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, 1997

                                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)

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

26 Red Lion Square, London, WC1R 4HQ, England      011-44-171-528-2000
---------------------------------------------      -------------------
   (Address of principal executive office            (Registrant's
                and Zip Code)                        telephone no.
                                                  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.    BUSINESS                                            3
ITEM 2.    PROPERTIES                                         27
ITEM 3.    LEGAL PROCEEDINGS                                  27
ITEM 4.    SUBMISSION OF MATTERS TO A VOTE
           OF SECURITY HOLDERS                                27

PART II.
ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY
           AND RELATED STOCKHOLDER MATTERS                    28
ITEM 6.    SELECTED FINANCIAL DATA                            29
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS      30
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA        34
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE             49

PART III
ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF
           THE REGISTRANT                                     50
ITEM 11.   EXECUTIVE COMPENSATION                             51
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
           OWNERS AND MANAGEMENT                              51
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED
           TRANSACTIONS                                       51

PART IV
ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
           REPORTS ON FORM 8-K                                52

Signatures                                                    53

Exhibit Index                                                 54


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<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 totaling 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 Bell
Cablemedia (South Hertfordshire) Limited (formerly Jones Cable
Group of South Hertfordshire Limited) ("Bell Cablemedia South
Herts") from Jones Global Funds, Inc. and certain of its
affiliates (the "Former Owners"). Bell Cablemedia 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 northwest perimeter of
Greater London (the "South Herts System"). The acquisition by the
Partnership of all of the shares of Bell Cablemedia 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 Bell Cablemedia 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 Bell Cablemedia South Herts, costs
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. Through December 31, 1997, the total amount reimbursed
to fund the South Herts System's construction and development
totaled approximately $48,800,000.


     The South Herts System's ownership by Bell Cablemedia 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 Bell Cablemedia South Herts are held indirectly by
the


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<PAGE>


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 Bell Cablemedia South Herts in 1993 and 1994. Jones Intercable
of South Hertfordshire, Inc. invested (pound)3,400,000 in Bell
Cablemedia 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 Bell Cablemedia 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 Bell
Cablemedia South Herts, Jones Global Funds, Inc.'s general
partner interest in the Partnership and the Sandler Group's
interest in Bell Cablemedia South Herts, to Bell Cablemedia plc
("BCM") in exchange for ordinary shares (in the form of American
Depositary 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 Bell Cablemedia South Herts, the Sandler Group's interest in
Bell Cablemedia 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 Bell Cablemedia South Herts for
51,089 Class A shares and BCM invested (pound)2,554,600 in Bell
Cablemedia South Herts for 25,546 Class A shares. In November
1994, the Partnership invested (pound)1,410,000 in Bell
Cablemedia South Herts for 14,100 Class A shares and BCM invested
(pound)705,000 in Bell Cablemedia South Herts for 7,050 Class A
shares. As a result of these transactions, Bell Cablemedia 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.


Recent Developments


     On October 21, 1996, BCM entered into a number of agreements
relating to the acquisition of control of the outstanding shares
of Videotron Holdings 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%.


                                4
<PAGE>


     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) Mercury
Communications Limited ("Mercury"), (ii) BCM (as enlarged by the
acquisition of Videotron), and (iii) NYNEX CableComms Group PLC
and NYNEX Cablecomms Group Inc. (collectively "NYNEX CableComms")
under one company to be called Cable & 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, Bell Atlantic and BCITH presently own, directly or
indirectly, approximately 52.6 per cent, 18.5 per cent and 14.2
per cent, respectively, of the issued share capital of C&W Comms.
Public shareholders hold the remaining 14.7 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 expected in 2001,
which already pass approximately four million residences and
business establishments, 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.


                                5
<PAGE>


                      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
approximately 87,100 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, after
the announcement of the results of the Duopoly Review (see
"Regulation") and the resulting potential for cable-based
telephony, an integrated cable television/telephony network
architecture was developed for this franchise in late 1991. As of
December 31, 1997, approximately 87,100 homes, or 93 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, 1997, Bell Cablemedia South
Herts serviced approximately 22,400 basic cable television
customers, 27,400 residential telephony lines and 1,200 business
telephony customers.


     C&W Comms controls the operations of Bell Cablemedia South
Herts. Bell Cablemedia South Herts is one of 47 franchise areas
which C&W Comms manages and controls from its headquarters in
Central London.


Products and Services


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


     Cable Television Services. Bell Cablemedia 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.


     Residential Telephony Services. Bell Cablemedia South Herts
offers local and long distance 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 dialing.


                                6
<PAGE>


     Business Telecommunications Services. Bell Cablemedia South
Herts offers businesses a range of services alongside 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


     Bell Cablemedia South Herts' broadband networks have been
designed to enable it to provide customers with a wide range of
advanced interactive and integrated entertainment,
telecommunications and information services, including
pay-per-view programming.


     Opportunities for interactive and integrated services, which
may be offered by Bell Cablemedia South Herts in the future,
include the following:


     Pay-per-view services. Pay-per-view ("PPV") provides a way
for customers to buy television programming, including high
profile movies, sports and music events, generating ongoing
transactional revenue incremental to the current subscription
charges. C&W Comms launched its on-demand services on January 19,
1998 using remote impulse technology. Bell Cablemedia South Herts
intends to use 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.


     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 control to the customer. Bell Cablemedia
South Herts is currently planning the introduction of digital
television services. Implementation of digital services would
require Bell Cablemedia South Herts to make minor network
upgrades to its broadband coaxial distribution network and to
replace the current set-top boxes in customers' homes. On March
7, 1997, TeleWest Communications plc ("TeleWest"), NYNEX
CableComms and BCM announced the selection of NextLevel Broadband
Networks Group of General Instrument Corporation as an initial
supplier of digital equipment, with whom TeleWest and C&W Comms
will enter into detailed negotiations relating to the supply of
transmission equipment and set-top boxes to provide an integrated
platform for the provision of digital services in cable homes
throughout the UK. Additional manufacturers of set-top boxes to
be supplied to Bell Cable Media South Herts may be identified in
due course.


     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 a digital television form of PPV,
the principal difference being 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. 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.


                                7
<PAGE>


     Internet and other on-line information services. With the
growth in the home PC market fueling the rapid growth in demand
for Internet access and other on-line information services, Bell
Cablemedia 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.
A cable modem trial has been running in Manchester since November
1996. Work is currently underway to introduce a full cable modem
service within C&W Comms' franchise areas.


Strategy and Near-Term Initiatives


     C&W Comms' objective is to create significant shareholder
value by building upon its position as the pre-eminent
competitive provider of integrated telecommunication and
television entertainment services in the United Kingdom to
achieve sustainable growth in revenues and earnings. The key
elements of the Company's near-term initiative include:


     National Marketing and Branding


     In the period up to September 1. 1997, the new "Cable &
Wireless" brand name was introduced, running alongside the
existing Mercury, BCM, Videotron and NYNEX CableComms brands in
marketing material. From September 1, 1997, C&W Comms dropped the
old brand names as it undertook a concerted marketing campaign to
raise awareness of the Cable & Wireless brand name as the new
service provider for the former customers of Mercury, BCM,
Videotron and NYNEX CableComms. A marketing campaign, launched
publicly on September 15, 1997, was developed with an additional
marketing budget of approximately (pound)50 million for the
period to March 31, 1998. This new campaign, using the theme
"Cable & Wireless - What can we do for you?" seeks to raise
awareness of both the Cable & Wireless brand name and the range
of services available through a wide variety of media, including
television, national newspaper advertisements and posters. The
results captured to date show that all performance targets for
the brand campaign have been met or exceeded and it is widely
acknowledged to be a highly successful introduction of the new
brand. C&W Comms believes that this will create a more favourable
environment for the acquisition and retention of customers.


     Delivery of Excellent Customer Service


     The establishment of world class customer service is key to
the development and growth of C&W Comms. The management structure
has been built around four end-to-end customer service processes
- Provide, Assure, Customer Interface and Bill and Collect -
providing standardization across the four combined companies. C&W
Comms established performance measures and step targets for all
processes and monitors progress on a routine basis. Significant
improvements have already been made, particularly in access to
customer services and meeting appointments for consumer field
installations.


     The achievement of improved customer satisfaction and
reducing unit costs underpin the Customer Operations strategies.
While process improvements continue in the short term, two key
projects - the integration of the Cable Companies subscriber
management systems onto a single platform and the consolidation
of call centres will deliver the potential for greatly improved
customer interface alongside economies of scale. Both of these
projects are currently scheduled for completion by August 1998.


