SHENANDOAH TELECOMMUNICATIONS CO/VA/, 10-K, 1996-03-29

SHENANDOAH TELECOMMUNICATIONS CO/VA/
10-K, 1996-03-29
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 1995
Commission File No.: 0-9881

SHENANDOAH TELECOMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)

VIRGINIA 54-1162807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

124 South Main Street, Edinburg, VA 22824
(Address of Principal Executive (Zip Code)
Offices)

Registrant's telephone number, including area code (540) 984-4141

Securities Registered Pursuant to Section 12(b) of the Act:

COMMON STOCK (NO PAR VALUE)
(Title of Class)

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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

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 as of March 1, 1996. $73,471,688. (In
determining this figure, the registrant has assumed that all of
its officers and directors are affiliates. Such assumption shall
not be deemed to be conclusive for any other purpose.) The
Company's stock is not listed on any national exchange nor
NASDAQ; therefore, the value of the Company's stock has been
determined based upon the average of the prices of transactions
in the Company's stock that were reported to the Company during
the year.

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

CLASS OUTSTANDING AT MARCH 1, 1996
Common Stock, No Par Value 3,760,760
Documents Incorporated by Reference
1995 Annual Report to Security Holders Parts I, II, IV
Proxy Statement, Dated March 22, 1996 Parts III

EXHIBIT INDEX PAGES 7 - 8<PAGE>

SHENANDOAH TELECOMMUNICATIONS COMPANY

Item Page
Number Number

PART I

1. Business 1
2. Properties 1-2
3. Legal Proceedings 2
4. Submission of Matters to a Vote of
Security Holders 2

PART II

5. Market for the Registrant's Common Stock
and Related Stockholder Matters 3
6. Selected Financial Data 3
7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 4
8. Financial Statements and Supplementary Data 4
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 5

PART III

10. Directors and Executive Officers of the
Registrant 5
11. Executive Compensation 5
12. Security Ownership of Certain Beneficial
Owners and Management 5
13. Certain Relationships and Related
Transactions 5

PART IV

14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 6-7

<PAGE>
PART I

ITEM 1. BUSINESS

(a) General development of business is incorporated by
reference -

1995 Annual Report to Security Holders -
Inside Front Cover

(b) Financial information about industry segments -

Not Applicable

1995 Annual Report to Security Holders -
Pages 4 - 7

(d) The registrant does not engage in operations in
foreign countries.

ITEM 2. PROPERTIES

The properties of the Company consist of land,
structures, plant and equipment required in providing
telephone, CATV, wireless communications and related
telecommunications services. The Company's main office
and corporate headquarters is in Edinburg, VA and a
service building is located outside the town limits of
Edinburg, VA. Additionally, the Company owns and
operates nine local telephone exchanges (switching
units) housed in brick/concrete buildings. One of
these is the main attended central office co-located
with the main office in Edinburg, Virginia. The
unattended central offices and outside plant are
located at:

(a) Basye, VA
(b) Bergton, VA
(c) Fort Valley, VA
(d) Mount Jackson, VA
(e) New Market, VA
(f) Strasburg, VA
(g) Toms Brook, VA
(h) Woodstock, VA

The Company owns long distance facilities outside of
its local franchised area as follows:

(a) Hagerstown, MD
(b) Harrisonburg, VA
(c) Martinsburg, WV<PAGE>
PART I (Continued)

ITEM 2. PROPERTIES (Continued)

(d) Stephens City, VA
(e) Weyers Cave, VA
(f) Winchester, VA

CATV reception equipment is located at the service
building, outside the town limits of Edinburg, Virginia
and at Basye, Virginia.

ITEM 3. LEGAL PROCEEDINGS

None

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

No matters were submitted to a vote of security
holders for the three months ended December 31, 1995.

<PAGE>
PART II

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

(a) Common stock price ranges are incorporated by
reference -

1995 Annual Report to Security Holders
Market Information - Inside Front Cover

(b) Number of equity security holders are
incorporated by reference -

1995 Annual Report to Security Holders
Five-Year Summary of Selected Financial Data -
Page 3

1995 Annual Report to Security Holders
Market and Dividend Information - Inside Front
Cover

Additionally, the terms of a mortgage agreement
require the maintenance of defined amounts of the
subsidiary's equity and working capital after
payment of dividends. Accordingly, approximately
$18,309,000 of retained earnings was available for
payment of dividends at December 31, 1995.

For additional information, see Note 4 in the
Consolidated Financial Statements of the 1995
Annual Report to Security Holders, which is
incorporated as a part of this report.

ITEM 6. SELECTED FINANCIAL DATA

Five-Year Summary of Selected Financial Data is
incorporated by reference -

1995 Annual Report to Security Holders
Five-Year Summary of Selected Financial Data - Page 3

PART II (Continued)

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

Results of operations, liquidity, and capital resources
are incorporated by reference -

1995 Annual Report to Security Holders
Management's Discussion and Analysis of Financial
Condition and Results of Operations - Pages 8-9

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated financial statements included in the 1995
Annual Report to Security Holders are incorporated by
reference as identified in Part IV, Item 14, on Pages 6
and 7.

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

None<PAGE>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning directors and executive officers
is incorporated by reference -

Proxy Statement, Dated March 22, 1996 - Pages 1 - 5

ITEM 11. EXECUTIVE COMPENSATION

Information concerning executive compensation is
incorporated by reference -

Proxy Statement, Dated March 22, 1996 - Page 5

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

(a) No person, director or officer owned over 5
percent of the common stock as of March 1, 1996.

(b) Security ownership by management is incorporated
by reference -

Proxy Statement, Dated March 22, 1996
Stock Ownership - Page 4

The Company knows of no contractual arrangements
which may, at a subsequent date, result in change
of control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There are no relationships or transactions to disclose
other than services provided by Directors which are
incorporated by reference -
Proxy Statement, Dated March 22, 1996
Directors - Page 2

<PAGE>
PART IV

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

A. Document List

The following documents are filed as part of this
Form 10-K. Financial statements are incorporated
by reference and are found on the pages noted.

Page Reference

Annual
Form 10-K Report
1. Financial Statements

The following consolidated financial
statements of Shenandoah Telecommunications
are included in Part II, Item 8

Auditor's Report 1995 and 1994
Financial Statements 17

Auditor's Report 1993 Financial
Statements 9

Consolidated Balance Sheets at
December 31, 1995, 1994, and 1993 10 & 11

Consolidated Statements of Income for
the Years Ending December 31, 1995,
1994, and 1993 12

Consolidated Statement of Retained Earnings
Years Ended December 31, 1995, 1994, and 1993 12

Consolidated Statements of Cash Flow
for the Years Ending December 31, 1995,
1994, and 1993 13

Notes to Consolidated Financial Statements 14-17

<PAGE>
PART IV (Continued)

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

Page Reference

Annual
Form 10-K Report

2. Financial Statement Schedules

All other schedules are omitted because
they are not applicable, or not required,
or because the required information is
included in the accompanying financial
statements or notes thereto.

3. Exhibits

Exhibit No.

99. Proxy Statement, prepared by Registrant
for 1995 Annual Stockholders Meeting -
Filed Herewith

13. Annual Report to Security Holders -
Filed Herewith

21. List of Subsidiaries -
Filed Herewith

B. Reports on Form 8-K

Reported the signing of a Letter of Intent to acquire
the Shenandoah County, Virginia cable television
systems of FrontierVision Operating Partners, L.P., of
Denver, Colorado. The acquisition is subject to
execution of a definitive agreement and approval by the
local governing bodies for the transfer of the existing
franchises.

<PAGE>
PART IV (Continued)

SIGNATURES

Pursuant to the requirements of Sections 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.

SHENANDOAH TELECOMMUNICATIONS COMPANY

March 29, 1996 By CHRISTOPHER E. FRENCH, PRESIDENT
Christopher E. French, President

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

President & Chief Executive
CHRISTOPHER E. FRENCH Officer March 29, 1996
Christopher E. French

LAURENCE F. PAXTON Principal Financial March 29, 1996
Laurence F. Paxton Accounting Officer

DICK D. BOWMAN Treasurer & Director March 29, 1996
Dick D. Bowman

KEN L. BURCH Director March 29, 1996
Ken L. Burch

PHILIP M. GRABILL, JR. Director March 29, 1996
Philip M. Grabill, Jr.

HAROLD MORRISON Director March 29, 1996
Harold Morrison

NOEL M. BORDEN Director March 29, 1996
Noel M. Borden

JAMES E. ZERKEL II Director March 29, 1996
James E. Zerkel II<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and the Stockholders of Shenandoah
Telecommunications Company

We have audited the accompanying consolidated balance sheets of
Shenandoah Telecommunications Company and subsidiaries, as of
December 31, 1993, and the related consolidated statements
of income, retained earnings, and cash flows for the years then
ended. These financial statements are the responsibility of the
Company'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 consolidated
financial position of Shenandoah Telecommunications Company and
subsidiaries as of December 31, 1993, and the results of their
operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

S.B. HOOVER & COMPANY, LLP

Harrisonburg, VA 22801
January 21, 1994
<PAGE>
EXHIBIT 99. PROXY STATEMENT

SHENANDOAH TELECOMMUNICATIONS COMPANY
124 South Main Street
Edinburg, Virginia

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 16, 1996

March 22, 1996

TO THE STOCKHOLDERS OF
SHENANDOAH TELECOMMUNICATIONS COMPANY:

The annual meeting of stockholders of Shenandoah
Telecommunications Company will be held in the Social Hall of the
Edinburg Fire Department, Stoney Creek Boulevard, Edinburg,
Virginia, on Tuesday, April 16, 1996, at 11:00 a.m. for the
following purposes:

1. To elect nine directors to serve for the ensuing year;

2. To approve the Shenandoah Telecommunications Company Stock
Incentive Plan; and

3. To transact such other business as may properly come before
the meeting or any adjournment thereof.

Only stockholders of record at the close of business March
20, 1996, will be entitled to vote at the meeting.

Lunch will be provided.

