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

                                    FORM 10-Q

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

                       For the quarter ended June 30, 1997

                                       or

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

               For the transition period from _______ to_________

                          Commission File No. 333-05017

                           UIH AUSTRALIA/PACIFIC, INC.
             (Exact name of Registrant as specified in its charter)

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

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

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







     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12 months and (2) has been  subject to such  filing
requirements for the past 90 days. Yes  X    No
                                      -----     -----


     The Company has no  publicly-traded  shares of capital stock.  As of August
14, 1997, the Company had 500 shares of common stock outstanding.



<PAGE>
<TABLE>
<CAPTION>
                                               UIH AUSTRALIA/PACIFIC, INC.

                                                    TABLE OF CONTENTS



                                                                                                                Page
                                                                                                               Number
                                                                                                               ------
                                              PART I - FINANCIAL INFORMATION
                                              ------------------------------

<S>                                                                                                                <C>    
Item 1 - Financial Statements
------

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

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

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

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

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


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


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

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

Item 6 - Exhibits and Reports on Form 8-K.....................................................................    16
------                                   
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                               UIH AUSTRALIA/PACIFIC, INC.
                                          CONDENSED CONSOLIDATED BALANCE SHEETS
                                (Stated in thousands, except share and per share amounts)
                                                       (Unaudited)

                                                                                                         June 30,      December 31,
                                                                                                           1997           1996 
                                                                                                         --------      ------------
<S>                                                                                                      <C>             <C> 
ASSETS  
Current assets
   Cash and cash equivalents ...................................................................         $  6,859        $ 19,220
   Short-term investments ......................................................................               --          18,640
   Subscriber receivables ......................................................................            1,885           1,625
   Related party receivables ...................................................................            2,273           1,958
   Other current assets ........................................................................            3,564           2,393
                                                                                                         --------        --------
       Total current assets ....................................................................           14,581          43,836

Other investments in affiliated companies, including marketable equity securities ..............            1,077           1,372
Property, plant and equipment, net of accumulated depreciation of $52,768 and
   $27,038, respectively .......................................................................          192,969         193,170
License fees, net of accumulated amortization of $3,126 and $2,520, respectively ...............            8,963          10,387
Goodwill, net of accumulated amortization of $7,881 and $3,835, respectively ...................           56,289          58,134
Other non-current assets, net, including related party receivables of $1,600 and
   $1,600, respectively ........................................................................           13,406          12,424
                                                                                                         --------        --------
       Total assets ............................................................................         $287,285        $319,323
                                                                                                         ========        ========

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities
   Accrued liabilities and accounts payable, including related party payables of
     $3,353 and $1,905, respectively ...........................................................         $ 25,819        $ 20,336
   Construction payables .......................................................................            8,978          38,407
   Accrued funding obligation ..................................................................            1,574           1,270
   Other current liabilities, including related party notes of $9,998 and $0,
     respectively ..............................................................................           11,088           1,108
                                                                                                         --------        --------
       Total current liabilities................................................................           47,459          61,121

Due to parent ..................................................................................            4,434           2,758
Senior discount notes and other liabilities ....................................................          305,701         251,397
                                                                                                         --------        --------
       Total liabilities........................................................................          357,594         315,276
                                                                                                         --------        --------

Stockholder's Equity (Deficit):
   Common stock, $0.01 par value, 1,000 shares authorized, 500 and 500 shares
     issued and outstanding, respectively ......................................................               --              --
   Additional paid-in capital ..................................................................          112,485         112,485
   Unrealized loss on investment ...............................................................           (3,707)         (3,412)
   Cumulative translation adjustments ..........................................................           (1,526)          1,867
   Accumulated deficit .........................................................................         (177,561)       (106,893)
                                                                                                         --------        --------
       Total stockholder's equity (deficit) ....................................................          (70,309)          4,047
                                                                                                         --------        --------
       Total liabilities and stockholder's equity (deficit) ....................................         $287,285        $319,323
                                                                                                         ========        ========

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

                                                            2
<PAGE>
<TABLE>
<CAPTION>
                                               UIH AUSTRALIA/PACIFIC, INC.
                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Stated in thousands, except share and per share amounts)
                                                       (Unaudited)


                                                                       For the Three Months Ended         For the Six Months Ended
                                                                               June 30,                         June 30,
                                                                       --------------------------        --------------------------
                                                                           1997            1996            1997              1996   
                                                                        ---------        --------        --------          --------
<S>                                                                     <C>              <C>             <C>               <C>  
Service and other revenue ......................................        $ 16,219         $  3,936        $  30,711         $  5,870

System operating expense, including related party
   expense of $919, $80, $1,321 and $165,
   respectively ................................................         (11,807)          (3,496)         (21,869)          (7,014)
System selling, general and administrative expense .............         (11,771)          (6,633)         (22,805)         (10,242)
Corporate general and  administrative  expense,
   including  management fees to a
   related party of $197, $187, $385 and $375,
   respectively ................................................            (293)            (240)            (576)            (532)
Depreciation and amortization ..................................         (18,431)          (5,501)         (35,736)          (8,249)
                                                                        --------         --------        ---------         --------

   Net operating loss ..........................................         (26,083)         (11,934)         (50,275)         (20,167)

Equity in losses of affiliated companies .......................          (1,077)          (1,535)          (1,443)          (2,568)
Interest income ................................................              63            1,260              279            1,317
Interest expense ...............................................          (9,793)          (3,840)         (18,384)          (4,064)
Interest expense, related party, net ...........................             (48)            (475)             (78)            (144)
Other (expense) income, net ....................................            (549)             906             (767)             618
                                                                        --------         --------        ---------         --------

   Net loss before minority interest ...........................         (37,487)         (15,618)         (70,668)         (25,008)