     C&W Comms is also committing significant investments to
upgrade its network (e.g., national and international
Asynchronous Transfer Mode ("ATM") backbone and Synchronous
Digital Hierarchy ("SDH") upgrades) in order to leverage new
customer applications and improve network performance.


                                8
<PAGE>


     Information Systems and Billing


     C&W Comms has embarked upon a complete review of its
information systems strategy to ensure that this reflects and
supports the new goals and objectives of C&W Comms and fits the
strategy for efficiency being led by C&W. The move to fully
integrated systems that will support the combined businesses will
mean that a number of systems from the separate companies will no
longer be necessary. The capitalized cost of these systems and
associated hardware is being written off, as they are being
replaced.


     Programming and Video Services


     Program supply contracts with owners of television channels
carried on C&W Comms' network are being renegotiated to allow C&W
Comms to deliver more consumer-friendly cable television
packages. A formal review of existing television channels is
underway to ensure C&W Comms continues to carry the best
available programs. The process of aligning the channels carried
in the former BCM, Videotron and NYNEX Cable Comms systems will
continue. Work is underway to source additional television
channels for the launch of a digital television service. Cable
transmission facilities for digital television are currently
being constructed and a commercial service offering of over 200
digital satellite channels is planned. C&W Comms has recently
entered into an agreement with BSkyB covering the provision of
programming for digital and analog pay-per-view ("PPV") and
co-operation on the launch and marketing of digital television
services.


     Cost Savings and Synergies


     C&W Comms anticipates realizing both revenue and cost
synergies from the formation of C&W Comms. Revenue synergies will
be derived from the cross-selling of products and services
between Mercury and the Cable Companies and, where possible,
migrating Mercury's indirect customers to direct connection.


     Cost synergies can be separated between direct costs,
operating costs and capital expenditures. Direct cost savings
will arise in the form of outpayments and programming costs,
while operating cost savings can be realized through greater
operating efficiencies in customer services, marketing, billing
and networks, in addition to the removal of duplicate support
functions. Capital savings are likely through procurement and the
elimination of duplicate future network expenditure.


     Pricing


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


     Cable Television. Bell Cablemedia South Herts currently
charges customers on the Unity cable television package in the
range of (pound)12.49 to (pound)18.99 per month for dual packages
excluding premium channels and up to (pound)38.99 for dual
packages including premium channels. There is a monthly charge of
approximately (pound)4.00 per additional channel selector box.
Bell Cablemedia South Herts also charges a one time connection
fee, with discounts for those customers who take telephony
services as well.


     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. Mercury's
price discount over BT has gradually eroded over the past 10
years and other operators have begun competing with both BT and
Mercury offering discount service provision in selected market
segments. 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


                                9
<PAGE>


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 charges 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 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 (the "Unity Packages" which were launched on
September 1, 1997) 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 ("Headstart"), a mid-range package
("Jigsaw") and a big basic package ("Vision Plus"). Based on past
experience, C&W Comms believes that customers with both cable
television and telecommunications services are less likely to
terminate service that 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.


     The Network


     Construction of Bell Cablemedia South Herts' cable
television/telephony network is substantially complete with
approximately 93% of homes in the South Hertfordshire franchise
area passed at December 31, 1997.


     Network Architecture. Bell Cablemedia South Herts' network
is designed to take integrated two-way broadband cable television
systems. Such systems will incorporate a digital overlay
telephony network to service the homes and businesses within the
franchise area. The network utilizes fiber 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.


     Bell Cablemedia South Herts' network makes extensive use of
fiber optic cable. Fiber optic technology is based on the
physical property of optical fiber that allows transmission at
the speed of light over long distances with little or no
distortion. Fiber optic systems are suitable for transmission of
voice, data, video or a combination of these types of
information. 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 network is constructed in underground ducts installed in both
the residential and commercial sectors of the franchise area and
with excess fiber and duct capacity.


     The cable television system has the capacity to carry over
50 channels of television plus radio, teletext,
telecommunications and other related services. This capacity
could be increased four to eight times by the addition of digital
compression techniques. 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. Television and radio programs for
cable television services are sourced from off-air antennas, by
satellite earth stations, and from videotape and are then
distributed from a single site (the "headend") to distribution
nodes over networks of fiber optic cable and from these nodes to
customers over coaxial cables. Generally, cable television is
distributed in a manner whereby all signals are delivered to all
customers, with the customer selecting which program signal to
use rather than a "switched" distribution (whereby a signal is
sent to a particular customer), although evolving technologies
such as VOD are blurring this distinction.


                               10
<PAGE>


     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.


     Bell Cablemedia South Herts' telephony network is currently
capable of providing a range of analog and digital voice and data
services. 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.


     Bell Cablemedia 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 labor. Total capital expenditure by Bell
Cablemedia South Herts on its cable television/telephony systems
up to December 31, 1997 was approximately (pound)62.8 million
($103.6 million based on a December 31, 1997 exchange rate of
(pound)1=$1.65).


     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. The UK does not have an
infrastructure of existing telephone poles, overhead lines or
electrical conduits in which to run new fiber optic and coaxial
cable. 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.


     Build Milestones. Because Bell Cablemedia South Herts did
not meet the construction timetable set forth in the original
telecommunications license issued for the South Herts franchise
area, Bell Cablemedia South Herts requested an amendment of the
construction timetable from the UK Office of Telecommunications
("OFTEL"), the authority that regulates the license. On February
28, 1994, OFTEL modified the South Herts System's
telecommunications license. The license, as modified, required
the South Herts System to be completed (by passing 85,000
premises) by December 31, 1995. At December 31, 1995 the South
Herts System passed approximately 83,400 homes and over 3,000
businesses, thereby complying with the construction timetable in
its license.


Strategic Alliances


     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


                               11
<PAGE>


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. For a discussion of practices relating to payments
between international operators, see "Regulation".


     C&W Comms enters into operating agreements with overseas
carriers to provide for interconnection between its network and
the domestic network of overseas carriers. At March 31, 1997, C&W
Comms had operating agreements for international switched
telephone service with over 100 carriers, including carriers in
the United States, France, Germany and Japan. Thirty-two of these
agreements involve relationships with C&W group companies or
associates as shareholder or manager of a carrier. C&W Comms
continues to seek 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 and 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 realtionships
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 is the UK Independent Television Commission's
(the "ITC's") current policy not to grant more than one cable
television license in any franchise area. Accordingly, Bell
Cablemedia South Herts is the exclusive provider of cable
television services in its licensed franchise area. Bell
Cablemedia South Herts' cable television system competes,
however, 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)


                               12
<PAGE>


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.


     In the UK multichannel television market, there are
approximately 3.45 million DTH subscribers that are customers of
BSkyB compared to an aggregate of approximately 2.12 million
broadband cable television subscribers as of December 31, 1996.


     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 currently presents
substantial competition to Bell Cablemedia South Herts' cable
television service, the General Partner believes that cable
television has a number of competitive advantages over DTH
satellite systems and that cable will become the preferred medium
for multichannel programming distribution. First, for a
subscriber with more than one television, cable television is
significantly more economical in providing service to the
additional sets than DTH satellite. Second, installation of
satellite dishes may require planning permission from local
authorities. Third, satellite dishes must be installed with a
line of site orientation toward the transmitting satellite which
limits or precludes placement options, particularly in urban
areas, and can result in aesthetic objections to installation.
Fourth, DTH satellite subscribers who purchase, as opposed to
rent their satellite dishes must arrange and pay for any
maintenance or servicing required for the dishes. Fifth, the
General Partner believes that, without substantial improvements
in existing technology, BSkyB will not be able to offer
integrated telephone services over its satellite network.


     The General Partner, however, expects BSkyB to provide
substantial competition for the foreseeable future and no
assurance can be given that it will not become an even stronger
competitor, especially following the launch of BSkyB's digital
satellite offerings in Spring 1998, or that Bell Cablemedia South
Herts will be able to compete successfully with BSkyB. A
significant factor in BSkyB's favor is its role as sole source
supplier of many of the South Herts System's popular cable
television programs. BSkyB has given undertakings to the OFT in
respect of its terms of supply of programming to cable companies.
However, if in the future, BSkyB chooses to restrict the
programming it makes available to Bell Cablemedia South Herts or
offers such programming to Bell Cablemedia South Herts at prices
relatively higher than those it currently charges, then Bell
Cablemedia South Herts' cable television business could be at a
significant competitive disadvantage. C&W Comms has recently
entered into an agreement with BSkyB covering, amongst other
things, the terms of supply by BSkyB of programming for digital
and analog PPV and cooperation on the launch and marketing of
digital television services. 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. Other than the considerations noted
above, 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. C&W Comms believes that if the
costs of purchasing DTH equipment together with the associated
maintenance costs are taken into account, then cable television
is generally cheaper than the equivalent DTH satellite service.