By Order of the Board of Directors
Harold Morrison, Jr.
Secretary

IMPORTANT

YOU ARE URGED TO COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY
CARD IN THE SELF-ADDRESSED STAMPED (FOR U. S. MAILING) ENVELOPE
PROVIDED AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING IN
PERSON, YOU MAY THEN WITHDRAW YOUR PROXY AND VOTE YOUR OWN
SHARES.

SEE PROXY STATEMENT ON THE FOLLOWING PAGES
PAGE
<PAGE>
PROXY STATEMENT
P. O. Box 459
Edinburg, VA 22824
March 22, 1996

TO THE STOCKHOLDERS OF
SHENANDOAH TELECOMMUNICATIONS COMPANY:

Your proxy in the enclosed form is solicited by the
management of the Company for use at the Annual Meeting of
Stockholders to be held in the Social Hall of the Edinburg Fire
Department, Stoney Creek Boulevard, Edinburg, Virginia, on
Tuesday, April 16, 1996, at 11:00 a.m., and any adjournment
thereof.

The mailing address of the Company's executive offices is
P. O. Box 459, Edinburg, Virginia 22824.

The Company has 8,000,000 authorized shares of common stock,
of which 3,760,760 shares were outstanding on March 20, 1996.
This proxy statement and the Company's annual report, including
financial statements for 1995, are being mailed on or about March
22, 1996, to approximately 3,270 stockholders of record on March
20, 1996. Only stockholders of record on that date are entitled
to vote. Each outstanding share will entitle the holder to one
vote at the Annual Meeting. No director, officer, or other party
owns as much as five percent of the outstanding shares of the
common stock of the Company. The Company intends to solicit
proxies by the use of the mail, in person, and by telephone. The
cost of soliciting proxies will be paid by the Company.

Executed proxies may be revoked at any time prior to
exercise. Proxies will be voted as indicated by the
stockholders.

THE ELECTION OF DIRECTORS

At the meeting, nine directors (constituting the entire
Board of Directors of the Company) are to be elected for the
ensuing year.

The proxy holders will vote the proxies received by them
(unless contrary instructions are noted on the proxies) for the
election as directors of the following nominees, all of whom are
now members of and constitute the Company's Board of Directors.
If any such nominees should be unavailable, the proxy holders
will vote for substitute nominees in their discretion.
Stockholders may withhold the authority to vote for the election
of directors or one or more of the nominees. Directors will be
elected by a plurality of the votes cast. Abstentions and shares
held in street name that are not voted in the election of
directors will not be included in determining the number of votes
cast.
PAGE
<PAGE>
THE ELECTION OF DIRECTORS (Continued)

Warren B. French, Jr. retired as Chairman and Director
December 31, 1995 in accordance with the age requirements of the
Bylaws of the Company; and effective January 1, 1996, President
Christopher French replaced him as Director. I. Clinton Miller,
who resigned as Director February 14, 1996, because of his
appointment to the Virginia State Corporation Commission, was
replaced effective February 15 by Philip M. Grabill, Jr.

PAGE
<PAGE>
<TABLE>
Nominees for Election of Directors
<CAPTION>
Elected Principal Occupation and Other
Name of Director Director Age Directorships for Past Five Years
(1) (2) (3)
<S <C> <C> <C>
Noel M. Borden 1972 59 Pres., H. L. Borden Lumber Co. (a
Vice President retail building materials firm); Chairman of Board,
1st National Corp.

Dick D. Bowman 1980 67 Pres., Bowman Bros., Inc. (a farm
Treasurer of the Co. equip. dealer); Dir., Shen. Valley
Elec. Coop.; Dir., Rockingham Mutual Ins. Co.; Dir.,
Old Dominion Electric Coop.

Ken L. Burch 1995 51 Farmer

Christopher E. French 1996 38 Pres., Shen. Telecommunications Co.
President & its Subsidiaries; Dir., 1st National Corp.

Philip M. Grabill, Jr. 1996 46 Attorney-at-Law

Grover M. Holler, Jr. 1952 75 Pres., Blue Ridge Homes, Inc. (a real estate
developer); Pres., Valley View, Inc.

Harold Morrison, Jr. 1979 66 Chairman of the Board, Woodstock
Secretary of the Co. Garage, Inc. (auto sales & repair
firm); Dir., 1st Va. Bank-SV

Zane Neff 1976 67 Retired Manager, Hugh Saum Co.,
Asst. Secretary Inc. (a hardware and furniture
of the Co. store); Director, Crestar Bank

James E. Zerkel II 1985 51 Vice Pres., James E. Zerkel, Inc.
(a plumbing, heating, gas, & hardware firm)
PAGE
<PAGE>
(1) The directors who are not full-time employees of the Company were compensated in 1995
for their services on the Board and one or more of the Boards of the Company's
subsidiaries at the rate of $340 per month plus $340 for each Board meeting attended.
Additional compensation was paid to the Vice President, Secretary, Assistant Secretary,
and Treasurer, for their services in these capacities, in the amounts of $1,240, $2,600,
$1,240, and $2,600, respectively.

(2) Years shown are when first elected to the Board of the Company or the Company's
predecessor, Shenandoah Telephone Company. Each nominee has served continuously since
the year he joined the Board.

(3) Each director also serves as a director of one or more of the Company's subsidiaries.

/TABLE
<PAGE>
Standing Audit, Nominating, and Compensation Committees
of the Board of Directors

1. Audit Committee - The Finance Committee of the Board of
Directors, consisted of the following directors: Dick D.
Bowman (Chairman), Grover M. Holler, Jr., and Noel M.
Borden. It performed a function similar to that of an
Audit Committee. This committee is responsible for the
employment of outside auditors and for receiving and
reviewing the auditor's report. During 1995 there were
three meetings of the Finance Committee. Additional
business of the committee was conducted in connection with
the regular Board meetings.

2. Nominating Committee - The Board of Directors does not
have a standing Nominating Committee.

3. Compensation Committee - The Personnel Committee of the
Board of Directors, consisted of the following directors:
Noel M. Borden (Chairman), Harold Morrison, Jr., and I.
Clinton Miller. It performed a function similar to that of
a Compensation Committee. This committee is responsible
for the wages, salaries, and benefit programs for all
employees. During 1995 there were three meetings of this
committee.

Attendance of Board Members at Board and Committee Meetings

During 1995, the Board of Directors held 14 meetings. All of
the directors attended at least 75 percent of the aggregate of:
(1) the total number of meetings of the Board of Directors; and
(2) the total number of meetings held by all committees of the
Board on which they served.

Certain Transactions

In 1995, the Company received services from Mr. Morrison's
company in the amount of $10,827 and from Mr. Zerkel's company in
the amount of $9,390. Management believes that each of the
companies provides these services to the Company on terms
comparable to those available to the Company from other similar
companies. No other director is an officer, director, employee,
or owner of a significant supplier or customer of the Company.

PAGE
<PAGE>
<TABLE> STOCK OWNERSHIP

The following table presents information relating to the beneficial ownership of the
Company's outstanding shares of common stock by all directors, the president, and all
directors and officers as a group.
<CAPTION>
No. of Shares
Name and Address Owned as of 2-1-96 Percent of Class
<S> <C> (1) <C> (2)
Noel M. Borden 17,456 *
Strasburg, VA 22657
Dick D. Bowman 42,744 1.14
Edinburg, VA 22824
Ken L. Burch 45,172 1.20
Quicksburg, VA 22847
Christopher E. French 127,486 3.39
Woodstock, VA 22664
Philip M. Grabill, Jr. 3,840 *
Woodstock, VA 22664
Grover M. Holler, Jr. 70,736 1.88
Edinburg, VA 22824
Harold Morrison, Jr. 20,378 *
Woodstock, VA 22664
Zane Neff 7,616 *
Edinburg, VA 22824
James E. Zerkel II 4,298 *
Mt. Jackson, VA 22842
Total shares beneficially
owned by 12 directors and
officers as a group 341,882 9.09

(1) Includes shares held by relatives and in certain trust relationships, which may be
deemed to be beneficially owned by the nominees under the rules and regulations of the
Securities and Exchange Commission; however, the inclusion of such shares does not
constitute an admission of beneficial ownership.

(2) Asterisk indicates less than 1%.
PAGE
<PAGE>
A report of beneficial ownership to the S.E.C. for the purchase of 300 shares by Dick D.
Bowman, Treasurer, was filed late due to a broker's delay in delivery for transfer. A
report of beneficial ownership to the S.E.C. for the purchase of 100 shares for an IRA and
30 shares for a Keogh Plan by Christopher E. French, President, was filed late due to a
clerical error.

SUMMARY COMPENSATION TABLE

The following Summary Table is furnished as to the salary and incentive payment paid by
the Company and its subsidiaries on an accrual basis during the fiscal years 1993, 1994,
and 1995 to, or on behalf of, the chief executive officer and each of the next four most
highly compensated executive officers who earn $100,000 or more per year.

<CAPTION>
Name and Principal Incentive
Position Year Salary Payment
<C> <C> <C> <C>
Christopher E. French 1995 $114,684 $ 20,150
President 1994 107,816 14,875
1993 100,904 14,159

/TABLE
<PAGE>
RETIREMENT PLAN

The Company maintains a noncontributory defined benefit
Retirement Plan for its employees. The following table
illustrates normal retirement benefits based upon Final Average
Compensation and years of credited service. The normal
retirement benefit is equal to the sum of:

(1) 1.14% times Final Average Compensation plus 0.65% times
Final Average Compensation in excess of Covered
Compensation (average annual compensation with respect to
which Social Security benefits would be provided at Social
Security retirement age) times years of service (not
greater than 30); and

(2) 0.29% times Final Average Compensation times years of
service in excess of 30 years (such excess service not to
exceed 15 years).