Minority interest in subsidiaries ..............................              --              879               --            1,605
                                                                        --------         --------        ---------         --------

   Net loss ....................................................        $(37,487)        $(14,739)       $ (70,668)        $(23,403)
                                                                        ========         ========        =========         ========

Net loss per common share ......................................        $(74,974)        $(30,265)       $(141,336)        $(48,055)
                                                                        ========         ========        =========         ========

Weighted-average number of common shares
   outstanding .................................................             500              487              500              487
                                                                             ===              ===              ===              ===



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

                                                            3
<PAGE>
<TABLE>
<CAPTION>
                                                UIH AUSTRALIA/PACIFIC, INC.
                              CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)
                                         (Stated in thousands, except share amounts)
                                                       (Unaudited)



                                            Common Stock         Additional    Unrealized    Cumulative
                                         ------------------        Paid-In      Loss on      Translation    Accumulated
                                         Shares      Amount        Capital     Investment    Adjustments      Deficit       Total
                                         ------      ------      ----------    ----------    -----------    -----------     -----
<S>                                      <C>         <C>          <C>           <C>            <C>          <C>           <C>
Balances, December 31, 1996 ...........   500        $  --        $112,485      $(3,412)      $ 1,867       $(106,893)    $  4,047

Unrealized loss on investment .........    --           --              --         (295)           --              --         (295)
Change in cumulative translation
  adjustments .........................    --           --              --           --        (3,393)             --       (3,393)
Net loss ..............................    --           --              --           --            --         (70,668)     (70,668)
                                         ----        -----        --------      -------       -------       ---------     --------

Balances, June 30, 1997 ...............   500        $  --        $112,485      $(3,707)      $(1,526)      $(177,561)    $(70,309)
                                         ====        =====        ========      =======       =======       =========     ========


















         The  accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                                              4
<PAGE>
<TABLE>
<CAPTION>
                                                      UIH AUSTRALIA/PACIFIC, INC.
                                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (Stated in thousands)
                                                             (Unaudited)
                                                                                                         For the Six Months Ended
                                                                                                                  June 30,
                                                                                                        ----------------------------
                                                                                                           1997               1996 
                                                                                                        ---------          ---------
<S>                                                                                                     <C>                <C>  
Cash flows from operating activities:
Net loss .....................................................................................          $(70,668)          $(23,403)
Adjustments to reconcile net loss to net cash flows from operating activities:
   Depreciation and amortization .............................................................            35,736              8,249
   Equity in losses of affiliated companies ..................................................             1,443              2,568
   Minority interest share of losses .........................................................                --             (1,605)
   Increase (decrease) in technical assistance agreement payables ............................             2,966               (844)
   Accretion of interest on senior discount notes ............................................            17,498              4,064
   Increase in subscriber receivables ........................................................              (326)            (1,388)
   Increase in other assets ..................................................................            (2,078)            (5,946)
   Increase in accounts payable, accrued liabilities and other ...............................             6,903              3,863
                                                                                                        --------           --------

Net cash flows from operating activities .....................................................            (8,526)           (14,442)
                                                                                                        --------           --------

Cash flows from investing activities:
Purchase of short-term investments ...........................................................            (3,663)           (70,627)
Proceeds from sale of short-term investments .................................................            22,303                 --
Restricted cash deposited ....................................................................                --            (10,000)
Investments in and advances to affiliated companies and other investments ....................            (1,138)           (10,450)
Increase in goodwill .........................................................................                --               (218)
Purchase of property, plant and equipment ....................................................           (41,776)           (43,610)
Increase (decrease) in construction payables .................................................           (28,163)             6,521
                                                                                                        --------           --------

Net cash flows from investing activities .....................................................           (52,437)          (128,384)
                                                                                                        --------           --------

Cash flows from financing activities:
Capital contributions from parent ............................................................                --             10,707
Proceeds from offering of senior discount notes ..............................................                --            225,115
Deferred debt offering costs .................................................................            (1,502)            (9,411)
Borrowing on related party payables to parent ................................................            11,633             15,073
Payment on bridge loan payable to parent .....................................................                --            (25,000)
Borrowing on other debt ......................................................................            39,286                 --
Payment on other debt ........................................................................              (777)                --
                                                                                                        --------           --------

Net cash flows from financing activities .....................................................            48,640            216,484
                                                                                                        --------           --------

Effect of exchange rates on cash .............................................................               (38)               855
                                                                                                        --------           --------
Increase (decrease) in cash and cash equivalents .............................................           (12,361)            74,513
Cash and cash equivalents, beginning of period ...............................................            19,220              8,730
                                                                                                        --------           --------
Cash and cash equivalents, end of period .....................................................          $  6,859           $ 83,243
                                                                                                        ========           ========

Non-cash investing and financing activities:
   Cash received for interest ................................................................          $    305           $    131
                                                                                                        ========           ========
   Assets acquired with capital leases .......................................................          $     --           $  1,707
                                                                                                        ========           ========

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

                                                                  5
<PAGE>
                           UIH AUSTRALIA/PACIFIC, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF JUNE 30, 1997
                      (Monetary amounts stated in thousands)
                                   (Unaudited)

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

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

      On May 15, 1997, the Company's minority holder exchanged its 2.6% interest
for  a 2%  interest  in  UIH  Asia/Pacific  Communications,  Inc.  ("UAP"),  the
Company's immediate parent.