     A number of UK cable companies have complained to the
European Commission about aspects of BSkyB's prices and trading
conditions alleging violation of Articles 85 and 86 of the Treaty
of Rome (which relate to anti-competitive agreements and abuse of
a dominant position, respectively). The European Commission is
considering the complaint. In November, 1996, the ITC commenced a
public consultation process which requests comments on the manner
in which television channels are currently bundled together for
wholesale to cable companies and retail sale to cable television
and DTH satellite customers and seeks views on whether there are
ways of providing programs at a retail and wholesale level in a
less restrictive manner without undermining the economics of
provision. In August 1997 the ITC announced its decision to
extend this consultation into a second phase.


                               13
<PAGE>


     Digital Television. Digital television is expected to
provide a wide range of additional services to customers. Its
impact is likely to be significant as 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 mulitplexing.
Because affordable digital television sets are not yet readily
available, it is likely that digital television will initially be
received through a set top box containing a processor than can
decode and decompress scrambled signals and convert them to
analog form.


     It is believed that the first provider of digital television
has advantages, as once a consumer has purchased a set top box
for one medium(e.g., satellite or cable), he is unlikely to
purchase a second set top box to be able to receive digital
television from a second medium. The DTI has given Oftel powers
to regulate the conditional access technology that allows digital
services to be unscrambled in homes where customers have paid up
relevant subscriptions, See :Regulation - Broadcasting Regulation
- Conditional Access Regulation".


     PTO's. HM Government has stated that it proposes reviewing
the broadcast restrictions on BT and other national PTO's in
1998. It is unclear whether any lifting of the restrictions will
be effected on a franchise by franchise basis or by setting a
future date for a nationwide removal of the restrictions. There
can be no assurance that BT (and all other national PTOs) will
not be allowed entry to the nationwide entertainment market in
the near future, particularly in the light of HM Government's
stated intention to begin consultation on this issue early in
1998. It is anticipated that a range of proposals will be
considered, from a program of rolling entry commencing in 1998 to
setting a date in the future for a nationwide lifting of the ban.
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 Bell Cablemedia South Herts without substantial investment.


     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 may
provide VOD services under their existing national PTO licenses.
Bell Cablemedia 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. BT conducted a trial of a VOD system in
the towns of Ipswich and Colchester (which are not within Bell
Cablemedia 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 Bell
Cablemedia South Herts in the future.


     Other Competitors to Cable Television. In addition to the
then existing UK terrestrial channels (BBC1, BBC2, ITV and
Channel 4), a new terrestrial television channel, Channel 5,
began broadcasting in March 1997. C&W Comms does not expect that
the introduction of Channel 5 will have a significant impact on
its business because, it believes, the introduction only made
terrestrial television marginally more attractive to viewers.
Channel 5 has only been allocated a limited range of frequencies
to broadcast its service and is only available to approximately
74 per cent of the UK population through terrestrial
distribution. For some homes, therefore Channel 5 will only be
available by subscribing to cable television or DTH satellite.
C&W Comms intends to monitor closely all relevant technological
developments and, where possible, to position itself to remain
competitive.


     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


                               14
<PAGE>


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 are now permitted to provide
telephony services in their own right, instead of as agents of BT
or Mercury as previously required, and have the right to switch
their telephony customers' calls. These changes have
significantly improved the terms on which cable operators have
been able to require BT, Mercury or another PTO to interconnect
with them. As at February 1996, over 160 companies were licensed
by the DTI to compete with BT and Mercury, operating in various
areas and providing a variety of services. As at January 1997, 44
new international facilities based licenses had been granted
allowing the provision of international services over
international telecommunications systems.


     Residential Telephony. Bell Cablemedia South Herts'
principal competitor in the UK residential market is BT, which
still held over 90% of the estimated national market in 1996.
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, 1997 revenues exceeded (pound)14.9 billion.
However, BT's ability to respond to price competition from local
cable/telephony operators is restricted by its license
obligations. 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.


     Bell Cablemedia South Herts also competes in the residential
telephony market with cellular telephone operators such as
Vodafone Group PLC ("Vodafone") and Telecom Securicor Cellular
Radio Limited ("Cellnet") (60% owned by BT), Mercury One2One (50%
owned by C&W) and Orange plc ("Orange"). Due to the non-exclusive
nature of telecommunications licenses in the UK, Bell Cablemedia
South Herts also competes with additional entrants to the
residential telephony markets, such as Energis Communications
Limited ("Energis"), a long-distance operator, and Ionica L3
Limited ("Ionica"), a wireless loop 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 Bell Cablemedia South Herts'
principal competitor in providing business telephony services. In
addition to BT, Bell Cablemedia South Herts currently competes
with other telecommunications companies, such as Energis, COLT
plc ("COLT") and MFS Communications Limited ("MFS"), and with
long distance service resellers, such as WorldCom International,
Inc. ("WorldCom"). Bell Cablemedia 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. For example, on December 20, 1994,
a subsidiary of American Telephone & Telegraph Company, AT&T UK,
was granted a telecommunications license which will permit the
subsidiary to provide most


                               15
<PAGE>


telecommunications services in the UK and to convey television
signals over its telecommunications network. In 1996, AT&T
launched a business telephony service in the UK and in December
1996, AT&T was granted an international facilities based license.
In December 1996 TeleWest was granted a national
telecommunications license. There can be no assurance that Bell
Cablemedia South Herts will be able to compete successfully with
BT or other telecommunications companies.


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"). 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 Bell Cablemedia South
Herts was issued for a 15 year period and is scheduled to expire
in 2005. The telecommunications license held by Bell Cablemedia
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


     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
confirm 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. The current stated policy of the ITC is that
only one cable television license will be


                               16
<PAGE>


granted in each cable television franchise area. Each cable
television license gives the holder the right to provide
television services within the cable television franchise area
using cable television distribution networks.


     BT and other national PTOs currently cannot compete directly
with cable companies in providing broadcast services over their
telephone network because their present telecommunications
licenses do not authorize them to convey or provide broadcast
entertainment services to residential customers. In addition,
such activity would require a license under the Broadcasting Act
the granting of which would be inconsistent with current ITC
policy. However, affiliates of PTOs have always been permitted to
hold cable television licenses and affiliates of BT hold a number
of them. Furthermore, since March 1994, the PTOs have been
permitted to apply directly for LDSLs in new franchise areas and
the ITC has stated that, in principle, BT and other PTOs may
offer VOD services because this service does not fall within the
Telecommunications Act license restrictions.


     HM Government has indicated that the restrictions on BT and
other national PTOs providing entertainment services on a
nationwide basis to residential customers will be reviewed. It is
anticipated that a range of proposals will be considered, from a
program of rolling entry commencing in 1998 to setting a date in
the future for a nationwide lifting of the ban. Consultation is
likely to take place early in 1998. It remains unclear whether it
is technically or economically viable to provide broadcast
television services on BT's or the national PTO's existing
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 licenses and radio
services) and different media (including local and national
newspapers and licensed services, such as local delivery
services) 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


                               17
<PAGE>


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 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 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. Bell Cablemedia South Herts has not yet
renewed its cable television license.


     New cable television licenses. As of November 1, 1996, cable
television licenses had been granted for franchise areas covering
approximately 16 million homes in the United Kingdom out of 22
million total homes nationally, including all major metropolitan
areas. Under the Broadcasting Act, a new cable television license
(called a local delivery service license) will be granted to the
applicant who submits the highest cash bid (i.e., offers to pay
the highest annual cash sum to the ITC during each year of the
license) except where it appears to the ITC that, based on the
coverage area proposed or the source of the applicant's funds,
the cable television license should be awarded to another
applicant. Under any new cable television licenses, operators
will be required to pay annually to the ITC during the term of
the license a percentage to be fixed by the ITC of the operator's
cable television related revenues plus an additional amount equal
to the operator's cash bid.


     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.


     Cable Television Operations


     Bundling of Services


     The ITC has announced a wide ranging consultation into the
way in which pay television channels are marketed at the
wholesale and retail levels. Issues for consideration include the
competition and consumer effects of minimum carriage
requirements, the practice of deep discounting premium channels,
requirements to buy basic tier services in order to receive
premium channels and the bundling of telephony and cable
television. The outcome of this consultation will have important
implications in terms of the flexibility afforded to C&W Comms in
packaging its television and telephony services.