Estimated Annual Pension
Years of Credited Service
Final Average
Compensation 15 20 25 30 35
$ 20,000 $ 3,420 $ 4,560 $ 5,700 $ 6,840 $ 7,130
35,000 6,709 8,945 11,181 13,418 13,925
50,000 10,736 14,315 17,894 21,473 22,198
75,000 17,449 23,265 29,081 34,898 35,985
100,000 24,161 32,215 40,269 48,323 49,773
120,000 29,531 39,375 49,219 59,063 60,803

Covered Compensation for those retiring in 1996 is $27,576.
Final Average Compensation equals an employee's average annual
compensation for the five consecutive years of credited service
for which compensation was the highest. The amounts shown as
estimated annual pensions were calculated on a straight-life
basis assuming the employee retires in 1996. The Company made
contributions totaling $197,200 to the Retirement Plan in 1995.
Christopher French has 14 years of credited service under the
plan as of January 1, 1996.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The members of the Personnel Committee of the Board of
Directors of the Company perform the function of a Compensation
Committee. The Committee's approach to compensation of the
Company's executive officers, including the chief executive
officer, is to award a total compensation package consisting of
salary, incentive, and fringe benefit components. The
compensation package is designed to provide a level of
compensation to enable the Company to attract and retain the
executive talent necessary for the long-term success of the
organization.
PAGE
<PAGE>
The incentive plan component of the total compensation package
provides an incentive to the officers to meet or exceed certain
performance objectives. The plan also places a portion of the
officers' compensation at risk in the event the Company does not
achieve its objectives. The objectives include a component
measuring the improvement in the level of service provided to the
Company's customers and a component measuring the increase in the
Company's net income. In 1995, the Company reached over 123
percent of its combined goals.

Submitted by the Company's Personnel Committee:
Noel Borden, Chairman, Harold Morrison, Jr.,
Clinton Miller

FIVE-YEAR STOCKHOLDER RETURN COMPARISON

The Securities and Exchange Commission requires that the
Company include in its Proxy Statement a line graph presentation
comparing cumulative, five-year stockholder returns on an indexed
basis with a performance indicator of the overall stock market
and either a nationally recognized industry standard or an index
of peer companies selected by the Company. The broad market
index used in the graph is the NASDAQ Market Index. The S&P
Telephone Index consists of the seven regional Bell Operating
Companies and GTE.

The Company's stock is not listed on any national exchange nor
NASDAQ; therefore, for purposes of the following graph, the value
of the Company's stock, including the price at which dividends
are assumed to have been reinvested, has been determined based
upon the average of the prices of transactions in the Company's
stock that were reported to the Company in each fiscal year.

Comparison of Five-Year Cumulative Total Return* among Shenandoah
Telecommunications Company, NASDAQ Market Index, and S&P
Telephone Index

1990 1991 1992 1993 1994 1995

Shenandoah
Telecommunications 100.00 177.11 186.83 195.65 186.88 201.52

NASDAQ Market
Index 100.00 160.00 186.90 214.50 209.70 296.30

S&P Telephone
Index 100.00 107.54 118.01 136.29 130.66 196.82

Assumes $100 invested December 31, 1990 in Shenandoah
Telecommunications Company stock, NASDAQ Market Index, and S&P
Telephone Index

*Total return assumes reinvestment of dividends<PAGE>

APPROVAL OF THE SHENANDOAH TELECOMMUNICATIONS
COMPANY STOCK INCENTIVE PLAN

The Board proposes that the shareholders approve the
Shenandoah Telecommunications Company Stock Incentive Plan (the
"Plan"), adopted by the Board on January 8, 1996, subject to the
approval of the Company's shareholders. The approval of the Plan
requires the affirmative vote of the holders of a majority of the
shares of Common Stock present or represented by properly
executed and delivered proxies at the meeting. Abstentions and
Broker Shares voted as to any matter at the meeting will be
included in determining the number of votes present or
represented at the meeting with respect to determining the vote
on the Plan. Broker Shares that are not voted on any matter at
the meeting will not be included in determining the number of
shares present or represented at the meeting with respect to
determining the vote on the Plan.

The following paragraphs summarize the principal features of
the Plan. This summary is subject, in all respects, to the terms
of the Plan. The Company will provide promptly, upon request and
without charge, a copy of the full text of the Plan to each
person to whom a copy of this proxy statement is delivered.
Requests should be directed to: Laurence F. Paxton, Vice
President-Finance, Shenandoah Telecommunications Company, P. O.
Box 459, Edinburg, Virginia 22824 (Telephone (540) 984-5222).

Summary of the Plan

The Board believes that the Plan will benefit the Company by
(i) assisting it in recruiting and retaining employees with
ability and initiative, (ii) providing greater incentive for
employees of the Company or its affiliates and (iii) associating
the interests of employees with those of the Company, its
affiliates, and its shareholders through opportunities for
increased stock ownership. A maximum of 240,000 shares of Common
Stock may be issued under the Plan.

The Personnel Committee of the Board (the "Committee") will
administer the Plan. The Committee may delegate its authority to
administer the Plan to one or more officers of the Company. The
Committee, however, may not delegate its authority with respect
to individuals who are subject to Section 16 of the Securities
Exchange Act of 1934 ("Section 16"). As used in this summary,
the term "Administrator" means the Committee and any delegate, as
appropriate.

Each employee of the Company or an affiliate is eligible to
participate in the Plan. The Administrator will select the
individuals who will participate in the Plan ("Participants") but
no person may participate in the Plan while he is a member of the
Committee. The Administrator may, from time to time, grant stock
options, stock appreciation rights ("SARs"), or stock awards to
Participants. <PAGE>

Options granted under the Plan may be incentive stock options
("ISOs") or nonqualified stock options. A stock option entitles
the Participant to purchase shares of Common Stock from the
Company at the option price. The option price will be fixed by
the Administrator at the time the option is granted, but the
price cannot be less than the shares' Fair Market Value on the
date of grant. The option price may be paid in cash, with shares
of Common Stock, or with a combination of cash and Common Stock.
"Fair Market Value" means, on any given date, the fair market
value of a share of Common Stock as determined by the Committee
using any reasonable method in good faith.

SARs entitle the Participant to receive with respect to each
share of Common Stock encompassed by the exercise of such SAR, an
amount determined by the Committee. If the Committee does not
make such a determination, the Participant will be entitled to
receive the excess of the Fair Market Value of a share of Common
Stock on the date of exercise over the initial value of the SAR.
The initial value of the SAR is the Fair Market Value of a share
of Common Stock on the date of grant. The amount payable upon
the exercise of an SAR may be paid in cash, Common Stock, or a
combination of the two.

SARs may be granted in relation to option grants
("Corresponding SARs") or independently of option grants. The
difference between these two types of SARs is that to exercise a
Corresponding SAR, the Participant must surrender unexercised
that portion of the stock option to which the Corresponding SAR
relates.

Participants may also be awarded shares of Common Stock
pursuant to a stock award. The Administrator, in its discretion,
may prescribe that a Participant's rights in a stock award shall
be nontransferable or forfeitable or both unless certain
conditions are satisfied. These conditions may include, for
example, a requirement that the Participant continue employment
with the Company or an affiliate for a specified period or that
the Company, an affiliate, or the Participant achieve stated
objectives.

All awards made under the Plan will be evidenced by written
agreements between the Company and the Participant. A maximum of
240,000 shares of Common Stock may be issued under the Plan. The
share limitation and the terms of outstanding awards shall be
adjusted, as the Committee deems appropriate, in the event of a
stock dividend, stock split, combination, reclassification,
recapitalization, or other similar events.

No option, SAR or stock award may be granted under the Plan
after January 7, 2006. The Board may sooner terminate the Plan
without further action by shareholders. The Board also may amend
the Plan except that no amendment that increases the number of
shares of Common Stock that may be issued under the Plan, changes
<PAGE>
the class of individuals who may be selected to participate in
the Plan, or materially increases the benefits that may be
provided under the Plan will become effective until it is
approved by shareholders.

Neither the number of individuals who will be selected to
participate in the Plan nor the type or size of awards that will
be approved by the Administrator can be determined. The Company
is also unable to determine the number of individuals who would
have participated in the Plan or the type or size of awards that
would have been made under the Plan had it been in effect in
1995.

Federal Income Tax Consequences

The Company has been advised by counsel regarding the federal
income tax consequences of the Plan. No income is recognized by
a Participant at the time an option is granted. If the option is
an ISO, no income will be recognized upon the Participant's
exercise of the option. Income is recognized by a Participant
when he disposes of shares acquired under an ISO. The exercise
of a nonqualified stock option generally is a taxable event that
requires the Participant to recognize, as ordinary income, the
difference between the shares' fair market value and the option
price.

No income is recognized upon the grant of an SAR. The
exercise of an SAR generally is a taxable event. The Participant
generally must recognize income equal to any cash that is paid
and the fair market value of Common Stock that is received in
settlement of an SAR.

The Participant will recognize income on account of a stock
award on the first day that the shares are either transferable or
not subject to a substantial risk of forfeiture. The amount of
income recognized by the Participant is equal to the fair market
value of the Common Stock received on that date.

The employer (either the Company or an affiliate) will be
entitled to claim a federal income tax deduction on account of
the exercise of a nonqualified option or SAR and the vesting of a
stock award. The amount of the deduction is equal to the
ordinary income recognized by the Participant. The employer will
not be entitled to a federal income tax deduction on account of
the grant or the exercise of an ISO. The employer may claim a
federal income tax deduction on account of certain dispositions
of Common Stock acquired upon the exercise of an ISO.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THE SHENANDOAH TELECOMMUNICATIONS COMPANY INCENTIVE
PLAN.
PAGE
<PAGE>
EMPLOYMENT OF AUDITORS

The Board of Directors, on the recommendation of the Audit
Committee, has appointed the firm of McGladrey and Pullen as
auditors to make an examination of the accounts of the Company
for the 1996 fiscal year. It is not expected that representatives
of the firm will be present at the annual meeting.

PROPOSALS OF SECURITY HOLDERS

Proposals of security holders to be included in management's
proxy statement and form of proxy relating to next year's annual
meeting must be received at the Company's principal executive
offices not later than November 22, 1996.

OTHER MATTERS

Management does not intend to bring before the meeting any
matters other than those specifically described above and knows
of no matters other than the foregoing to come before the
meeting. If any other matters properly come before the meeting,
it is the intention of the persons named in the accompanying form
of proxy to vote such proxy in accordance with their judgment on
such matters, including any matters dealing with the conduct of
the meeting.

FORM 10-K

The Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission is available to stockholders,
without charge, upon request to Mr. Laurence F. Paxton, Vice
President-Finance, Shenandoah Telecommunications Company, P. O.
Box 459, Edinburg, VA 22824.

