,107)           249,713      (3,975,339)
       Depreciation and amortization                        6,279,976          4,119,297       6,176,710
       Write down of fixed assets                                   -                  -       6,562,400

       Change in operating assets and liabilities
       Decrease/(increase) in other receivables                     -                  -       4,813,885
       Decrease/(increase) in prepaid expenses and
       other assets
       Increase in accounts payable to related parties         65,641            119,341         285,150
       Decrease in trade accounts payable and accrued       2,428,123            671,961       8,482,550
       liabilities                                              9,346             47,910      (5,294,541)
                                                         ------------------------------------------------

       Net cash generated by operating activities          6,016,647          5,331,792       8,660,288
                                                         ------------------------------------------------

       CASH FLOWS FROM INVESTING ACTIVITIES
       Construction payments for cable
       television/telephony system                        (3,355,383)        (4,798,137)    (11,259,882)

       CASH FLOWS FROM FINANCING ACTIVITIES
       (Repayment) / Increase in loans                    (2,181,651)                 -       2,624,960
       Overdraft movement                                          -                  -        (689,426)
       Principal payments under capital leases              (280,982)          (894,989)     (1,012,870)

                                                         ------------------------------------------------
       Net cash provided by (used in) financing
       activities                                          (2,462,633)        (894,989)         922,664
                                                         ------------------------------------------------

       Increase/ ( decrease) in cash and cash
       equivalents

       before exchange rate changes                           198,631         (361,334)     (1,676,930)

       Effect of exchange rate changes on cash                 (1,779)           3,285         (89,666)

       Net increase / (decrease) in cash and cash
       equivalents                                            196,852         (358,049)     (1,766,596)


       Cash and cash equivalents, beginning of  year           76,337          434,386       2,200,982

       Cash and cash equivalents, end of year                 273,189           76,337         434,386
                                                        ================================================


       SUPPLEMENTAL CASH FLOW DISCLOSURES
       Interest paid                                       $2,329,509       $3,091,883      $3,060,608
                                                        ================================================


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


                  SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
                             (A Limited Partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)      ORGANIZATION AND PARTNERS' INTERESTS

         Formation and Business

         South Hertfordshire United Kingdom Fund, Ltd. (the "Partnership"), a
Colorado limited partnership, was formed on December 23, 1991, pursuant to a
public offering. The Partnership was formed to acquire, construct, develop, own
and operate cable television/telephony systems in the United Kingdom. Fawnspring
Limited, a UK corporation, is the general partner of the Partnership (the
"General Partner").


         The General Partner has complete and unrestricted authority to manage
the business, properties and activities of the Partnership. This includes the
ability to operate and maintain cable television and telephony properties, and
to purchase or lease property at the expense of the Partnership, the ability to
make on behalf of the Partnership all payments required of the Partnership for
all direct and indirect costs incurred in the conduct of its business, the
ability to borrow money in the name of the Partnership, and the obligation to
maintain accurate financial records and to prepare and file the reports required
under applicable regulations.


         Contributed Capital


         The capitalization of the Partnership is set forth in the accompanying
Consolidated Statements of Partners' Capital (Deficit). No existing partner is
obligated to make any additional contributions to partnership capital.


         The General Partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.


         Profits, losses and distributions of the Partnership are allocated 99
percent to the limited partners and 1 percent to the General Partner until the
limited partners have received distributions equal to 100 percent of their
capital contributions plus an annual return thereon of 12 percent, cumulative
and non-compounded. Thereafter, profits and distributions will generally be
allocated 75 percent to the limited partners and 25 percent to the General
Partner. Interest income earned prior to the formation of the Partnership was
allocated 100 percent to the limited partners.


         Investment in Subsidiary


         Cable & Wireless Communications South Herts is a United Kingdom
corporation originally owned by Jones Global Funds, Inc. (the previous general
partner) and Jones Cable Group, Ltd., an affiliate of the previous general
partner. Cable & Wireless Communications South Herts is the holder of a
franchise to own and operate a cable television/telephony system in the South
Hertfordshire franchise area, located adjacent to the north-west perimeter of
Greater London, England (the "South Herts System").


         Cable & Wireless Communications South Herts is owned 66.7 percent by
the Partnership and 33.3 percent by Cable & Wireless Communications (B) plc
("BCM"), which itself is a subsidiary of C&W Comms. The General Partner is a
wholly owned subsidiary of BCM. The general partner provides consulting services
to the Partnership and may delegate some or all of the consulting services to
BCM or to other affiliates.