                               18
<PAGE>


     Conditional Access Regulation


     In July 1997, Oftel and the DTI published a joint
consultation document on the extension of the UK conditional
access regulatory regime to cover non-broadcast and digital
broadcast television services. These regulations are designed to
complement those currently in place for digital broadcast
television services. The regulations 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 October 1997, Oftel published
for consultation the principles it would use when examining the
prices proposed by a conditional access provider . The regime
should be finalized by April 1998.


     Digital Broadcasting


     The introduction of digital technology by Bell Cablemedia
South Herts would 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 is
expected to launch a digital satellite service in the first
quarter of 1998 and DTT is currently scheduled to be launched on
September 30, 1998.


     Digital Terrestrial Broadcasting. The New Broadcasting Act
introduced a legal framework for the regulation of digital
terrestrial broadcasting. Most of the 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 the new 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 who 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.


     The New Broadcasting Act created a framework for the
licensing by the ITC of digital terrestrial television
multiplexes. Capacity on multiplexes has been allocated to
existing terrestrial broadcasters, being one full multiplex
frequency for BBC1 and BBC2, one multiplex frequency for ITV and
Channel 4 and half a multiplex frequency for Channel 5 and S4C.
The BBC may use such capacity pursuant to its Royal Charter,
whereas the other broadcasters will be licensed under the New
Broadcasting Act. On January 31, 1997 applications for further
digital terrestrial mulitplex licenses were received by the ITC
from British Digital Broadcasting (BDB), Digital Television
Network (owned by NTL Incorporated) and S4C Digital. BDB, a
consortium incorporating Carlton Communications and Granada Group
and S4C Digital were successful in their applications and were
awarded mulitplex licenses, BDB's licence for three multiplex
frequencies only being awarded after BSkyB had withdrawn from the
consortium on the ITC's request. Issues concerning BDB's proposal
have been under consideration by the European Commissions
Competition Authority, DGIV. On December 19, 1997 the ITC granted
multiplex licenses to BDB and Channels 3 and 4. It is expected
that a license will be granted to S4C Digital in the near future.
The licenses granted to BDB included a number of specific
conditions to address concerns raised by the European Commission.
These conditions include:


                               19
<PAGE>


     o program supply agreements to be limited to five years;


     o support of open standard in integrated television sets;


     o conditions to ensure Granada's 11 per cent equity interest
       in BSkyB does not prevent BDB competing with BSkyB.


      BDB must begin its service within 12 months of the grant of
      its license unless a later date is agreed by the ITC.


     C&W Comms will be under a "must carry" obligations for
digital qualifying services (i.e., digital simulcasts of current
analog televison broadcasts) once those digital qualifying
services commence and if C&W Comms is operating a digital system.
See "Business - Cable Television - Interactive Services - Future
Services Digital Television".


     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 Mercury, 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


                               20
<PAGE>


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 Monopolies and Mergers
Commission ("MMC").


     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;


                               21
<PAGE>


(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 must be implemented by
December 31, 1997. In November 1997, the DTI and Oftel published
a consultation document on the proposed UK implementation of the
Directive. The key elements of these proposals are:


o   modification of the interconnection condition of all
    operators' licenses;


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 and coming into force
on December 31, 1997. Consultation on certain aspects of the
regime, in particular access to cost - oriented rates will,
however, continue into 1998.


     Interconnection and Interoperability. In April 1997, Oftel
published proposals proposals to ensure interworking between
interconnecting networks and between customer premise equipment
and telecoms networks. Oftel recognises that the introduction of
new and innovative services will be an increasing characteristic
of the UK


                               22
<PAGE>


competitive environment and hence the importance of the need to
ensure that the services are interoperable between competing
networks. The primary elements of Oftel's proposals are:


(a)  for enhanced services, no explicit regulatory rules are
     imposed. These services will be addressed by ensuring
     interoperability of the basic network services they utilize.
     Were an enhanced service provider to gain market power, any
     abuse would be addressed through general fair trading
     provisions.


(b)  in relation to basic network services, rules are established
     to address network to network interface issues as well as at
     the customer interface level. Operators with market power
     must publish new network interfaces 15 months in advance of
     implementation and have an obligation to provide
     interconnection. New customer interfaces must be published
     by all operators 15 months in advance of retail launch.


     Oftel is considering responses to its statement. Statutory
Consultation on license modifications to all PTO licenses
implementing the new regime is expected in 1998.


     Indirect and Equal Access. Indirect access is access by a
customer to a network through another operator's network whereas
equal access means preselection by the customer of the indirect
access operator or dialling parity, where the number of digits
dialed for calls over the first (access) network is the same as
for calls over the second (indirect) network. In July 1996, Oftel
released a statement setting out its policy on indirect and equal
access, dealing with the continued provision by BT of indirect
access to Mercury and other operators, the possible extension of
the obligation imposed on BT to include equal access and the
possible extension of an indirect access obligation to Mercury
and other "non - dominant" operators.


     Oftel concluded in its statement that indirect access will
remain an important route for many customers who are not yet able
to take advantage of competition in direct connections to receive
the benefits of competitive provision of telecommunications
services and that, given BT's continuing dominant position in the
indirect access network, BT should continue to be obliged to
provide indirect access to other operators. However, Oftel also
concluded that this obligation on BT should not extend to
providing equal access to other operators, Oftel, having
commissioned a cost benefit analysis that, rather than a net
benefit, there would be a significant net cost in implementing
equal access. Further, Oftel concluded that "non - dominant"
operators (such as Mercury and the cable companies) should not be
required to give indirect access to other operators. Oftel has
stated that it considers the "well established" operator
threshold of 25 per cent of customer connections in a relevant
market to be a useful guide in determining whether a "non -
dominant" operator should, in the future, be required to grant
indirect access to other operators. Oftel stated that this
threshold would not automatically mean that the operator would be
required to grant indirect access, but that Oftel would
investigate the issue further in respect of that operator and
market conditions generally once that threshold was reached.


     The European Commission has finalized proposals requiring
the introduction of equal access by those operators with
significant market power by January 1, 2000. If those proposals
are adopted, a European Directive will therefore require the
introduction of equal access in the United Kingdom on this date,
subject to the deferment rights of member states under the
proposals. In November 1997, Oftel published for consultation its
proposals to deem BT and Kingston Communications as having
significant market power in the fixed line telecommunication
market.


     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.


                               23
<PAGE>


     Mercury 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 MFS, COLT 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 Bell
Cablemedia South Herts and telecommunication providers other than
BT is not limited by specific regulation by any HM Government
entity, but are subject to general competition and fair trade
rules.


     Independent Service Providers. On February 27, 1997, Oftel
published its final proposals on the promotion of competition in
services over telecommunications networks. The measures are
designed to enable independent service providers that do not own
their own network to compete on an equal basis with BT's own
retail business. Oftel will require the prices of network
services offered to independent service providers to be lower
than end - user prices so as to reflect BT retailing cost
savings. This development may result in independent service
providers launching products across BT's network that compete
with Bell Cablemedia South Herts' offerings.


     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,
     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;


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, but continued examination of the costs and benefits
     will be undertaken as an input to 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.


                               24
<PAGE>


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


     Number Portability. Business and residential
telecommunications customers changing their telephone services
from one telecommunications service provider to another
previously had to change their telephone numbers. BT did not
offer customers telephone number portability until 1996, although
its PTO license has required this, subject to certain
preconditions including technical feasibility and cost - benefit
study, since 1991. As a result, some business customers have used
their new telecommunications provider lines primarily for
outbound telephone calls and maintained their BT or Mercury lines
for inbound calls.


     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.
Bell Cablemedia South Herts believes that the absence of number
portability was a significant impediment to competition in the
telecommunication market and that its implementation will provide
and is providing BT's competitors with access to greater numbers
of customers. The number portability modifications made to BT's
license related to the portability of numbers at a particular
geographic address. In April 1997, Oftel consulted on
modifications to the licenses of BT and other operators to
implement number portability of non - geographic numbers (e.g.,
freephone, premium rate services etc.). These modifications also
altered the number portability license provisions of other
operators in a similar (though not identical) way to BT's and
were finalized for the majority of UK operators, including
Mercury and Bell Cablemedia South Herts on December 17, 1997. A
draft determination of BT's charges for non - geographic number
portability was issued in November 1997.


     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 Bell Cablemedia
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. 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.


     Convergence Green Paper. On December 3, 1997, the European
Commission adopted its Green Paper on the convergence of the
telecommunications, media and technology sectors and the
implications for regulation. This signals the start of a five
month long consultation process, finishing in April 1998. The
conclusions of this review


                               25
<PAGE>


and any resulting Directives, may have a significant impact on
the way in which C&W Comms is regulated in the United Kingdom and
elsewhere in Europe.