PAGE
<PAGE>
EXHIBIT 13. ANNUAL REPORT
(inside front cover)
STOCKHOLDER INFORMATION

Our Business

Shenandoah Telecommunications Company is a holding company
which provides telephone service through its subsidiary,
Shenandoah Telephone Company, primarily in Shenandoah County and
small service areas in Rockingham, Frederick, and Warren
counties, all in Virginia. The Company provides cable television
service through its subsidiary, Shenandoah Cable Television
Company, at Edinburg and in rural areas in the vicinity of
Edinburg, Woodstock, and Bryce Mountain. The Company provides
unregulated communications equipment and services through its
subsidiary, ShenTel Service Company, which sells and maintains
PBXs, key systems, computers, and security systems. The Company
finances purchases of telecommunications facilities and equipment
through its subsidiary, Shenandoah Valley Leasing Company.
Shenandoah Mobile Company furnishes paging, mobile telephone,
business radio, and cellular telephone services in the northern
Shenandoah Valley. Shenandoah Mobile Company is the managing
general partner of a partnership providing cellular services in
Virginia RSA 10 covering the northwestern portion of Virginia.
The Company resells long distance services through Shenandoah
Long Distance Company. Shenandoah Network Company operates and
maintains the Company's interstate fiber optic network. Under an
agreement with American Personal Communications, Shenandoah
Personal Communications Company is building and operating a
personal communications network in the four-state region from
Chambersburg, Pennsylvania to Harrisonburg, Virginia.

Annual Meeting

The Board of Directors extends an invitation to all
stockholders to attend the Annual Meeting of Stockholders. The
meeting will be held Tuesday, April 16, 1996, at 11:00 a.m. in
the Social Hall of the Edinburg Fire Department, Stoney Creek
Boulevard, Edinburg, Virginia. Notice of the Annual Meeting,
Proxy Statement, and Proxy were mailed to each stockholder on or
about March 22, 1996.

Form 10-K

The Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission is available to stockholders,
without charge, upon request to Mr. Laurence F. Paxton, Vice
President - Finance, Shenandoah Telecommunications Company, P. O.
Box 459, Edinburg, VA 22824.<PAGE>
(Inside front cover bottom)

Market and Dividend Information

The stock of Shenandoah Telecommunications Company is not
listed on any national exchange or NASDAQ, and the Company is not
aware of any broker who maintains a position in the Company's
stock. It, however, is aware of unconfirmed transactions of the
stock which have been handled privately and by brokers and local
auctioneers. Some of these prices include commissions and
auctioneers' fees. Since some prices are not reported to the
Company and family transactions are not applicable, all
transactions are not included in the following summary of prices.
The shares, prices, and cash dividends for 1994 have been
adjusted to reflect a 2-for-1 stock split which was paid to
stockholders of record January 23, 1995. The Company has
maintained a policy of declaring an annual cash dividend.

1995 1994
No. No. No. No.
Qtr. Trans. Shares High Low Trans. Shares High Low
1st 69 10,123 $25.00 $18.41 59 11,348 $25.00 $20.00
2nd 221 22,860 40.00 19.00 45 9,086 25.00 14.41
3rd 167 13,860 31.00 19.00 112 13,870 25.00 17.50
4th 119 10,885 30.00 19.00 57 6,600 25.00 19.00

Average price per share - $21.42 $20.31
Annual cash dividend per
share - .42 .375
Special cash dividend per
share - .06 -

Corporate Headquarters Independent Auditors
Shenandoah Telecommunications Company McGladrey & Pullen, LLP
124 South Main Street 1051 East Cary Street
Edinburg, VA 22824 Richmond, VA 23210

Stockholders' Questions and Stock Transfers - Call (540) 984-5260
Transfer Agent - Common Stock
Shenandoah Telecommunications Company
P. O. Box 459
Edinburg, VA 22824<PAGE>
<TABLE>
FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Operating Revenues $21,919,150 $20,229,178 $18,329,886 $17,359,114 $15,180,205
Operating Expenses 13,027,468 12,050,713 11,455,136 10,454,448 9,535,090
Income Taxes 3,572,956 2,577,641 2,481,764 2,189,663 1,792,022
Other Income less Other
Expenses (1) 456,544 (90,897) (154,454) 188,210 307,259
Interest Expense 685,971 658,908 621,944 667,900 771,285
Gain (loss) on Security
Sales or Writedown 1,141,386 - - (220,000) -
Consolidated Net Income $ 6,230,685 $ 4,851,019 $ 4,602,619 $ 4,015,313 $ 3,389,067
Consolidated Net Income
from Operations (2) $ 5,522,904 $ 4,851,019 $ 4,156,300 $ 4,151,801 $ 3,389,067
Total Assets $59,896,990 $52,464,150 $49,652,064 $44,839,501 $42,206,407
Long-Term Obligations $10,558,953 $ 9,941,209 $ 9,381,813 $ 8,754,524 $ 9,033,561
Stockholder Information
Number of Stockholders 3,226 2,979 2,879 2,683 2,519
Shares of Stock (3) 3,760,760 3,760,760 3,760,760 3,760,760 3,760,760
Earnings per Share (3) $ 1.66 $ 1.29 $ 1.22 $ 1.07 $ .90
- Continuing
Operations (3) $ 1.47 $ 1.29 $ 1.11 $ 1.10 $ .90
Cash Dividend per
Share (3) $ .42 $ .375 $ .30 $ .275 $ .25
Special Cash Dividend
per Share (3) $ .06 $ - $ - $ - $ -

(1) Includes non-operating income less expenses and minority interest in net income of
consolidated subsidiaries.

(2) Excludes gain on sale of investments in Virginia Metrotel and MFS Communications
Company in 1995; gain on sale of fiber optic lease asset; write-off of portion of
investment in Metrotel Services, Ltd.; share of loss of Virginia Metrotel in 1994 and
1993; and write-down of AvData in 1992.

(3) The information has been restated to reflect a 2-for-1 split to stockholders of record
January 23, 1995. /TABLE
<PAGE>
PCS STARTED IN RURAL AREAS

Shenandoah Personal Communications Company, the newest
subsidiary of Shenandoah Telecommunications, has initiated
service for the first rural PCS (Personal Communications
Services) system in the United States. PCS is the next
generation of wireless telephone and data service. The PCS
technology was developed more than a decade ago in order to
create a common mobile telephone system for Europe. PCS has been
the European standard for wireless communications since 1982.
Our involvement with PCS began in 1994 when Shenandoah Personal
Communications Company agreed to build the western part of the
PCS network for American Personal Communications (APC). APC
built the first PCS network in the United States, covering the
Washington/Baltimore metropolitan trading area (MTA). Mirroring
the historic first phone call ever placed (from Baltimore to
Washington), Vice President Al Gore made the first PCS call from
Washington to Baltimore. The Mayor of Baltimore, with whom the
Vice President spoke, joked that it was about time Washington
returned their call. Based in Bethesda, Maryland, APC is an
affiliate of the Sprint Telecommunications Venture, the company
that will offer PCS nationwide under the brand name Sprint
Spectrum. Shenandoah Personal Communications Company will also
be marketing PCS under the Sprint Spectrum name to a potential
customer base of 750,000 in rural Virginia, West Virginia, and
Maryland.

PCS uses digital technology to provide high-quality voice
communications, alpha-numeric paging, and VoiceMail in one
handset, for totally mobile wireless communications. The
handsets are also capable of fax and data transmission, so
portable computer users will soon have the ability to be "on-
line" anywhere in the network from their PCS handset without the
need for a separate modem. The brain of a PCS handset is a
computer chip called a Smart Card. Because a user's serial
number does not transmit over the air, where it could potentially
be fraudulently intercepted, this technology eliminates
unauthorized use of your number.

Shenandoah Personal Communications Company has been extremely
busy building our PCS network. In the past year we have built
nine towers in the Hagerstown/Chambersburg area and are on track
to extend the service area north and south along the I-81
corridor. As of December 1995, we had coverage in the Greater
Hagerstown area (Maryland), north to Greencastle, Pennsylvania,
south to Nipetown, West Virginia, and east on I-70 to Myersville,
Maryland. We will have continuous coverage from Hagerstown,
Maryland to Harrisonburg, Virginia by December 1996. Our PCS
network will eventually extend along the I-81 corridor from
Rockingham County, Virginia to Franklin County, Pennsylvania.
The grand opening of our store in Hagerstown is scheduled for
March 1996; however, we have already been open for business, and
there is a tremendous amount of excitement about our products and
services.<PAGE>
With its PCS venture, Shenandoah Telecommunications Company is
remaining in the forefront of technology, which is part of our
continuing commitment to bring the technologies of the future to
our customers today.

SHENANDOAH CABLE TELEVISION TO ACQUIRE
C4 MEDIA CABLE PROPERTIES IN SHENANDOAH COUNTY

On February 21, 1996 Shenandoah Cable Television Company
signed a letter of intent to acquire the Shenandoah County CATV
systems formerly owned by C4 Media Cable. The systems, which
were recently acquired by FrontierVision Operating Partners, L.P.
of Denver, Colorado, will become part of Shentel's existing CATV
system, which presently serves the town of Edinburg, Basye and
surrounding areas of Shenandoah County.

This acquisition will allow us to offer the residents of
Shenandoah County the benefits of local ownership and operation
of their CATV services. At the same time it will enable us to
continue expanding our broadband network services in order to
provide the services needed by our customers, both today and in
the future.

Our Company had previously expressed interest in acquiring the
former C4 properties as we felt the acquisition would be in the
best long term interests of the residents of Shenandoah County.
The recent enactment of the Telecommunications Act of 1996
removes the requirement of approval by the Federal Communications
Commission, and now allows the Company to purchase or build CATV
facilities within the same areas as it provides local telephone
services. Operation of CATV and telephone networks in the same
area will allow both services to share common network elements,
such as the Company's state of the art fiber optics facilities.