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

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

      The Company accounts for its investment in XYZ  Entertainment  Pty Limited
("XYZ Entertainment") under the equity method of accounting.  Under this method,
the  investment,  originally  recorded at cost,  is adjusted  to  recognize  the
Company's  proportionate  share of net  earnings  or  losses  of the  affiliate,
limited  to the  extent  of the  Company's  investment  in and  advances  to the
affiliate,   including  any  debt  guarantees  or  other   contractual   funding
commitments.  The Company's proportionate share of net earnings or losses of XYZ
Entertainment  includes the  amortization  of basis  differences  related to the
excess of cost over net tangible assets acquired. Investments in and advances to
XYZ Entertainment are as follows:
<TABLE>
<CAPTION>
                                                                                  As of
                                                                               June 30, 1997
                                               ------------------------------------------------------------------------
                                                 Investments in          Cumulative Equity       Cumulative
                                                 and Advances to           in Losses of          Translation
                                               Affiliated Company       Affiliated Company       Adjustments      Total
                                               ------------------       ------------------       ------------     -----
<S>                                                 <C>                       <C>                    <C>          <C> 
XYZ Entertainment.......................            $17,645(1)                $(17,755)              $110         $   --
                                                    =======                   ========               ====         ======
</TABLE>
<TABLE>
<CAPTION>
                                                                                 As of
                                                                            December 31, 1996
                                               --------------------------------------------------------------------------
                                                 Investments in          Cumulative Equity       Cumulative
                                                 and Advances to           in Losses of          Translation
                                               Affiliated Company       Affiliated Company       Adjustments       Total
                                               ------------------       ------------------       -----------       -----
<S>                                                 <C>                       <C>                    <C>           <C> 
XYZ Entertainment.......................            $16,202(1)                $(16,312)              $110          $   --
                                                    =======                   ========               ====          ======
</TABLE>
(1)   Includes an accrued  funding  obligation  of $1,574 and $1,270 at June 30,
      1997 and  December  31,  1996,  respectively.  The Company does not have a
      contractual funding obligation to XYZ Entertainment;  however, the Company
      would  face  significant  and  punitive  dilution  if it did not  make the
      scheduled fundings.

      The  Company  recognized  $1,443  and  $4,484  of equity  losses  from XYZ
Entertainment for the six months ended June 30, 1997 and the year ended December
31, 1996,  respectively.  In addition, the Company recognized $1,638 and $930 of
equity  losses  from XYZ  Entertainment  and Saturn,  respectively,  for the six
months ended June 30, 1996.
                                       6
<PAGE>
                           UIH AUSTRALIA/PACIFIC, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

PROPERTY, PLANT AND EQUIPMENT

     Property,  plant and equipment are stated at cost. Additions,  replacements
and  major  improvements  are  capitalized,  and  costs for  normal  repair  and
maintenance of property, plant and equipment are charged to expense as incurred.
All  subscriber  premises  equipment  and  capitalized   installation  labor  is
depreciated over 3 years. Upon disconnection of a subscriber, the remaining book
value of the subscriber equipment, excluding converters which are recovered upon
disconnection,  and the capitalized labor are written off.  Depreciation expense
is computed using the straight-line method over the estimated useful lives shown
below.  Detail of property, plant and equipment is as follows:
<TABLE>
<CAPTION>
                                                                           As of              As of
                                                                         June 30,         December 31,     Average
                                                                           1997               1996           Life
                                                                         --------         ------------     -------
<S>                                                                      <C>                <C>              <C>  
        MMDS distribution facilities.............................        $ 58,423           $ 57,073         5-10
        Cable distribution networks..............................          15,922             11,672         5-10
        Subscriber premises equipment and converters.............         142,983            125,238            3
        Furniture and fixtures...................................           2,090              2,031         5-10
        Leasehold improvements...................................           3,362              3,465         6-10
        Other....................................................          22,957             20,729          3-5
                                                                         --------           --------    
                                                                          245,737            220,208
                Accumulated depreciation.........................         (52,768)           (27,038)
                                                                         --------           --------
                Net property, plant and equipment................        $192,969           $193,170
                                                                         ========           ========
</TABLE>

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

FOREIGN OPERATIONS

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

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

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

RECLASSIFICATIONS

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

                                       7

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


2.   SENIOR DISCOUNT NOTES AND OTHER LIABILITIES

     Senior discount notes and other liabilities consists of the following:
<TABLE>
<CAPTION>
                                                                                   As of                 As of
                                                                                  June 30,            December 31,
                                                                                    1997                  1996
                                                                                  --------            ------------
<S>                                                                               <C>                   <C>   
     Senior discount notes, net of unamortized discount.........................  $262,587              $245,182
     Austar interim financing facility, including accrued
       interest of $521 and $0, respectively....................................    38,212                    --
     Capitalized lease obligations..............................................     3,846                 4,522
     Mortgage note, interest at 7.885%, 7 year term.............................     1,025                 1,252
     Other......................................................................       930                 1,337
                                                                                  --------              --------
                                                                                   306,600               252,293
         Less current portion...................................................      (899)                 (896)
                                                                                  --------              --------
                                                                                  $305,701              $251,397
                                                                                  ========              ========
</TABLE>

     On May 14, 1996, the Company  raised total gross proceeds of  approximately
$225,115 from the private  placement of $443,000  aggregate  principal amount of
14% senior discount notes (the "Notes").  No cash interest payments are required
until  May 15,  2001,  at which  time cash  interest  payments  will be  payable
semi-annually on each May 15 and November 15. The Notes are due May 15, 2006. In
September 1996, the Notes were exchanged for 14% Senior Discount Notes due 2006,
Series B. Effective May 16, 1997, the interest rate on the Notes increased by an
additional 0.75% per annum to 14.75%.

     If the Company does not  consummate an issuance of capital stock  resulting
in gross proceeds to the Company of at least $70,000 (an "Equity Sale") prior to
November  16,  1997,  the then  holders of the Notes will be entitled to receive
warrants  to  purchase  3% of the  common  stock of the  Company,  assuming  the
aggregate fair market value of the Company's equity is $150,000,  or, in certain
circumstances,  of the Company's  immediate parent.  The Company plans to pursue
additional  sources of funding that may constitute an Equity Sale although there
can be no assurance  that the Company will be successful in concluding an Equity
Sale prior to November 16, 1997.