Employees


     The Partnership has no employees. Bell Cablemedia South
Herts is managed as a part of C&W Comms Consumer business unit,
thus benefiting from the economies of scale of sharing support
functions.


<PAGE>


                        ITEM 2. PROPERTIES


     Bell Cablemedia 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.


                               27
<PAGE>


                             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 30, 1998, the approximate number of
investors in the Partnership was 5,200.


                               28
<PAGE>


                  ITEM 6. SELECTED FINANCIAL DATA

           South Hertfordshire United Kingdom Fund, Ltd.

<TABLE>
<CAPTION>

                                                                   For the Years Ended
                                                                       December 31,
Income Statement Data:             1997                1996                 1995                1994                 1993
                                   ----                ----                 ----                ----                 ----
<S>                            <C>                 <C>                  <C>                  <C>                  <C>       
Revenues                       $23,603,312         $20,851,777          $16,554,283          $9,088,929           $2,631,555
Operating, General
and Administrative
Expenses                       (13,648,846)        (15,691,431)         (16,079,815)        (13,478,273)          (3,679,057)
Management Fees and
Allocations from
General Partner                 (6,058,801)         (3,943,096)          (2,754,941)         (2,004,964)          (1,295,522)
Depreciation and
Amortization                    (6,177,968)         (5,129,620)          (4,214,341)         (3,064,313)          (1,999,086)
Write down of
fixed assets                    (6,562,400)                  -                    -                   -                    -
                               -----------         -----------          -----------         -----------          -----------
Operating Loss                  (8,844,703)         (3,912,370)          (6,494,814)         (9,458,621)          (4,342,110)
Interest Income                     78,749              30,667               17,251             185,472               48,896
Interest Expense                (3,599,912)         (2,836,056)          (2,442,312)           (549,834)            (262,276)
Other Expenses (net)                     -                  -                     -          (2,410,724)                   -
                               -----------         -----------          -----------         -----------          -----------
Loss from continuing
operations before
minority interests             (12,365,866)         (6,717,759)          (8,919,875)        (12,233,707)          (4,555,490)
Minority Interests               3,975,339           2,100,658            2,767,869           3,991,358              298,036
                               -----------         -----------          -----------         -----------          -----------
Net Loss                        (8,390,527)         (4,617,101)          (6,152,006)         (8,242,349)          (4,257,454)
                               -----------         -----------          -----------         -----------          -----------
Net Loss per Limited
Partnership Unit                   (145.90)             (80.28)             (106.97)            (149.06)             (145.81)
Weighted Average
Number of Limited
Partnership Units
Outstanding                         56,935              56,935               56,935              54,743               28,906

Balance Sheet Data:
Total Assets                    76,963,343          91,119,344           80,239,942          73,473,610           48,640,459
Accounts Payable to
Affiliates/Related
Parties                         18,335,570          10,202,585            2,232,050           6,028,108            2,368,948
Long term debt                  31,756,220          30,290,110           24,220,560           1,043,000            1,115,381
General Partner's
Capital (Deficit)                 (336,517)           (252,612)            (206,441)           (144,921)             (62,497)
Limited Partners'
Capital                         15,685,077          23,991,699           28,562,629          34,653,115           30,078,228
Minority Interests               8,588,899          13,079,544           13,948,743          18,553,653            8,061,163
</TABLE>


                               29
<PAGE>


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

Results of Operations


      1997 Compared to 1996


      Revenues of the Partnership increased $2,751,535 for the
year ended December 31, 1997, over the similar period in 1996
from $20,851,777 in 1996 to $23,603,312 in 1997. This increase is
primarily the result of an increase in the South Herts System's
customer base. The South Herts System served approximately 20,900
basic cable television customers, 24,200 residential telephony
lines and 1,000 business telephony customers at December 31, 1996
as compared to 22,400 basic cable television customers, 27,400
residential telephony lines and 1,200 business telephony
customers at December 31, 1997.


      Operating expenses increased $2,138,446 for the year ended
December 31, 1997 over the similar period in 1996 from $9,335,910
in 1996 to $11,474,356 in 1997. This increase relates to
telephony and programming costs arising from the growth in the
South Herts' customer base.


      Selling, general and administrative expenses reduced
$4,181,031 for the year ended December 31, 1997 over the similar
period in 1996 from $6,355,521 in 1996 to $2,174,490 in 1997.
This reduction was primarily due to reductions in overhead costs,
resulting from the provision of additional services by the
General Partner in 1997 as compared to 1996.


      Management fees and allocated overhead from the General
Partner increased $2,115,705 for the year ended December 31, 1997
over the similar period in 1996 from $3,943,096 in 1996 to
$6,058,801 in 1997. 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 Cable & Wireless Communications Group. Overall, the aggregate
of selling, general and administrative expenses and management
fees and allocated overhead from the General Partner has declined
in 1997 as compared to 1996.


      Depreciation and amortization expense increased $1,048,348
for the year ended December 31, 1997 over the similar period in
1996 from $5,129,620 in 1996 to $6,177,968 in 1997. This increase
was due to an increase in the Partnership's depreciable asset
base resulting from the buildout of the South Herts System.


      During 1997, the General Partner has undertaken a review of
the net book values of Bell Cablemedia South Herts' assets. This
has 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. The Company has written
off the total value of its analog converters and headend,
amounting to $2,939,128 and $2,193,782, respectively. In
addition, it has written off part of its computer hardware and
software and freehold property amounting to $676,453 and
$753,037, respectively. The fair value of Bell Cablemedia South
Herts' assets will be reassessed over the coming year as more
information becomes available.


      Interest income increased $48,082 for the year ended
December 31, 1997 over the similar period in 1996 from $30,667 in
1996 to $78,749 in 1997. The increase in interest income was the
result of interest received on temporary cash balances.


      Interest expense increased $763,856 for the year ended
December 31, 1997 over the similar period in 1996 from $2,836,056
in 1996 to $3,599,912 in 1997. This increase was mainly due to an
increase in outstanding


                               30
<PAGE>


indebtedness during 1997, under a credit facility entered into in
April 1995, and interest on deferred fees charged by an affiliate
of the General Partner.


      1996 Compared to 1995


      Revenues of the Partnership increased $4,297,494 for the
year ended December 31, 1996, over the similar period in 1995
from $16,554,283 in 1995 to $20,851,777 in 1996. This increase is
primarily the result of an increase in the South Herts System's
customer base. The South Herts System served approximately 18,300
basic cable television customers, 20,900 residential telephony
lines and 800 business telephony customers at December 31, 1995
as compared to 20,900 basic cable television customers, 24,200
residential telephony lines and 1,000 business telephony
customers at December 31, 1996.


      Operating expenses increased $1,747,098 for the year ended
December 31, 1996 over the similar period in 1995 from $7,588,812
in 1995 to $9,335,910 in 1996. This increase relates to telephony
and programming costs arising from the growth in the South Herts'
customer base.


      Selling, general and administrative expenses reduced
$2,135,482 for the year ended December 31, 1996 over the similar
period in 1995 from $8,491,003 in 1995 to $6,355,521 in 1996.
This reduction was primarily due to reductions in overhead costs,
resulting from the provision of additional services by the
General Partner in 1996 as compared to 1995.


      Management fees and allocated overhead from the General
Partner increased $1,188,155 for the year ended December 31, 1996
over the similar period in 1995 from $2,754,941 in 1995 to
$3,943,096 in 1996. 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 BCM Group. Overall, the aggregate of selling, general and
administrative expenses and management fees and allocated
overhead from the General Partner has declined in 1996 as
compared to 1995.


      Depreciation and amortization expense increased $915,279
for the year ended December 31, 1996 over the similar period in
1995 from $4,214,341 in 1995 to $5,129,620 in 1996. This increase
was due to an increase in the Partnership's depreciable asset
base resulting from the buildout of the South Herts System,
mainly during 1995.


      Interest income increased $13,416 for the year ended
December 31, 1996 over the similar period in 1995 from $17,251 in
1995 to $30,667 in 1996. The increase in interest income was the
result of interest received on temporary cash balances during
1996 following revised treasury arrangements.


      Interest expense increased $393,744 for the year ended
December 31, 1996 over the similar period in 1995 from $2,442,312
in 1995 to $2,836,056 in 1996. This increase was mainly due to an
increase in outstanding indebtedness during 1996, under a credit
facility entered into in April 1995, and interest on deferred
fees charged by an affiliate of the General Partner in the second
half of 1996.


                               31
<PAGE>


Financial Condition


The Partnership


      The Partnership was formed on December 23, 1991 to acquire,
construct, develop, own and operate cable television/telephony
systems in the United Kingdom. As of December 31, 1997 and 1996,
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
secondary public offerings.