Owning and operating a combined CATV system will allow us to
offer all of our CATV customers a broad selection of video
programming, and to supplement the basic services with additional
features and functionality in the future. Of particular interest
is the potential to use the bandwidth capacity of the CATV
network for the delivery of new services such as high speed
Internet access, development of a community public access
channel, and possible integration with educational efforts such
as the Shenandoah County School's Interactive Classroom system.
Work will initially be focused on bringing the systems up to the
quality standards expected by residents of the area, and then to
explore ways to enhance the range of services available to our
customers. The acquisition is subject to finalization of a
definitive agreement, and approval by the local governing bodies
for the transfer of the existing franchises.<PAGE>

INTERNET SERVICE CONTINUES RAPID GROWTH

In September 1994, ShenTel Service Company became the first
provider in the Northern Shenandoah Valley to offer local access
to the Internet. Local access has now been expanded to include
Shenandoah, Rockingham, Frederick, Clarke, Warren, and Page
counties. Usage of our Internet service has continued to grow,
due in part to our continued investment in providing high-quality
service. While the Internet has received much publicity and
hype, we have focused on providing the necessary network capacity
and overall service quality in order to remain the premier
provider of service.

During 1995, ShenTel offered free access to the Internet to
all public schools and public libraries in ShenTel's Internet
service area. The offer reflects the organization's view that
this is a valuable tool for educational purposes and reinforces
our commitment and support for the education of our youth. We
believe that by making the Internet more readily accessible, all
members of our community will be able to broaden their horizons,
educational opportunities, and be part of the global information
society.

The Internet continues to evolve and grow, both in popularity
and available services. ShenTel remains committed to providing
our customers with state of the art technology to meet and
surpass their telecommunications needs.

DBS SERVICE NOW AVAILABLE FROM SHENTEL

ShenTel Service Company is now offering DIRECTV, an all-
digital satellite television service. DIRECTV is a relatively
new technology which uses high-powered communications satellites
to broadcast digital TV signals to a small receiving dish located
at the customer's premises. DIRECTV provides our customers with
an additional choice on how they receive their video programming
services. The equipment includes an 18" satellite dish which
captures signals from a communications satellite. The signal is
then passed on to a VCR-sized digital receiving box that works
with a remote control. A wide range of programming choices is
available, along with a unique "video store in the home"
capability which allows customers to order on demand recent box
office hits and classic movies.

ShenTel currently markets and services the larger C-band
dishes, and our cable operation provides conventional cable
television services to a large portion of Shenandoah County. The
addition of this product offering allows us to bring the leading
edge information and entertainment technology to all of our
customers and earn revenues from the sale of equipment and
programming.
<PAGE>
PERSONNEL

The business growth and expansion of our organization was
reflected in the increase in our number of employees. At the end
of the year we had 140 full-time equivalent (FTE) employees, as
compared to 122 FTE employees at the end of 1994. These
additions were primarily due to the start-up of our PCS
operations, growth of our Internet business, and the additions to
our Accounting Department.

Employees hired in 1995 include: Shenandoah Telephone Company
- - Teresa Edmonds, Part-time Communications Center Operator;
Shelly Bowman, Junior Staff Accountant; Sandra Nelson, Rhonda
Rau, and Deborah Smoot, Accounting Clerks; Robin Miller, Facility
Clerk; Betty Ayers and Lisa Shillingburg, Service
Representatives; Angela Talley, Office Assistant; and Edward
Williams, Laborer. ShenTel Service Company Internet Department -
Richard Church, Product Manager; Beth Venditti, Sales Assistant;
and Donna Miller, Office Assistant. Shenandoah Cellular - Gayle
Morris, Sales Manager; William Hunt, Installer-Repairman; and
Tamara Weekley and Kelly Clark, Service Representatives.
Shenandoah Personal Communications Company (Edinburg office) -
David MacDonald, Construction Manager; Leonard Greisz, Project
Manager; and Zoe Forrester and Lynda Hoffman, Office Assistants;
(Hagerstown office) - William Young, Local Manager; David
Dillard, Sales and Marketing Director; and David Mathias and
Timothy Klick, Retail Sales Representatives; and (Winchester
office) - Brian Brooks, Sales Manager.

In addition, the following seven employees received promotions
during the year: Steven Heltzel and Chris Herbaugh, Installer-
Repairmen; Jeffrey Manning, Field Engineer; Rhonda Rau, Junior
Staff Accountant; Curtis Sawyer, Accounting Clerk; Freddie
Wellard, Construction Coordinator; and Lorrie Wood, Cellular
Sales Representative.

Many milestone anniversaries were reached in 1995. We
recognized the following 17 employees for a total of 250 years of
service: 35 years - Ray Hawkins and Lewis Fadely; 30 years -
Roger Baker and Larry Richard; 20 years -Kenneth Fadely and
William Sibert, Jr.; 15 years - Eugene Miller; 10 years - Richard
Keller, Charles MacLeod, and Dwayne Ryman; and 5 years - Susan
France, Chris Herbaugh, Dale Jordan, Ronnie Judd, Adora Kipps,
David Myers, and Phillip Speicher.

Our summer internship program was again active during 1995. A
total of 19 college students assisted our organization during the
summer months and holiday vacations.

During the year our employees supported many charitable
organizations, including Shenandoah County Hospice, the local
food pantries, Response, and a toy drive in conjunction with the
Sheriff's Department. The employees also participated in
community and industry events, including telephone book<PAGE>
recycling, parades and National Small Independent Telephone
Company week.

On February 14, 1996, Clinton Miller resigned as a Director of
our organization in order to accept his appointment as a
Commissioner of the Virginia State Corporation Commission (VSCC).
Mr. Miller will fill the unexpired term of Preston Shannon, who
retired after 24 years of service. The VSCC oversees the
insurance, banking, transportation, telecommunications, and
utility industries in the Commonwealth of Virginia. Mr. Miller's
appointment came after serving the Shenandoah Valley area for
over 23 years as a member of the Virginia House of Delegates.

On December 31, 1995, Warren B. French, Jr. retired as
Chairman of the Board of Shenandoah Telecommunications Company in
accordance with the Company's Bylaws. Mr. French's association
with the forerunner companies of Shenandoah Telecommunications
has been a long one, beginning in 1954 when he was hired as
General Manager of Farmers Mutual Telephone System of Shenandoah
County. In addition to other positions, Mr. French became
President and Director of Shenandoah Telephone Company in 1973,
positions which he held until his retirement as President in
1988, at which time he was appointed as Chairman of the Board of
Shenandoah Telecommunications Company. During the past four
decades Mr. French has also been active at the state and national
levels, holding positions with the National Exchange Carrier
Association, the FCC Network Reliability Council, the U. S.
Telephone Association, the Virginia Telephone Association, and
the Organization for the Protection and Advancement of Small
Telephone Companies. Mr. French has had a profound impact on our
organization and the telecommunications industry through his
vision and leadership. <PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Shenandoah Telecommunications Company is a diversified
telecommunications holding company providing both regulated and
unregulated telecommunications services through its eight wholly-
owned subsidiaries.

The regulated telephone local exchange company is the largest
subsidiary, accounting for over 59.0% of revenue and 79.0% of
consolidated net income from operations. This industry is in a
period of transition from a protected monopoly to a competitive
environment as evidenced by the recent passage of the
Telecommunications Act of 1996. As a result, Shenandoah
Telecommunications has made and plans to continue to make
significant investments in the new and emerging technologies. In
1994 the Company began providing Internet access and in December
of 1995 became the first in the United States to offer Personal
Communications Services in a rural location.

Other significant services provided are cellular phone, cable
television, long distance, and facilities leased to interexchange
carriers on a Company owned fiber optic cable network. The
Company also sells and leases equipment, mainly related to
services provided. The Company also participates in emerging
technologies by direct investment in non-affiliated companies.

RESULTS OF OPERATIONS

The Company's largest source of revenue continues to be for
access to the Company's local exchange network by interexchange
carriers. The volume for these access revenues are measured in
minutes of use. The minutes of use during 1995 increased 7.2%
compared to an increase of 6.8% in 1994. The revenue increase
was not as large as the minutes of use increase, principally due
to a change in the mix of interstate and intrastate minutes of
use.

The decrease in the ShenTel Service revenues category for 1995
compared to 1994, is due to a decrease in retail equipment sales.
The decrease equaled $262,603 or 32.0% for 1995 compared to a
$405,311 increase in 1994. Offsetting this decrease is an
increase in revenues from our Internet Service operation of
$149,608. The Company began offering access to the Internet in
1994 and revenues were insignificant in that year.

The Mobile revenues are mainly comprised of revenues from
wireless communications services. Local cellular service
revenues increased $177,761 or 8.9% in 1995 compared to $529,635
or 36.0% in 1994. Outcollect roamer revenues increased $536,772
or 26.1% in 1995 compared to $561,514 or 37.6% in 1994. The
increase in local cellular revenues was due to a 27.5% increase
in the customer base, compared to an 18.6% increase in 1994. <PAGE>
Financing lease revenues are chiefly for leases and rentals of
a few large telecommunications systems, small systems sold by
Company subsidiaries, and customer premise equipment. One lease
for fiber optic facilities between Charlottesville and Richmond
which accounted for $143,683 of 1993 revenue, expired at the end
of 1993. The lessee exercised the fair market buy-out provision,
resulting in a one-time after tax gain of $611,734 in 1993. The
remaining lease revenues are derived from smaller leases for
equipment such as PBXs and home satellite dishes sold through
Company subsidiaries.

On September 1, 1994, the cable television company
restructured its rates by increasing its rates for basic and
premium service and decreasing or eliminating its charges for
other services such as rental of converters. This was primarily
responsible for the 17.1% increase in cable television revenues
compared to the 7.9% increase in 1994.

The Company also leases capacity on fiber optic facilities in
West Virginia and Maryland to interexchange carriers. The
revenue for this activity appears as Network revenues on the
income statement. This service experienced a revenue decrease of
9.5% in 1994. The decrease was due to contracts expiring and
being renewed at lower rates. New contracts added in late 1994
were primarily responsible for the 1995 increase of 42.6%.

Total payroll costs (including capitalized costs) increased
8.9% in 1995 compared to 1994. Total payroll costs in 1994
decreased 2.5% from the previous year. The increase in 1995 is
due to an increase in full-time equivalent employees, primarily
due to the start-up of the Internet Service and Personal
Communications Services operations.

Depreciation, our largest expense category, increased at a
slower rate than the previous year. Over 40% of our additions to
Property, Plant, and Equipment during 1995 were placed in service
during the fourth quarter, reducing their effect on the increase
in depreciation.