     In July 1997, Austar secured a financing  facility from a bank for a Senior
Syndicated  Term  Debt  Facility  in the  amount  of  Australian  $("A$")200,000
(US$155,000)  (the "Bank  Facility").  The proceeds of the Bank Facility will be
used to fund Austar's subscriber acquisition and working capital needs. The Bank
Facility  consists  of three  sub-facilities:  (i)  A$50,000  revolving  working
capital  facility;  (ii)  A$60,000  cash  advance  facility  available  upon the
contribution  of  additional  equity on a 2:1  debt-to-equity  basis;  and (iii)
A$90,000  term loan  facility,  which will be  available  on the basis of Austar
having achieved minimum  subscriber and operating cash flow levels.  The maximum
amount of equity required in (ii) above would be A$30,000, approximately A$7,500
of which has already been contributed  during 1997 and the remainder of which is
expected to be  contributed  by a third  party  equity  provider,  UAP or United
International  Holdings, Inc. ("UIH"). The cash advance and term loan facilities
are fully repayable pursuant to an amortization  schedule beginning December 31,
2001 and ending June 30, 2004.  As of June 30, 1997,  Austar had drawn  A$50,000
(US$38,840 converted using the exchange rate on each funding date) on an interim
financing facility,  which was subsequently repaid from the proceeds of the Bank
Facility.

                                       8

<PAGE>

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


3.   RELATED PARTY

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

     As of June 30, 1997, United International  Properties,  Inc. ("UIPI"),  the
immediate  parent of UAP,  had loaned  Saturn  $4,999 for the  expansion  of its
system.  This loan  accrues  interest  at 15% and is due on  September  12, 1997
unless  extended at UIPI's  option.  As of June 30,  1997,  UIPI had also loaned
$4,999 to UIH Australia/Pacific  Finance, Inc., a wholly-owned subsidiary of the
Company. This loan accrues interest at 15% and is due on demand.

     Included in the amount due to parent is the following:
<TABLE>
<CAPTION>

                                                                                             As of         As of
                                                                                           June 30,     December 31,
                                                                                             1997          1996
                                                                                           --------     -----------
<S>                                                                                         <C>            <C>  
      Austar technical assistance agreement obligations..............................       $2,086         $1,135
      Telefenua technical assistance agreement obligations...........................        2,304          1,879
      Saturn technical assistance agreement obligations..............................        1,514          1,002
      Other..........................................................................        1,883            647
                                                                                            ------         ------
                                                                                             7,787          4,663
           Less current portion......................................................       (3,353)        (1,905)
                                                                                            ------         ------
                                                                                            $4,434         $2,758
                                                                                            ======         ======
</TABLE>

4.    SUBSEQUENT EVENT

      In July 1997, SaskTel Holdings (New Zealand), Inc. ("SaskTel") purchased a
35%  equity   interest  in  Saturn  by  investing   approximately   New  Zealand
$("NZ$")30,000  (US$20,000) for its shares. The Company believes that SaskTel, a
division   of   Saskatchewan    Telecommunications   Holdings   Corporation   of
Saskatchewan, Canada, will contribute telephony expertise to Saturn in providing
cable/telephony  service in the Wellington,  New Zealand area. The proceeds from
the sale are  expected  to  provide  a  portion  of the  capital  necessary  for
completion of the project,  and  SaskTel's  35% equity  interest will reduce the
Company's proportionate share of future fundings.

                                       9

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

                     (Monetary amounts stated in thousands)


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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

     The  Company is  responsible  for its  proportionate  share of the  capital
requirements  of the  operating  companies and has funded its share to date with
capital  contributed  by UIH and from the  proceeds of the Notes.  In July 1997,
Austar  secured  the  Bank  Facility  of  A$200,000  (US$155,000)  to  fund  its
subscriber acquisition and working capital needs (see Note 2).

     If the Company does not  consummate an issuance of capital stock  resulting
in an Equity  Sale prior to November  16,  1997,  the then  holders of the Notes
would be entitled to receive  warrants to purchase 3% of the common stock of the
Company,  assuming the aggregate  fair market value of the  Company's  equity is
$150,000, or, in certain  circumstances,  of the Company's immediate parent. The
Company  plans to pursue  additional  sources of funding that may  constitute an
Equity  Sale  although  there  can be no  assurance  that  the  Company  will be
successful in concluding an Equity Sale prior to November 16, 1997.

     The  following  table  sets  forth,  as of June  30,  1997,  (i) the  total
estimated  funding required for the  construction  and initial  marketing of the
operating  companies'  systems in their existing  license  areas,  including any
capital  invested to date and the application of any operating cash flow sources
for such operating companies,  (ii) the total amount of capital invested in each
of the operating  companies and the portion  funded by the Company and (iii) the
total estimated  additional  funding required based on the assumptions stated in
(i) above and the Company's estimated portion of such funding.  Such amounts are
expected  to be funded  over the next 24 to 36 months.  The  estimated  required
additional  funding  numbers  below have not been  reduced to give effect to any
surplus cash flow of any one operating  company which might be available to fund
the  requirements  of another  operating  company.  To the extent the  operating
companies fund their construction and other costs through project financing, the
Company's   portion   of   estimated   additional   funding   would  be  reduced
proportionately.  The Company's portion of estimated additional funding would be
increased  proportionately to the extent cash flow from the operating  companies
and other  sources of  financing  are not  sufficient  to meet  project  funding
requirements.  To the extent that the other  shareholders  of XYZ  Entertainment
fail to fund their pro rata share of the  additional  shareholder  capital,  the
Company may elect to fund all or a portion of such shortfall.