      In order to provide additional funding for the construction
of the South Herts System, two additional participants invested
in Bell Cablemedia South Herts in 1993 and 1994. Jones Intercable
of South Hertfordshire, Inc. invested (pound)3,400,000 in Bell
Cablemedia 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 Bell Cablemedia 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/telephone operations and franchises, including Jones
Intercable of South Hertfordshire, Inc.'s interest in Bell
Cablemedia South Herts, Jones Global Funds, Inc.'s general
partner interest in the Partnership and the Sandler Group's
interest in Bell Cablemedia South Herts to BCM in exchange for
ordinary shares (in the form of ADSs) to be issued by BCM in
connection with a planned public offering of ADSs by BCM. At that
date, BCM was indirectly owned 80 percent by BCI and 20 percent
by C&W.


      On July 22, 1994, in connection with the closing of the
public offering by BCM, Jones and the Sandler Group completed the
exchange of their interests in United Kingdom cable/telephony
operations and franchises for ADSs issued by BCM. At closing, BCM
acquired Jones Intercable of South Hertfordshire, Inc.'s interest
in Bell Cablemedia South Herts, the Sandler Group's interest in
Bell Cablemedia South Herts and the general partner interest in
the Partnership. In October 1994, the Partnership invested
(pound)5,108,900 in Bell Cablemedia South Herts for 51,089 Class
A shares and BCM invested (pound)2,554,600 in Bell Cablemedia
South Herts for 25,546 Class A shares. In November 1994, the
Partnership invested (pound)1,410,000 in Bell Cablemedia South
Herts for 14,100 Class A shares and BCM invested (pound)705,000
in Bell Cablemedia South Herts for 7,050 Class A shares. As a
result of these transactions, Bell Cablemedia South Herts is
owned 66.7 percent by the Partnership and 33.3 percent by BCM,
and the general partner of the Partnership is Fawnspring Limited,
a wholly owned subsidiary of BCM.


      As stated above, 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 Bell Cablemedia 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, 1997 the
Partnership had current liabilities of approximately $855,000
owing to BCM. Accordingly, until such time as Bell Cablemedia
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


                               32
<PAGE>


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.


Bell Cablemedia South Herts


      During 1997, Bell Cablemedia South Herts had approximately
$8.9 million of capital expenditures. Most of these expenditures
were for the construction of the South Herts System and were
largely funded by depreciation.


      On April 18, 1995, Bell Cablemedia 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 term loan portion will require
repayment of outstanding principal amounts beginning in 1999,
with the final 50% of such amounts being repaid in 2002 and 2003.
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 Bell Cablemedia South Herts.


      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, 1997. 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 Bell
Cablemedia South Herts, certain bankruptcy and insolvency events
and certain changes of ownership.


      The obligations of Bell Cablemedia South Herts under the
South Herts Credit Agreement are secured by first fixed and
floating charges over all of the assets of Bell Cablemedia South
Herts. In addition, there is a pledge of all of the share capital
of Bell Cablemedia South Herts given by BCM 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 Bell Cablemedia 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, 1997 was
(pound)19,300,000 and this amount was all drawn under Facility B.


                               33
<PAGE>


       ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

                CONSOLIDATED FINANCIAL STATEMENTS

                 AS OF DECEMBER 31, 1997 AND 1996

     AND FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

                              INDEX

                                                            Page

Independent Auditors' Reports                                35

Consolidated Balance Sheets                                  38

Consolidated Statements of Operations                        39

Consolidated Statements of Partners' Capital (Deficit)       40

Consolidated Statements of Cash Flows                        41

Notes to Consolidated Financial Statements                   42


                               34
<PAGE>


                   INDEPENDENT AUDITORS' REPORT


South Hertfordshire United Kingdom Fund, Ltd.

     We have audited the accompanying consolidated balance sheet
of South Hertfordshire United Kingdom Fund, Ltd. (a Colorado
limited partnership) as of December 31, 1997, and the related
consolidated statements of operations, partners' capital
(deficit) and cash flows for the year then ended. 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 financial position
of South Hertfordshire United Kingdom Fund, Ltd. as of December
31, 1997, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted
accounting principles in the United States.



ARTHUR ANDERSEN
London, England

March 30, 1998


                               35
<PAGE>


                   INDEPENDENT AUDITORS' REPORT



South Hertfordshire United Kingdom Fund, Ltd.

     We have audited the accompanying balance sheet of South
Hertfordshire United Kingdom Fund, Ltd. (a Colorado limited
partnership) as of December 31, 1996 and the related statements
of operations, partners' capital (deficit) and cash flows for
each of the two years in the period ended December 31, 1996.
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 audits.


     We conducted our audits in accordance with generally
accepted auditing standards. 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 audits provide a reasonable basis for our
opinion.


     In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of South Hertfordshire United Kingdom Fund, Ltd. as of December
31, 1996 and the results of its operations and its cash flows for
each of the two years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.



DELOITTE & TOUCHE
London, England

March 20, 1997


                               36
<PAGE>


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

                    CONSOLIDATED BALANCE SHEETS

                                                     December 31,
                                               -----------------------
ASSETS                                         1997               1996
                                               ----               ----
CASH AND CASH EQUIVALENTS                   $434,386          $2,200,982
RECEIVABLES
  (net of allowances for doubtful
  accounts of $765,634 at
  December 31, 1996)                               -           4,935,769
PREPAID EXPENSES                              19,919             301,868
                                         -----------         -----------
CURRENT ASSETS                               454,305           7,438,619
INVESTMENT IN CABLE TELEVISION
AND TELECOMMUNICATIONS PROPERTIES
  (net of accumulated depreciation
  and amortization of $28,220,589
  and $16,061,206 at December 31,
  1997 and 1996, respectively)            75,924,942          82,972,180
OTHER ASSETS                                 584,096             708,545
                                         -----------         -----------
    Total assets                         $76,963,343         $91,119,344
                                         ===========         ===========


                     The accompanying notes
   are an integral part of these consolidated balance sheets.


                               37
<PAGE>


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

                   CONSOLIDATED BALANCE SHEETS

                                                    December 31,
                                             ------------------------
                                             1997                1996
                                             ----                ----
LIABILITIES:
  Accounts payable to affiliates
  and related parties                    $18,335,570         $10,202,585
  Trade accounts payable                           -           4,770,009
  Accrued liabilities                        134,018           3,383,259
  Bank overdraft                                   -             719,136
  Short term obligations
  under capital leases                       888,516           1,057,014
                                         -----------         -----------
    Current liabilities                   19,358,104          20,132,003
  Long term debt                          31,756,220          30,290,010
  Long term obligations under
  capital leases                             322,498           1,259,022
                                         -----------         -----------
    Total liabilities                     51,436,822          51,681,035
                                         -----------         -----------

COMMITMENTS AND CONTINGENCIES                      -                   -
MINORITY INTERESTS                         8,588,899          13,079,544

PARTNERS' CAPITAL (DEFICIT):
  General Partner-
  Contributed capital                          1,000               1,000
    Accumulated deficit                     (337,517)           (253,612)
                                         -----------         -----------
                                            (336,517)           (252,612)
                                         -----------         -----------
Limited Partners-
Net contributed capital (56,935
  units outstanding at December 31,
  1997 and 1996 respectively)             48,817,997          48,817,997
  Accumulated deficit                    (33,132,920)        (24,826,298)
                                         -----------         -----------
                                          15,685,077          23,991,699

  Currency translation adjustment          1,589,062           2,619,678
                                         -----------         -----------
    Total partners' capital               16,937,622          26,358,765
                                         -----------         -----------
    Total liabilities and
    partners' capital                    $76,963,343         $91,119,344
                                         ===========         ===========


                     The accompanying notes
   are an integral part of these consolidated balance sheets.