(2)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


         Accounting Records


         The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles
in the United States.


         Principles of Consolidation


         Cable & Wireless Communications South Herts has been consolidated with
the Partnership's operations in the accompanying consolidated financial
statements. All intercompany balances and transactions have been eliminated.


         Cash and Cash Equivalents


         Cash and cash equivalents include cash on hand, amounts held in banks
and highly liquid investments purchased with an original maturity of three
months or less.


         Currency Exchange Rates


         Foreign currency transactions arising from normal trading activities
are recorded in local currency at current exchange rates. Monetary assets and
liabilities denominated in foreign currencies at the year end are translated at
the year end exchange rate. Foreign currency gains and losses are credited or
charged to the profit and loss account as they arise. The statements of
operations of overseas subsidiary undertakings are translated into United States
dollars at average exchange rates and the year end net investments in these
companies are translated at year end exchange rates. Exchange differences
arising from retranslation at year end exchange rates of the opening net
investments and results for the year are charged or credited directly to the
cumulative translation adjustment in partners' capital.


         Limited Partner investments in Cable & Wireless Communications South
Herts were made at an average exchange rate of $1.62 per (pound)1. The average
exchange rates used in the preparation of this report for the year ended
December 31, 1999 was $1.61 per (pound)1 and the year ended December 31, 1998
was $1.66 per (pound)1.


         Property, Plant and Equipment



         At December 31, 1999 and 1998, the investment in the cable television
and telecommunications network was comprised of $69,012,669 and $73,825,090 of
cable network and other electronic equipment, $2,264,222 and $2,288,285 of
freehold buildings, and $1,060,127 and $1,135,927 of office equipment and other
fixed assets respectively.



         Depreciation is provided on property, plant and equipment at rates that
are intended to write off the cost of the assets over their estimated useful
lives. Effect is given to commercial and technical obsolescence. Depreciation is
provided on a straight line basis over 10-40 years for the cable network and
other electronic equipment, 40 years for buildings and 3-10 years for office and
other equipment. Depreciation of the capitalized construction costs begins from
the time of receiving first revenues from subscribers. During the prematurity
period a portion of the depreciation is recognized, based on the projected
construction costs at the end of the prematurity period. The portions
depreciated are increased as progress is made toward the prematurity period,
after which full depreciation continues. Cable & Wireless Communications South
Herts has completed its prematurity period.


         In the light of the losses arising from continuing operations arising
during 1998, an impairment review was undertaken to assess whether the carrying
value of tangible fixed assets was in excess of their fair value. In accordance
with SFAS 121 the company assessed the expected level of future cash flows. This
resulted in a write down of fixed assets of $6,562,400 for the year ended
December 31, 1997 principally relating to assets which will have no value to the
Company upon the planned introduction of digital cable television. On an ongoing
basis, analogue set top boxes are written down to a nil net book value on
acquisition.


         Revenue Recognition


         Subscriber prepayments are initially deferred and recognized rateably
over the service period.


         Current assets and liabilities


         Since the final quarter of 1997, the current assets and liabilities of
Cable & Wireless Communications South Herts have been managed by C&W Comms. The
net balance payable by Cable & Wireless Communications South Herts to C&W Comms
is disclosed under Accounts payable to affiliates and related parties.


         Finance Costs


         Finance costs of debt are recognised in the profit and loss account at
a constant rate over the term of such instruments.


         Use of Estimates


         The preparation of financial statements in conformity with generally
accepted accounting principles in the United States 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 the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.


 (3)     TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATED ENTITIES


         Consulting and Management Fees


         An affiliate of the General Partner is entitled to be paid a consulting
fee by Cable & Wireless Communications South Herts. During the construction
phases of the South Herts System, this consulting fee was 2 percent of
construction costs. Since completion of construction of each portion of the
system, the consulting fee for the completed portion has been 5 percent of the
gross revenues, excluding revenues from the sale of cable television/telephony
systems. The fees cover the management of the network, billing, operations, debt
collection, and financial and legal support and is calculated and payable
monthly. Consulting fees paid or payable by Cable & Wireless Communications
South Herts for the years ended December 31, 1999, 1998 and 1997 were
$1,424,290, $1,490,780 and $1,310,839 respectively. These amounts were expensed
in the Consolidated Statements of Operations each year.