                                       10
<PAGE>
<TABLE>
<CAPTION>
                            Estimated Total Project             Capital Invested                Estimated Required
                             Funding Requirements             As of June 30, 1997(1)            Additional Funding  
     Operating             ------------------------      ----------------------------------  ------------------------
     Company               The Company      Total        The Company(2)       Total(2)       The Company        Total
     -------               -----------      -----        --------------       --------       -----------        -----
<S>                         <C>           <C>              <C>               <C>             <C>              <C>
Austar                      $369,800      $369,800         $250,461(3)       $250,461(3)     $119,339(4)      $119,339
Saturn                       109,700       109,700           30,213(5)         30,213(5)       79,487(6)        79,487
Telefenua                     17,400        17,400           16,737            16,737             663              663
XYZ Entertainment             14,000        56,000           11,673            46,692           2,327            9,308
United Wireless                8,200         8,200            6,111             6,111           2,089            2,089
                            --------      --------         --------          --------        --------         --------
     Total                  $519,100      $561,100         $315,195          $350,214        $203,905         $210,886
                            ========      ========         ========          ========        ========         ========
</TABLE>
(1)  Certain amounts  contributed by the Company's  partners were contributed in
     currencies  other than U.S.  dollars.  Such amounts have been translated to
     U.S. dollars using a convenience translation.
(2)  Includes amounts contributed to Austar  (approximately  $11,000) and Saturn
     (approximately  $2,920)  by  shareholders  other  than the  Company,  which
     amounts were contributed by such  shareholders  prior to the acquisition of
     their respective interests by the Company.
(3)  Does not include the $58,600  paid by the Company to increase  its economic
     interest in Austar to approximately 100%.
(4)  The Austar Bank  Facility of A$200,000  (US$155,000)  reduces the Company's
     portion of the remaining funding requirements.  As of June 30, 1997, Austar
     had drawn  A$50,000  (US$38,840  converted  using the exchange rate on each
     funding date) on an interim financing facility (see Note 2).
(5)  Does not include the value of shares of common stock  exchanged  for shares
     of the Company to increase the Company's interest in Saturn to 100%.
(6)  The SaskTel investment will reduce the Company's future funding requirement
     for  Saturn  to  approximately   $38,700  ($79,500  estimated  for  project
     completion  less the $20,000 share  subscription  and  SaskTel's  estimated
     proportionate future funding of $20,800).

     In July  1997,  SaskTel  purchased  a 35%  equity  interest  in  Saturn  by
investing  approximately  NZ$30,000  (US$20,000)  for its  shares.  The  Company
believes that SaskTel,  a division of Saskatchewan  Telecommunications  Holdings
Corporation of  Saskatchewan,  Canada,  will contribute  telephony  expertise to
Saturn in providing cable/telephony service in the Wellington, New Zealand area.
The  proceeds  from the sale are  expected  to provide a portion of the  capital
necessary for completion of the project.

     The  Company  believes  that  it  will  be  required  to  fund a  total  of
approximately $163,000, after the effect of the SaskTel investment,  in order to
build-out  its  existing  projects  over the next four years.  To the extent the
operating  companies  fund their  construction  and other costs through  project
financing,  the  Company's  portion of  estimated  additional  funding  would be
reduced  proportionately.  In addition to the recently  completed  Bank Facility
(see Note 2) and cash on hand, the Company intends to raise  additional  capital
through capital contributions from its parent corporation,  further issuances of
debt either by the Company or the operating companies,  or by the sale of all or
a part of its equity in certain of its  operating  subsidiaries.  The  Company's
indenture and UIH's indentures place  restrictions on the Company and certain of
its  subsidiaries  with respect to the amount of additional debt each may incur.
The Company and all of the operating  companies are currently  restricted  under
the UIH indentures.  The Company,  Austar and Telefenua are restricted under the
Company's  indenture.  The  restrictions  imposed  by  the  indentures  will  be
eliminated upon the retirement of UIH's notes at their maturity in November 1999
and upon the retirement of the Company's Notes at their maturity in May 2006.

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

     During the six months ended June 30, 1997, the Company recognized losses of
$70,668 of which $35,736 was from non-cash  depreciation  and  amortization  and
$1,443 was from non-cash equity in losses of affiliated companies.  In addition,
the Company  recorded  non-cash  accretion  of interest on the Notes of $17,498.
During  the six month  period,  the  Company  incurred  related  party  payables
totaling $11,633,  including loans to Saturn and UIH Australia/Pacific  Finance,
Inc.  The  Company  purchased  $41,776  of  property,  plant and  equipment  and
experienced a decrease of $28,163 in construction payables during the six months
ended June 30,  1997.  The  majority of this  construction  activity  relates to
Austar. Austar also borrowed $39,286 on an interim financing facility to provide
adequate funds for its operations  until the Bank Facility  closed.  The Company
purchased $3,663 and sold $22,303 of short-term  investments,  respectively,  as
part of its cash management  activities for the six month period.  The remainder
of cash was primarily used in operations.