The expense category with the largest increase in 1995 was
Network and Other. The increase in 1995 was due primarily to
facilities costs attributed to our Internet Service operation.
These costs increased $164,945 or 780.0% due to the rapidly
increasing customer base.

The increase in Taxes Other Than Income in 1994 was primarily
due to a rate increase in the real estate tax for the local
jurisdiction in which a majority of our regulated Telephone plant
is located.

The Non-operating Income Less Expenses category consists
mainly of the income or loss from investments made by the
Company. The increase reflected on the income statement is due<PAGE>
to an increase in the amount of interest bearing investments
compared to a year earlier. Investments accounted for by the
equity method that are also included in this category, had an
increase in income of $359,909 due mainly to the sale of Virginia
MetroTel discussed below. The Company recorded a loss of
$221,477 on this investment in 1994 compared to none in 1995.

The Company, along with other telecommunications providers,
founded Virginia Metrotel to construct and operate a fiber optic
network in the Richmond, Virginia metropolitan area. The fiber
network would provide competitive access to businesses in the
area. As a result of a strategic change, it was agreed to sell
this business to MFS Communications Company. The Company
recognized a gain on the sale in January 1995. The amount of the
gain was $872,125. The Company recognized further gains of
$269,261 on subsequent sales of MFS stock.

LIQUIDITY AND CAPITAL RESOURCES

The Company continued to generate a cash flow from operations
that adequately met the Company's need for cash in 1995. Other
available sources of liquidity are $4,500,000 in unsecured lines
of credit with two local banks. No advances were made from these
lines of credit in 1995. The Company has a loan agreement with
the Rural Telephone Bank in the amount of $9,240,000. The
Company received an advance of $1,047,900 in August of this year.
As of December 31, 1995, the Company has received advances in the
amount of $4,433,900. Expenditure of these loan funds is limited
to capital projects for the regulated local exchange carrier.

As discussed above, the Company recently began participating
in the new Personal Communications Services (PCS) business. This
will require significant investment in new plant and equipment.
The Company has budgeted approximately $6,000,000 for PCS-related
new plant in 1996, and anticipates additional cash flow
requirements for inventory and initial operating losses.

The Company has a material contractual commitment for capital
expenditures, requiring the build out of our PCS network by
certain time periods. The Company's Board of Directors has
approved a construction budget of approximately $14,000,000.
This budget includes the expenditures for PCS discussed above.
The remaining amounts are primarily for telephone central office
equipment and fiber optic cable facilities.

The Company signed a letter of intent in February 1996 to
acquire the Shenandoah County cable television assets of
FrontierVision Operating Partners, L.P. The Company expects to
finance this planned transaction, as well as the expenditures
discussed above, through internally generated cash flows,
additional advances from the RTB note, and loans from external
sources.
<PAGE>
Independent Auditor's Report

The Board of Directors
Shenandoah Telecommunications Company
Edinburg, Virginia

We have audited the accompanying consolidated balance sheets of
Shenandoah Telecommunications Company and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated
statements of income, retained earnings, and cash flows for the
years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audit. The consolidated financial statements of Shenandoah
Telecommunications Company and subsidiaries for the year ended
December 31, 1993 were audited by other auditors whose report,
dated January 21, 1994, expressed an unqualified opinion on
those statements.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Shenandoah Telecommunications Company and
subsidiaries as of December 31, 1995 and 1994, and the results
of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on
the basic consolidated financial statements taken as a whole.
The consolidating information is presented for purposes of
additional analysis of the basic consolidated financial
statements rather than to present the financial position and
results of operations of the individual companies. The
consolidating information has been subjected to the auditing
procedures applied in the audits of the basic consolidated
financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic consolidated
financial statements taken as a whole.

Richmond, Virginia
January 26, 1996<PAGE>
<TABLE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
<CAPTION>
CONSOLIDATED BALANCE SHEETS
December 31, 1995, 1994 and 1993
<S>
ASSETS 1995 1994 1993
Current Assets <C> <C> <C>
Cash and cash equivalents $ 6,106,447 $ 8,574,559 $ 8,304,415
Certificates of deposit 1,242,228 930,911 106,375
Short-term investments (Note 2) - - 969,382
Investment in held-to-maturity
securities (Note 2) 2,488,773 950,750 -
Accounts receivable 3,068,379 2,880,428 2,284,197
Direct financing leases,
current portion (Note 3) 74,350 81,140 63,243
Materials and supplies 1,922,090 1,511,006 1,545,082
Prepaid and other current assets 406,653 236,191 356,678
Total current assets 15,308,920 15,164,985 13,629,372

Investments and Other Assets
Investment in available-for-sale
securities (Note 2) 2,000,077 - -
Investment in held-to-maturity
securities (Note 2) 2,098,968 499,687 -
Other investments (Note 2) 3,412,464 4,615,689 4,463,221
Direct financing leases,
long-term portion (Note 3) 250,321 287,584 55,620
7,761,830 5,402,960 4,518,841

Property, Plant and Equipment (Note 4)
Plant in service 53,316,016 49,102,832 47,290,763
Plant under construction 2,372,750 248,717 476,378
55,688,766 49,351,549 47,767,141

Less accumulated depreciation 18,862,526 17,455,344 16,263,290
36,826,240 31,896,205 31,503,851
$ 59,896,990 $ 52,464,150 $ 49,652,064
See Notes to Consolidated Financial Statements.<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1995, 1994 and 1993
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994 1993
<S> <C> <C> <C>
Current Liabilities
Notes payable, bank (Note 4) $ - $ - $ 875,000
Current maturities of
long-term debt (Note 4) 461,927 423,329 329,891
Accounts payable 813,887 307,691 537,884
Advance billings and payments 625,559 526,105 550,413
Customers' deposits 107,509 137,793 147,952
Accrued construction costs 1,097,844 - -
Other current liabilities 1,066,225 910,968 907,867
Income taxes payable - 26,618 462,325
Other taxes payable 85,804 53,739 43,294
Total current liabilities 4,258,755 2,386,243 3,854,626
Long-Term Debt, less current
maturities (Note 4) 10,097,026 9,517,880 9,051,922
Other Liabilities and Deferred Credits
Deferred investment tax credit 367,143 442,844 518,545
Deferred income taxes (Note 5) 3,965,318 3,535,014 3,512,637
Pension and other (Note 6) 438,324 745,935 542,151
4,770,785 4,723,793 4,573,333
Minority Interests 1,499,151 1,219,493 996,176
Stockholders' Equity (Note 4)
Common stock, no par value,
authorized 8,000,000 shares;
issued 3,760,760 shares 4,740,677 4,740,677 4,740,677
Retained earnings 34,301,584 29,876,064 26,435,330
Unrealized gain on available-for-sale
securities, net (Note 2) 229,012 - -
39,271,273 34,616,741 31,176,007
$ 59,896,990 $ 52,464,150 $ 49.652.064

See Notes to Consolidated Financial Statements.<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1995, 1994 and 1993

<S> 1995 1994 1993
Operating revenues
Telephone revenues: <C> <C> <C>
Local service $ 3,072,097 $ 2,868,656 $ 2,665,975
Access service 6,648,495 6,447,067 6,396,425
Toll service 9,581 8,886 11,154
Miscellaneous:
Directory 1,119,858 1,024,740 993,053
Facility leases 1,699,709 1,291,390 994,344
Billing and collection 409,983 447,008 440,836
Other miscellaneous 109,910 121,538 101,590
Total telephone revenues 13,069,633 12,209,285 11,603,377
Cable Television revenues 868,310 741,491 686,951
ShenTel Service revenues 1,379,200 1,555,848 1,150,537
Leasing revenues 24,116 19,796 162,577
Shenandoah Long Distance revenues 1,129,554 1,148,705 1,170,713
Mobile revenues 4,952,967 4,206,736 3,172,041
Network revenues 495,370 347,317 383,690
Total operating revenues 21,919,150 20,229,178 18,329,886
<S>
Operating expenses: <C> <C> <C>
Cost of products sold 764,264 802,904 579,015
Line costs 543,873 543,887 523,212
Plant specific 1,850,316 1,742,824 1,726,444
Plant nonspecific:
Network and other 2,059,255 1,649,329 1,571,935
Depreciation 2,864,521 2,730,938 2,536,920
Customer operations 2,465,316 2,206,931 2,264,622
Corporate operations 1,988,852 1,903,653 1,847,065
Other operating expense 185,133 154,241 135,955
Taxes other than income 305,938 316,006 269,968
$ 13,027,468 $ 12,050,713 $ 11,455,136

(Continued)<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
Years Ended December 31, 1995, 1994 and 1993

1995 1994 1993
<S> <C> <C> <C>
Operating income $ 8,891,682 $ 8,178,465 $ 6,874,750
Other income (expenses):
Nonoperating income,
less expenses 991,202 302,420 (84,918)
Interest expense (685,971) (658,908) (621,944)
Gain on sale of assets 1,141,386 986,031
10,338,299 7,821,977 7,153,919
Income taxes (Note 5) 3,572,956 2,577,641 2,481,764
6,765,343 5,244,336 4,672,155
Minority interests (534,658) (393,317) (69,536)
Net income $ 6,230,685 $ 4,851,019 $ 4,602,619

Net income per share $ 1.66 $ 1.29 $ 1.22

Cash dividends per share $ 0.480 $ 0.375 $ 0.300

Weighted average shares
outstanding 3,760,760 3,760,760 3,760,760

See Notes to Consolidated Financial Statements.<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Years Ended December 31, 1995, 1994 and 1993

1995 1994 1993
<S> <C> <C> <C>
Balance, beginning $ 29,876,064 $ 26,435,330 $ 22,960,939
Net income 6,230,685 4,851,019 4,602,619
36,106,749 31,286,349 27,563,558
Cash dividends 1,805,165 1,410,285 1,128,228

Balance, ending $ 34,301,584 $ 29,876,064 $ 26,435,330

See Notes to Consolidated Financial Statements.<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1995, 1994 and 1993

<S> 1995 1994 1993
Cash Flows From Operating Activities <C> <C> <C>
Net income $ 6,230,685 $ 4,851,019 $ 4,602,619

Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,864,521 2,730,938 2,536,920
Deferred taxes 323,680 (53,324) (518,360)
Gain on sale of assets (1,141,386) - (986,031)
Investment losses 43,763 207,510 276,205
Minority share of income 279,658 223,317 69,536
Other (4,551) 224,378 253,858
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (187,951) (596,231) (154,233)
Material and supplies (411,084) 34,076 37,269
Increase (decrease) in:
Accounts payable 396,307 (209,571) 172,802
Income taxes payable (26,618) (435,707) 176,989
Other prepaids, deferrals
and accruals (205,731) 305,220 166,554
Net cash provided by
operating activities 8,161,293 7,281,625 6,634,128

(Continued)<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)
Years Ended December 31, 1995, 1994 and 1993

<S> 1995 1994 1993
Cash Flows From Investing Activities <C> <C> <C>
Purchases of property and equipment $ (6,697,476) $ (3,356,079) $ (3,762,267)
Investment in direct financing leases (39,038) (332,213) (74,733)
Payments received on direct
financing leases 83,091 82,352 315,323
Sale of lease residual - - 1,892,931
Purchase of certificates of deposit (1,252,016) (930,911) -
Maturities of certificates of deposits 940,699 106,375 -
Cash flows from securities (Note 2) (2,427,349) (810,461) -
Sale of investment securities - - 782,897
Purchase of investment securities - - (2,676,419)
Net cash used in
investing activities (9,393,089) (5,240,937) (3,522,268)

Cash Flows From Financing Activities
Dividends paid $ (1,805,165) $ (1,410,285) $ (1,128,228)
Proceeds from notes payable - - 875,000
Payment on notes payable - (875,000) -
Proceeds from long-term debt 998,000 893,000 929,000
Principal payments on long-term debt (430,151) (378,259) (348,160)
Net cash provided by (used in)
financing activities (1,237,316) (1,770,544) 327,612
Net increase (decrease) in cash
and cash equivalents (2,468,112) 270,144 3,439,472
Cash and cash equivalents:
Beginning 8,574,559 8,304,415 4,864,943
Ending $ 6,106,447 $ 8,574,559 $ 8,304,415

(Continued)<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 1995, 1994 and 1993

1995 1994 1993
<S>
Supplemental Disclosures of Cash Flow
Information
Cash payments for: <C> <C> <C>
Interest, net of capitalized interest
of $39,070 in 1995 $ 683,313 $ 661,029 $ 623,715
Income taxes $ 3,081,596 $ 3,013,201 $ 2,820,772

Supplemental Schedule of Noncash
Investing and Financing Activities
Notes receivable exchanged for
investment in stock $ - $ - $ 103,000

Common stock received in sale of
equity investee $ 1,446,942 $ - $ -

Change in classification of
investments from cost method
to available-for-sale (Note 2) $ 1,225,858 $ - $ -

Proceeds of long-term debt for
stock in Rural Telephone Bank $ 49,900 $ 44,650 $ 46,450

See Notes to Consolidated Financial Statements.
/TABLE
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Accounting Policies

The Company operates entirely in the telecommunications
industry. The Company is a holding company which, through its
subsidiaries, provides telephone service, cable television
service, unregulated communications equipment and services,
paging, mobile telephone, business radio, and cellular telephone
services. In addition, through its subsidiaries, the Company
finances purchases of telecommunications facilities and
equipment and operates and maintains an interstate fiber optic
network. The Company's operations are primarily located in the
Northern Shenandoah Valley and the surrounding areas. A summary
of the Company's significant accounting policies follows:

Principles of consolidation: The consolidated financial
statements include the accounts of all wholly owned subsidiaries
and those partnerships where effective control is exercised.
All significant intercompany accounts and transactions have been
eliminated.

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

Cash and cash equivalents: The Company considers all temporary
cash investments with a purchased maturity of three months or
less to be cash equivalents. The Company places its temporary
cash investments with high credit quality financial
institutions. At times such investments may be in excess of the
FDIC insurance limit.

Securities and investments and accounting change: The Company
has investments in debt and equity securities, which consist of
shares of common and preferred stock and partnerships. Debt
securities consist primarily of obligations of the U. S.
Government.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Accounting Policies (Continued)

The Company adopted the provisions of FASB Statement No. 115,
Accounting for Certain Investments in Debt and Equity
Securities, as of January 1, 1994. Statement 115 requires that
management determine the appropriate classification of debt and
equity securities that have readily determinable fair values.
Classification is determined at the date of adoption, and
thereafter at the date individual investment securities are
acquired. The appropriateness of such classification is
reassessed continually. The classification of those securities
and the related accounting policies are as follows:

Held-to-maturity securities: These consist entirely of debt
securities which are obligations of the U. S. Government. The
Company has both the intent and ability to hold to maturity
regardless of changes in market conditions, liquidity needs or
changes in general economic conditions. These securities are
valued at amortized cost.

Available-for-sale securities: Securities classified as
available for sale are those securities that the Company intends
to hold for an indefinite period of time but not necessarily to
maturity. Any decision to sell a security classified as
available for sale would be based on various factors, including
changes in market conditions, liquidity needs and other similar
factors. Securities available-for-sale are carried at fair
value. Unrealized gains and losses are reportable as increases
and decreases in stockholders' equity net of tax. Realized
gains and losses, are determined on the basis of the cost of
specific securities sold, are included in earnings.

Investments carried at cost: These investments are those where
the Company does not have significant ownership and for which
there is no ready market. Information regarding these and all
other investments is reviewed continuously for evidence for
impairment in value. No impairment was deemed to have occurred
at December 31, 1995.

Equity method investments: These investments consist of
partnership and corporate investments where the Company's
ownership is 20% or more, except where such investments meet the
requirements for consolidation. Under the equity method, the
Company's equity in earnings or losses of these companies is
reflected in the earnings.
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Accounting Policies

Prior to the adoption of Statement 115, the Company stated its
debt securities at the lower of amortized cost or fair value.
Under both the newly adopted accounting standard and the
Company's former accounting practices, premiums and discounts on
investments in debt securities are amortized over their
contractual lives. The method of amortization results in a
constant yield on those securities (the interest method).
Interest on debt securities is recognized in income as accrued.
Realized gains and losses, including losses from declines in
value of specific securities determined by management to be
other-than-temporary, are included in income. Realized gains
and losses are determined on the basis of specific securities
sold.

Materials and supplies: New and reusable materials are carried
in inventory principally at average original cost. Specific
costs are used in the case of large individual items.
Nonreusable material is carried at estimated salvage value.

Property, plant and equipment: Property, plant and equipment
is stated at cost. Accumulated depreciation is charged with the
cost of property retired, plus removal cost, less salvage.
Depreciation is determined under the remaining life method and
straight-line composite rates. Depreciation provisions were
approximately 5.7%, 5.7%, and 5.6% of average depreciable assets
for the years 1995, 1994 and 1993, respectively.

Pension plan: The Company maintains a noncontributory defined
benefit retirement plan covering substantially all employees.
Pension benefits are based primarily on the employee's
compensation and years of service. The Company's policy is to
fund the maximum allowable contribution calculated under federal
income tax regulations.

Income taxes: Deferred taxes are provided on a liability method
whereby deferred tax assets are recognized for deductible
temporary differences and deferred tax liabilities are
recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of
assets and liabilities and their tax bases. Deferred tax assets
and liabilities are adjusted for the effect of changes in tax
laws and rates on the date of enactment. Investment tax credits
have been deferred and are amortized over the estimated life of
the related assets.

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Accounting Policies (Continued)

Revenue recognition: Local, access, toll and cellular revenues
are recognized when earned regardless of the period in which
they are billed. The Company has a telephone subsidiary which
participates in the telephone revenue pooling and settlements
process of the National Exchange Carriers Association.

Earnings per common share: Earnings per common share is
computed by dividing net income by the weighted average number
of common shares outstanding. All per share amounts have been
restated to give effect to stock splits.

Note 2. Investments

As of January 1, 1994, the Company changed its method of
accounting for equity securities having readily determinable
fair values and all debt securities in accordance with FASB
Statement No. 115. As provided by this statement, the 1993
comparative financial statements have not been restated for the
change in accounting principle. Investments consist of the
following:

Investment in held-to-maturity securities:

1995 1994 1993

U. S. Treasury securities,
current $2,488,773 $ 950,750 $ -
U. S. Treasury securities,
noncurrent (due within
three years) 2,098,968 499,687 -
$4,587,741 $1,450,437 $ -

The fair market value approximates the carrying value for all
held to maturity investments at December 31, 1995 and 1994. At
December 31, 1993, investments in debt securities were
classified on the accompanying balance sheets as short-term
investments and were recorded at amortized cost, which
approximates market value.<PAGE>
<TABLE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<CAPTION>
Note 2. Investments (Continued)

1995 1994 1993
<S>
Investment in available-for-sale
securities:
Orion Network Systems, Inc., Common
(including unrealized gain of <C> <C> <C>
$142,263 in 1995) $1,444,855 $ - $ -
MFS Communications Company, Inc.
(including unrealized gain of
$210,750 in 1995) 532,500 - -
Comsat Corporation
(including unrealized gain of
$16,123 in 1995) 22,722 - -
Total securities available for sale $2,000,077 $ - $ -

In 1995, the Company realized a gain of approximately $269,000
on the sale of available-for-sale securities.