         Distribution Ratios and Reimbursement


         Any Partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners and
1 percent to the General Partner. Any distributions other than interest income
on limited partner subscriptions earned prior to the acquisition of the
Partnership's first cable television system or from cash flow, such as from the
sale or refinancing of a system or upon dissolution of the Partnership, will be
made as follows: 99 percent to the limited partners and 1 percent to the General
Partner until any negative balances in the limited partners' capital accounts
are reduced to zero; 100 percent to the General Partner until any negative
balance in its capital account is reduced to zero; 99 percent to the limited
partners and 1 percent to the General Partner until the balance in the limited
partners' capital accounts is equal to their adjusted capital contribution plus
a 12 percent return; 100 percent to the General Partner until the balance in its
capital account is equal to its adjusted capital contribution, and any remaining
income or gain shall be allocated 75 percent to the limited partners and 25
percent to the General Partner.


         The General Partner and its affiliates are entitled to reimbursement
from Cable & Wireless Communications South Herts for direct and indirect
expenses allocable to the operation of the South Herts System, and from the
Partnership for direct and indirect expenses allocable to the operation of the
Partnership which include but are not limited to, rent, supplies, telephone,
travel, copying charges and salaries of any full or part-time employees. The
General Partner believes that the methodology used in allocating these expenses
is fair and reasonable. During the years ended December 31, 1999, 1998 and 1997,
reimbursement made by Cable & Wireless Communications South Herts and the
Partnership to the General Partner or its affiliates for any allocable direct
and indirect expenses totalled $8,999,513, $6,682,595 and $4,747,962
respectively.


         The General Partner and its affiliates may make advances to, and defer
collection of fees and allocated expenses owed by, the Partnership, although
they are not required to do so. The Partnership is charged interest on such
advances and deferred amounts at a rate equal to the General Partner's or
certain affiliates' weighted average cost of all debt financing from
unaffiliated entities. For the years ended December 31, 1999, 1998 and 1997,
interest on deferred fees of $802,205, $658,325 and $449,341 respectively was
charged by an affiliate of the General Partner, and interest on advances of
$84,466, $69,104 and $51,294 respectively was charged by the General Partner.


(4)      FINANCING


         Cable & Wireless Communications South Herts


         On April 18, 1995, Cable & Wireless Communications South Herts entered
into an agreement with two major banks to provide a (pound)25,000,000 revolving
and term loan credit facility agreement maturing on December 31, 2003 (the
"South Herts Credit Agreement"). On October 18, 1996, (pound)5,000,000 was
cancelled and the facility reduced to (pound)20,000,000.


         The credit facility was structured as a revolving facility through
December 31, 1997, at which time the facility was converted into a term loan.
The facility is divided into two tranches, denoted Facility A and Facility B,
and the aggregate amount drawn down under both tranches may not exceed
(pound)20,000,000. Amounts drawn down under Facility A bear interest at sterling
LIBOR plus a margin of 2.5%. The availability of Facility B of (pound)20,000,000
is subject to certain conditions which have been satisfied and amounts drawn
down under Facility B bear interest at sterling LIBOR plus a margin ranging from
0.75% to 2.0% depending on the bank debt ratio (the ratio of bank debt to
annualized operating cash flow) of Cable & Wireless Communications South Herts.
At December 31, 1999, sterling LIBOR was 6.08%.

         The South Herts Credit Agreement contains various covenants including
financial covenants such as a cumulative revenue test, bank debt ratio, interest
cover ratio, a fixed charges ratio and a pro-forma debt service ratio and other
covenants such as restrictions on disposals and on the creation of indebtedness
and encumbrances. The South Herts Credit Agreement also includes a restriction
on the payment of dividends which provides that dividends or distributions in
respect of its issued share capital and payments in respect of certain
intercompany loans may not be made prior to December 31, 1998. Such payments
will be permitted thereafter only if the bank debt ratio for the previous two
accounting quarters is less than 5.5:1 and no event of default or potential
event of default has occurred and is continuing at such time and the payment of
such dividend or distribution will not give rise to an event of default or
potential default.