                                       11

<PAGE>

      During the six months  ended June 30,  1996,  UIH  contributed  capital of
$10,707 to the Company and made bridge loans of $15,073 to Austar and Telefenua.
In addition,  the Company raised  $225,115 of gross proceeds from the Notes.  At
that time, the Company acquired $25,000 of the Austar bridge loans from UIH with
proceeds  from the Notes and  converted  those loans (plus  accrued  interest of
$600) to  equity of  Austar.  Subsequently,  the  Company  funded an  additional
$25,000 to Austar,  thereby  increasing the Company's interest in Austar to 96%.
Prior to the closing of the Notes, approximately $5,000 of the Societe Francaise
des  Communications  et du Cable S.A.  ("SFCC")  bridge loans was converted into
convertible  debentures of SFCC,  which are convertible  into preferred stock of
SFCC.  The  remaining  SFCC bridge  loans  totaling  $2,600  (including  accrued
interest) will be either (i) repaid by SFCC,  after which time the Company would
invest  the  proceeds  of  such  repayment  as  permitted  under  the  Company's
indenture,  or (ii)  converted  by the Company  into equity of SFCC.  The bridge
loans were used to fund the construction  and initial  marketing of Austar's and
Telefenua's systems.  The Company also made $10,450 in capital  contributions to
Saturn and XYZ  Entertainment  during the six months  ended June 30,  1996 using
capital  contributed  to it by  UIH.  Approximately  $43,610  was  used  for the
purchase of  property,  plant and  equipment  by Austar and  Telefenua  as these
systems are in the process of building their multi-point microwave  distribution
systems ("MMDS") and direct-to-home  ("DTH") satellite systems. The Company also
experienced  a related  increase in  construction  payables of $6,521 during the
period.  The Company purchased  $70,627 of short-term  investments in connection
with its cash management activities. The remainder was used in operations.

RESULTS OF OPERATIONS

SERVICE AND OTHER  REVENUE.  The Company's  service and other revenue  increased
$12,283  and  $24,841  for the  three  and  six  months  ended  June  30,  1997,
respectively, compared to the amounts for the corresponding periods in the prior
year as follows:
<TABLE>
<CAPTION>
                                                      For the Three Months Ended           For the Six Months Ended
                                                                June 30,                           June 30,
                                                      ----------------------------         ------------------------
                                                        1997                 1996            1997            1996 
                                                      -------              -------         -------          ------- 
         <S>                                          <C>                  <C>             <C>              <C>
         AUSTRALIA
              Austar.............................     $15,055              $3,059          $28,524          $4,127
              United Wireless....................         107                   1              131               5
         TAHITI
              Telefenua..........................         959                 876            1,875           1,738
         NEW ZEALAND
              Saturn.............................          98                  --              181              --
                                                      -------              ------          -------          ------   
                Total service and other revenue..     $16,219              $3,936          $30,711          $5,870
                                                      =======              ======          =======          ======

</TABLE>

         AUSTAR

              Service  revenue at Austar was  $15,055  and $28,524 for the three
         and six months  ended June 30, 1997,  respectively,  compared to $3,059
         and $4,127 for the  corresponding  periods in 1996.  For the six months
         ended June 30,  1997,  revenues  consisted  primarily  of  service  and
         installation  fees  from  basic  subscribers  of  $23,930  and  $3,836,
         respectively,  with other  revenue  totaling  $758.  For the six months
         ended June 30,  1996,  revenues  consisted  primarily  of  service  and
         installation   fees  from  basic  subscribers  of  $2,627  and  $1,494,
         respectively,  with other revenue  totaling $6. The increase in service
         revenue was  primarily due to  subscriber  growth  (149,495 at June 30,
         1997  compared  to 29,282  at June 30,  1996) as  Austar  continues  to
         roll-out its services, which were initially launched in August 1995.


                                       12
<PAGE>

         TELEFENUA


              Telefenua's service revenue increased to $959 and $1,875 from $876
         and $1,738 for the three and six months  ended June 30,  1997 and 1996,
         respectively.  The increase was  primarily  attributable  to subscriber
         growth (6,080 at June 30, 1997 compared to 4,361 at June 30, 1996).

         SATURN

              The Company began  consolidating  the results of Saturn  effective
         July 1, 1996. Accordingly,  the Company reported no service revenue for
         Saturn for the six months  ended June 30,  1996.  For the three and six
         months ended June 30, 1997, the Company reported service revenue of $98
         and $181, respectively, compared with service revenue for Saturn of $52
         and  $104  for the  corresponding  periods  in 1996.  The  increase  is
         primarily  due to an  increase in  subscribers  (2,288 at June 30, 1997
         compared to 1,125 at June 30, 1996).

SYSTEM OPERATING EXPENSE.  System operating expense increased $8,311 and $14,855
for the three and six months ended June 30, 1997, respectively,  compared to the
amounts for the corresponding periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                           For the Three Months Ended          For the Six Months Ended
                                                                     June 30,                           June 30,
                                                           --------------------------          -------------------------
                                                             1997               1996             1997               1996
                                                           -------            -------          -------            -------
         <S>                                               <C>                <C>              <C>                 <C>  
         Austar..................................          $ 9,999            $2,623           $18,466             $5,281
         Telefenua...............................              459               501               885              1,073
         Saturn..................................              932                --             1,659                 --
         United Wireless.........................              417               372               859                660
                                                           -------            ------           -------             ------
              Total system operating expense.....          $11,807            $3,496           $21,869             $7,014
                                                           =======            ======           =======             ======
</TABLE>

         AUSTAR

              The Company reported  operating expense from  Austar of $9,999 and
         $18,466   for  the  three  and  six   months   ended  June  30,   1997,
         respectively, compared to  $2,623 and $5,281 for the comparable periods
         in the prior year.  For the six  months ended June 30,  1997,  Austar's
         operating  expense consisted  primarily  of satellite  programming fees
         ($9,024),  salaries  and benefits  ($3,073) and MMDS  spectrum  license
         fees  ($1,279),  with  the  remainder  consisting  of   system  travel,
         maintenance, vehicle and customer  billing expenses. For the six months
         ended June 30, 1996, Austar's operating  expense consisted primarily of
         salaries and  benefits ($1,964), satellite  programming fees ($995) and
         MMDS spectrum  license fees ($688),  with  the remainder  consisting of
         system travel, maintenance, vehicle  and customer billing expenses. The
         increase  in  operating  expense  in  1997  was  primarily  due  to the
         on-going roll-out of Austar's services and  the corresponding  increase
         in  subscribers.  Austar  is  currently  experiencing   high  operating
         expenses  relative to service  revenues due to  certain fixed operating
         expenses  (such  as  management  overhead,  license  fees  and  certain
         office-related   costs).   Austar  expects   operating   expense  as  a
         percentage of service  revenue  to decline as start-up  costs  decrease
         and as certain  fixed  operating  expenses  are  spread  over  expected
         increases in service revenues.