                               38
<PAGE>


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

              CONSOLIDATED STATEMENTS OF OPERATIONS


                                        For the years ended December 31,
                                      -----------------------------------
                                      1997            1996           1995
                                      ----            ----           ----
REVENUES                          $23,603,312     $20,851,777    $16,554,283

COSTS AND EXPENSES:
Operating                         (11,474,356)     (9,335,910)    (7,588,812)
Selling, general and
administrative                     (2,174,490)     (6,355,521)    (8,491,003)
Management fees and
allocated overhead from
the General Partner                (6,058,801)     (3,943,096)    (2,754,941)
Depreciation and amortization      (6,177,968)     (5,129,620)    (4,214,341)
Write down of fixed assets         (6,562,400)              -              -
                                  -----------     -----------    -----------
OPERATING LOSS                     (8,844,703)     (3,912,370)    (6,494,814)
                                  -----------     -----------    -----------

OTHER INCOME (EXPENSE):
Interest income                        78,749          30,667         17,251
Interest expense                   (3,599,912)     (2,836,056)    (2,442,312)
                                  -----------     -----------    -----------

LOSS FROM CONTINUING
OPERATIONS BEFORE MINORITY
INTERESTS                         (12,365,866)     (6,717,759)    (8,919,875)
Minority interests                  3,975,339       2,100,658      2,767,869
                                  -----------     -----------    -----------
NET LOSS:                         $(8,390,527)    $(4,617,101)   $(6,152,006)
                                  ===========     ===========    ===========

ALLOCATION OF NET LOSS
(Note 1):
General Partner                      $(83,905)       $(46,171)      $(61,520)
                                  ===========     ===========    ===========
Limited Partners                  $(8,306,622)    $(4,570,930)   $(6,090,486)
                                  ===========     ===========    ===========

NET LOSS PER LIMITED
PARTNERSHIP UNIT                     $(145.90)        $(80.28)      $(106.97)
                                  ===========     ===========    ===========

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


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


                                39
<PAGE>


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

     CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)

                                        For the years ended December 31,
                                      -----------------------------------
                                      1997            1996           1995
                                      ----            ----           ----
GENERAL PARTNER:
Balance, beginning of year          $(252,612)      $(206,441)     $(144,921)
Net loss for year                     (83,905)        (46,171)       (61,520)
                                  -----------     -----------    -----------
Balance, end of year                $(336,517)      $(252,612)     $(206,441)
                                  -----------     -----------    -----------

LIMITED PARTNERS:
Balance, beginning of year        $23,991,699     $28,562,629    $34,653,115
Net loss for year                  (8,306,622)     (4,570,930)    (6,090,486)
                                  -----------     -----------    -----------
Balance, end of year              $15,685,077     $23,991,699    $28,562,629
                                  -----------     -----------    -----------


Translation adjustment              1,589,062       2,619,678        183,340
                                  -----------     -----------    -----------

Total partners' capital           $16,937,622     $26,358,765    $28,539,528
                                  ===========     ===========    ===========


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


                               40
<PAGE>


          SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.
                     (A Limited Partnership)
              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                        For the years ended December 31,
                                      -----------------------------------
                                      1997            1996           1995
                                      ----            ----           ----
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss                          $(8,390,527)    $(4,617,101)   $(6,152,006)
Adjustments to reconcile
net loss to net cash
generated by/(used in)
operating activities:
Minority interests                 (3,975,339)     (2,100,658)    (4,604,910)
Depreciation and
amortization                        6,176,710       5,129,620      4,214,341
Write down of fixed assets          6,562,400

Change in operating
assets and liabilities:
Decrease/(increase) in
other receivables                   4,813,885      (1,124,204)      (942,689)
Decrease/(increase) in
prepaid expenses and
other assets                          285,150         178,287       (644,312)
Overdraft movement                   (689,426)        658,245
Increase in accounts payable
to related parties                  8,482,550       7,134,099              -
Decrease in trade accounts
payable and accrued
liabilities                        (5,294,541)       (846,131)    (1,925,036)
                                  -----------     -----------    -----------
Net cash generated by
(used in) operating
activities                          7,970,862       4,412,157    (10,054,612)
                                  -----------     -----------    -----------

CASH FLOWS FROM
INVESTING ACTIVITIES:
Construction payments for
cable television/telephony
system                            (11,259,882)     (5,538,433)   (10,032,520)

CASH FLOWS FROM
FINANCING ACTIVITIES:
Increase in borrowings              2,624,960       3,289,440     24,220,560
Repayments of
shareholder loans                           -               -     (4,374,752)
Increase in accounts
payable to affiliates                       -               -        784,919
Repayment of property loan                  -               -     (1,043,000)
Principal payments under
capital leases                     (1,012,870)       (831,290)      (478,047)
                                  -----------     -----------    -----------
Net cash provided by
financing activities                1,612,090       2,458,150     19,109,680
                                  -----------     -----------    -----------
Effect of exchange rate
changes on cash                       (89,666)        192,377      1,514,876
                                  -----------     -----------    -----------
(Decrease)/Increase in
cash and cash equivalents          (1,766,596)      1,524,251        537,424
                                  -----------     -----------    -----------

Cash and cash equivalents,
beginning of period                 2,200,982         676,731        139,307
                                  -----------     -----------    -----------
Cash and cash equivalents,
end of period                        $434,386      $2,200,982       $676,731
                                  ===========     ===========    ===========

SUPPLEMENTAL CASH FLOW
DISCLOSURES:
Interest paid                      $3,060,608      $2,492,396     $2,245,782
                                  ===========     ===========    ===========


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


                               41
<PAGE>


           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., formerly
known as Jones 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").


      Contributed Capital


      The capitalization of the Partnership is set forth in the
accompanying Consolidated Statements of Partners' Capital
(Deficit). No existing limited 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


      Bell Cablemedia (South Hertfordshire) Limited (formerly
Jones Cable Group of South Hertfordshire Limited) ("Bell
Cablemedia 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. Bell Cablemedia 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 northwest perimeter of Greater
London, England (the "South Herts System").


       Bell Cablemedia South Herts is owned 66.7 percent by the
Partnership and 33.3 percent by Bell Cablemedia plc ("BCM"),
which itself is a subsidiary of Cable & Wireless Communications
plc. The general partner of the Partnership is Fawnspring
Limited, 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.


                               42
<PAGE>


(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. The
Partnership tax returns are also prepared on the accrual basis.


      Principles of Consolidation


      As a result of the Partnership's majority ownership of Bell
Cablemedia South Herts, it has been consolidated with the
Partnership's operations in the accompanying consolidated
financial statements as of December 31, 1997, 1996 and 1995.


      Cash and Cash Equivalents


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


      Currency Exchange Rates


      The costs incurred by Bell Cablemedia South Herts are
converted from United Kingdom pounds sterling to United States
dollars pursuant to Statement of Financial Accounting Standard
No. 52 ("SFAS 52"). Since pounds sterling represent Bell
Cablemedia South Herts' functional currency, translation
adjustments related to recording assets and liabilities in U.S.
dollars at current exchange rates are charged or credited
directly to cumulative translation adjustment in partners'
capital. In the discretion of the General Partner, net proceeds
received from the sale of Partnership interests will be converted
from United States dollars to United Kingdom pounds sterling.
Likewise, net proceeds from the sale or refinancing of the
Partnership's cable television/telephony properties will be
converted from United Kingdom pounds sterling to United States
dollars in order to make any distributions to the partners.


      Limited Partner investments in Bell Cablemedia South Herts
were made at an average exchange rate of $1.62 per United Kingdom
pound sterling. The average exchange rate used in the preparation
of this report for the year ended December 31, 1997 was $1.64 per
United Kingdom pound sterling and the exchange rate at December
31, 1997 was $1.65 per United Kingdom pound sterling.


      Property, Plant and Equipment


      Prior to receiving the first revenues from subscribers of
the cable television/telephony system constructed by Bell
Cablemedia South Herts, all construction costs, operating
expenses and interest related to the system are capitalized. From
the time of such receipt until completion of the main
construction build (defined as the "prematurity period"), which
in most cases is no longer than two years, except in major urban
markets, in which case the prematurity period may be longer than
two years, portions of certain fixed operating expenses and
interest are capitalized in addition to direct construction
costs. The General Partner has estimated a prematurity period of
3 years for the South Herts System based upon its urban location,
housing density and requirement for mostly underground cable. The


                               43
<PAGE>


portions capitalized are decreased as progress is made toward
obtaining the subscriber level expected at the end of the
prematurity period, after which no further expenses are
capitalized. At December 31, 1997 and 1996, the investment in the
cable television and telecommunications network was comprised of
$70,989,325 and $77,901,431 of cable network and other electronic
equipment, $2,308,713 and $2,256,896 of freehold buildings, and
$2,626,904 and $2,813,853 of office and other electronic
equipment, respectively. As of December 31, 1997, the South Herts
System had received $73,032,003 of revenue from operations.


      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 freehold property 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.


      During 1997, the General Partner has undertaken a review of
the net book values of Bell Cablemedia South Herts' assets. This
has 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. The Company has written
off the total value of its analog converters and headend,
amounting to $2,939,128 and $2,193,782, respectively. In
addition, it has written off part of its computer hardware and
software and freehold property amounting to $676,453 and
$753,037, respectively. The fair value of Bell Cablemedia South
Herts' assets will be reassessed over the coming year as more
information becomes available.


      Revenue Recognition


      Subscriber prepayments are initially deferred and
recognized as revenue when earned.