         The South Herts Credit Agreement contains certain events of default
including non-payment of amounts due under the South Herts Credit Agreement,
breaches of representations and covenants (including financial ratios) contained
in the South Herts Credit Agreement, cross-default to certain other indebtedness
of Cable & Wireless Communications South Herts, certain bankruptcy and
insolvency events and certain changes of ownership.

         The obligations of Cable & Wireless Communications South Herts under
the South Herts Credit Agreement are secured by first fixed and floating charges
over all of the assets of Cable & Wireless Communications South Herts. In
addition, there is a pledge of all of the share capital of Cable & Wireless
Communications South Herts given by BCM and the Partnership as additional
security for the facility.

         The General Partner believes that the South Herts Credit Agreement will
be sufficient to fund the completion of construction and operation of the South
Herts system. The amount outstanding under the facility at December 31, 1999 was
(pound)17,949,000 and this amount was all drawn under Facility B. Repayment of
the credit facility falls due as follows:


                                   (pound)                         $
 2000                           3,474,000                  5,615,721
 2001                           4,825,000                  7,799,612
 2002                           4,825,000                  7,799,613
 2003                           4,825,000                  7,799,613
                         -----------------         ------------------
                               17,949,000                 29,014,559
                         -----------------         -----------------


       * At closing rate(pound)1 = $1.62


 (5)     INCOME TAXES


         Income taxes have not been recorded in the accompanying consolidated
financial statements because they accrue directly to the partners. The
Partnership's tax returns, the qualification of the Partnership as such for tax
purposes, and the amount of distributable Partnership income or loss are subject
to examination by Federal and state taxing authorities. If such examinations
result in changes with respect to the Partnership's qualification as such, or in
changes with respect to the Partnership's recorded income or loss, the tax
liability of the general and limited partners would be changed accordingly.


         United Kingdom profits (comprising income and gains) of a corporation
owned by the Partnership will be subject to United Kingdom corporation tax.
However corporations are able to carry forward losses from operations to be
offset against subsequent profits for the same operations for an indefinite
number of years. Cable & Wireless Communications South Herts has significant tax
losses available for offset against future trading profits.


(6)      OBLIGATIONS UNDER CAPITAL LEASES


                                                         1999      1998
Minimum lease payments due:                                 $         $
Less than one year                                     39,604   318,105
1-2 years                                                   -    40,347
2-3 years                                                   -         -
3-4 years                                                   -         -
                                                      ------------------
                                                       39,604   358,452
                                                      ==================

Less finance charges allocated to future periods      (4,041)  (33,190)
                                                      ------------------
                                                       35,563   325,262
                                                      ==================
Due within one year                                    35,563   288,753
Due after more than one year                                -    36,509
                                                      ------------------
                                                       35,563   325,262
                                                      ==================


(7)      IMPACT OF NEW PRONOUNCEMENTS


         In June 1998 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. This is not material to the Fund or its subsidiaries.
SFAS No.133 establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded on the balance sheet as either an asset or
liability measured at its fair value. The statement requires that changes in the
derivative's fair value be recognised currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows derivative's gains and losses to offset related results on the hedged
item in the income statement or other comprehensive income (depending on the
type of hedge). To adopt hedge accounting the company must formally document,
designate and assess the effectiveness of transactions that receive hedge
accounting.

SFAS No 137.delayed the effective date of SFAS No. 133 to fiscal years beginning
after June 15, 2000. A company may implement the statement as of the beginning
of any fiscal quarter after issuance, however, SFAS No. 133 can not be applied
retroactively. The company has not yet determined the timing of adoption of SFAS
No. 133.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE


None.


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The Partnership itself has no officers or directors. Certain
information concerning directors and executive officers of the General Partner
is set forth below.


Name                       Age      Positions with the General Partner
----                       ---      ----------------------------------


Robert Beveridge           44       Director


Greg Clarke                42       Director


Robert Drolet              43       Director and Company Secretary


Mary Molyneux              44       Director


Robert Beveridge has been a Director of the General Partner since 1 April 1999.
He is a Chartered Accountant who joined C&W Comms in April 1998 as Director of
Finance & Planning. Prior to this he was UK Finance Director of United Biscuits
plc. He started his career with Ensors, Chartered Accountants and after
qualifying moved to the Mars corporation in 1981. His final position in Mars was
Financial Controller for European Snackfoods.