         TELEFENUA

              Operating expense at Telefenua  decreased to $459 and $885 for the
         three and six month period ended June 30, 1997, respectively, from $501
         and $1,073 for the corresponding  periods in 1996.  These decreases are
         primarily due to decreases in technical-related repairs and maintenance
         costs as well as a weakening in the local currency, partially offset by
         increased   programming   costs   associated   with  the   increase  in
         subscribers.  Telefenua's  operating  expense for  the six months ended
         June 30,  1997  consisted  primarily  of  programming-related  expenses
         ($557)  with the  remainder  consisting  of  payroll-related  costs and
         technical-related  costs.  Telefenua's  operating  expense for  the six
         months ended June 30, 1996 consisted  primarily of  programming-related
         expenses ($602) with the remainder consisting of payroll-related  costs
         and technical-related costs.

                                       13

<PAGE>

         SATURN

              The Company began  consolidating  the results of Saturn  effective
         July 1, 1996.  Accordingly,  the Company reported no operating  expense
         for Saturn for the six months  ended June 30,  1996.  For the three and
         six months ended June 30, 1997, the Company  reported system  operating
         expense of $932 and  $1,659,  respectively,  for Saturn  compared  with
         system operating expense of $378 and $720 for the corresponding periods
         in 1996.  For the six months  ended  June 30,  1997,  system  operating
         expense  consisted  primarily  of payroll  ($721)  and office  expenses
         related to the system design and engineering  work for the expansion of
         Saturn's  Wellington system and to the provision of service to existing
         customers.  For the six months  ended June 30, 1996,  system  operating
         expense consisted primarily of payroll ($341) and office expenses.

SYSTEM SELLING,  GENERAL AND ADMINISTRATIVE EXPENSE. System selling, general and
administrative expense increased $5,138 and $12,563 for the three and six months
ended June 30, 1997, respectively, compared to the amounts for the corresponding
periods in the prior year as follows:
<TABLE>
<CAPTION>
                                                          For the Three Months Ended         For the Six Months Ended
                                                                   June 30,                           June 30,
                                                          --------------------------         -------------------------
                                                            1997               1996            1997             1996   
                                                          -------            -------         --------         --------
         <S>                                              <C>                <C>              <C>             <C>   
         Austar..................................         $10,083            $5,964           $19,609         $  8,823
         Telefenua...............................             538               661             1,011            1,268
         Saturn..................................             746                --             1,396               --
         United Wireless.........................             404                 8               789              151
                                                          -------            ------           -------          -------
              Total system selling, general and
              administrative expense............          $11,771            $6,633           $22,805          $10,242
                                                          =======            ======           =======          =======

</TABLE>

         AUSTAR

              Austar's  system  selling,   general  and  administrative  expense
         increased  to $10,083 and $19,609  from $5,964 and $8,823 for the three
         and six months ended June 30, 1997 and 1996,  respectively.  During the
         six  months  ended  June  30,  1997,   system   selling,   general  and
         administrative  expense  at  Austar  consisted  primarily  of  salaries
         associated with the National  Customer  Operations  Center and Austar's
         Sydney  corporate  headquarters  ($6,009),  marketing  costs related to
         print,  radio and television  advertisements  ($4,833),  office-related
         expenses  including  rent  and  utilities  ($3,361)  and  direct  sales
         commissions ($2,897). During the six months ended June 30, 1996, system
         selling,  general  and  administrative  expense   at  Austar  consisted
         primarily of salaries  associated with the National Customer Operations
         Center and Austar's Sydney corporate headquarters  ($3,464),  marketing
         costs related to print, radio and television  advertisements  ($1,906),
         office-related  expenses  including  rent and  utilities  ($1,605)  and
         direct sales commissions  ($1,030).  The increase in 1997 was primarily
         due to the on-going roll-out of Austar's services.  Austar expects that
         system  selling,  general  and  administrative  expense as a percent of
         service  revenue will continue to decline over the remainder of 1997 as
         certain fixed  expenses are spread over  expected  increases in service
         revenues.

         TELEFENUA

              System selling, general and administrative expense consolidated by
         the Company from  Telefenua  decreased to $538 and $1,011 for the three
         and six months ended June 30, 1997, respectively,  from $661 and $1,268
         for the same periods in the prior year.  This decline was primarily due
         to a reduction in marketing costs during 1997 as well as a weakening of
         the local currency.

                                       14
<PAGE>

         SATURN

              The Company began  consolidating  the results of Saturn  effective
         July 1, 1996.  Accordingly,  the Company  reported  no system  selling,
         general and administrative  expense for Saturn for the six months ended
         June 30, 1996.  Saturn's  system  selling,  general and  administrative
         expense was $746 and $1,396 for the three and six months ended June 30,
         1997,  respectively,  compared  to $442  and  $801  for the  comparable
         periods  in  1996.  For the six  months  ended  June 30,  1997,  system
         selling,  general and  administrative  expense  consisted  primarily of
         marketing  and support  salaries and benefits  ($721)  associated  with
         increased  marketing  efforts to expand the subscriber base as Saturn's
         system expands. For the six months ended June 30, 1996, system selling,
         general and administrative expense consisted primarily of marketing and
         support salaries and benefits ($341).