      Current assets and liabilities


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


                               44
<PAGE>


      Pervasiveness 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.


      New Accounting Pronouncements


      SFAS 128 was issued in June 1997 and is effective for
fiscal years beginning after December 15, 1997. This statement
simplifies the standards for computing earnings per share
previously found in APB Opinion 15, Earnings per share and makes
them more comparative to international EPS standards. Statement
128 replaces the presentation of primary EPS with a presentation
of basic EPS. In addition the statement requires dual
presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the
diluted EPS computation. Statement 128 does not have any impact
on the accounts of the Partnership.


(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 Bell Cablemedia South Herts. During the
construction phases of the South Herts 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 the gross revenues,
excluding revenues from the sale of cable television/telephony
systems. The consulting fee is calculated and payable monthly.
Consulting fees paid or payable by Bell Cablemedia South Herts
for the years ended December 31, 1997, 1996 and 1995 were
$1,310,839, $1,370,755 and $1,068,887, respectively. All these
amounts were expensed on the Consolidated Statements of
Operations for the years ended December 31, 1997, 1996 and 1995,
respectively.


      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.


                               45
<PAGE>


      The General Partner and its affiliates are entitled to
reimbursement from Bell Cablemedia 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, 1997, 1996 and 1995, reimbursement made by Bell
Cablemedia South Herts and the Partnership to the General Partner
or its affiliates (or its predecessor) for any allocable direct
and indirect expenses totaled $4,747,962, $2,572,341 and
$1,419,554 respectively.


      In connection with Bell Cablemedia South Herts'
(pound)20,000,000 revolving and term loan credit facility
agreement, originally entered into in April 1995, amended in
October 1996 and described in section (4) below, Bell Cablemedia
Management Limited, an affiliate of the General Partner, received
a 1% financing fee. The fee was allocated between the investors
in Bell Cablemedia South Herts in proportion to their
shareholding. The Partnership's share of this fee amounted to
$266,267, which was expensed in 1995.


      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 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, 1997
and 1996, interest on deferred fees of $449,341 and $136,183,
respectively was charged by an affiliate of the General Partner,
and interest on advances of $51,294 and $15,676, respectively was
charged by the General Partner. For the year ended December 31,
1995 no such interest was charged to the Partnership by the
General Partner or its affiliates.


(4)   FINANCING


      The Partnership


      As stated above, 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 Bell Cablemedia 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, 1997, the
Partnership had current liabilities of approximately $855,000
owing to BCM. Accordingly, until such time as Bell Cablemedia
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.


                               46
<PAGE>


Bell Cablemedia South Herts


      On April 18, 1995, Bell Cablemedia 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 term loan portion will require
repayment of outstanding principal amounts beginning in 1999,
with the final 50% of such amounts being repaid in 2002 and 2003.
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 Bell Cablemedia South Herts.


      Repayment of the credit facility falls due as follows:


                 (pound)             $
1999            1,351,000       2,222,935
2000            3,474,000       5,716,120
2001            4,825,000       7,939,055
2002            4,825,000       7,939,055
2003            4,825,000       7,939,055
              ---------------------------
               19,300,000      31,756,220
              ---------------------------



      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, 1997. 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 Bell
Cablemedia South Herts, certain bankruptcy and insolvency events
and certain changes of ownership.


      The obligations of Bell Cablemedia South Herts under the
South Herts Credit Agreement are secured by first fixed and
floating charges over all of the assets of Bell Cablemedia South
Herts. In


                               47
<PAGE>


addition, there is a pledge of all of the share capital of Bell
Cablemedia South Herts given by BCM and the Partnership as
additional security for the facility.


      Commitment fees are payable on the amount of any undrawn
facility at the rate of 0.4% per annum. Commitment fees paid
during the year ended December 31, 1997 were $9,461.


      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, 1997 was
(pound)19,300,000 and this amount was all drawn under Facility B.


(5)   INCOME TAXES


      Income taxes have not been recorded in the accompanying
consolidated financial statements because they accrue directly to
the partners. The Federal and state income tax returns of the
Partnership are prepared and filed by the General Partner. There
are no significant differences between taxable income and the net
income reported in the Consolidated Statements of Operations.


      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 likely 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. Corporation tax is currently charged at
a rate of 31 percent, with a lower rate of 21 percent applying to
companies with profits of less than (pound)300,000. Marginal
relief applies where the profits exceed (pound)300,000 but not
(pound)1,500,000. These limits are reduced proportionately where
there is more than one associated company. Such corporation will
be able to carry forward losses from operations to be offset
against subsequent profits for the same operations for an
indefinite number of years. No tax benefit has been recognized in
the accompanying financial statements for tax net operating
losses generated by Bell Cablemedia South Herts. Bell Cablemedia
South Herts has approximately (pound)10.4 million of tax net
operating losses carried forward at December 31, 1997
((pound)10.4 million at December 31, 1996).


                               48
<PAGE>


(6)   OBLIGATIONS UNDER CAPITAL LEASES


                                          1997          1996
Minimum lease payments due:                 $             $
Less than one year                       979,049     1,266,622
1-2 years                                315,402     1,018,261
2-3 years                                 40,174       328,034
3-4 years                                      -        41,783
                                       ---------     ---------
                                       1,334,625     2,654,700
Less finance charges allocated
to future periods                       (123,611)     (338,664)
                                       ---------     ---------
                                       1,211,014     2,316,036
                                       =========     =========
  Due within one year                    888,516     1,057,014
  Due after more than one year           322,498     1,259,022
                                       ---------     ---------
                                       1,211,014     2,316,036
                                       =========     =========


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


                              - None


                               49
<PAGE>


                             PART III.

    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.


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

      Graham Wallace            49    Chief Executive


      Nicholas Mearing-Smith    48    Finance Director


      Robert Drolet             41    Director and Company
                                      Secretary


Graham Wallace, a fellow of The Chartered Institute of Management
Accountants, was Chief Executive of the Restaurants and Services
division of Granada Group between September 1995 and January
1997. He joined the Granada in June 1986 as Head of Finance and
Planning and in October 1989 was appointed to the Board of
Granada Group plc as Finance Director. During this time he was
involved in setting up British Satellite Broadcasting and was
closely involved in the merger of British Satellite Broadcasting
and Sky in 1990. Between October 1992 and September 1995, he was
Chief Executive Office of the UK television and video rental
business of the Granada Group plc. Mr. Wallace read engineering
at Imperial College, London.


Nicholas Mearing-Smith, a fellow of the Institute of Chartered
Accountants and a member of the Institute of Taxation, was
appointed Chief Financial Officer of NYNEX CableComms UK in May
1993. Between 1991 and 1993, he was Executive Group Director of
NYNEX CableComms UK, responsible for regulatory issues,
interconnect negotiations, information systems, real estate and
public relations. With extensive experience of investment and
banking communities, Mr Mearing-Smith has entrepreneurial and
major corporate experience, in addition to a regulatory
background and exposure to the convergence of the
telecommunication and entertainment markets.


Mr. Drolet has been a Director of the General Partner since
January 1997. On March 19, 1997 he was appointed as Legal
Director and Company Secretary of Cable & Wireless Communications
plc. 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.


                               50
<PAGE>


                  ITEM 11. EXECUTIVE COMPENSATION


      The Partnership has no employees; however, various
personnel are required to operate the South Herts System.
Personnel are employed by Cable & Wireless Communications and its
affiliates and, pursuant to the terms of the Partnership's
limited partnership agreement, the cost of such employment is
charged by Cable & Wireless Communications 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 Bell Cablemedia 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, 1997 totaled
$1,310,839.


      The General Partner and its affiliates are entitled to
reimbursement from Bell Cablemedia 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, 1997 amounted to $500,635.


                               51
<PAGE>


                             PART IV.



       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 31 for
             the list of financial statements and exhibits
             thereto filed as part of this report.


      2.     The following exhibits are filed herewith:


      27.1   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.


                               52
<PAGE>









                       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: /s/ Nicholas Mearing-Smith
                                  ------------------------------
                                     Nicholas Mearing-Smith
Date: March 30, 1998                   Director


     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.


                               By: /s/ Nicholas Mearing-Smith
                                  ------------------------------
                                     Nicholas Mearing-Smith
                                     Director of
                                     Fawnspring Limited
Dated: March 30, 1998                (Finance Director)


                               By: /s/ Robert Drolet
                                  ------------------------------
                                     Robert Drolet
                                     Director of
                                     Fawnspring Limited
Dated: March 30, 1998                (Legal Director and
                                     Company Secretary)


                               53
<PAGE>


EXHIBIT INDEX

Number   Description

27       Financial Data Schedule.


                               54