Greg Clarke has been a director of the General Partner since 1 April 1999. In
February 1999 he was appointed Chief Executive of C&W Comms. From June 1997 he
was Chief Operating Officer. Before joining C&W Comms, he was Chief Executive,
Mobile at C&W between 1995 and 1997. Prior to that he was Vice President,
Cellular at Nortel plc and Managing Director at Dowty Group plc.


Mr. Drolet has been a Director of the General Partner since January 1997. On
March 19, 1997 he was appointed as Company Secretary of C&W Comms and on 1 May
1999 he was appointed Commercial Director and General Counsel. He has been
General Counsel and Company Secretary of BCM since July 1996. He was General
Counsel and Assistant Corporate Secretary of BCI from May 1995 to July 1996, and
from March 1993 to May 1995, Assistant General Counsel and Assistant Corporate
Secretary. Previously, Mr. Drolet was Vice President, Corporate Affairs and
Corporate Secretary of The Canam Manac Group Inc. from January 1991 to March
1993.


Ms Molyneux has been a Director of the General Partner since 1 April 1999. She
has been Director of Legal Services of C&W Comms since 1 May 1999 and Assistant
Company Secretary since 7 July 1998. She joined Cable & Wireless (Mercury)
Limited Legal Department in August 1995. Previously Ms Molyneux was in private
legal practice with the Amercian Law firm O'Melveny & Myers from September 1985.


ITEM 11. EXECUTIVE COMPENSATION


         The Partnership has no employees; however, various personnel are
required to operate the South Herts System. Personnel are employed by C&W Comms
and its affiliates and, pursuant to the terms of the Partnership's limited
partnership agreement, the cost of such employment is charged by C&W Comms and
its affiliates to the Partnership as a direct reimbursement item. See Item 13.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         No person or entity owns more than 5 percent of the limited partnership
interests in the Partnership.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         The General Partner and its affiliates engage in certain transactions
with the Partnership as contemplated by the limited partnership agreement of the
Partnership and as disclosed in the prospectuses for the Partnership's public
offerings. The General Partner believes that the terms of such transactions,
which are set forth in the Partnership's limited partnership agreement, are
generally as favorable as could be obtained by the Partnership from unaffiliated
parties. This determination has been made by the General Partner in good faith,
but none of the terms were or will be negotiated at arm's-length and there can
be no assurance that the terms of such transactions have been or will be as
favorable as those that could have been obtained by the Partnership from
unaffiliated parties.


         An affiliate of the General Partner is entitled to be paid a consulting
fee by Cable & Wireless Communications South Herts. During the construction
phases of the cable television/telephony system, this consulting fee was 2
percent of construction costs. After completion of construction of each portion
of the system, the consulting fee for the completed portion is 5 percent of
gross revenues, excluding revenues from the sale of cable television/telephony
systems. Consulting fees paid or payable by the Partnership for the year ended
December 31, 1999 totalled $1,424,290.


         The General Partner and its affiliates are entitled to reimbursement
from Cable & Wireless Communications South Herts for direct and indirect
expenses allocable to the operation of the South Herts System and from the
Partnership for direct and indirect expenses allocable to the operation of the
Partnership, which include but are not limited to rent, supplies, telephone,
travel, copying charges and salaries of any full or part time employees.


         The General Partner and its affiliates may make advances to, and defer
collection of fees and allocated expenses owed by, the Partnership, although
they are not required to do so. The Partnership will be charged interest on such
advances and deferred amounts. Interest charges incurred by the Partnership for
the year ended December 31, 1999 amounted to $84,470.


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


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


         1.       See  index to  financial  statements  at page 28 for the
         list of  financial  statements  and exhibits thereto filed as part of
         this report.


         2.       The following exhibits are filed herewith:


         27       Financial Data Schedule.


         (b)      Reports on Form 8-K


                  The Partnership has not filed a report on Form 8-K during the
         last fiscal quarter of the period for which this Form 10-K is filed.


SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) 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.


                                                SOUTH HERTFORDSHIRE UNITED
                                                KINGDOM FUND, LTD.
                                                a Colorado limited partnership

                                                By: Fawnspring Limited,
                                                its General Partner




                                                By:_______________________

                                                Robert Drolet
                                                Director of Fawnspring Limited
                                                Date:    March 31, 2000


EXHIBIT INDEX
-------------

Number            Description
------            -----------

27                Financial Data Schedule.