Changes in the unrealized gain on available-for-sale securities:

Unrealized gain at January 1, 1995 $ -
Unrealized gains during the year 369,136
Unrealized gains at December 31, 1995 369,136
Related deferred tax effect 140,124
Unrealized gain included in stockholders' equity $ 229,012
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Investments (Continued)
<CAPTION>
Cash flows from purchases, sales, and maturities of securities:

<S> 1995 1994
Available-for-sale securities: <C> <C>
Sales $ 1,392,354 $ -
Purchases (83,335) -

Held-to-maturity securities:
Maturities 5,466,558 969,384
Purchases (8,603,862) (1,450,439)

Other investments:
Sales 63,751 -
Purchases (662,815) (329,406)

Total $(2,427,349) $ (810,461)

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Investments (Continued)

Other investments comprised of equity securities which do not
have readily determinable fair values consist of the following:

<S> 1995 1994 1993
Cost method: <C> <C> <C>
Orion Network Systems, Inc. $ $ 1,552,592 $ 1,352,592
Independent Telecommunications
Network, Inc. 773,600 773,600 773,600
AvData Systems, Inc. 149,860 149,860 149,860
Rural Telephone Bank 568,992 519,097 474,442
Other 556,919 368,081 252,550
2,049,371 3,363,230 3,003,044
Equity method:
Virginia MetroTel - 633,627 855,104
South Atlantic Venture Fund III L.P. 369,289 - -
Virginia Independent Telephone Alliance 206,138 234,888 269,266
Rural Service Area - 6 378,989 368,554 329,207
Other 408,677 15,390 6,600
1,363,093 1,252,459 1,460,177
Total other securities
and investments $ 3,412,464 $ 4,615,689 $ 4,463,221

During the year ended December 31, 1995 Onion Network Systems,Inc. became
publicly traded and was therefore reclassified from cost method to
available-for-sale.

In January 1995, Virginia MetroTel was sold in exchange for stock of the
acquiring company, MFS Communications Company, Inc. and approximately
$59,000 in cash. A gain of approximately $872,000 resulted from the sale.

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
Note 3. Direct Financing Leases

The Company is the lessor of various telecommunications equipment under
direct financing leases. The typical lease agreement is for a period of
2 to 10 years. The payments below are net of unearned lease income as
of December 31, 1995.

Minimum Future Lease Payments Amount
<S> <C>
1996 $ 74,350
1997 70,841
1998 79,667
1999 20,718
2000 14,000
During the remaining term of the leases 65,095
Total minimum future lease payments $ 324,671

<CAPTION>
Investment in direct financing leases consists of the following:

December 31,
1995 1994 1993
<S> <C> <C> <C>
Minimum lease payments receivable $ 482,559 $ 596,407 $ 137,440
Unearned lease income (157,888) (227,683) (18,577)
$ 324,671 $ 368,724 $ 118,863

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
Note 4. Long-Term Debt and Lines of Credit

Long-term debt is comprised of notes payable to the Rural Utilities Service
(RUS) and the Rural Telephone Bank (RTB) which are secured by assets, with
a book value of approximately $36,000,000 and Industrial Development Bonds
(IDB) which bear interest at a floating rate based upon the bank's prime rate.

Interest
Rate 1995 1994 1993
<S> <C> <C> <C> <C>
RTB 6.04% - 8% $ 9,765,672 $ 9,004,549 $ 8,300,813
RUS 2% - 5% 716,562 819,945 924,289
IDB 77.7% of prime 76,719 116,715 156,711
10,558,953 9,941,209 9,381,813
Current maturities 461,927 423,329 329,891
Total long-term debt $ 10,097,026 $ 9,5177.880 $ 9,051,922

The approximate annual debt maturities for the five years subsequent to
December 31, 1995 are as follows:

Year Amount
<S> <C>
1996 $ 461,927
1997 483,928
1998 474,585
1999 499,013
2000 512,817
Later years 8,126,683
$10,558,953

The long-term debt agreements contain restrictions on the payment of
dividends and redemption of capital stock. The terms of the agreements
require the maintenance of defined amounts of equity and working capital
after payment of dividends. Accordingly, approximately $18,309,000 of
retained earnings was available for payment of dividends at December 31, 1995.<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 4. Long-Term Debt and Lines of Credit (Continued)

As of December 31, 1995, the Company had no borrowings outstanding on other
approved lines of credit for $4,500,000.

Long-term debt carries rates which approximate market rates for similar debt
being issued. Therefore the carrying value of long-term debt is not
significantly different than fair market value at December 31, 1995.

<CAPTION>
Note 5. Income Taxes

The Company and its subsidiaries file consolidated tax returns. The provision
for income taxes included in the consolidated statements of income consists of
the following components:
Years Ended December 31,
<S> 1995 1994 1993
Current: <C> <C> <C>
Federal $ 2,837,187 $ 2,402,840 $ 2,642,516
State 412,089 228,125 356,353
Total 3,249,276 2,630,965 2,998,869
Deferred:
Federal 272,529 (72,622) (452,481)
State 51,151 19,298 (64,624)
Total $ 323,680 $ (53,324) $ (517,105)
Provision for income taxes $ 3,572,956 $2,577,641 $2,481,764

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Income Taxes (Continued)

A reconciliation of income taxes determined using the statutory federal
income tax rates to actual income taxes provided is as follows:

Years Ended December 31,
<S> 1995 1994 1993
Federal income tax expense at <C> <C> <C>
statutory rates $ 3,336,620 $ 2,525,744 $ 2,408,690
State income taxes net of federal
tax benefit 305,738 163,299 190,515
Amortization of investment tax credit (75,701) (75,701) (75,701)
Other 6,299 (35,701) (41,740)
Provision for income taxes $ 3,572,956 $ 2,577,641 $ 2,481,764

Net deferred tax liabilities consist of the following at
December 31, 1995 and 1994:
1995 1994 1993
Deferred tax liabilities:
Accelerated depreciation $ 4,106,119 $ 4,019,391 $ 3,877,476
Unrealized gain on securities
available for sale 140,124 - -
4,246,243 4,019,391 3,877,476
Deferred tax assets:
Accrued compensation costs 92,329 76,413 86,815
Accrued pension costs 105,084 139,432 92,396
Equity investments 83,512 268,532 184,460
Other - - 1,168
280,925 484,377 364,839
Net deferred tax liabilities $ 3,965,318 $ 3,535,014 $ 3,512,637

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<CAPTION>
Note 6. Pension Plan

The Company maintains a noncontributory defined benefit pension plan. The
following table presents the plan's funded status and amounts recognized in
the Company's consolidated balance sheets.

1995 1994 1993
<S>
Actuarial present value of benefit
obligations:
<C> <C> <C>
Vested $ 2,645,748 $ 2,263,951 $ 2,091,910
Nonvested 52,826 62,286 63,968
Accumulated benefit obligations $ 2,698,574 $ 2,326,237 $ 2,155,878

Projected benefit obligation for
service rendered to date $ 4,408,161 $ 3,800,239 $ 3,573,241
Plan assets at fair value,
common stocks and bonds 4,449,840 3,676,436 3,839,827

Plan assets in excess (deficient)
of projected benefit obligation $ 261,679 $ (123,803) $ 266,586
Unrecognized prior service cost 278,513 299,218 319,923
Unrecognized transition asset at
January 1, 1987, being recognized
over 17 years (239,234) (267,978) (296,722)
Unrecognized net gain (621,588) (276,453) (553,163)
Net pension liability $ (320,630) $ (369,016) $ (263,376)
<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Pension Plan (Continued)

Net pension cost included the following components:

1995 1994 1993
<S> <C> <C> <C>
Service costs (benefits earned) $ 147,568 $ 143,072 $ 123,592
Interest cost on projected benefit
obligation 280,691 263,693 246,235
Actual (return) loss on plan assets (914,207) 46,130 (455,124)
Net amortization and deferral 634,762 (347,255) 183,789
Net periodic pension cost $ 148,814 $ 105,640 $ 98,492

<PAGE>
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Pension Plan (Continued)

Assumptions used by the Company in the determination of pension
plan information consisted of the following at December 31,
1995, 1994 and 1993:

1995 1994 1993
<S> <C> <C> <C>
Discount rate 7.50% 7.50% 7.50%
Rate of increase in compensation levels 5.50 5.50 5.50
Expected long-term rate of return on plan assets 7.50 7.50 7.50

Note 7. Reclassification

Certain amounts on the 1994 and 1993 financial statements have been
reclassified, with no effect on net income, to conform with the
classifications adopted in 1995.

Note 8. Proposed Stock Incentive Plan

On January 8, 1996, the Board of Directors adopted a Company Stock
Incentive Plan to be proposed for stockholders' approval at the
Annual Meeting to be held April 16, 1996. A maximum of 240,000
shares of common stock may be awarded for a period of 10 years under
the proposed Plan. Subject to certain restrictions, it is expected
that full-time employees of the Company will be eligible to participate
in the Plan.
/TABLE
<PAGE>
EXHIBIT 21. LIST OF SUBSIDIARIES

The following are all subsidiaries of Shenandoah
Telecommunications Company:

- Shenandoah Telephone Company

- ShenTel Service Company

- Shenandoah Cable Television Company

- Shenandoah Long Distance Company

- Shenandoah Valley Leasing Company

- Shenandoah Mobile Company

- Shenandoah Network Company

- Shenandoah Personal Communications Company

<ARTICLE> 5

<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1995 DEC-31-1994 DEC-31-1993
<CASH> 6106447 6270849 5695891
<SECURITIES> 4099045 6600 6600
<RECEIVABLES> 3068379 2880428 2284197
<ALLOWANCES> 0 0 0
<INVENTORY> 1922090 1511006 1545082
<CURRENT-ASSETS> 15308920 15164985 13629372
<PP&E> 53316016 49102832 47290763
<DEPRECIATION> 18862526 17455344 16263290
<TOTAL-ASSETS> 59896990 52464150 49652064
<CURRENT-LIABILITIES> 4258755 2386243 3854626
<BONDS> 10097026 9517880 9051922
0 0 0
0 0 0
<COMMON> 4740677 4740677 4740677
<OTHER-SE> 34530596 29876064 26435330
<TOTAL-LIABILITY-AND-EQUITY> 59896990 52464150 49652064
<SALES> 558031 890675 441195
<TOTAL-REVENUES> 21919150 20229178 18329886
<CGS> 764264 802904 579015
<TOTAL-COSTS> 13027468 12050713 11455136
<OTHER-EXPENSES> 536254 452090 349421
<LOSS-PROVISION> 29386 47796 18488
<INTEREST-EXPENSE> 685971 658908 621944
<INCOME-PRETAX> 9803641 7428660 7084383
<INCOME-TAX> 3572956 2577641 2481764
<INCOME-CONTINUING> 5522904 4851019 4156300
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 6230685 4851019 4602619
<EPS-PRIMARY> 1.66 1.29 1.22
<EPS-DILUTED> 1.66 1.29 1.22

</TABLE>