CORPORATE   GENERAL   AND   ADMINISTRATIVE   EXPENSE.   Corporate   general  and
administrative  expense increased $53 and $44 for the three and six months ended
June 30,  1997,  respectively,  compared to the  amounts  for the  corresponding
periods in the prior year.

DEPRECIATION AND  AMORTIZATION  EXPENSE.  Depreciation and amortization  expense
increased  $12,930 and $27,487 for the three and six months ended June 30, 1997,
respectively, compared to the amounts for the corresponding periods in the prior
year. This increase was primarily  attributable to the significant deployment of
operating assets and subscriber  growth at Austar during the latter part of 1996
and, to a lesser extent, in 1997.

EQUITY IN LOSSES OF AFFILIATED  COMPANIES.  The Company experienced decreases in
equity in losses of  affiliated  companies  of $458 and $1,125 for the three and
six month  ended June 30,  1997,  respectively,  compared  to the  corresponding
amounts in the prior year as follows:
<TABLE>
<CAPTION>

                                                        For the Three Months Ended         For the Six Months Ended
                                                                 June 30,                           June 30,
                                                        --------------------------        -------------------------
                                                          1997             1996             1997              1996
                                                        -------          -------          -------           -------
                                                                                            
<S>                                                     <C>              <C>              <C>                <C> 
         Saturn (1)................................     $   --           $  528           $   --             $  929
         XYZ Entertainment.........................      1,077            1,007             1,443             1,639
                                                        ------           ------            ------            ------
              Total equity in losses of affiliated
              companies............................     $1,077           $1,535            $1,443            $2,568
                                                        ======           ======            ======            ======
</TABLE>

         (1)  The Company  acquired a 50%  interest in Saturn in July 1994.  The
              Company  increased  its  ownership  in  Saturn  to 100% and  began
              consolidating its results effective July 1, 1996.



INTEREST  INCOME.  Interest income decreased $1,197 and $1,038 for the three and
six months  ended June 30, 1997,  respectively,  compared to the amounts for the
corresponding  periods of the prior year.  This decrease was due to reduced cash
and short-term  investment balances as a result of the fundings to the Company's
affiliated operating systems.

INTEREST  EXPENSE.  Interest expense  increased $5,953 and $14,320 for the three
and six months  ended June 30, 1997,  respectively,  compared to the amounts for
the corresponding  periods in the prior year. This increase was primarily due to
the issuance of the Notes.  The Notes  currently  accrete  interest at a rate of
14.75% compounded semi-annually.

                                       15
<PAGE>


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

ITEM 5 - OTHER INFORMATION

SUMMARY OPERATING DATA

      The following tables set forth certain unaudited operating data:
<TABLE>
<CAPTION>

                                                                          As of
                                                                       June 30, 1997                        
                                              -----------------------------------------------------------
                                              Television
                                               Homes in                                         Economic
                                               Service             Homes          Basic        Ownership
Operating System                                 Area           Serviceable    Subscribers      Interest
----------------                              ----------        -----------    -----------     ----------
<S>                                            <C>              <C>              <C>              <C>
Austar.....................................    1,622,000        1,589,000        149,495          100%
Saturn.....................................      141,000           16,113          2,288          100%(3)
Telefenua..................................       31,000           19,728          6,080           90%
XYZ Entertainment..........................          N/A(1)           N/A        443,073(2)        25%
                                               ---------        ---------        -------     
      Total................................    1,794,000        1,624,841        600,936
                                               =========        =========        =======
</TABLE>
<TABLE>
<CAPTION>
                                                                          As of
                                                                       June 30, 1996                         
                                              -----------------------------------------------------------
                                              Television
                                               Homes in                                         Economic
                                               Service             Homes          Basic        Ownership
Operating System                                 Area           Serviceable    Subscribers      Interest
----------------                              -----------       -----------    -----------     ----------
<S>                                            <C>              <C>              <C>               <C>  
Austar.....................................    1,500,000        1,171,000         29,282           94%
Saturn.....................................      141,000            6,000          1,125           50%
Telefenua..................................       31,000           17,458          4,361           90%
XYZ Entertainment..........................          N/A(1)           N/A        207,666(2)        25%
                                               ---------        ---------        -------
      Total................................    1,672,000        1,194,458        242,434
                                               =========        =========        =======
</TABLE>
(1)  The Company expects that XYZ  Entertainment's  programming  package will be
     marketed to virtually all of Australia's 6.5 million television  households
     by  Australian  multi-channel   television  providers,   including  Austar,
     Australis  Media  Limited,  Foxtel  Management  Pty  Limited and East Coast
     Television Pty Limited.
(2)  Total  estimated  subscribers  to the eight channel Galaxy package to which
     XYZ Entertainment supplies four channels.
(3)  In July 1997, the Company sold a 35% equity interest in Saturn.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     4.0  Supplemental  Indenture  dated as of June 30, 1997 between the Company
          and Firststar Bank of Minnesota N.A., as trustee. 

     27.1 Financial Data Schedule

(b)  Reports on Form 8-K filed during the quarter.
<TABLE>
<CAPTION>
     Date of Report        Item Reported                                                     Financial Statements Filed
     --------------        -------------                                                     --------------------------
     <S>                   <C>                                                                          <C>  
     May 15, 1997          Item 5 - Cautionary statement pursuant to safe harbor                        None
                           provisions of the Private Securities Litigation Reform
                           Act of 1995.

</TABLE>
                                       16
  
<PAGE>



                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



UIH AUSTRALIA/PACIFIC, INC.



Date:      August 14, 1997
           ---------------

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






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